Photo: Pradeep Gaur/Mint
Photo: Pradeep Gaur/Mint

Delhi HC stays levy of service charge on senior advocates

A division bench comprising of Justices S. Muralidhar and R.K Gauba also issued a notice to the Centre in the matter

New Delhi: The Delhi high court on Friday stayed the relevant provisions under a notification passed by the Centre, imposing service tax on senior advocates with effect from 1 April.

A division bench comprising of Justices S. Muralidhar and R.K Gauba also issued a notice to the Centre in the matter.

A stay order was passed in order to maintain consistency with an order passed by the Gujarat high court on 30 March which had also issued stay on the levy of service tax.

According to the notification, tax on senior advocates would be levied on forward charge basis (wherein service tax is required to be paid by service provider) and/or reverse charge basis (where service tax is required to be paid by service recipient).

The Delhi high court bar association approached the Delhi high court seeking to strike down the notification, contending that it is “unconstitutional" and against the basic principles of the value-added tax regime as it amounts to double taxation.

It was further stated that senior advocates were officers of the court who aid the administration of justice and that their services would not amount to “taxable services" for levy of service tax.

The court was informed that it had on two earlier occasions, in 2011 and 2012, stayed the operation of provisions that sought to levy service tax on senior advocates.

In Budget 2016, the Centre brought back the levy of service tax on senior advocates by way of two notifications dated 1 March, which are being challenged.

The matter will be heard next on 27 September.

Close