Service Tax on Senior Advocates - Reaching the Supreme Court
SENIOR Advocates are required to pay the Service Tax themselves under the forward charge system with effect from 1.4.2016. At least three High Courts have stayed the tax on the senior advocates. In DDT 2820 05 04 2016, we asked, "Now, should each High Court stay these provisions? Can't we take the issue to the Supreme Court?"
And that is exactly what the CBEC has done.
In a letter to the Chief Commissioners, the Board states, "Delhi, Gujarat & Calcutta High Courts have stayed the levy of service tax on legal services provided by Senior Advocates. The Chairman CBEC has directed to engage the services of the Ld. Attorney General to get the stays vacated by moving the Hon'ble Supreme Court and requesting for aggregating the petitions filed in various courts in the country in this subject."
Board has asked the Chief Commissioners to send to the Board the relevant documents involving the issue in their zones pending in the High Courts so that Transfer Petitions can be filed before the Supreme Court.
The Attorney General himself is a 'Senior Advocate' and the Board's Budget exercises have made him also liable to the rigours of Service Tax Law. He has to now argue in the Supreme Court that he and several other senior advocates have been made liable to pay Service Tax under the forward charge system in public interest and it is absolutely legal.
If he wins the case, he loses as it will adversely affect him personally. If he loses, he personally wins, but his client (Union of India) loses, which is not all that good for a lawyer. A really difficult situation for a lawyer! What will the Board do if the Attorney General advises them that they have no case? Can they hire another lawyer?
CBEC F. No. 276/91/2016-CX.8A., Dated April 11, 2016