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2017 (7) TMI 542 - DELHI HIGH COURT

2017 (7) TMI 542 - DELHI HIGH COURT - Tmi - GST on legal services - Constitutional validity of Section 9 (4) of CGST Act - collection of GST on ‘reverse charge’ basis from a person registered under the CGST Act, IGST Act or DGST Act in respect of goods supplied and services received by such person from a person who has not been so registered - whether the impugned Notification No.13/2017 dated 28th and 30th June, 2016 cover all legal services not restricted to representational services rendered .....

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overned by the reverse charge mechanism than there would be no purpose in requiring legal practitioners and law firms to compulsorily get registered under the CGST, IGST and/or DGST Acts. 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). There is therefore prima facie merit in the contention of Mr Mittal that the legal practitioners are under a genuine doubt whether they requir .....

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DGST Act from 1st July, 2017 onwards will not be denied the benefit of such clarification as and when it is issued. - It is further clarified that if an appropriate clarification is not able to be issued by the Respondents 1 and 2 by the next date, the Court will proceed to consider passing appropriate interim directions. - W.P.(C) 5709/2017 & CM No. 23814/2017 (stay) - Dated:- 12-7-2017 - MR. S.MURALIDHAR AND MR. PRATHIBA M. SINGH, JJ. For The Petitioner : Mr. J. K. Mittal, Mr. Hitender M .....

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e Tax Council (GST Council) through its Secretary. Petitioner is permitted to additionally serve the notice dasti on the Secretary to the GST Council. 3. This petition is by J. K. Mittal & Company, which is a proprietary concern of which Mr. J. K. Mittal, Advocate, who appears in person, is the Sole Proprietor. The Petitioner states that he provides legal services including consultancy, opinion, drafting, appearances before Courts etc. Mr. Mittal states that although he has an office only in .....

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ndia (Respondent No. 1) and the GNCTD (Respondent No. 2), which are per se in violation of the Central Goods and Service Tax Act 2017 (CGST Act), the Delhi Goods and Service Tax Act 2017 (DGST Act) read with Article 279 A of the Constitution of India and have adverse consequences to lawyers in general including himself. Accordingly, in this petition the constitutional validity of the aforesaid notifications is challenged. 5. In addition, the petition also challenges Notification No.5/2017-Centra .....

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ound in the model laws prepared by the GST Council. It seeks to collect GST on reverse charge basis from a person registered under the CGST Act, IGST Act or DGST Act in respect of goods supplied and services received by such person from a person who has not been so registered. Mr Mittal submits that this provision lacks a proper corresponding machinery provision to facilitate its implementation, and is therefore ultra vires the statute. According to him this provision is incapable of being compl .....

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ws, principles of levy, apportionment of Goods and Services Tax… Consistent with this requirement a number of provisions of the CGST Act including Section 9 (1), 9 (2), 9 (3) and 9 (5) envisage notifications being issued by the central government on the recommendations of the Council. The categorical averment is that the impugned notifications are in violation of this mandatory statutory requirement inasmuch as the GST Council had recommended that legal services as a whole would be amenab .....

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2%, 18% and 28%. The list of services that will be under reverse charge as proved by the GST Council is given below. The information is being uploaded immediately after the GST Council s decision and it will be subject to further vetting during which the list may undergo some changes. The decisions of the GST Council are being communicated for general information and will be given effect to through gazette notifications which shall have force of law. S.No. Service Provider of service Percentage .....

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rcise of' the powers conferred by sub-section (3) of section 9 of the Central Goods and Services Tax Act 2017 ( 12 of 20 17), the Central Government on the recommendations of the Council hereby notifies that on categories of supply of services mentioned in column (2) or the Table below supplied by a person as specified in column (3) of the said Table, the whole of central tax leviable under section 9 of the said Central Goods and Services Tax Act, shall be paid on reverse charge basis by the .....

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dvocates or by a firm of advocates, by way of legal services to a business entity. An individual advocate including a senior advocate or firm of advocates Any business entity located in the taxable territory 8. Notification No.13/2017-State Tax (Rate), dated 30th June, 2017 issued by the GNCTD is on the same lines. The case of Mr. Mittal is that the expression provision of such services following the expression located in the taxable territory restricts the exemption to only representational ser .....

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However, there was no provision in the FA to allow for de-registration. Thus Mr Mittal s FA registration continues. Mr. Mittal draws attention to Section 22(2) of the CGST Act, which reads as under:- 22 (2) Every person who, on the day immediately preceding the appointment day, is registered or holds a licence under an existing law, shall be liable to be registered under this Act with effect from the appointed day. 10. He submits that the mere clarification that all legal services are amenable .....

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resentational services rendered by legal practitioners. The ancillary question is whether there is any requirement of registration by legal practitioners and/or firms rendering legal services under the CGST Act or the IGST Act or the DGST Act even if they are earlier registered under the FA? 12. Mr. Mittal has pointed out that under Section 25 (3) of the CGST Act, it is open to a person, though not liable to be registered under Section 22 or Section 24 of the CGST Act to get himself registered v .....

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He states that the prevalent uncertainty is causing great inconvenience to him and other legal practitioners in the matter of receiving and rendering services. 13. Both Mr. Narula, learned counsel appearing on behalf of the Union of India and Mr. Gautam Narayan, learned counsel for the GNCTD seek a short adjournment to take instructions from the respective governments to clarify the legal position in respect of the above impugned notifications. In particular they seek time to obtain a clarifica .....

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