Service tax on legal
services provided by an advocate (whether individual or firm) to any business
entity has been imposed vide the Finance Act, 2012 under reverse charge
mechanism wherein service recipient is liable to deposit service
tax on fees paid to advocates.
High Court of Delhi vide order dated
21.09.2012 has stayed the implementation of this amendment in a
petition (W.P.(c) No. 5957/2012) led Mr. A. S. Chandhiok, Sr. Adv. with Mr.
Ruchir Bhatia, Adv. for Delhi Tax Bar Association.
Therefore, any business entity receiving legal services of an
advocate must not deposit service tax under reverse charge till further notice.
