Goods and Services Tax

Technical e-way bill discrepancies cannot support GST penalties where transactions are reported, tax paid, and evasion intent is absent.
Case-Laws
GST
Technical discrepancies between e-way bill dispatch locations and transporter goods receipts do not justify GST penalty where consignments carry valid e-invoices and e-way bills, transactions are recorded in statutory returns, and applicable tax has been paid. In the absence of substantive irregularity or intent to evade tax, the procedural mismatch was insufficient for penalty under section 129. The penalty orders were quashed, with consequential refund in accordance with law.
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Prospective refund restrictions cannot defeat pre-existing input tax credit claims merely because the refund application was filed later.
Case-Laws
GST
Notification-based restrictions on refunds of unutilized input tax credit for edible oils under an inverted duty structure operate prospectively from 18 July 2022. They do not deny refunds for credit accumulated before that date merely because a fresh application was filed later. A circular cannot retrospectively curtail an accrued input tax credit entitlement without statutory basis. Where a claim concerns the pre-notification period and is filed within the limitation period, rejection based solely on the later filing date is unsustainable. Refund claims require fresh consideration under applicable law and judicial precedents, while interest remains for examination in the refund proceedings.
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Statutory GST appeal limits bar excess delay condonation, while restoring registration prevents departmental challenge to the implemented order.
Case-Laws
GST
Section 107(4) confines the First Appellate Authority's power to condone delay in GST registration-cancellation appeals to its prescribed outer limit; writ-jurisdiction orders based on particular facts, hardship, equity, or substantial justice cannot expand that statutory jurisdiction. Condonation beyond that limit is therefore without jurisdiction. Where the Department has implemented an appellate restoration of GST registration and the taxpayer has continued business on that basis, estoppel and orderly administration prevent the Department from later challenging the implemented order. As no effective relief remains and intervening genuine transactions would be unsettled, the departmental challenge is infructuous and not maintainable.
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Commencement of Finance Act amendments brings specified statutory changes into force from the appointed date
Notifications
GST
Sections 153 to 155 of the Finance Act, 2026 take effect on 1 November 2026. Their commencement activates the amendments enacted through these provisions, including amendments to sections 15, 34, 54 and 101A. The amendments accordingly apply from the appointed date, which establishes the operative commencement date for the specified Finance Act changes under central tax law.
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GST registration processing requires prescribed documents, restricted officer queries, and time-bound approval, with simplified electronic registration for eligible small suppliers.
Circulars
GST
GST registration applicants must file the appropriate online form and furnish accurate, legible information on business constitution, promoters, authorised signatories, and principal or additional places of business, supported by prescribed premises documents. Aadhaar authentication generally enables processing within seven working days; non-authentication, risk selection, or authorised physical verification permits processing within thirty days. Eligible small suppliers may receive automated simplified registration within three working days, subject to restrictions on input tax credit passed to registered recipients. Officers may seek clarification only through FORM GST REG-03 for specified deficiencies, must avoid irrelevant or presumptive queries, and must decide replies within seven working days. Registration is deemed approved if no timely action occurs.
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Omission of the GST export-refund restriction applies retrospectively to pending proceedings absent an express saving provision.
Circulars
GST
The omission of rule 96(10) of the CGST Rules is to be given retrospective effect from 23 October 2017. The rule had restricted IGST refunds on exports where specified input exemptions or concessional benefits were availed, to prevent double benefits. In the absence of a saving or sunset clause, omission applies to proceedings pending when the rule was removed; the General Clauses Act does not preserve pending proceedings following omission of a rule. Pending proceedings concerning rule 96(10) must therefore be dealt with on that basis. The same treatment applies to the omissions of rules 89(4A) and 89(4B).
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Export payment realisation through repatriable INR accounts, compliant set-offs, and net retention meets GST export conditions.
Circulars
GST
Receipt of consideration for exported services in convertible foreign exchange or through repatriable INR accounts, including SNRR, INR Nostro and NRE accounts, satisfies the IGST export-of-service payment condition, subject to applicable FEMA and RBI requirements. Payments through NRO accounts qualify only when routed through repatriable INR accounts. RBI-compliant set-off of service export receivables against service import payables, and reinsurance brokers' net retention of commission, also satisfy that condition. For exported goods, the FEMA-prescribed or extended period governs realisation of sale proceeds for GST refund purposes. Refund recovery for non-realisation does not apply where an AD Bank writes off the realisation requirement wholly or partly.
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Input tax credit on dealer-agency demo vehicles is available, aligning their treatment with traditional vehicle dealerships.
Circulars
GST
Input tax credit on demo vehicles used by authorised agents in the dealer-agency model is not blocked under the passenger motor vehicle restriction. The expression “such motor vehicles” permits credit not only for the particular vehicle ultimately supplied, but also for demo vehicles used to further supplies of similar vehicles. Although customer sales are made directly by the manufacturer in the dealer-agency model, the demo vehicles serve the same sales-promotion purpose as in the traditional dealership model. The earlier clarification denying credit to dealer-agency agents is withdrawn, ensuring equivalent ITC treatment for demo vehicles under both models.
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Banking-sector ITC apportionment under section 17(4) requires a uniform credit election across all eligible registrations
Circulars
GST
Section 17(4) permits the fifty-percent eligible input tax credit method only for registrations of banking companies, financial institutions and NBFCs that supply deposit, loan or advance services; registrations not providing those services cannot elect or must not follow that method. Once an eligible registration elects it, all eligible registrations of that entity must comply. The second-proviso relaxation applies only to supplies received from same-PAN registrants that have also elected section 17(4). GSTR-3B reporting requires permanent reversal of non-business, blocked and the remaining ineligible credit, with temporary reversal and later reclaim of credit where section 16 conditions are subsequently met. Under IMS, presently ineligible invoices must be kept pending. Earlier reporting practices should not attract adverse action if the resulting credit conforms to these principles.
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Input Service Distributor credit rules assign eligibility, reversals and refund treatment to recipients while excluding transfer invoices from turnover.
Circulars
GST
Input Service Distributors must obtain registration where separately registered business verticals or places of business receive input-service invoices for distinct persons, and must distribute credit only to the attributable recipient. Recipients must satisfy input tax credit eligibility conditions and undertake required reversals; ISDs remain liable for penalties for improper distribution, while excess credit is recoverable from recipients. Credit must be distributed in the month the ISD prima facie determines it eligible, separately identifying eligible and ineligible credit in GSTR-6. The rule 54(1A) mechanism merely transfers credit: related invoices do not form turnover or Net ITC for refund purposes, and reversals rest with recipients rather than the transferring registrant.
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CGST appellate pre-deposit rules clarify disputed tax calculation, refund entitlement, interest dates, and remand-related adjustment requirements.
Circulars
GST
CGST appeal pre-deposit requirements distinguish admitted liability, payable in full, from disputed tax, of which 10% must be deposited at each appellate stage. The Tribunal-stage deposit is calculated on the disputed liability confirmed by the Appellate Authority. Refund of pre-deposit following a favourable appellate order does not require an express refund direction and must be claimed through FORM GST RFD-01 under “on account of order”. A departmental further appeal does not bar refund unless the favourable order is stayed. Interest on refunds is computed separately from each actual pre-deposit payment date. On remand, pre-deposit is refundable; for partial remand, confirmed demand and applicable interest must first be recovered or adjusted.
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Reasoned GST adjudication requires evidence-based notices, fair hearings, fraud-specific proof, and appellate scrutiny within statutory limits.
Circulars
GST
CGST demand, adjudication and first-appeal guidelines require show cause notices to state material facts, legal grounds, evidence, issue-wise quantification, and electronic summaries in prescribed forms. Demands based on fraud, wilful misstatement or suppression require disclosed evidence of deliberate intent to evade tax; absent this, demand must be confined to the non-fraud route. Authorities must avoid parallel CGST and SGST/UTGST proceedings on the same subject, afford effective hearings, and issue reasoned orders limited to SCN grounds and amounts. Rectification is confined to patent record errors by the issuing authority, not merits review. Appeals require threshold scrutiny, separately reasoned limitation findings, controlled admission of new grounds or evidence, and timely reasoned disposal.
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GST notice service requires alternative delivery and personal hearing before ex parte assessment; time-barred input tax credit is quashed.
Case-Laws
GST
Effective service of GST notices requires more than portal upload where repeated non-response indicates that the taxpayer may not have received notice. In those circumstances, the officer must consider other permitted service modes, preferably RPAD, and provide a clear personal-hearing notice; otherwise, an ex parte assessment becomes an empty formality. The assessment on issues other than input tax credit limitation was set aside for fresh consideration after reply and hearing, subject to stipulated partial tax payment. The input tax credit component disallowed as time-barred under section 16(4) was separately quashed in accordance with an earlier common order.
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Retrospective input tax credit eligibility overrides filing-time limits for specified years when GST returns met the prescribed deadline.
Case-Laws
GST
Section 16(5) of the CGST Act operates retrospectively notwithstanding section 16(4), permitting input tax credit for specified financial years where the section 39 return was filed by 30 November 2021. Input tax credit cannot be reversed solely for breach of the ordinary limitation provision when this retrospective exception applies. Recovery founded only on that limitation ground is correspondingly unsustainable, while proceedings concerning other substantive input tax credit eligibility conditions remain unaffected. Consequential relief includes de-freezing bank accounts and refunding or adjusting amounts recovered solely on the limitation ground.
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Effective GST notice service requires further statutory communication and a personal hearing when portal notices receive no response.
Case-Laws
GST
Effective service of GST notices requires more than portal upload where repeated portal communications receive no response. After cancellation of registration, officers must consider other prescribed modes to secure effective notice; the absence of physical or registered-email communication, coupled with denial of a personal hearing, breaches principles of natural justice. The assessment was set aside and remitted for fresh consideration on merits, subject to the stipulated deposit and filing of a reply, with clear notice of personal hearing required.
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Interest on wrongly availed IGST credit requires fresh review against the combined electronic credit ledger balance.
Case-Laws
GST
Interest on wrongly availed IGST credit requires determination by considering the aggregate balance in the electronic credit ledger across IGST, CGST and SGST heads, as required by the clarificatory circular. The interest liability itself remained undecided on merits. The impugned orders were set aside and the matters remitted for fresh consideration after a personal hearing. The fresh enquiry is confined to applying the circular when determining interest on wrongly availed IGST credit.
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Ex parte compensation cess demand set aside, restoring show-cause response opportunity subject to partial balance-tax payment.
Case-Laws
GST
Ex parte adjudication of compensation cess without a reply to the show cause notice was set aside because entitlement to the cess required determination. The High Court also set aside the consequential rectification order and restored the petitioner's opportunity to respond to the show cause notice. The petitioner must file the reply within eight weeks and pay 25% of the balance tax within that period.
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Show-cause notice specificity invalidates GST demands founded on undisclosed grounds and requires reconciliation of wrong-head tax payments.
Case-Laws
GST
GST demands based on alleged ineligible recredit must identify the factual and legal charge in the show-cause notice; a bare assertion that input tax credit conditions were unmet does not support adjudication on undisclosed grounds. Tax paid under an incorrect head on outward supplies does not become input tax credit or create a fresh credit entitlement, and the prescribed refund mechanism cannot be bypassed by unilateral recredit. Correct-head payments require recognition and reconciliation with the original payment and recredit, without duplicate refund or credit. Interest requires wrongful availment and utilisation supported by ledger and timing findings; penalty requires a sustainable wrongful-credit finding.
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Delayed bookkeeping entries supported by invoices and returns do not establish deliberate non-accountal or justify stock confiscation.
Case-Laws
GST
Delayed bookkeeping entries supported by contemporaneous invoices and statutory returns do not, without more, establish unaccounted stock or an intention to clandestinely remove goods. Confiscation is confined to clear and deliberate evasion; a rough visual stock estimate without standard physical weighment is insufficient, particularly where separate assessment proceedings accept the explanation. These principles address alleged stock discrepancies and the consequential confiscation-related tax, penalty and redemption fine.
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Statutory limits on GST appeal delay prevent excess condonation, while implemented registration restoration renders departmental challenge non-maintainable.
Case-Laws
GST
Statutory appellate power to condone delay in GST registration-cancellation appeals ends at the outer limit prescribed by Section 107(4); writ orders granting relief on particular facts do not enlarge that power, and equity or hardship cannot override the limit. Condonation beyond that period is therefore without jurisdiction. Where the Department has implemented an appellate restoration order by reinstating GST registration, its subsequent challenge to that order is barred by its own conduct: reversal would disrupt the restored registration and intervening transactions, with no effective relief available. The departmental appeal is consequently treated as infructuous and not maintainable.
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Rectification of apparent typographical errors may proceed without hearing when tax liability, input tax credit, and ruling substance remain unchanged.
Case-Laws
GST
Rectification of an error apparent on the face of the record may be made without an opportunity of hearing where the correction does not alter the advance ruling, increase tax liability, or reduce admissible input tax credit. An inadvertent typographical reference to B30 in a specified expression was deleted because the error was apparent from the record. The correction left all other findings, discussions, and the substantive ruling unchanged.
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Pre-trial detention in fraudulent input tax credit prosecutions is non-punitive, supporting conditional bail after investigation concludes.
Case-Laws
GST
Pre-conviction detention is non-punitive and serves to secure the accused's attendance at trial. In an alleged fraudulent input tax credit prosecution involving passing credit without inward supply, investigation had concluded and the complaint was filed, while charges remained unframed and trial completion was unlikely within a reasonable period. In the absence of criminal antecedents or material indicating absconding, witness intimidation, evidence tampering, or subversion of justice, continued custody was not warranted. Conditional bail was granted, requiring trial attendance and non-interference with evidence or witnesses.
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Timely Electronic Cash Ledger credit preserves amnesty relief despite later DRC-03A appropriation formalities for tax deposited within prescribed time.
Case-Laws
GST
Section 128A amnesty relief remains available where the full tax amount is credited to the Electronic Cash Ledger within the prescribed period, even if FORM GST DRC-03A for appropriation to the Electronic Liability Register is filed later. Rule 164(2) requires appropriation through the Electronic Liability Register, but subsequent compliance with that requirement can cure the delay where timely deposit establishes bona fides. The proviso to Rule 88B(1), although not directly applicable, recognises the relevance of the Electronic Cash Ledger credit date. A minor procedural delay should not defeat settlement benefits where payment was timely deposited and later appropriated, including waiver of interest and penalty and issuance of GST SPL-05 where the amount is sufficient.
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GST on government-hired hotel accommodation requires operator registration, with tax payable separately by the hiring department beyond rent.
Case-Laws
GST
GST on rental income from hotel accommodation hired by the Department of Home requires the affected hotel operators to obtain GST registration and deposit the applicable tax. GST must be paid by the Department of Home in addition to the agreed rental amount, rather than being treated as part of the rent payable for the accommodation. This treatment follows the approach applied to comparable hotel-accommodation rental arrangements involving the Department of Home.
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Provisional ITC reversal does not establish self-assessed GST liability, preventing refund rejection solely during a pending investigation.
Case-Laws
GST
Provisional reversal of input tax credit in Table 4(B)(2) of GSTR-3B, unlike reporting output-tax liability in Table 3.1, does not by itself constitute self-assessed GST liability. The entry's statutory character depends on its nature, applicable provisions and contemporaneous material. Where the reversal was described as provisional and no liability had been determined or admitted, a pending stock-shortage investigation could not establish liability or justify retention of GST. A later demand under separate appeal could not retrospectively validate refund rejection. Refund eligibility remained subject to verification of applicable statutory conditions, and rejection could not rest solely on voluntary reversal or a pending investigation.
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