2021 (4) TMI 554 - HC - GST

Whether the Petitioner should have submitted documentary evidence to prove his claim that he is a practicing individual lawyer and does not come under the provision of GST or service tax? - HELD THAT - The Court expresses its concern that practising advocates should not have to face harassment on account of the Department issuing notices calling upon them to pay service tax/GST when they are exempted from doing so, and in the process also having to prove they are practising advocates. The Commissioner GST is directed to issue clear instructions to all the officers in the GST Commissionerates in Odisha that no notice demanding payment of service tax/GST will be issued to lawyers rendering legal services and falling in the negative list, as far as GST regime is concerned. List on 22nd April, 2021.

Summary

Issues:
1. Whether practicing advocates should be issued notices to pay service tax/GST despite being exempted.
2. Burden of proof on advocates to establish their exemption from service tax/GST.
3. Compliance with Notification dated 20th June 2012 regarding service tax liability of individual advocates.
4. Instructions to be issued to GST Commissionerates regarding notices to practicing advocates.

Analysis:
1. The Court addressed the concern of practicing advocates facing harassment due to the Department issuing notices for service tax/GST payment, even though they are exempt. The Court directed the Commissioner GST to issue clear instructions to all officers in the GST Commissionerates in Odisha to refrain from issuing such notices to advocates rendering legal services and falling in the negative list under the GST regime.

2. The Court highlighted the issue of burden of proof on advocates to establish their exemption from service tax/GST. The Court noted that despite advocates being exempt from such taxes, they were required to provide documentary evidence to prove their status as practicing advocates and their exemption from tax liability.

3. Reference was made to a Notification dated 20th June 2012, which stated that the service tax liability of individual advocates is Nil for legal services provided to business entities in taxable territories. However, the Department insisted on advocates proving their exemption, even though similar notices were issued in the past and responses were provided by the advocates explaining their non-liability to pay service tax.

4. The Court emphasized the need for clear instructions to be issued by the Department to all officers involved in enforcing the GST regime regarding the exemption of practicing advocates from service tax/GST liabilities. The Court sought copies of such instructions to be presented before the next hearing scheduled for 22nd April 2021 to ensure compliance and prevent further harassment of practicing advocates.