Service tax on senior advocates will be applicable on reverse charge basis, as opposed forward charge as proposed in budget 2016.

In budget it is proposed service tax on senior advocate or partnership firm of advocates is being levied under forward charge. It means senior advocate would have to collect tax on every service provided and deposit the same in department.

The provision was challenged in different courts, Gujrat and Delhi high court granted a stay on the same.

Three notifications have been issued by the department in order to affect the amendment.

As per notification no. 32/2016, dated 6 June 2016,

The following services provided by senior advocate are exempt from service Tax.

1.    Service provided to any person other than a business entity or

2.    Service provided to business entity with a turnover up to rupees ten lakhs in the preceding financial year.

This meant that service provided by senior advocates comes under service tax preview only when the service is provided to business entities with turnover more than ten lakhs in the preceding financial year.

As per Notification No. 33/2016 and 34/2016, dated 6 June 2016,

Service tax on taxable services provided by senior advocate is applicable on reverse charge basis, i.e. the recipient of the service is liable to pay the service tax.