Having brought a sec tion of high-earning lawyers under the ambit of service tax last year Pranab Mukherjee has now expanded the scope of legal consultancy services bring more into the net.
If the levy was earlier limited to legal services provid ed by one business entity another (transactions between collectives such as firms, en terprises and companies), would now apply to individual lawyers and clients as well, in certain situations.
Also, legal services com ing under the service tax net has been expanded to include service of appearance before any court of law or any statutory authority, under ‘‘representational services’’.
Representational services provided to individuals will continue to be exempt. They will attract service tax when the client is a business entity, irrespective of whether the service provider is a firm or an individual lawyer.
On other legal services in relation to advice, consultancy or assistance in any branch of law, only law firms remain liable to pay service tax. The change is, they will now pay service tax even when clients are individuals.
Arbitration too will invite service tax. The levy will be on the tribunal arbitrating for a business entity.
Source:- The Times of India 1st March 2011 Page 9 Delhi
If the levy was earlier limited to legal services provid ed by one business entity another (transactions between collectives such as firms, en terprises and companies), would now apply to individual lawyers and clients as well, in certain situations.
Also, legal services com ing under the service tax net has been expanded to include service of appearance before any court of law or any statutory authority, under ‘‘representational services’’.
Representational services provided to individuals will continue to be exempt. They will attract service tax when the client is a business entity, irrespective of whether the service provider is a firm or an individual lawyer.
On other legal services in relation to advice, consultancy or assistance in any branch of law, only law firms remain liable to pay service tax. The change is, they will now pay service tax even when clients are individuals.
Arbitration too will invite service tax. The levy will be on the tribunal arbitrating for a business entity.
Source:- The Times of India 1st March 2011 Page 9 Delhi
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