It turns out not all lawyers are against being charged service tax...
The Bar Council of India for one has come out in favour of the tax change that was introduced in Monday's budget, which meant that for the first time ever, Indian lawyers will be deemed to provide a service - something that clients will no doubt applaud after years of being palmed off with mere professional advice.
BCI chairman SNP Sinha told the Business Standard he thought it was a great idea that law firms would finally be taxed.
"The government of India has taken a wise decision by imposing tax," he said. "In the wake of the recently passed Limited Liability Partnership Act, foreign law firms are making (back-door) entry through joint ventures and collaboration. Thus they are justified in imposing tax."
Perhaps crucially, the tax change will not affect individual practitioners or those rendering services to - sorry, advising - individuals.
Unsurprisingly, the Society of Indian Law Firms (SILF) was not happy. The body's president Lalit Bhasin told the daily paper: "It is a (retrograde) step.
"Instead of helping, strengthening and promoting Indian law firms, the government is trying to substantially weaken them, and they are facing the threat of entry of foreign firms in the country."
Thanks to islandexpress who first tweeted the Business Standard article.
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India seriously needs two regulators, one for litigation and the other for corporate... but offcourse this would be a first for civilised common law jurisdictions...
It seems Mr. Sinha is unable to regulate the sector that he is supposed to (to which he admits unambiguously) and has to rely on other authorities to disincentivise foreign law firms!! Mr. Sinha should realise that such "backdoor entry"/ foreign firms are not the only ones which will pay service tax but domestic "clerk" firms and litigating lawyers (who have formed firms) will also end up paying service tax.
If not for the "noble" professionals' sake then for us lowlife "clerks" sake, he should either let foreign firms in or bar their entry completely. Let their be clarity!!
- is he suggesting that joint ventures are already in place?!
- And how does this translate to a justification for tax?? Are only the joint ventures being taxed?
Mystified by his leap of logic (if one can call it that)
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