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All about Service Tax & new Service Tax Rate

As per Service Tax Rules, 1994, ‘Legal Service’ means any service provided in relation to advice, consultancy or assistance in any branch of law, in any manner and includes representational services before any court, tribunal or authority. Legal service would include advice, consultancy, technical assistance in legal matter and appearance before court and various judicial and quasi-judicial authorities. Service tax was first introduced on ‘Legal Services Tax Consultants’ from 01.09.2009 by the Finance (No.2) Act, 2009 by inserting clause (zzzzm) in Section 65 (105) of the Finance Act, 1994.
As per notification no. 30/2012 dated 20.06.2012, any legal services provided or agreed to be provided by individual advocate or a firm of advocates by way of legal services and arbitral tribunal, the service tax has to be discharged by the service receiver i.e. business entity on 100% Value of service under reverse charge mechanism.

As per Notification No.25/2012- Dated- 20th June, 2012 , legal service tax is exempt if service is provided by,-
An arbitral tribunal to :–
Legal Services Tax Consultants
  • Any person other than a business entity; or
  • A business entity with a turnover up to rupees ten lakh in the preceding financial years
  • An individual as an advocate or a partnership firm of advocates by way of legal services to,-
  • An advocate or partnership firm of advocates providing legal services
  • Any person other than a business entity; or
  • A business entity with a turnover up to rupees ten lakh in the preceding financial year; or
  • A person represented on an arbitral tribunal to an arbitral tribunal;
Under reverse charge service tax is payable on payment basis instead of accrual basis i.e. service tax liability to be discharged at the time of payment not at the time of receiving of invoice provided payment has been discharged within six months. If payment not made in six months then service tax liability to be discharged along with interest from the date of invoice.

The CENVAT credit cannot be used for payment of service tax in respect of services where the person liable to pay tax is the service recipient. However, service tax discharged under reverse charge on legal service can be used as CENVAT credit for discharging the service tax liability on output taxable services and Central Excise duty.
professional Tax adviser
With the introduction of reverse charge mechanizm, the receiver of the service is liable to pay tax and to comply for all the statutory compliances in place of service provider. This has become an additional task for the service receiver. However service tax under reverse charge mechanism is posing a challenge.

In today''s competitive environment clients expect their professional adviser to provide expert and timely advice on an increasingly wide range of subjects.

Meeting these expectations can place a severe burden on resources and increase risk. Failure to meet these expectations can and does result in the loss of the valued clients.
In the field of tax we can cover all of your needs. We have a proven helpline to assist you with those day to day questions. Whether it is about something you do not know about or you would value a second opinion. For those more complex issues we can also provide you with a full consultancy service. We cover all taxes as well as Investigations  and Anti-Money  Laundering  systems  and training " professional Tax adviser ".

Profession Tax is a tax which is levied by the State Government on the Income earned by way of profession, trade, calling or employment. Professional Tax in Maharashtra is governed by The Maharashtra State Tax on Professions, Trades, Callings and Employment Act, 1975.

We provide following services relating to Profession Tax:-
  • Professional Tax Registration Certificate (PTRC) & Professional Tax Enrollment Certificate (PTEC)
  • Registration
  • PTRC Returns
  • Profession Tax Payment
  • Assessment Assistance
  • Consultancy in above matters

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