KANWAL CHAUDHARY Vs INSOLVENCY AND BANKRUPTCY BOARD OF INDIA & ORS.

W.P.(C) 9410/2021 Page 1 of 48

$~

* IN THE HIGH COURT OF DELHI AT NEW DELHI

Reserved on: 9th July, 2026.

Pronounced on: 13th August, 2026.

Uploaded on: 13th August, 2026.

+ W.P.(C) 9410/2021

KANWAL CHAUDHARY .....Petitioner

Through: Mr. Rajat Navet, Mr. Kushagra Pandit

and Mr. Rajat Rana, Advs.

Versus

INSOLVENCY AND BANKRUPTCY

BOARD OF INDIA & ORS. .....Respondents

Through: Mr. Ashish Verma, Mr. Nikhil Thakur

& Ms. Kriti, Advs. for R-1. (M:

9958022990)

Mr. Pulkit Deora, Mr. Sagar Pathak

and Mr. Vinamra Kothari, Advs. for

R2. (M: 7067223151)

Mr. Ajay Kumar Agarwal, Adv. for

R3. (M: 9810292253)

Mr. Ruchesh Sinha, SSC, CGST with

Ms. Upasna Vashistha (Adv.)

Mr. Preetpal Singh, Ms. Simran

Kumari and Ms. Pooja, Adv. for BCI.

(M: 8585985322)

Mr. K.V. Jain, RP.

CORAM:

JUSTICE PRATHIBA M. SINGH

JUSTICE SHAIL JAIN

JUDGEMENT

Prathiba M. Singh, J.

1. This hearing has been done through hybrid mode.

2. The present petition has been filed by the Petitioner-Mr. Kanwal

Chaudhary, under Article 226 of the Constitution of India, inter alia, assailing

the order dated 9th March, 2021, passed by the Insolvency and Bankruptcy

W.P.(C) 9410/2021 Page 2 of 48

Board of India (hereinafter, ‘IBBI’).

3. Vide the impugned order, the IBBI has held that ‘Insolvency and

receivership services’ are not covered under the reverse charge mechanism and

thereby, the Petitioner was directed to submit Goods and Services Tax

(hereinafter, ‘GST’) compliant invoices towards the professional fees charged

by him in the capacity of an interim resolution professional.

I. Factual Background

4. The background of the present case is that, Mr. Kanwal Chaudhary, is an

Advocate registered with the Bar Council of Delhi and has been practising law

since 1995.

5. Upon the enactment of the Insolvency and Bankruptcy Code, 2016

(hereinafter, ‘the IBC’), the Petitioner decided to take the ‘Limited Insolvency

Examination’ in order to be recognised and registered as an Insolvency

Professional. The Petitioner qualified in the said examination, and is stated to

have been registered as an Insolvency Professional since 27th July, 2017.

6. On 13th December, 2018, the NCLT, Delhi Bench, while admitting an

application under Section 9 of the IBC, filed by Workspace Consulting Pvt. Ltd.

in CP(IB) No. 408/2018, appointed the Petitioner as an Interim Resolution

Professional for the Corporate Debtor i.e., Ireo Fiveriver Pvt. Ltd.

7. The Petitioner in his role as the Interim Resolution Professional is stated

to have raised certain invoices dated 13th August, 2019 and 31st October, 2019

upon the corporate debtor.

8. On 17th September, 2019, Respondent No.2-Mr. K.V. Jain was appointed

as the Resolution Professional for the Corporate Debtor and took over the

assignment from the Petitioner.

W.P.(C) 9410/2021 Page 3 of 48

9. Since the payments had not been made to the Petitioner, by the

Corporate Debtor, the Petitioner preferred two applications being CA

430/ND/2019 and CA 1268/ND/2020 before the NCLT, seeking appropriate

directions for release of payments.

10. Both the aforesaid applications came to be taken up for hearing before

the NCLT on 1st September, 2020 and Mr. K.V Jain, the Resolution

Professional, was directed to examine Petitioner’s invoices and calculate the

contribution to be made by the Committee of Creditors.

11. Thereafter, vide email dated 6th September, 2020, Mr. K.V. Jain, called

upon the Petitioner to issue GST compliant invoices, in place of the invoices

dated 13th August, 2019 and 31st October, 2019. The Petitioner, by email reply

dated 9th September, 2020, responded that he was neither registered with the

GST Department nor required to be so registered, being exempted in terms of

Section 9(3) and (4) of the Central Goods and Services Tax Act, 2017

(hereinafter, ‘CGST Act’) read with the Notification No. 12/2017 Central Tax

(Rate) dated 28th June, 2017 and Notification No. 13/2017-Central Tax (Rate),

dated 28th June, 2017 issued by Government of India, Ministry of Finance

(Department of revenue).

12. Mr. K.V. Jain, by a further email dated 17th September, 2020, once again

sought GST compliant invoices from the Petitioner. In response, the Petitioner,

vide email dated 18th September, 2020, reiterated his stand.

13. Thereafter, on 23rd September, 2020, Mr. K.V Jain filed an additional

affidavit before the NCLT, stating that an amount of Rs. 49,04,988/- was

payable to the Petitioner, while once again raising the issue of GST compliant

invoices. In response, the Petitioner filed his Response Affidavit dated 5th

October, 2020, stating that GST, if payable, was to be paid by the Corporate

W.P.(C) 9410/2021 Page 4 of 48

Debtor on a ‘reverse charge’ basis.

14. The NCLT, vide order dated 7th October, 2020, while directing the

balance payment of Rs. 49,04,988/- to be paid to the Petitioner, sought a

clarification pertaining to the payment of GST to the IBBI. The relevant portion

of the order dated 7th October, 2020 is set out below:

“IA No. 430/ND/2019 along with IA No.

1268/ND/2020 These two applications filed by erstwhile

IRP seeking directions with respect to payment of the

expenses incurred and the fees of erstwhile IRP. Mr.

Chaudhary, Learned Counsel appearing for the

erstwhile IRP states that there are two memos submitted

to Resolution Professional against which the payment

was not made. Mr. Deora, Learned Counsel for the

Resolution Professional states that they have filed reply

and out of total amount of Rs. 77 ,07 ,907 /-, after

verification, total of Rs. 28,02,919/- has already been

paid thus leaving a balance of Rs. 49,04,988/-.

Resolution Professional is directed to disburse the

balance amount to the erstwhile IRP of Rs. 49,04,988/-

within three days.

At this stage, it is· mentioned that a clarification is

required with respect to payment of GST by parties.

The same can be referred to IBBI for clarification.

With this direction, applications are disposed of.”

15. As is evident from the above order passed by the NCLT, a clarification

was sought from the IBBI, as to who is liable to deposit the GST. Pursuant

thereto, the IBBI issued its clarification dated 9th March, 2021 (hereinafter,

‘the impugned order’.

16. The IBBI observed that ‘Insolvency and Receivership’ services are not

covered under the ‘reverse charge mechanism’, and that the Petitioner, who was

the interim resolution professional, was, therefore, required to submit GST

W.P.(C) 9410/2021 Page 5 of 48

compliant invoices in respect of the professional fee charged by him. The

decision of the IBBI dated 9th March, 2021 is extracted below:

“This is with reference to your letter dated October 12,

2020 and Hon'ble NCLT, New Delhi order dated

October 07, 2020 in the matter of Worxpace Consulting

Pvt. Ltd. V/s Ireo Fiveriver Pvt. Ltd. on the issue of

applicability of GST on professional fee charged by

interim resolution professional (IRP) in the aforesaid

matter.

2. In this connection, it is hereby informed that

the matter has been examined vis-a-vis the provisions

of extant GST law. It is also understood that the

‘lnsolvency and Receivership’ services are not covered

under ‘Reverse Charge Mechanism,’ as/claimed by

Mr. Kanwal Chaudhary, having acted as IRP in the

matter

3. Mr. Kanwal Chaudhary, IRP is therefore

required to submit to the Resolution Professional, the

GST compliant invoices towards the professional fee

being charged by him in the capacity of IRP in the

aforesaid matter.”

17. Aggrieved by the decision of the IBBI, the Petitioner has preferred the

present petition seeking the following reliefs:

“a) Issue an appropriate Writ/order/direction quashing

Respondent’s Communication/order dated 09.03.2021,

whereby it has held that Insolvency and Receivership

services provided by an Advocate under the Insolvency

and Bankruptcy Code, 2016 is not covered under the

Reverse Charge Mechanism in terms of Section 9 of the

GST Act, 2017;

b) Issue an appropriate Writ/order/direction directing

that services provided by an Advocate under the

Insolvency and Bankruptcy Code, 2016 are covered

under the Reverse Charge Mechanism in terms of

Section 9 of the GST Act, 2017 and notifications issued

W.P.(C) 9410/2021 Page 6 of 48

under the said Act from time to time;

c) Pass such other order(s) and further order(s) as this

Hon'ble Court may deem just and proper in the facts and

circumstances of the case.”

II. Proceedings before the Court

18. Notice in the present petition was issued on 9th September, 2021,

whereby the impugned order dated 9th March, 2021 was stayed.

19. The said interim order was made absolute during the pendency of the

present petition, vide order dated 17th August, 2022.

20. On 29th January, 2025, this Court noted that pleadings in the matter

stood completed and directed that the matter be listed for hearing.

21. Pursuant thereto, the matter was listed from time to time. On 24th July,

2025, this Court directed the Bar Council of India to place its stand before the

Court.

22. Thereafter, the submissions on behalf of the Petitioner were concluded

on 10th September, 2025. The matter was taken up for final hearing on 9th

July, 2026.

23. On the said date, arguments on behalf of the Respondents were

concluded and the judgment was reserved.

III. Submissions on behalf of the parties

a) Submissions on behalf of the Petitioner

24. Mr. Rajat Navet, ld. Counsel for the Petitioner has made the following

submissions:

(i) At the outset, it is stated that the impugned order is passed without any

jurisdiction, as the IBBI is not the competent authority to determine the

applicability of ‘forward charge mechanism’ to Advocates acting as Insolvency

Professionals.

W.P.(C) 9410/2021 Page 7 of 48

(ii) That one of the categories of persons who are qualified to give the

‘Limited Insolvency Examination’ in terms of Chapter-III, Regulation 5 of the

Insolvency and Bankruptcy Board of India (Insolvency Professionals)

Regulations, 2016 (hereinafter, ‘the IBBI regulations) are Advocates enrolled

with the Bar Council.

(iii) Advocates who are enrolled with the Bar Council, under the prevailing

system, are governed by the ‘reverse charge mechanism’ for payment of GST.

Though other Insolvency Professionals may be liable to pay GST under the

‘forward charge mechanism’, the position is different, where an Insolvency

Professional is also an Advocate. In such a case, the GST registration need

not be obtained by the said Advocate. Such an Advocate, would continue to

be governed by the ‘reverse charge mechanism’, even for the services

rendered as an Insolvency Professional.

(iv) Insofar as the manner in which Advocates are governed under the GST

regime is concerned, reliance is placed upon the following:

a) Notification No. 12/2017 Central Tax (Rate) dated 28th June, 2017

issued by the Government of India, Ministry of Finance (Department of

revenue) (hereinafter, Notification No. 12/2017 Central Tax (Rate),

where advocate and legal service are defined.

b) Notification No. 13/2017-Central Tax (Rate), dated 28th June, 2017,

issued by the Government of India, Ministry of Finance (Department of

Revenue),(hereinafter, ‘Notification No. 13/2017-Central Tax (Rate)

whereby it has been clarified that, in respect of certain services, the GST

shall be payable on reverse charge basis. It is stated that the said

notification includes services by an Advocate.

c) The order dated 12th July, 2017 passed by the Coordinate Bench of this

W.P.(C) 9410/2021 Page 8 of 48

Court in W.P. (C) 5709/2017 titled ‘J.K. Mittal & Company v. Union of

India & Ors.’, wherein the Court observed that there is lack of clarity as

to whether all legal services provided by legal practitioners and law firms

would be governed by the ‘Reverse Charge mechanism’. Thus, the Court

directed that no-coercive action be taken against any lawyer or law firm

for non-compliance under the GST regime.

d) The order dated 18th July, 2017 passed by the Coordinate Bench of this

Court in W.P. (C) 5709/2017.Vide the said order, the Court observed that

until further order, the Advocates, law firms, LLPs of Advocates would

be governed by ‘reverse charge mechanism’, unless such individual/firm

wants to take advantage of the Input Tax Credit and seeks to continue

with the voluntary registration under Section 25 (3) of the CGST Act.

(v) Since the notifications, as well as the orders dated 12th July, 2017 and

18th July, 2017 passed in W.P.(C) No. 5709/2017, make it abundantly clear

that Advocates are covered only under the ‘reverse charge mechanism’, the

impugned order would, therefore, be contrary thereto.

(vi) That though other classes of professionals may also be providing

Insolvency Professional Services, so far as Advocates registered with the Bar

Council are concerned, they cannot be treated differently from other Advocates,

if they provide insolvency professional services – failing which it would be

discriminatory.

(vii) Further, it is also stated that Chartered Accountants and other

professionals are generally governed by the ‘Forward Charge Mechanism’

for GST, whereas Advocates are governed by the ‘Reverse Charge

Mechanism’. In terms thereof, there cannot be said to be any

discrimination between these two separate classes of professionals.

W.P.(C) 9410/2021 Page 9 of 48

(viii) That the term ‘legal service’ includes services of any kind, in

any branch of law, and would also cover services rendered as an Insolvency

Professional. To emphasise this position, reliance is placed upon the syllabus

of the Limited Insolvency Examination, which is the qualifying examination

for Insolvency Professionals, to contend that the majority of the subjects on

which the examination is conducted, relate to statutes, laws, and other

regulations, etc.

(ix) Thus, it is contended that when Advocates registered with any Bar

Council, render services as Insolvency Professionals, they continue to render

legal services. Hence, they cannot be asked to obtain GST registration for

payment of GST on a ‘Forward Charge Mechanism’ basis.

(x) Furthermore, it is also stated that IBBI’s reliance on the separate

classification of ‘Insolvency and Receivership Services’ under the heading

998241 of the ‘Explanatory Notes to the Scheme of Classification of Services’

issued by the GST Council (hereinafter, ‘Scheme of Classification of

Services’) is misplaced, as the said entry covers advice, operational assistance,

and acting as receiver/trustee in bankruptcy. However, it does not encompass

the specific functions performed by an insolvency professional.

(xi) In terms of the Bar Council of India Rules, Advocates can only render

legal services, and cannot engage in any business or any other kind of activity,

as is provided in the restrictions contained in Section VII, Part VI, Chapter II

of the Bar Council of India Rules.

(xii) Finally, it is contended that continued enrolment as an Advocate

constitutes an eligibility requirement for appearing in the qualifying

examination for registration as an insolvency professional. It is stated that,

under the Advocates Act, 1961, and the Bar Council of India Rules, an

W.P.(C) 9410/2021 Page 10 of 48

Advocate can only render legal services, and that if insolvency services are

not to be considered as legal services, the enrolment of the Advocate would

have to be suspended. It is, therefore, submitted that any interpretation which

leads to the suspension of an Advocate’s enrolment ought not to be accepted.

b) Submissions on behalf of the Department

25. Mr. Sinha, ld. Counsel for the GST Department has made the following

submissions:

(i) At the outset, reliance is placed upon the affidavit dated 6th September,

2025, on behalf of the Bar Council of India (hereinafter, ‘BCI’) to

contend that whenever an Advocate is appointed as an Insolvency

Professional, the nature of services is different from conventional legal

services.

(ii) In the said affidavit, the BCI has categorically taken a position that the

Advocate as an Insolvency Professional would be liable to pay GST

under the ‘forward charge mechanism’ and cannot claim benefit under

the ‘reverse charge mechanism’, which is applicable to traditional legal

services.

(iii) It is also stated that the IBBI regulations clearly prescribes the manner

in which an Insolvency Professional is required to be registered. In this

regard, reliance is placed upon Regulations 7, 7(2)(h), and 10 of the IBBI

regulations.

(iv) That when an Advocate acts in the capacity of an Insolvency

Professional, they are governed by the provisions of Insolvency and

Bankruptcy Code, 2016 (hereinafter, ‘IBC’) and the rules and

regulations framed thereunder, and not by the Bar Council of India

W.P.(C) 9410/2021 Page 11 of 48

Rules. A distinction is, therefore, required to be drawn based on the

nature of services.

(v) It is emphasized that, under the GST regime, the taxability is determined

by the nature of the services rendered and not by the identity or

professional status of the person rendering such service.

(vi) That when an Advocate is appointed as an Insolvency Professional, the

individual performs functions such as managing the affairs of the

Corporate Debtor, inviting claims of creditors, convening and

conducting meetings of committee of creditors, submitting resolution

plans, etc., Such functions, being administrative in nature, do not amount

to ‘practising law’.

(vii) It is contended that the Scheme of classification of services under the

GST regime is specific and exhaustive, and that where a particular

service is covered by a specific entry, recourse cannot be made to a

general entry.

(viii) In this regard, a distinction is drawn between entry- 99821 i.e., ‘legal

services’ and entry-998241 i.e., ‘insolvency and receivership services’

of the Scheme of classification of services. It is stated that services

rendered by an Insolvency Professional squarely fall within the specific

entry which is ‘insolvency and receivership services’, and not within the

general entry pertaining to ‘legal services’.

(ix) Reliance is placed upon the judgments of Supreme Court in

Commissioner of Commercial Tax v. A. R. Thermosets (P.) Ltd., (2016)

16 SCC 122, and Moorco (India) Ltd. v. Collector of Customs, Madras,

(1994) Supp (3) SCC 562, in support of the aforesaid submissions.

W.P.(C) 9410/2021 Page 12 of 48

(x) Thus, Mr. Sinha, ld. Counsel submits that advocates who are Insolvency

Professionals have to be governed by the ‘forward charge mechanism’

and not by the ‘reverse charge mechanism’.

c) Submissions on behalf of the IBBI

26. On behalf of the Insolvency and Bankruptcy Board of India

(hereinafter, ‘IBBI’), Mr. Ashish Verma, ld. Counsel has made the following

submissions:

(i) A chart has been placed on behalf of the IBBI, which indicates that the

total number of Advocates registered as Insolvency Professionals is

approximately 273, whereas the total number of registered Insolvency

Professionals is 4,558. The said chart is taken on record. The relevant

statistical data, as reflected in the said chart, is set out below:

“Table 21: Distribution of Ips as per their Eligibility as on June 30,

2025

Eligibility No. of Ips (Individual)

Male Female Total

Member of

ICAI

2215 224 2439

Member of ICSI 602 139 741

Member of

ICMAI

186 19 205

Member of Bar

Council

238 35 283

Managerial

Experience

724 37 761

PGIP Qualified 40 6 46

Total 4005 460 4558

W.P.(C) 9410/2021 Page 13 of 48

(ii) It is emphasised that any person seeking recognition and registration as

an Insolvency Professional is required to qualify the Limited Insolvency

Examination conducted by the IBBI. It is only upon successfully

clearing the said qualifying examination, that a person can be

recognised and permitted to render services as an Insolvency

Professional, and that persons who do not qualify the examination are

ineligible to render such services.

(iii) In this regard, it is contended that services provided by an interim

resolution professional are not specific to Advocates. Even other

professionals can provide such services. Advocates may provide

services as an interim resolution professional. However, all Advocates

may not provide services as an Insolvency Professional, unless they are

eligible and qualified.

(iv) Further, it is stated that Insolvency Professionals are regulated under

the IBC. It is also stated that Sections 17 and 18 of the IBC clearly

delineate the duties and responsibilities of an interim resolution

professional, which are predominantly managerial in nature. In this

regard, reliance is placed upon the decision in Swiss Ribbons Pvt. Ltd.

v. Union of India (2019) 4 SCC 17 to argue that services of a resolution

professional are managerial/administrative and quasi-judicial in nature.

(v) Additionally, Sections 20, 22, 23 of the IBC prescribe the manner in

which the affairs of the corporate debtor are to be managed by the

Insolvency Professional.

(vi) Section 25 of IBC, in particular, enumerates the duties of the

Insolvency Professionals. It is also stated that the Code of conduct of

the Insolvency Professionals and the disciplinary proceedings against

W.P.(C) 9410/2021 Page 14 of 48

them are also separately governed by the provisions of the IBC and the

IBBI regulations.

(vii) Accordingly, IBC and the IBBI regulations lay down a comprehensive

statutory framework governing the functioning of the Insolvency

Professionals.

(viii) Thus, Insolvency Professionals are governed by the statutory

framework under the IBC and the regulations framed thereunder, and

not by the Bar Council of India Rules or the provisions of the Advocates

Act, 1961, insofar as the discharge of their functions as Insolvency

Professionals is concerned.

(ix) Finally, it is submitted that the role of an Advocate is extremely

important. It is contended that where an Advocate renders legal

services, such services are governed by the ‘reverse charge

mechanism’, under the GST regime. However, where the same

Advocate renders services of a different nature, for instance, by renting

out immovable property, the applicable GST liability would be

governed by the ‘forward charge mechanism’.

d) Submissions on behalf of Respondent No.2-Mr. K.V. Jain

27. Mr. Pulkit, ld. Counsel for Respondent No. 2- Mr. K.V. Jain has

advanced the following submissions:

(i) That holding a sanad or being enrolled as an Advocate is not a pre-

requisite for qualifying as an Insolvency Professional. According to ld.

Counsel, the IBC, which defines and regulates the Insolvency

Professionals, is a complete code in itself, comprehensively governing

W.P.(C) 9410/2021 Page 15 of 48

the qualifications, registration, functions and conduct of the Insolvency

Professionals.

(ii) It is contended that Regulation 5(c)(iv) of the IBBI regulations makes

it clear that continued enrolment as an Advocate is not mandatory, so

long as the requirement of ten years’ cumulative practice, as an

Advocate, has been fulfilled. It is further contended that, at the stage,

when a person seeks to appear for the qualifying examination or obtain

registration as an Insolvency Professional, he or she is not required to

be a practising Advocate.

(iii) Furthermore, it is stated that the certificate of registration/licence

granted by the IBBI to the Insolvency Professional is distinct from, and

independent of, the enrolment granted by the Bar Council to the

Advocates, and that the two operate in separate fields.

(iv) Finally, it is highlighted that the preface to the Scheme of classification

of services itself makes it clear that when there is a specific description,

the same would be preferred over a general description. Therefore, the

Insolvency Professionals ought to be governed under the specific entry-

998241, and not under the general entry 99821, in the scheme of

classification.

e) Submissions of behalf of BCI

28. Mr. Preetpal Singh, ld. Counsel appearing for the BCI, places reliance

upon the affidavit dated 6th September, 2025, filed on behalf of the BCI to

contend that the services rendered by the Insolvency Professionals are not

governed by the ‘reverse charge mechanism’, under the GST regime. It is

W.P.(C) 9410/2021 Page 16 of 48

submitted by ld. Counsel that such services are governed by the ‘forward

charge mechanism’.

29. It is stated on behalf of the BCI that when an Advocate is appointed as

an Insolvency Professional, under IBC, the nature of services rendered are

different from conventional legal services.

30. Thus, it is stated that Advocates acting as Insolvency Professionals are

liable to pay GST under the ‘forward charge mechanism’ and are not covered

under the ‘reverse charge mechanism’, which is applicable to traditional legal

services.

IV. Analysis and findings

31. The issue that arises for determination in the present petition is whether

Advocates, who act as Insolvency Professionals, would be governed by the

‘forward charge mechanism’ or the ‘reverse charge mechanism’, for the

purposes of payment of GST.

32. In order to answer the aforesaid question, the following three aspects

require consideration:

(i) The GST payment mechanism applicable to Advocates.

(ii) The GST payment mechanism applicable to Insolvency

Professionals.

(iii) The GST payment mechanism applicable to Advocates who act

as Insolvency Professionals.

A. The GST payment mechanism applicable to Advocates

33. The CGST Act came into effect from 1st July, 2017. The said Act

brought into effect a whole new tax regime in India, in respect of supply of

goods and services.

W.P.(C) 9410/2021 Page 17 of 48

34. Under Section 12 and 13 of the CGST Act, the liability to pay the tax

arises at the time of ‘supply’ of goods or services.

35. Section 9(1) of the CGST Act, is the charging provision. It levies tax

on all supplies of goods or services or both, to be collected in the manner

prescribed and paid by the taxable person. Section 2(107) of the CGST Act

defines a ‘taxable person’, as a person registered or liable to be registered

under Section 22 and Section 24 of the CGST Act.

36. Under Section 22 of the CGST Act, the registration of the ‘supplier’ is

compulsory.

37. The tax is paid at the time when the supply is made by the person who

has undertaken the outward supply – the supplier. The incidence of tax is thus

at the stage when the supply is made. This is the mechanism under the

‘forward charge mechanism’, and is the default rule. Thus, the supplier has to

include the GST component, at the time of raising the invoice, in the invoice

itself. The liability to pay the GST is thus of the supplier.

38. However, Section 9(3) of the CGST Act, empowers the Government

acting on the recommendations of the GST Council, to notify specific

categories of supply of goods or services, in respect of which the tax shall be

paid by the recipient, i.e., where the recipient is the person liable to pay tax

under the CGST Act. Is respect of such categories, the tax is paid or liable to

be paid on reverse charge basis, and the responsibility of paying the tax shifts

from the supplier, to the recipient of such goods and services.

39. In order to determine the GST payment mechanism applicable to

Advocates, it would be necessary to examine the relevant statutory

notifications and judicial decisions interpreting the same.

W.P.(C) 9410/2021 Page 18 of 48

40. Insofar as Advocates are concerned, two notifications are relevant to

determine the manner in which GST is paid, namely:

(i) Notification No. 12/2017 Central Tax (Rate) dated 28th June, 2017

issued by the Government of India, Ministry of Finance (Department of

revenue);

(ii) Notification No. 13/2017-Central Tax (Rate), dated 28th June, 2017,

issued by the Government of India, Ministry of Finance (Department of

Revenue)

41. In terms of Notification No. 12/2017 Central Tax (Rate), an Advocate

is defined as under:

“(b) “advocate” has the same meaning as assigned to it

in clause (a) of sub-section (1) of section 2 of the

Advocates Act, 1961 (25 of 1961);”

42. The said notification also defines ‘legal services’ in the following

terms:

“(zm) “legal service” means any service provided in

relation to advice, consultancy or assistance in any

branch of law, in any manner and includes

representational services before any court, tribunal or

authority;”

43. The Notification No. 13/2017-Central Tax (Rate) provides that for

certain services, the central tax leviable under Section 9 of the CGST Act,

shall be paid on ‘reverse charge’ basis, by the recipient of such services. Such

services includes the following:

W.P.(C) 9410/2021 Page 19 of 48

XXX

…. “GSR .. : ... (E).- In exercise of the powers conferred

by sub-section (3) of section 9 of the Central Goods and

Services Tax Act 2017 ( 12 of 20 17), the Central·

Government on the recommendations of the Council

hereby notifies that on categories of supply of services

mentioned in column (2) or the Table below supplied by

a person as specified in column (3) of the said Table, the

whole of central tax leviable under section 9 of the said

Central Goods and Services Tax Act, shall be paid on

reverse charge basis by the recipient of the such

services as specified in column (4) of the said Table:-

Sl.

No.

Category of Supply of

Services

Supplier of

service

Recipient of

Service

2. Services supplied by an

individual advocate including

a senior advocate by way of

representational services

before any court, tribunal or

authority, directly or

indirectly, to any business

entity located in the taxable

territory, including where

contract for provision of such

service has been entered

through another advocate or a

firm of advocates, or by a firm

of advocates, by way of legal

services, to a business entity.

An individual

advocate

including a

senior advocate

or firm of

advocates.

Any business

entity located in

the taxable

territory.

44. A conjoint reading of the aforesaid Notifications reveals that, insofar

as Advocates are concerned, the central tax leviable under Section 9 of the

CGST Act is payable on ‘reverse charge basis’.

W.P.(C) 9410/2021 Page 20 of 48

45. The aforesaid Notifications also came to be considered by a Coordinate

Bench of this Court in W.P. (C) 5709/2017, wherein a challenge was raised

to various notifications issued under the GST regime, including Notification

No. 13/2017-Central Tax (Rate).

46. The principal contention of the Petitioners therein was that legal

services, as a whole, were liable to GST only under the ‘reverse charge

mechanism’, in terms of the recommendations of the GST Council. It was,

accordingly, contended that Notification No. 13/2017-Central Tax (Rate),

insofar as it restricted the categories of legal services covered under the

‘reverse charge mechanism’, was arbitrary and violative of the rights of

Advocates. While considering the said challenge, the Division Bench vide

order dated 12th July, 2017 observed as under:

“[…]14. In view of the above submissions it is plain that

as of date there is no clarity on whether all legal

services (not restricted to representational services)

provided by legal practitioners and firms would be

governed by the reverse charge mechanism. If in fact all

legal services are to be governed by the reverse charge

mechanism than there would be no purpose in requiring

legal practitioners and law firms to compulsorily get

registered under the CGST, IGST and/or DGST Acts.

Those seeking voluntary registration would anyway

avail of the facility under Section 25 (3) of the CGST Act

(and the corresponding provision of the other two

statutes). There is therefore prima facie merit in the

contention of Mr Mittal that the legal practitioners are

under a genuine doubt whether they require to get

themselves registered under the three statutes. In the

circumstances, the Court directs that no coercive

action be taken against any lawyer or law firms for

non-compliance with any legal requirement under the

CGST Act, the IGST Act or the DGST Act till a

W.P.(C) 9410/2021 Page 21 of 48

clarification is issued by the Central Government and

the GNCTD and till further orders in that regard by

this Court.

15. It is clarified that any lawyer or law firm that has

been registered under the CGST Act, or the IGST Act or

the DGST Act from 1st July, 2017 onwards will not be

denied the benefit of such clarification as and when it is

issued.”

47. In terms thereof, the Court observed that there is ambiguity regarding

the applicability of ‘reverse charge mechanism’ to all legal services rendered

by an Advocate. Thus, the Court directed that no coercive action be taken

against Advocates and law firms, pertaining to non-compliance with GST

requirements, until the issue was clarified by the competent authorities.

48. The aforesaid interim protection was thereafter continued by the

Coordinate Bench in W.P. (C) 5709/2017, vide order dated 18th July, 2017,

wherein the Court further observed as under:

“[…]13. Considering that the Respondents are seeking

more time to address the important legal and

constitutional issues that arise in these petitions and it

is asserted in the Court on behalf of the Respondents

that as to date, in fact, no coercive action is taken

against the lawyers, law firms or providers of legal

services, Limited Liability Partnerships (LLPs), for non-

compliance with the legal requirement of the CGST,

IGST and DGST, the Court directs that till further

orders:

(i) no coercive action would be taken against advocates,

law firms of advocates including Limited Liability

Partnerships (LLPs) of advocates providing legal

services for non compliance with any legal requirement

W.P.(C) 9410/2021 Page 22 of 48

under the CGST, DGST, or IGST Act; and

(ii) Any advocate, law firm of advocates, LLPs of

advocates who are providers of legal services, who have

registered under the CGST, DGST, or IGST Act from 1st

July, 2017 will not be denied the benefit of this interim

order.

(iii) In view of the Press Release issued by the Ministry

of Finance as shown to the Court today, and the

instructions given to Mr. Narula to the effect that the

legal position that existed under the Finance Act, 1994

as regard legal services being amenable to service tax

under the reverse charge mechanism continuing even

under the CGST, DGST or IGST Acts, till further orders,

all legal services provided by advocates, law firms of

advocates, or LLPs of advocates will be continued to be

governed by the reverse charge mechanism unless of

course any such legal service provider wants to take

advantage of input tax credit and seeks to continue with

the voluntary registration under Section 25 (3) of the

CGST Act and the corresponding provisions of IGST or

DGST Act.”

49. Thereafter, the issue in respect of Advocates being governed by the

‘reverse charge mechanism’ was clarified by way of a corrigendum dated 25th

September, 2017 to Notification No. 13/2017-Central Tax (Rate), published

by the Government of India, Ministry of Finance, (Department of Revenue).

The said corrigendum is set out below:

W.P.(C) 9410/2021 Page 23 of 48

50. Subsequent thereto, various writ petitions were filed before various

High Courts, relating to the applicability of ‘reverse charge mechanism’.

Transfer petitions came to be filed before the Supreme Court.

51. In Transfer Petition (C) No. 2460-2462/2017, vide order dated 28th

March, 2018, the W.P.(C) 5709/2017 referred to above along with other

petitions pending before this Court and in the High Court of Chhattisgarh were

transferred to the Supreme Court. The relevant portion of the order dated 28th

March, 2018 is set out below:

W.P.(C) 9410/2021 Page 24 of 48

“[…]Learned Additional Solicitor General and the

respondent-in-person are fairly agreed that the

transfer petitions be allowed and Writ

Petition(C)No.5709 of 2017 titled as M/s J.K.Mittal &

Co. vs. UOI & Ors., pending at High Court of Delhi

at New Delhi, Writ Petition(C)No.6017 of 2017 titled

as Legalence IP Corp LLP vs. UOI & Ors., pending

at High Court of Delhi at New Delhi and Writ Petition

(T) No. 274 of 2017 titled as M/s Lexloft Legal

Advisory LLP & Anr. vs. UOI & Ors, pending at High

Court of Chhattisgarh be transferred to this Court.

Ordered accordingly.

After transfer of the above-mentioned cases, the

Registry is directed to register them as transferred

cases.”

52. Thus, the position that enures as on date, from the aforesaid

notifications, the orders dated 12th July, 2017 and 18th July, 2017, and

corrigendum dated 25th September, 2017, is that services rendered by

Advocates are governed by ‘reverse charge mechanism’, for the purposes of

payment of GST.

B. The GST payment mechanism applicable to Insolvency

Professionals

53. Insofar as Insolvency Professionals are concerned, it would be

necessary to first examine the statutory framework under the IBC and the

IBBI regulations, before considering the applicable GST mechanism.

54. The IBC was enacted in 2016, with effect from 28th May, 2016. Under

the IBC, Insolvency Professionals are defined under Section 3(19), which

reads as under:

W.P.(C) 9410/2021 Page 25 of 48

“(19) “insolvency professional” means a person

enrolled under section 206 with an insolvency

professional agency as its member and registered with

the Board as an insolvency professional under section

207;”

55. Further, Section 5(27) defines a Resolution Professional as under:

“(27) “resolution professional”, for the purposes of this

Part, means an insolvency professional appointed to

conduct the corporate insolvency resolution process

and includes an interim resolution professional; and”

56. Section 207 of the IBC provides for the registration of Insolvency

Professionals with the IBBI, as per the categories which would be specified

by the IBBI. The same would include persons possessing qualifications in the

field of finance, law, management, insolvency. The said provision is set out

below:

“207. Registration of insolvency professionals.—

(1) Every insolvency professional shall, after obtaining

the membership of any insolvency professional agency,

register himself with the Board within such time, in such

manner and on payment of such fee, as may be specified

by regulations.

(2) The Board may specify the categories of

professionals or persons possessing such qualifications

and experience in the field of finance, law, management,

insolvency or such other field, as it deems fit.”

57. Section 208 of the IBC lays down the functions and obligations of

Insolvency Professionals. The said provision is as under:

W.P.(C) 9410/2021 Page 26 of 48

“208. Functions and obligations of insolvency

professionals.—

(1) Where any insolvency resolution, fresh start,

liquidation or bankruptcy process has been initiated, it

shall be the function of an insolvency professional to

take such actions as may be necessary, in the following

matters, namely:—

(a) a fresh start order process under Chapter II of Part

III;

(b) individual insolvency resolution process under

Chapter III of Part III;

(c) corporate insolvency resolution process under

Chapter II of Part II; (d) individual bankruptcy process

under Chapter IV of Part III; and

(e) liquidation of a corporate debtor firm under Chapter

III of Part II.

(2) Every insolvency professional shall abide by the

following code of conduct:—

(a) to take reasonable care and diligence while

performing his duties;

(b) to comply with all requirements and terms and

conditions specified in the bye-laws of the insolvency

professional agency of which he is a member; (c) to

allow the insolvency professional agency to inspect his

records;

(d) to submit a copy of the records of every proceeding

before the Adjudicating Authority to the Board as well

as to the insolvency professional agency of which he is

a member; and

(e) to perform his functions in such manner and subject

to such conditions as may be specified.”

58. As per Section 240 of the IBC, the IBBI can frame regulations in order

to carry out the provisions of IBC. In terms of the power granted under Section

240, the IBBI regulations have been framed.

W.P.(C) 9410/2021 Page 27 of 48

59. The IBBI regulations stipulate the eligibility criteria, qualifications and

experience, registration and recognition of the Insolvency Professionals. The

IBBI regulations have been analysed in detail, in the next section.

60. The IBC and IBBI regulations provide a comprehensive statutory

framework to regulate Insolvency Professionals. It is evident from the

aforesaid statutory scheme that an Insolvency Professional is subject to

distinct and self-contained regulatory regime.

61. Having regard to the aforesaid statutory framework, it would be

apposite to examine the GST mechanism applicable to such services.

62. Section 9(1) of the CGST Act, 2017 provides that, subject to the

provisions of 9(3), central tax shall be levied on all supplies of goods or

services and shall be paid by the ‘taxable person’. A conjoint reading of

Section 2(107) and Section 22 of the CGST Act, as discussed previously,

denotes the taxable person to be the ‘supplier’ of the goods and services. Thus,

the default rule under the CGST Act is that the supplier of services is liable to

discharge GST under the ‘forward charge mechanism’.

63. In the exercise of powers under Section 9(3), Notification No. 13/2017-

Central Tax (Rate) was issued, specifying the categories of services in respect

of which the tax payable by the recipient of such services, is under the ‘reverse

charge mechanism’.

64. Accordingly, insofar as Insolvency Professionals are concerned,

services rendered by them are not separately stipulated under the specific

categories of services mentioned in Notification No. 13/2017-Central Tax

(Rate). Thereby, the default rule under Section 9(1) of the CGST Act applies.

65. Thus, services rendered by an Insolvency Professional is governed by

the ‘forward charge mechanism’.

W.P.(C) 9410/2021 Page 28 of 48

C. The GST payment mechanism applicable to Advocates who act as

Insolvency Professionals

66. Having examined the GST mechanism applicable to Advocates, and

Insolvency Professionals as two distinct classes, it is necessary to further

consider what would be the position, when an Advocate renders services in

the capacity of an Insolvency Professional.

67. The analysis in the foregoing sections yields that, insofar as Advocates

are concerned, they are governed by the ‘reverse charge mechanism’ for the

purposes of payment of GST, whereas Insolvency Professionals, as a class,

are governed by the ‘forward charge mechanism’, for the said purpose.

(I) Eligibility criteria for registration as an Insolvency Professional

68. In order to examine whether an Advocate acting in the capacity of an

Insolvency Professional continues to be governed by the ‘reverse charge

mechanism’, or is to be governed by the ‘forward charge mechanism’

applicable to Insolvency Professionals, it is necessary to first examine the

eligibility criteria prescribed for registration as an Insolvency Professional.

69. The eligibility criteria for Insolvency Professionals is prescribed in the

IBBI Regulations.

70. Regulation 3 of the IBBI regulations is set out below:

“ CHAPTER II

INSOLVENCY EXAMINATIONS

3. (1) The Board shall, either on its own or through a

designated agency, conduct a ‘National Insolvency

Examination’ in such a manner and at such frequency,

as may be specified, to test the knowledge and practical

skills of individuals in the areas of insolvency,

W.P.(C) 9410/2021 Page 29 of 48

bankruptcy and allied subjects.

(2) The Board shall, either on its own or through a

designated agency, conduct a ‘Limited Insolvency

Examination’ to test the knowledge and application of

knowledge of individuals in the areas of insolvency,

bankruptcy and allied subjects.

(3) The syllabus, format, qualifying marks and

frequency of the Limited Insolvency Examination shall

be published on the website of the Board at least three

months before the examination.”

71. Regulation 4 of the IBBI Regulations provides as under:

“ CHAPTER III

REGISTRATION OF INSOLVENCY

PROFESSIONALS Eligibility.

4. (1) No individual shall be eligible to be registered as

an insolvency professional if he-

(a) is a minor;

(b) is not a person resident in India;

(c) does not have the qualification and experience

specified in Regulation 5 or Regulation 9, as the case

may be;

(d) has been convicted by any competent court for an

offence punishable with imprisonment for a term

exceeding six months or for an offence involving moral

turpitude, and a period of five years has not elapsed

from the date of expiry of the sentence:

Provided that if a person has been convicted of any

offence and sentenced in respect thereof to

W.P.(C) 9410/2021 Page 30 of 48

imprisonment for a period of seven years or more, he

shall not be eligible to be registered;

(e) he is an undischarged insolvent, or has applied to be

adjudicated as an insolvent;

(f) he has been declared to be of unsound mind; or

(g) he is not a fit and proper person; Explanation: For

determining whether an individual is fit and proper

under these Regulations, the Board may take account of

any consideration as it deems fit, including but not

limited to the following criteria-

(i) integrity, reputation and character,

(ii) absence of convictions and restraint orders, and

(iii) competence, including financial solvency and net

worth.”

72. Upon a perusal of the aforesaid regulations, it emerges that Regulation

3 empowers the IBBI to conduct the National Insolvency Examination and the

Limited Insolvency Examination, to test the individual’s knowledge and

practical skills in the field of insolvency, bankruptcy and allied subjects.

73. Regulation 4 sets out the threshold disqualifications that would render

an individual ineligible for registration as an Insolvency Professional.

74. These regulations establish that recognition of an Insolvency

Professional is governed by an independent regulatory code i.e., IBBI

regulations and independent authority i.e., the IBBI.

75. Regulation 5 provides for the qualifications and experience for an

Insolvency Professional, and reads as under:

“5. Subject to the other provisions of these regulations,

an individual shall be eligible for registration if he-

(a) has passed the Limited Insolvency Examination

W.P.(C) 9410/2021 Page 31 of 48

within twelve months before the date of his application

for enrolment with the insolvency professional agency;

(b) has completed a pre-registration educational

course, as may be required by the Board, from an

insolvency professional agency after his enrolment as a

professional member; and

(c) has-

(i) successfully completed the National Insolvency

Programme, as may be approved by the Board;

(ii) successfully completed the Graduate Insolvency

Programme, as may approved by the Board;

(iii) experience of –

(a) ten years in the field of law, after receiving

a Bachelor's degree in law;

(b) ten years in management, after receiving a

Master's degree in Management or two-year full time

Post Graduate Diploma in Management; or

(c) fifteen years in management, after receiving

a Bachelor's degree,

from a university established or recognised by

law or an Institute approved by All India Council of

Technical Education; or

(iv) ten years’ of experience as –

(a) chartered accountant registered as a

member of the Institute of Chartered Accountants of

India,

(b) company secretary registered as a member

of the Institute of Company Secretaries of India,

(c) cost accountant registered as a member of

the Institute of Cost Accountants of India, or

(d) advocate enrolled with the Bar Council.”

W.P.(C) 9410/2021 Page 32 of 48

76. A perusal of the Regulations would show that any individual who

wishes to qualify as an Insolvency Professional is required to pass the Limited

Insolvency Examination, referred to in Regulation 3.

77. In addition, the individual would have to satisfy the eligibility criteria

prescribed under Regulation 5(c), which requires as under:

(i) Complete the National insolvency programme as approved by the

IBBI;

(ii) Complete the post-graduate insolvency programme as approved by

the IBBI;

(iii) Such an individual is required to have ten years’ experience after

obtaining the LLB degree, or 10 years’ experience in management

after completion of the Master’s degree in management or a post

graduate diploma in management, or 15 years in management after

receiving bachelor’s degree from a recognised university;

(iv) Individuals having 10 years’ experience as Chartered Accountants

registered as members of the Institute of Chartered Accountants of

India (hereinafter, ‘ICAI’), Company Secretaries registered as

members of the Institute of Company Secretaries of India, Cost

Accountants registered as members of the Institute of Cost

Accountants of India, or Advocates enrolled with the Bar

Council.

78. It is apparent from a perusal of Regulation 5(c) of the IBBI Regulations

that a wide range of degree holders are entitled to practice as Insolvency

Professionals. They could include persons from varied qualifications,

including , management, law, accountancy and economics.

79. Regulation 5(c) does not confine eligibility to any single basic

W.P.(C) 9410/2021 Page 33 of 48

qualification exclusively, rather, it prescribes a defined set of alternative

qualifying routes, through law, management, chartered accountancy,

company secretaryship, or cost accountancy, the fulfilment of any one of

which suffices, to act as an Insolvency Professional.

80. There are several professionals who hold double qualifications, such

as, Chartered Accountants who are also lawyers, economists who are also

lawyers, engineers who are also lawyers, and so on.

81. For instance, where a Chartered Accountant becomes a member of the

ICAI, the person thereby chooses to practise as a Chartered Accountant and

not as an Advocate, despite holding a law degree. Similarly, a Chartered

Accountant who holds a law degree and is registered with the Bar Council

chooses to practise as an Advocate and not as a Chartered Accountant.

82. In fact, Advocates form only a small sub-set of the large number of

persons, who can qualify themselves as Insolvency Professionals.

83. This is further borne out by the statistical data placed on behalf of the

ld. Counsel for the IBBI, which is extracted hereinabove. The said chart

reveals that out of the 4,558 Insolvency Professionals registered as on 30th

June, 2025, only 283 persons are Advocates registered with the Bar Council

i.e., less than 6%. Thus, Advocates constitute a small fraction of the persons

who can act as Insolvency Professionals.

(II) Insolvency Professionals as a distinct statutory class

84. Insolvency Professionals as a class discharge functions in terms of

Section 17 (Management of affairs of corporate debtor by interim resolution

professional), Section 18 (Duties of interim resolution professional), and

Section 25 (Duties of resolution professional) of the IBC, and are regulated

by the IBBI Regulations, which prescribes a specific code for them.

W.P.(C) 9410/2021 Page 34 of 48

85. Further, as discussed in the preceding section, Sections 207 and 208 of

the IBC prescribe the statutory framework governing the qualifications and

professional obligations of Insolvency Professionals.

86. The IBBI issues the certificate of registration to the Insolvency

Professionals in order to enable them to discharge their duties. Furthermore,

the manner in which professional assignments are allocated to the Insolvency

Professionals, is also strictly governed by the IBBI Regulations.

87. Insolvency Professionals, therefore, constitute a distinct class,

governed exclusively by the IBC and the IBBI Regulations. The fact that such

persons possess other qualifications or registrations, would not make them

distinct or different from the class as a whole. The Insolvency Professionals

as a class, are a singular, and distinct class by themselves.

88. This position finds further support in the Scheme of classification of

services, adopted for the purposes of levy of GST.

89. Under the broad head for ‘legal and accounting services’, there are

various subcategories of services, which are as under:

“982 Legal and Accounting Services

99821 Legal services

998211 Legal advisory and representation services

concerning criminal law

This service code includes advice, representation

and related services (defence, search for evidence,

witnesses, experts, etc.) concerning criminal law

998212 Legal advisory and representation services

concerning other fields of law

This service code includes advice, representation

and other related legal services in judicial and quasi-

W.P.(C) 9410/2021 Page 35 of 48

judicial procedures concerning civil law, administrative

law, constitutional law, international law, military law

and other fields of law, except criminal law

998213 Legal documentation and certification services

concerning patents, copyrights and other intellectual

property rights

This service code includes drafting and

certification of documents and other related legal

services concerning patents, copyrights and other

intellectual property rights

998214 Legal documentation and certification services

concerning other documents

This service code includes drafting and

certification of documents and other related legal

services concerning other legal documents, such as

wills, marriage contracts, commercial contracts,

business charters, etc.

998215 Arbitration and conciliation services

xxx

998219 Other legal services n.e.c.

xxx

99822 Accounting, auditing and bookkeeping services

xxx

998221 Financial auditing services

xxx

998222 Accounting and bookkeeping services

xxx

998223 Payroll services

xxx

998223 Other similar services n.e.c

xxx

99823 Tax consultancy and preparation services

998231 Corporate tax consulting and preparation

services

W.P.(C) 9410/2021 Page 36 of 48

xxx

998232 Individual tax preparation and planning

services

xxx

99824 Insolvency and receivership services

998241 Insolvency and receivership services

This service code includes providing advice and

operational assistance to the management and/or

creditors of insolvent businesses and/or acting as

receiver or trustee in bankruptcy”

90. A perusal of the above heads would show that insofar as the Insolvency

Professionals are concerned, the services rendered by them i.e., ‘insolvency

and receivership services’ are specifically covered under the head – 998241.

91. Furthermore, the broad head 982 –‘Legal and Accounting Services’ -

is itself sub-divided into four distinct and mutually exclusive service codes.

Legal services under 99821 are exhaustively enumerated through heads,

998211 to 998219, the last of which is 998219- ‘Other legal services n.e.c.’,

and that is the residuary entry, meant to capture any legal service not falling

within the preceding specific codes. Insolvency and receivership services,

however, do not fall within this residuary entry, or anywhere within the 99821

sub-head at all. They are instead classified under an independent specific sub-

head, 99824, co-ordinate with, and not subordinate to 99821.

92. The Scheme of Classification, therefore, itself demonstrates that

‘insolvency and receivership services’ are treated as a distinct category of

service, separate from ‘legal services’. This classification, further indicates

that the nature of the service rendered by an Insolvency Professional is not,

for the purposes of GST, to be equated with or subsumed within ‘legal service’

W.P.(C) 9410/2021 Page 37 of 48

merely because the person rendering it happens to be enrolled as an Advocate.

93. The preface of the Scheme of classification of services further makes it

more clear that, where a service is capable of differential treatment, based on

its description, the most specific description is to be preferred over a more

general one. The preface reads as under:

“Explanatory Notes to the Scheme of Classification of

Services

Preface

The Scheme of Classification of Services adopted

for the purposes of GST is a modified version of the

United Nations Central Product Classification.

2. The Explanatory notes for the said Scheme of

Classification of Services is based on the explanatory

notes to the UNCPC, and as recommended by the

committee constituted for the purpose, is annexed.

3. The explanatory notes indicate the scope and

coverage of the heading, groups and service codes of the

Scheme of Classification of Services. These may be used

by the assessee and the tax administration as a guiding

tool for classification of services. However, it may be

noted that where a service is capable of differential

treatment for any purpose based on its description, the

most specific description shall be preferred over a more

general description.”

94. The principle that a specific entry prevails over a general entry is well

settled, and has been considered in the following decisions:

(i) In Moorco (India) Ltd. v. Collector of Customs, 1994 Supp (3)

SCC 562, the question before the Supreme Court was whether

components and accessories of a volumetric flow meter were

classifiable under the specific Customs Tariff Heading 90.24

W.P.(C) 9410/2021 Page 38 of 48

(instruments for measuring flow) or the general residuary Heading

90.26 (production or calibrating meters). The Court observed that a

specific heading of classification would prevail over a general heading.

The observations of the Supreme Court are as under:

“….The primary question, therefore, is

whether the goods manufactured by the

appellant fall in clause (a) as if it can be

classified with reference to (a) then clauses (b)

and (c) would not apply. Clause (a)

incorporates the common and general

principle that the goods which can be

classified specifically with reference to any

heading should be placed in that category

alone. The specific heading of classification

has to be preferred over general heading. The

clause contemplates goods which may be

satisfying more than one description. Or it

may be satisfying specific and general

description. In either situation the

classification which is the most specific has to

be preferred over the one which is not specific

or is general in nature. In other words,

between the two competing entries the one

most nearer to the description should be

preferred. Where the class of goods

manufactured by an assessee falls say in more

than one heading one of which may be specific,

other more specific, third most specific and

fourth general, the rule requires the authorities

to classify the goods in the heading which

satisfies most specific description. For

instance, taking the case of the appellant the

item manufactured by the appellant is

described and used as flow meter. It is an

instrument for measuring volume as well. Flow

meter is specifically classified in Heading No.

W.P.(C) 9410/2021 Page 39 of 48

90.24. Whereas the Heading 90.26 is general

in nature, it applies to every production meter

or calibrating meter for gas, liquid and

electricity supply. Therefore, on the finding

recorded by the Assistant Collector the goods

produced by the appellant specifically fall in

90.24. They may also fall in 90.26 but that

being more general entry preference should

have been given to the Entry 90.24 as the

goods satisfy most specific description of

being flow meter. The Tribunal or the

appellate authority without adverting to it

applied clause (c) and levied duty under 90.26

as it was a latter heading. But clause (c) would

apply only if clauses (a) and (b) do not apply.

Since the goods manufactured by the appellant

satisfied the specific description of Tariff

Heading 90.24 being a flow meter, the Tribunal

committed an error of law in classifying it

under Tariff Heading 90.26 as it was a latter

item under the classification list.”

(ii) Similarly, in SLP(C) 22191/2013 titled ‘Commissioner of

Commercial Tax, U.P. v. M/s A.R. Thermosets (Pvt.) Ltd.’, the

Supreme Court was considering whether “bitumen emulsion” fell

within the specific tariff entry 22 of Schedule II of Part A of the Uttar

Pradesh Value Added Tax Act, 2008 (which refers only to “bitumen”),

or under the general residuary entry as an unclassified commodity. In

this regard, the Supreme Court held that bitumen emulsion, sharing the

same composition, identity and use as bitumen, was covered by the

specific entry, and that resort to the residuary entry was impermissible.

The relevant portion of the said decision is as under:

W.P.(C) 9410/2021 Page 40 of 48

“[…]

21. It is perceivable that the legislature has

used the word “bitumen” and treated it as a

separate entity. As we notice, it has not

indicated that this was done with the intention

and purpose to exclude some type or variety of

bitumen. All bitumen products, which share

and have common composition and

commercial entity, and meet the popular

parlance test, is, therefore, meant to be

covered by the said Entry. In the instant case,

even the end use test is satisfied. There is

nothing in the Entry to suggest and show that

the Entry is required to be given a restrictive

and a narrow meaning.

22. In this regard, another aspect needs to be

noted. The

Revenue does not rely upon another Entry

under which

bitumen emulsion can be taxed. The Revenue

relies upon

the residuary Entry which would only include

goods, which cannot be covered under any

other Entry in the schedule on application of

the three-fold criteria. In the State of

Maharashtra v. Bradma of India Limited, the

Court had observed that the general principle

is that specific Entry would override a general

Entry. Referring to the decisions in the case

of Collector of Central Excise, Shillong v.

Wood Craft Products Ltd., it has been ruled

that resort can be made to a residuary heading

only when by liberal construction the specific

Entry cannot cover the goods in question.

Referring to Entry No. 90 in the said case,

which covered tabulating, calculating, cash

W.P.(C) 9410/2021 Page 41 of 48

registering, indexing and data processing, etc,

other than computer machines, it was held that

the words did not contain words of limitation

and would cover every species of cash

registering machines, irrespective of their

mode of operation. In the absence of any

limitation or qualification as to the different

kind of cash registering machines, there was no

reason for such qualification and limit the

Entry to a particular kind of cash registering

machine.”

III Applicability of GST to Advocates acting as Insolvency

Professionals

95. Applying the aforesaid principles, when an Advocate renders services

as an Insolvency Professional, the role in which he acts is that of an

Insolvency Professional, and not that of an Advocate. It is this role– that of a

provider of ‘insolvency and receivership’ services –that is determinative of

the nature of services rendered for the purpose of classification, and NOT the

underlying professional qualification or the registration of the individual

concerned. Accordingly, such services rendered by an Advocate, acting as an

Insolvency Professional would fall under the specific head of ‘insolvency and

receivership services’ of the Scheme of classification of services, rather than

general head of ‘legal services’, irrespective of the concerned individual’s

underlying qualification as an Advocate.

96. Thus, even when Advocates, or any other professionals, render

services as Insolvency professionals, their services being ‘insolvency and

receivership services’, would be governed by the IBC and IBBI

Regulations, and not by the statute or regulatory body otherwise

W.P.(C) 9410/2021 Page 42 of 48

applicable to their respective basic professional qualifications. As a class,

Insolvency Professionals cannot be treated differently, just because the

basic qualifications of the concerned individual is that of an Advocate.

97. This position is also affirmed by the stance taken by the BCI in its

affidavit dated 6th September, 2025.The relevant portion of the said affidavit

is set out below:

“[…]6. That when an advocate is appointed as an

Insolvency Resolution Professional (hereinafter

'TRP") or Resolution Professional under the

Insolvency and Bankruptcy Code, 2016 (hereinafter

"IBC"), the nature of services rendered is significantly

different from conventional legal practice/services.

The IRP performs functions such as managing the

affairs of the corporate debtor, inviting claims from

creditors, convening and conducting meetings of the

Committee of Creditors, submitting resolution plans,

and other regulatory compliance tasks under the IBC.

7. Hence, such services do not fall within the scope of

the reverse charge mechanism under Entry No. 2 of

Notification No. 13/2017, but are instead taxable

under the forward charge mechanism applicable to

professional or management services.

8. The Insolvency and Bankruptcy Board of India

(hereinafter "IBBI"), which is the regulatory authority

under the IBC, has consistently held the position that

IRPs are to be treated as professionals providing

management or consultancy services, and are therefore

liable to pay Goods and Services Tax (GST) under the

forward charge mechanism.

9. The Central Board of Indirect Taxes and Customs

(hereinafter “CBIC”) has issued clarifications through

frequently asked questions (FAOs) and circulars

W.P.(C) 9410/2021 Page 43 of 48

indicating that the taxability of service under the reverse

charge or forward charge mechanism depends on the

actual nature of the service rendered. When a

professional, even if an advocate, provides services not

in the nature of legal representation or legal advice,

such services are not covered under the reverse charge

mechanism. Copy of the relevant extract is annexed

herewith as Annexure Rl.

10. Therefore, the services provided by an advocate

functioning as an IRP are generally not considered

"legal services" as contemplated under the CGST Act

and related notifications. Rather, they fall within the

domain of managerial or professional services, and thus

the GST is payable by the IRP under the forward charge

mechanism.

11. The statutory provisions of Central Goods and

Services Tax Act, 2017, the Insolvency and Bankruptcy

Code, 2016 ensures clarity in taxation. Applying the

reverse charge mechanism to such professional roles

performed by advocates would create inconsistencies

and mischaracterize the nature of the services being

performed.

12. Thus, advocates acting as Insolvency Resolution

Professionals are liable to pay Goods and Services Tax

under the forward charge mechanism and are not

covered under the reverse charge mechanism

applicable to traditional legal services.”

98. As can be seen from the aforesaid affidavit, the BCI affirms that the

nature of services rendered by an Advocate, acting as an Insolvency

Professional is significantly distinct from conventional legal services, and

thereby, does not attract reverse charge mechanism. The BCI has further

affirmed that such services, being in the nature of managerial and professional

W.P.(C) 9410/2021 Page 44 of 48

services, would accordingly, be governed by the ‘forward charge

mechanism’.

99. In fact, if there is any violation of the code of conduct by an Insolvency

Professional, disciplinary action can be taken by the IBBI, even where the

Insolvency Professional happens to be an Advocate. While services rendered

by an Advocate under the Advocates Act, 1961 are governed by the Bar

Council, services rendered by an Advocate acting as an Insolvency

Professional are governed by the IBBI Regulations, and not by the Advocates

Act, 1961 or the Bar Council of India Rules.

100. The contention of the Petitioner was that an Advocate can, under the

Advocates Act, 1961, only render legal services, and that treating insolvency

services as distinct from legal services would necessitate suspension of the

Advocate’s enrolment.

101. However, in this case, the regulation 5(c)(iv)(d) of the IBBI regulations

expressly recognises an “Advocate enrolled with the Bar Council” as one

among several distinct categories of professionals to be eligible for

registration as an Insolvency Professional.

102. Thus, when the IBBI Regulations themselves recognise that an

Advocate enrolled with the Bar Council is eligible to be registered as an

Insolvency Professional. Far from restricting or disqualifying Advocates from

undertaking such registration, the said regulation expressly contemplates and

facilitates Advocates to take up this role. The Petitioner’s apprehension, that

treating insolvency and receivership services as distinct from legal services

would jeopardise an Advocate’s enrolment, cannot be sustained where the

legislative and regulatory intent, as reflected in said regulation, is to permit

and enable Advocates to render services as Insolvency professionals.

W.P.(C) 9410/2021 Page 45 of 48

103. Where another statute, such as the IBC and IBBI regulations

permits Advocates to additionally qualify as Insolvency Professionals, it

does not derogate from the Advocates Act, 1961. It merely offers another

stream or opportunity for Advocates to render more specialised and

niche services. Such services may be connected with law, however, this

would not mean that Advocates shall, for that reason, always be governed

by the Advocates Act, 1961 and the Bar Council of India rules, since there

is a separate regulatory mechanism for Insolvency Professionals as a

class.

104. The two statutes, namely, the Advocates Act and the IBC, are

accordingly required to be read in a harmonious manner, so as not to

curb or curtail the growth of Advocates into other areas of rendering

services, so long as the same is recognised by law.

105. An Advocate can, also render service as an Insolvency Professional,

as the same is statutorily permitted. However, to the extent that they

renders such services, such persons would be governed by the IBC and

the IBBI regulations, and not by the regime otherwise applicable to

Advocates.

106. There cannot be any distinction in the manner in which Insolvency

Professionals as a class are treated. Thus, even where the Insolvency

Professional happens to be an Advocate, the tax regime applicable to

services rendered as an Insolvency Professional would be that which

applies to Insolvency Professionals, and not that which applies to

Advocates.

107. As per Notification No. 13/2017-Central Tax (Rate) read with

corrigendum dated 25th September, 2017, which notifies the specific

W.P.(C) 9410/2021 Page 46 of 48

categories of services to which the ‘reverse charge mechanism’ would apply,

the said mechanism is stipulated as applicable to “services provided by an

individual advocate including a senior advocate or firm of advocates by way

of legal services, directly or indirectly,” with ‘legal service’ defined

thereunder to mean "any service provided in relation to advice, consultancy

or assistance in any branch of law, in any manner and includes

representational services before any court, tribunal or authority.”

108. While services rendered by the Insolvency Professionals would fall

within the broad category of ‘legal and accounting services’, the specific

service rendered is that of ‘insolvency and receivership service’.

109. Such ‘insolvency and receivership services’ are not covered by

Notification No. 13/2017-Central Tax (Rate), as amended vide corrigendum

dated 25th September, 2017.

110. Thus, the ‘reverse charge mechanism’ applicable to Advocates would

not be applicable to services rendered by Advocates as Insolvency

Professionals. An Advocate acting as an Insolvency Professional would,

therefore, be governed by the ‘forward charge mechanism’, which is

applicable to Insolvency Professionals, as a class, and not by the ‘reverse

charge mechanism’, which is otherwise applicable to Advocates

rendering legal services.

111. The facts of the present case are not in dispute. The Petitioner herein is

an Advocate, registered with the Bar Council of Delhi since 1995. He was

registered as an Insolvency Professional on 27th July, 2017, and appointed as

an interim resolution professional for the Corporate Debtor, i.e., Ireo Fiveriver

Pvt. Ltd., vide NCLT order dated 13th December, 2018. A dispute arose over

the release of his professional fees as an interim resolution professional, in the

W.P.(C) 9410/2021 Page 47 of 48

course of which he was called upon to raise GST compliant invoices. The

Petitioner contended that he stood exempted, and that GST, if payable, was

payable by the Corporate Debtor on a ‘reverse charge basis’. The NCLT

referred the issue to the IBBI, which, vide the impugned order dated 9th

March, 2021, observed that ‘Insolvency and Receivership’ services are not

covered under the ‘reverse charge mechanism’, and directed the Petitioner to

furnish GST compliant invoices.

112. The impugned order of the IBBI dated 9th March, 2021, therefore,

reflects the correct position in law. The position taken by the IBBI vide the

impugned order is also reaffirmed by the affidavit dated 6th September, 2025

filed by the BCI. Accordingly, the challenge to the impugned order is not

tenable.

V. Conclusion & Directions

113. In this factual, legal, and statutory background discussed above, it is

concluded as under:

(i) That Advocates enrolled with the Bar Council, who act as

Insolvency Professionals under the IBC, shall be governed by the

‘forward charge mechanism’. Accordingly, they shall be liable to

obtain GST registration, and comply with all consequential

requirements under the CGST Act, 2017 and the rules and notifications

framed thereunder, in the same manner as is applicable to Insolvency

Professionals, as a class.

(ii) It is further clarified that the aforesaid direction shall apply only

insofar as services rendered by an Advocate in the capacity of an

Insolvency Professional are concerned, and shall not, in any manner,

affect or alter the GST payment mechanism otherwise applicable to

W.P.(C) 9410/2021 Page 48 of 48

Advocates, in respect of legal services rendered by them in their

capacity as Advocates, which shall continue to be governed by the

‘reverse charge mechanism’.

(iii) In terms of the conclusions above, the Petitioner is directed to

furnish GST compliant invoices, in respect of the professional fee

charged by him for services rendered as an Interim Resolution

Professional in CP(IB) No. 408/2018.

114. The present petition is disposed of in these terms. Pending applications,

if any, are also disposed of.

PRATHIBA M. SINGH

JUDGE

SHAIL JAIN

JUDGE

AUGUST 13, 2026

dj/sm