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Saga continues: SC stays Bombay HC order that upheld service tax of lawyers

The Financial Express and others reported:

The Supreme Court on Monday stayed the Bombay high court’s judgment that upheld the levy of service tax on services provided by lawyers and law firms to business clients with turnover of Rs 10 lakh and more.

A bench headed by Chief Justice HL Dattu while issuing notice to the ministry of finance, the Director General of Service Tax, Central Board of Excise and Customs, and others stayed the HC judgment on the petition filed by the Bombay Bar Association challenging the levy of service tax on lawyers, which was imposed with effect from May 1, 2011, and was changed to reverse charge (obligation was shifted to business entities from July 1, 2012). The issue pertains to the 14-month period between May 1, 2011, and July 1, 2012.

Service tax has been a long-running dispute between lawyers and the tax man after the 2011 budget hit advocates with service tax.

Read the Bombay high court case summary and judgment here.

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