Thaindian News

New Delhi, April 29 (IANS) The Delhi High Court Friday stayed the central government’s notification seeking to bring individual lawyers, who extend services to companies and firms, under the service tax net from May 1.

The division bench of Chief Justice Dipak Misra and Justice Sanjiv Khanna imposed the stay while hearing a petition of the Delhi High Court Bar Association challenging the notification.

The bench said: “The notification is stayed. However, now the matter will be heard May 23.”

The court asked the central government to file its response within two weeks.

The government April 25 notified the Legal Practitioners Bill, 2010, for imposing 10 percent tax on the fee charged by individual lawyers for rendering their services to firms and companies. The bill was to be implemented from May 1.

Legal firms, as opposed to individual lawyers, are already under the service tax net since last year.

Various bar associations had gone on strike March 24 to protest the service tax proposed in the union budget for 2011-12 presented by Finance Minister Pranab Mukherjee. He had sought to exempt individual lawyers rendering their services to individual clients.

Lawyers of the Delhi High Court and all the six Delhi district courts also went on a day-long strike to protest the Finance Bill proposal of 10 percent tax on individual lawyers.

Delhi Bar Association president Rajiv Khosla said lawyers were opposed to imposition of service tax on services rendered by them to firms and companies, besides the services given by legal firms to individuals.

“Instead of imposing 10 percent service tax on lawyers, the centre should make efforts to stop corruption,” said Khosla.