Service tax on senior lawyers, law firms from tomorrow

Senior advocates providing services to fellow lawyers and legal partnership firms will pay 14 per cent Service Tax from tomorrow.
Finance Minister Arun Jaitley, himself a noted senior lawyer, had proposed to levy 14 per cent service tax on certain type legal services as part of broadening of tax base.
"Exemption on services provided by - (i) a senior advocate to an advocate or partnership firm of advocates providing legal service; and
"(ii) a person represented on an arbitral tribunal to an arbitral tribunal, being withdrawn and service tax being levied under forward charge, with effect from 01.04.2016," he had announced in his Budget for 2016-17.

Centre's move in the Union budget to levy 14 per cent service tax on legal services had drawn mixed reactions from law firms and senior advocates with one section saying it would help generate funds for the government while the other maintained it would raise litigation cost.
Service tax exemption to the services of transport of passengers, by ropeway, cable car or aerial tramway being will also be withdrawn from tomorrow. Such services will attact service tax at the rate of 14 per cent.