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Senior advocates again avoid service tax net, courtesy DHCBA, Guj HC, Delhi HC

Senior advocates are now temporarily outside the service tax net, as the Delhi high court today stayed the imposition of this tax on them, reported Mint.

Justices S Muralidhar and RK Gauba ordered the stay on the Delhi High Court Bar Association’s (DHCBA) plea that charging senior advocates on the services they provide to their clients, as well as charging the clients on the services they take from senior advocates, amounts to double taxation and is unconstitutional.

The stay order was passed in order to maintain consistency with a similar stay order by the Guajarat high court on 30 March, according to Mint.

The DHCBA had also contended that the function of senior advocates – aiding the court in administration of justice – is not a “taxable service”, according to Live Law which published a copy of the DHCBA’s petition in the Delhi high court.

The union budget 2016 had withdrawn the exemption provided to senior advocates from service tax, effectively increasing the cost of instructing them by 14 per cent, as reported by [legallyindia.com/news/budget-catches-senior-advocates-tribunals-with-wider-service-tax-net

Legally India*].

The budget provisions which had taken away the senior advocates’ exemption were to be effective from today. Previous unsuccessful attempts of the government to levy service tax on lawyers came in 2011 and 2012.

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