| The petitioner, an advocate enrolled with the Bar Council of Delhi since 1995, qualified in the limited insolvency examination and was registered as an insolvency professional. and raised invoices on the CD. The IBBI by the impugned order dated 09.03.2021 held that insolvency and receivership services are not covered by the reverse charge mechanism is applicable to an advocate and directed the petitioner to furnish GST compliant invoices. The HC held that the Advocates Act, 1961 and the Code must be read harmoniously so as not to curtail the growth of advocates into other recognised areas of service, that an advocate may render service as an insolvency professional since that is statutorily permitted, but that to the extent such services are rendered the person is governed by the Code and the IBBI regulations and not by the regime otherwise applicable to advocates. It held that there can be no distinction in the treatment of insolvency professionals as a class, and that even where the insolvency professional happens to be an advocate the applicable tax regime is that which applies to insolvency professionals. Examining Notification No. 13/2017-Central Tax (Rate) read with the corrigendum dated 25.09.2017, which applies the reverse charge mechanism to services provided by an individual advocate or firm of advocates by way of legal services, the HC held that while services rendered by insolvency professionals fall within the broad category of legal and accounting services, the specific service rendered is insolvency and receivership service, which is not covered by that notification. The reverse charge mechanism applicable to advocates therefore does not apply, and an advocate acting as an insolvency professional is governed by the forward charge mechanism. |
