2017 (7) TMI 623 - HC - GST

GST on legal services - reverse charge mechanism - Respondents (Government) are seeking more time to address the important legal and constitutional issues that arise in these petitions and it is asserted in the Court on behalf of the Respondents that as to date, in fact, no coercive action is taken against the lawyers, law firms or providers of legal services, Limited Liability Partnerships (LLP), for non-compliance with the legal requirement of the CGST, IGST and DGST - Next Date is 14th September, 2017

Summary

Issues:
1. Interpretation of the applicability of GST on legal services provided by individual advocates and law firms.
2. Authority to issue press releases regarding GST Council recommendations.
3. Modification of GST Council recommendations through notifications, circulars, or press releases.
4. Clarification on the legal sanctity of press releases.
5. Mechanism for de-registration or surrender of registration by lawyers or law firms under the Finance Act, 1994.
6. Provision for input tax credit and voluntary registration under the CGST Act for legal service providers.

Analysis:

1. The judgment addresses the interpretation of the applicability of GST on legal services provided by individual advocates and law firms. The Court directs that no coercive action should be taken against advocates, law firms, or Limited Liability Partnerships (LLPs) providing legal services for non-compliance with the legal requirements under the CGST, DGST, or IGST Act. Additionally, legal services will continue to be governed by the reverse charge mechanism unless the service provider opts for voluntary registration under the CGST Act.

2. The Court examines the authority to issue press releases regarding GST Council recommendations. Questions arise regarding the legal sanctity of such press releases and whether they can modify or clarify GST Council recommendations. The Court seeks clarification on the legal basis for issuing press releases and the authority responsible for their issuance.

3. The judgment discusses the modification of GST Council recommendations through notifications, circulars, or press releases. The Court requests further information on whether the recommendations of the GST Council can be altered through notifications or press releases and seeks clarification on the legal process for such modifications.

4. The judgment delves into the legal sanctity of press releases related to GST Council recommendations. The Court emphasizes the importance of understanding the legal authority behind the issuance of press releases and requests detailed responses from the concerned parties regarding the legal implications of such communications.

5. The Court examines the mechanism for de-registration or surrender of registration by lawyers or law firms under the Finance Act, 1994. The Court seeks clarification on whether registered lawyers or law firms have the option to de-register or surrender their registration and requests information on any established procedures for such actions.

6. The judgment addresses the provision for input tax credit and voluntary registration under the CGST Act for legal service providers. The Court highlights the option for legal service providers to avail input tax credit and opt for voluntary registration under the CGST Act, emphasizing the importance of compliance with relevant provisions for tax benefits.