The impact of GST is factually evident on literally all the services. It is clearly stated by experts that if GST is applied properly and in defined steps, and if all the stakeholders act promptly to apply it and obey the rules and regulations; it requires little introduction to say that GST will streamline the entire system, many people will come under the ambit of tax, business process system will be transparent. The consumers will be beneficial. However; the entire impact of GST however needs to seen and might take a few months to reflect.
Along with other sectors, GST will have its meaningful impact on legal services. There have been a lot of confusions and complicated questions that were asked by legal entities as to how GST might impact them and how to regulate the ambit of GST. This article covers some of the key impact of GST on legal services. Read on!
It is clarified by the govt that services offered by lawyers and law firms will keep on to be under the tax system where the onus of remitting the applicable tax amount to the government will be with clients getting the services. An article published in the Mint.com puts it clearly - "An 18% GST rate with full input tax credit is applicable on legal services availed by businesses with a turnover above Rs20 lakh, while such services taken by individuals and smaller businesses are exempt from the indirect tax. The turnover threshold is Rs10 lakh in the case of northeastern states" SOURCE
No change is made in the ambit of taxation of legal services under the GST. Under the defined system, it is mentioned and clarified that the legal services is defined as any service offered in relation to advice, consultancy or any specific and defined assistance in any branch of law, literally in any manner and it also includes the representational services offered before court, tribunal or authority. Source
These are just some of the notable impact of GST on legal services. The entire impact of the GST can be experienced only after a few months. Nut until then we can only expect it will streamline the entire system and will help in the formation and development of the entire legal system. Should you want to learn more about how GST is going to impact the industry and beyond, please keep reading our blog section.
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