Advocates and Legal Services: Is GST Applicable?

Yes, advocates and legal services are subject to GST (Goods and Services Tax) in India. As per the GST Act, legal services provided by advocates, including senior advocates, are considered as a supply of services and are liable to GST.

The rate of GST applicable on legal services is 18% and it is applicable on the entire fee charged by the advocate, including the fee charged for appearance, drafting of documents, and legal consultancy.

However, there are certain exemptions available under the GST law for certain legal services provided by advocates. For example, legal services provided to individuals, where the fee charged by the advocate is less than Rs. 1,000 per day, are exempt from GST. Similarly, services provided by advocates to the government, local authorities, or to a specified person (such as a person registered under the GST law) are also exempt from GST.

It is important for advocates and legal service providers to comply with the GST law, maintain proper records, issue tax invoices, and file GST returns in a timely and accurate manner to avoid any penalties or legal action by the tax authorities.

GST Registration Requirement for Advocates and Legal Services

Advocates and legal services providers in India are required to obtain GST registration under certain conditions. The GST registration requirement for advocates and legal services is as follows:

1. Threshold Limit:

If the aggregate turnover of an advocate or legal service provider exceeds Rs. 20 lakh in a financial year, then he/she is required to obtain GST registration.

2. Inter-State Supply:

If the advocate or legal service provider provides services to clients located in other states, then he/she is required to obtain GST registration, irrespective of the turnover.

3. Voluntary Registration:

An advocate or legal service provider can also opt for voluntary registration, even if the turnover does not exceed the threshold limit. This is beneficial as it enables the service provider to claim input tax credit on the GST paid on inputs and input services.

4. Reverse Charge Mechanism:

In case the advocate or legal service provider provides services to a business entity registered under the GST law, then the recipient of the service is required to pay GST under the reverse charge mechanism. In such a case, the advocate or legal service provider may not be required to obtain GST registration, as the liability to pay GST is on the recipient of the service.

It is important for advocates and legal service providers to obtain GST registration and comply with the GST law to avoid any penalties or legal action by the tax authorities. They should maintain proper records, issue tax invoices, and file GST returns in a timely and accurate manner.

Exemptions available for Advocates, Senior Advocates and Firm of Advocates : GST registration

Under the GST law in India, certain exemptions are available for advocates, senior advocates, and firms of advocates. These exemptions are as follows:

1. Threshold Limit Exemption:

If the aggregate turnover of an advocate or a firm of advocates does not exceed Rs. 20 lakh in a financial year, then they are not required to obtain GST registration. This exemption is available only for services provided to individuals and not to businesses.

2. Services to Senior Advocates:

If a senior advocate provides legal services to another senior advocate, then the services provided are exempt from GST.

3. Services to Individuals:

Legal services provided by advocates, including senior advocates, to individuals are exempt from GST if the fee charged is less than Rs. 1,000 per day.

4. Services to Court or Tribunal:

Services provided by advocates, including senior advocates, to a court or tribunal are exempt from GST.

5. Services to Government:

Services provided by advocates, including senior advocates, to the government, local authorities, or to a specified person are exempt from GST.

It is important to note that while advocates, senior advocates, and firms of advocates may be exempt from GST registration in certain cases, they are still required to comply with other provisions of the GST law, such as issuing proper invoices, maintaining records, and filing GST returns in a timely and accurate manner. Additionally, if a registered business entity engages the services of an advocate, they may be required to pay GST under the reverse charge mechanism.

GST rates and HSN or SAC codes for Advocates, Senior Advocates & Firm of Advocates

Under the GST law in India, legal services provided by advocates, including senior advocates and firms of advocates, are classified under the service accounting code (SAC) 998212. The applicable GST rate for legal services provided by advocates is 18%.

Here are the GST rates and HSN or SAC codes for some common legal services provided by advocates:

1. Legal Consultancy:

HSN/SAC - 998212; GST Rate - 18%

2. Drafting of Legal Documents:

HSN/SAC - 998212; GST Rate - 18%

3. Representation before any Court, Tribunal, or Authority:

HSN/SAC - 998212; GST Rate - 18%

4. Arbitration Services:

HSN/SAC - 998213; GST Rate - 18%

It is important to note that while legal services provided by advocates are taxable under GST, there are certain exemptions available for legal services provided to individuals and by senior advocates or to the government, local authorities, or a specified person. In such cases, no GST is levied on the services provided.

Additionally, if a registered business entity engages the services of an advocate, they may be required to pay GST under the reverse charge mechanism. In such cases, the business entity is required to register under GST and pay GST on the services received from the advocate.