Service Tax on Lawyers
Threefold increase in Plan provision for Department of Justice. The cause of speedier justice has got a major boost with a threefold increase in the Plan provision for the Department of Justice – from Rs. 280 crore to Rs. 1,000 crore in the budget for the coming financial year.
The bulk of the enhancement would be for the Central scheme for improving judicial infrastructure. The allocation for the scheme goes up from Rs. 95 crore to Rs. 453 crore.
The other areas covered under the enhanced provision include the scheme for computerisation of district and subordinate courts [from Rs. 108 crore to Rs. 267 crore], and the one for providing assistance to State governments for establishing and operating ‘Gram Nyayalayas’ [from Rs. 39 crore to Rs. 145 crore].
An expansion in the scope of legal services for imposition of tax — those provided by business entities to individuals as well as representational and arbitration services by individuals to business entities.
There would, however, be no tax on services provided by individuals to other individuals.
For the first time lawyers have been brought in under the ambit of service tax after consultants were brought in last year and that the enhancement in the provision for improving judicial infrastructure could result in more courts in every district.