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SILF to file 2nd writ v new service tax as 1st writ stuck in court: Bhasin

Exclusive: Society of Indian Law Firms (SILF) chairman Lalit Bhasin has condemned the expanded service tax rules on law firms, saying that SILF and other law firms would file a new writ petition against the changes while the existing writ petition remained pending in the Bombay High Court.

Bhasin (pictured) told Legally India that there had been “no movement” on the writ petition that is pending in the Bombay High Court that was filed in November 2009.

On today’s Union Budget tax changes that would also pull advocates and arbitrators into the tax net when servicing businesses, as well as make law firms pay service tax on legal services rendered to individuals, he said: “The implications do not seem to have been understood by the budget makers.

“We’ll definitely be challenging [it in a writ] – SILF also and some individual law firms. It affects our right to carry out our profession. It’s also bad for advocates – it’s bad for the entire legal profession. I won’t be surprised if this may also create a lot of unrest in the legal profession.”

He also slammed the new proposal to make service tax payable as soon as a bill is raised and not when it was paid. “I think that is quite a retrograde step,” Bhasin commented. “So many times you don’t receive the payments, clients can negotiate and all that. It will be very cumbersome – if at all it has to be [paid] it is only when you receive [the money] – it can not be at the initial stage: you are raising an invoice and then paying tax on it.”

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