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Ahead of GST rollout, corporate lawyers in demand

Lawyers have a double advantage this season. While on one hand, the top tax firms are expanding their staff strength, companies are also adding people to their legal teams before the GST deadline rolls out on July 1.

Jun 28, 2017 05:56 PM IST | Source: Moneycontrol.com

The Goods and Services Tax (GST) regime as well as the new Insolvency and Bankruptcy Code has made life difficult for companies as well as defaulters. However, there is a section of professionals who are making hay while the sun shines; and these are corporate lawyers.

Lawyers have a double advantage this season. While on one hand, the top tax firms are expanding their staff strength, companies are also adding people to their legal teams before the GST deadline rolls out on July 1.

Legal experts working in the space of taxation will be the most in demand for GST. While four slabs, 5, 12, 18 and 28 have been proposed for various categories of products, companies are confident that there will be issues related to interpretations.

“Companies will want to pay minimum tax while the government will want to collect maximum tax. There will be court cases filed in the course of the next few months and in this period lawyers will be the most in demand," said the indirect tax head at a large accounting firm.

For instance, a large FMCG major is already engaged in litigation with the tax authorities on whether the chocolate they manufacture falls under the category of chocolate, wafer or chocolate coated wafer. With a different tax rate for these products, the legal disputes are only expected to see a rise.

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While the government and the GST Council have tried to protect the interests of the local and small manufacturers by providing a lower rate of tax for local sweets and toffees, international companies are also trying to push their products into the lower tax bracket.

A senior official of a large Mumbai-based tax firm said that in July itself, a series of cases may be filed in court over categorisation issues of products. With this, not only team sizes are getting bigger, lawyers even with lesser years of experience are being hired to manage the work flow.

Sunil Goel, managing director of human resource firm GlobalHunt said that the demand for lawyers had seen a surge a few years ago when the Companies Act was amended. “A similar surge is being seen with GST and the Insolvency and Bankruptcy Code being revised. Companies have realised that compliance will get stronger. Hence, apart from external firms which are expanding their teams to engage with corporates, India Inc is also hiring additional members in their legal and tax accounting teams,” he added.

Under the new Insolvency and Bankruptcy Code, the Reserve Bank of India has asked banks to take their top 12 defaulters to bankruptcy courts where the decisions on resolution will be finalised by the insolvency professionals.