The Delhi High Court has ruled that advocates acting as insolvency professionals are liable to collect Goods and Services Tax (GST) from recipients of their services and deposit it with the government under the forward charge mechanism [Kanwal Chaudhary v. Insolvency and Bankruptcy Board of
India]. A Division Bench of Justices Prathiba M Singh and Shail Jain held that advocates providing insolvency and receivership services must obtain GST registration and comply with the requirements ap-plicable to insolvency professionals as a class. “An Advocate acting as an Insolvency Professional would,
therefore, be governed by the ‘forward charge mechanism’, which is applicable to Insolvency Profession-
als, as a class, and not by the ‘reverse charge mechanism’, which is otherwise applicable to Advocates
rendering legal services,” the Court said.
Radhika Goyal is Author of Taxconcept Gurugram head office, for deeply reported tax, gst and income tax articles on issues that matter. He splits her time between New Delhi and Bengaluru, and has worked as a reporter, a podcaster and an editor for publications across India.