GST exemption applicable to legal services and advocates

Legal services are taxable as per GST law in India. However, the government of india vide circular number 12/2017 has exempted certain legal services from GST. In this post we have listed those exemptions for your reference.

Before getting into the exemption provisions, you should know what legal service is.

As per the notification, legal service means any service provided in relation to advice, consultancy or assistance in any branch of law, in any manner and includes representational services before any court, tribunal or authority.

Legal services by arbitral tribunal

Services provided by an arbitral tribunal to any person other than a business entity or a business entity with an aggregate turnover up to twenty lakh rupees (ten lakh rupees in the case of special category states) in the preceding financial year;

Legal services advocates

Services provided by a partnership firm of advocates or an individual as an advocate other than a senior advocate, by way of legal services to –

(i) an advocate or partnership firm of advocates providing legal services;

(ii) any person other than a business entity; or

(iii) a business entity with an aggregate turnover up to 20,00,000 rupees (10,00,000 rupees in the case of special category states) in the preceding financial year;

Please note, limited liability partnership firms are also considered as partnership firm.

GST exemption form legal services by senior advocates

Services Provided by a senior advocate by way of legal services to-

(i) any person other than a business entity; or

(ii) a business entity with an aggregate turnover up to 20,00,000 rupees (10,00,000 rupees in the case of special category states) in the preceding financial year.

In this regard, certain terms are defined in the notification itself. As per this notification;

In both the case of advocate and senior advocate, legal services provided to a business entity with an aggregate turnover exceeding 20 Lakh rupees in the preceding financial year are liable to GST. If the business entity is in special category states, then the aggregate turnover limit is 10 Lakh rupees instead of 20 lakh rupees.

Meaning of Advocates and Senior Advocates

As per the notification, Advocate means an advocate entered in any roll under the provisions of the Advocates Act, 1961. Senior advocate has the same meaning as assigned to it in section 16 of the Advocates Act, 1961 (25 of 1961). As per this section;

(1) There shall be two classes of advocates, namely, senior advocates and other advocates. 

(2) An advocate may, with his consent, be designated as senior advocate if the Supreme Court or a High Court is of opinion that by virtue of his ability standing at the Bar or special knowledge or experience in law he is deserving of such distinction. 

(3) Senior advocates shall, in the matter of their practice, be subject to such restrictions as the Bar Council of India may, in the interest of the legal profession, prescribe. 

(4) An advocate of the Supreme Court who was a senior advocate of that Court immediately before the appointed day shall, for the purposes of this section, be deemed to be a senior advocate: 

Provided that where any such senior advocate makes an application before the 31st December, 1965 to the Bar Council maintaining the roll in which his name has been entered that he does not desire to continue as a senior advocate, the Bar Council may grant the application and the roll shall be altered accordingly.

is a fellow member of the Institute of Chartered Accountants of India. He lives in Bhubaneswar, India. He writes about personal finance, income tax, goods and services tax (GST), company law and other topics on finance. Follow him on facebook or instagram or twitter.