SILF to file 2nd writ v new service tax as 1st writ stuck in court: Bhasin

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Exclusive: Society of Indian Law Firms (SILF) chairman Lalit Bhasin has condemned the expanded service tax rules on law firms, saying that SILF and other law firms would file a new writ petition against the changes while the existing writ petition remained pending in the Bombay High Court.

Bhasin (pictured) told Legally India that there had been “no movement” on the writ petition that is pending in the Bombay High Court that was filed in November 2009.

On today’s Union Budget tax changes that would also pull advocates and arbitrators into the tax net when servicing businesses, as well as make law firms pay service tax on legal services rendered to individuals, he said: “The implications do not seem to have been understood by the budget makers.

“We’ll definitely be challenging [it in a writ] – SILF also and some individual law firms. It affects our right to carry out our profession. It’s also bad for advocates – it’s bad for the entire legal profession. I won’t be surprised if this may also create a lot of unrest in the legal profession.”

He also slammed the new proposal to make service tax payable as soon as a bill is raised and not when it was paid. “I think that is quite a retrograde step,” Bhasin commented. “So many times you don’t receive the payments, clients can negotiate and all that. It will be very cumbersome – if at all it has to be [paid] it is only when you receive [the money] – it can not be at the initial stage: you are raising an invoice and then paying tax on it.”

Comments

Anonymous guest 1 Mar 2011, 05:33
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This guy, does not want foreign law firms. Now, he does not want to pay taxes.

All he and his ilk, SILF, just want to eat, eat, eat.

[...].
Anonymous guest 1 Mar 2011, 11:50
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This should read as follows:
"We [should] definitely be challenging SILF also and some individual law firms. It affects our right to carry out our profession. It’s also bad for advocates – it’s bad for the entire legal profession. I won’t be surprised if this (i.e. SILF) creates a lot of unrest in the legal profession."

Ban SILF. They're one of the prime reasons for India's legal profession being a wreck.
Anonymous guest 1 Mar 2011, 15:29
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@ 1 and 2. You pay Income Tax. You pay road tax. You pay Property Tax. You pay the corrupt govt. official bribe to get your work done. You STILL want to pay Service Tax? Leave your besoted notions about law firms aside for once and look at the greater implications of the new tax sought to be imposed on the legal fraternity as a whole.
Anonymous guest 1 Mar 2011, 17:13
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Not to get into the politics of SILF, but the comments made above are ridiculously childish. I think there is immense merit to the contention that tax should be chargeable on actuals, and not on invoice basis, because the stark reality of legal practice in India (for law firms and individuals practitioners alike) is that clients often don't pay - and many times they negotiate the bill to a reduced amount.
Anonymous guest 1 Mar 2011, 19:00
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totally agree with #1 why should lawyers not pay service tax? they are owned by billionaires who are getting even richer by preventing liberalisation. we are a poor country where the rich pay no tax
raj_0886 2 Mar 2011, 06:40
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ofcourse , being a citizen of india one should pay taxes... u cannot give excuse of corruption for tax evasion.. if you are earning in india then whts the problem to contribute toward development of nation....

and just because we are lawyer we will not pay tax.. sound unhealthy
Anonymous guest 2 Mar 2011, 16:47
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Well the cost of justice and legal services just went up. It's the client who will end up footing the bill.
Anonymous guest 2 Mar 2011, 20:49
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lol @ 1

LI why do u censor comments against SILF? its freedom of speech. if u have the guts conduct a poll among students and youngsters asking how many support SILF on foreign firms, foreign universities, new regulatory body etc
Anonymous guest 3 Mar 2011, 08:13
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This is definitely a retrograde step. Individual Advocates are now being subject to service tax. This was supposed to be a noble profession not a commercial one. Now we will have to justify to Babu's in the Servie Tax department as to why we should not pay Service Tax even when we have not received the payment from the client. In other words raise an Invoice and pay service tax even if the client does not pay. Then pay the baus to get a refund. Ridiculous.

Individual lawyers will be the worst hit. While the idea was perhaps to target the Big Guns who as individuals charge fees in in crores every year, but what has been done is going to hit the practice of budding indivudals. What happens to the small individual lawyers as there will be no cost advantage? As it is big firms have no problems and even if they hike rates by 10 or 20% big corproates will pay. Now they are creating a divide as the cost advantage that helps small lawyers come up in the profession will be lost. Hence even if you are an indivudal lawyer, there is no scope for growth as the cost advantage is lost. Corporates would rather go to big firms and not to individuals.

This is a conspiracy by big law firms to ensure small individual lawyers do not grow as they can provide quality services at 10% cheaper fees minus the servie tax. Now this will be lost. So the big firms grow bigger and no room for indivudal excellence. While SME's and entreprenurial skills were to be promoted, this appears to be clearly contradictory to the Government policy.
Anonymous guest 3 Mar 2011, 15:01
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I do not know whether the argument "It affects our right to carry out our profession. It’s also bad for advocates –it’s bad for the entire legal profession.” would jel at all. If it be so, then not only the lawyers even other businesses would have the same argument. Does that mean that the Government cannot impose tax?
I think that this is nothing more than a 'publicity' gimmik.
Anonymous guest 10 Mar 2011, 16:02
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Single Eagle makes sense.. where is the push from the Government to help individual lawyers to set up their practices?

Established Seniors continue to treat freshers like dirt or worse.. Large law-firms would rather a "connected" fresher join them. To become an employee after your study law is meaningless and a slap on your own education..

There should be a total rebate from payment of taxes for the first 5/7 years of one's practice OR age 30, whichever is earlier.

The concern to me is something bigger. The judiciary is one institution which is becoming the biggest thorn in the flesh of the corrupt politicos. There is nothing we can expect from them, except steps to further demoralize people who form part of the justice delivery system, esp "uncontrollable elements" like us lawyers.

I am sure that large law-firms are much easier for the political system to manage because they can have "arrangements" with politicos and swing deal after deal of great value.

But true depth and integrity of the system can only come through lawyers who may appear to be idiosyncratic but who ask truly relevant and uncomfortable questions..

But I guess, like Henry Ford, they believe we can be any color -so long as it is Black!
Anonymous guest 27 Apr 2011, 05:24
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The proposal to force service tax on legal services, is an open challenge to the rule of law by PERSONS who consider themselves above law, It is taxing the right of a person to approach the Courts when injustice is done to him, The Hon. Apex court of the country must immediately interfere in this matter, If a person is taxed for going to a court for Justice, It means there is nothing left for the ordinary citizen of INDIA, The right of a person to approach a court of law for getting Justice and to engage a lawyer of his choice for the purpose is a fundamental right, Provided in the Constitution, The Govt. has challenged the entire society by TAXING a fundamental right, Tomorrow it will extend to the rights of Equality, Freedom, opportunity etc... , Means you will have to pay tax to have speak, walk, etc... too, The Govt. thinks it can do whatever it wants and also tax the citizen if he goes to Court, What a shameless act,