The Gujarat High Court has issued notices to the central and state governments and the GST Council on a petition challenging the “absence of
provisions” under the GST Act which “blocks” advocates from availing the input tax credit.
A bench of Justices Akil Kureshi and B N Karia issued notices on Tuesday and sought the response of both the governments on June 21.
Petitioner Nipun Singhvi, a lawyer, said the absence of provisions for availing the input tax credit by advocates was resulting in a cascading effect as the GST on taxable legal services is being passed on to the litigants by way of the professional fees, on which again GST is being charged.
Through his counsel Vishal Dave, the petitioner said the provisions under sections 17 (2) and 17 (3) of the GST Act, 2017 are unconstitutional, as they block availing of the input tax credit on GST on legal services offered by advocates.
The absence of the provisions for availment of input tax credit by advocates is leading to a cascading effect and is “in essence leading to a break in the credit chain which is in direct conflict with the very underlying fundamentals of the GST law,” the petition stated.
The petitioner prayed for directions to the respondents to introduce a mechanism for availing the input tax credit on expenses incurred with respect to the GST availed by the advocates.