Legal services are not exempt from payment of Goods and Services Tax (GST) applicable on them, under the GST's reverse charge mechanism, the government clarified on Saturday, 15 July.

Individual advocates including senior advocates, as well as law firms will be paying the GST applicable on the representational, advisory, assistance or consultancy services provided by them to a client before any court, tribunal or authority, the government has said in the clarification.

The government's press release states:

Legal services provided by either of them are liable for payment of GST under reverse charge by the business entity.The words “by way of representational services before any court, tribunal or authority….” appear in conjunction with senior advocate without a comma and merely describe the nature and mode of representational services provided by a senior advocate to a business entity. It, therefore, follows that legal services, which includes representational services, provided by advocates are under reverse charge.

The Delhi high court had ruled that legal services were exempt from the GST until the government clarifies that they are not exempt.

press release (PDF)