ALB reports…. that in the latest budget Indian Finance Minister Pranab Mukherjee has decided to tax all law firms and consultancies a 10.3% tax on services….
Is this payback by the government because the various Indian bar associations and legal organisations have point blank refused to let foreign law firms into the country. Maybe the government have decided to raise the revenue that they thought they might get from foreign law firms via local firms instead? Here’s how ALB introduce the story.
Indian clients to feel pinch of new tax on law firms, LPOs
By Rashida Yosufzai | Thursday, 9 July 2009
Amid growing opposition and unrest in India’s legal community, Indian law firms’ fee income will be taxed as part of the government’s annual budget changes.
Finance Minister Pranab Mukherjee defended the decision to charge all law firms and consultancies a 10.3% tax on services in his budget speech. "Although there is a school of thought that legal consultants do not provide any ‘service’ to their clients, I hold my distinguished predecessor in high esteem and disagree," he said. "As such, I propose to extend service tax on advice, consultancy or technical assistance provided in the field of law."
India’s legal community has argued that the law is not a business like other trades and therefore should not be taxed. Legal bodies have organised a lawyers strike on 9 July in protest. "The lawyers of India will not tolerate any attempt by the government to impose service tax on the legal fraternity and shall adopt all peaceful means to oppose such uncalled for and unwarranted taxes on lawyers," said a statement issued by the Co-Ordination Committee of All Bar Associations of Delhi, the organiser of the strike.
