Sunday, March 27, 2011

‘Levy of service tax on legal profession a retrograde step'

Can tax be legally and justifiably levied on services rendered to court, asks SILF

The Society of Indian Law Firms (SILF) and the All-India Bar Association (AIBA) have expressed serious concern over the levy of ‘service tax' on the legal profession and urged the Centre to withdraw it immediately.
In a statement, SILF president Lalit Bhasin said, “Service tax on the legal profession is a retrograde step and SILF fully supports the strike call given by lawyers.”
“The legal profession is an integral and important part of our system of administration of justice, so much so that a lawyer is considered as an officer of the court. A lawyer renders service to the court as a vehicle for effective administration of justice. He provides his expertise and assistance to clients as a part of over all service to the court. Can a Service Tax be legally and justifiably levied on services rendered to the court,” he asked.
“No rational basis”

Service tax had no rational basis, Mr. Bhasin said and added that if it was not withdrawn, the profession would seek redress from the courts.

AIBA Vice-Chairman S. Prabakaran recalled how a similar attempt to levy service tax on lawyers when P. Chidambaram was the Finance Minister in 2007 was withdrawn due to opposition from the legal fraternity. What was withdrawn had now been re-imposed.

He said that by no stretch of imagination could it be said that legal assistance provided by lawyers to their clients would amount to rendering a ‘service' to warrant imposition of tax.

“Lawyers only assist the court in dispensation of justice and such assistance cannot be described as a service.”

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