Do law firms come under GST: Delhi HC seeks clarification from Centre

The Delhi High Court has asked the Central Government to clarify whether legal firms and lawyers come under Goods and Services Tax (GST) or not.

In a statement directed towards the Central Government, the High Court has directed that no forcible actions be taken against any lawyer or law firm for non-compliance with any legal requirement under the CGST Act, the IGST Act or the DGST Act till a clarification is issued by the Centre and the Delhi Government.

The Delhi High Court said, "As of date there is no clarity on whether all legal services (not restricted to representational services) provided by legal practitioners and firms would be governed by the reverse charge mechanism."

 

The High Court further said that if all legal services are to be governed by the reverse charge mechanism, then there would be no purpose in requiring legal practitioners and law firms to compulsorily get registered under the CGST, IGST and DGST Acts.

It also said, "Those seeking voluntary registration would anyway avail of the facility under Section 25 (3) of the CGST Act (and the corresponding provision of the other two statutes)."

It added that there is prima facie merit in the contention of Mittal that the legal practitioners are under a genuine doubt whether they require to register themselves.

"In the circumstances, the Court directs that no coercive action be taken against any lawyer or law firms for non-compliance with any legal requirement under the CGST Act, the IGST Act or the DGST Act till a clarification is issued by the Central Government and the GNCTD, till orders in that regard by this Court also clarifies that any lawyer or law firm that has been registered under the CGST Act, or the IGST Act or the DGST Act from 1" July, 2017 onwards will not be denied the benefit of such clarification as and when it is issued," said the Delhi HC.

The High Court has listed the hearing on the same for July 18.