Goods and Services Tax

GST enforcement must respect statutory conditions, protect genuine input tax credit claims, and distinguish bona fide errors from fraud.
Articles
GST
GST enforcement must adhere to statutory conditions, constitutional fairness and the rule of law rather than revenue targets. Input tax credit requires a reliable evidentiary trail establishing actual physical movement of goods, while bona fide purchasers and genuine recipients should not bear the consequences of a supplier's tax-payment default. Demand proceedings for fraud or wilful suppression require the essential statutory elements; absent those elements, such proceedings are unsustainable. Tax demands must also remain within the statutory scope of supply. A valid levy requires certainty regarding the taxable event, person liable, rate and measure of tax; ambiguity in any of these elements defeats the levy. Administrative authorities should address bona fide compliance errors proportionately and act as faithful trustees of statutory integrity.
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Extended GST limitation requires prima facie material linking tax shortfall to fraud, wilful misstatement, or suppression.
Notes
GST
Section 74 CGST extended limitation applies only where available material permits a rational prima facie view that tax shortfall, erroneous refund or wrongful input tax credit arose by reason of fraud, wilful misstatement or suppression of facts to evade tax. Conclusive proof is not required at notice stage, but suspicion or a bare allegation is insufficient. Prior scrutiny, audit, inspection or pre-notice communications may supply the factual basis for a DRC-01 notice if they gave the taxpayer meaningful notice. Section 75 prevents confirmation on new grounds and permits treatment under the ordinary regime where the extended-period allegations are ultimately not established.
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Outright leasehold assignment: complete transfer of industrial plot rights falls outside GST, unlike original leasing or sub-leasing services.
Notes
GST
Outright assignment of an industrial lessee's entire leasehold estate, including the building, is distinguished from the original grant of a lease. Original leasing or renting is treated as a supply of services, but complete divestment without a retained reversionary interest transfers a proprietary benefit arising from land. Such a transfer falls within the Schedule III exclusion for land and specified building transactions, rather than service classification under Schedule II; GST charge therefore does not arise. Classification depends on the deed's substance, including rights retained, the assignee's assumption of lease covenants, and transferred structures. A sub-lease, licence, or continuing rental arrangement may be characterised differently. Approval charges collected by the industrial development corporation remain distinct from assignment consideration.
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CBIC commemorates 10 years of India’s Authorised Economic Operator (AEO) Programme; Outlines way forward and reaffirms commitment to trusted trade
GST
Dated:- 16-9-2026

AEO Programme is pivotal in transforming India's customs administration into a modern, trusted and facilitative system aligned with the World Customs Organisation's SAFE Framework of Standards: CBIC Chairman

CBIC Member (Customs) noted transformation of Customs from a transaction-centric approach to a risk-based and trust-oriented model of administration since the introduction of the current AEO framework

The Central Board of Indirect Taxes and Customs (CBIC) today celebrated a decade of India's Authorised Economic Operator (AEO) Programme with a commemorative event titled “AEO@10: Accelerating Growth, Enhancing Trust, Optimizing Trade” in New Delhi.

The event brought together policymakers, industry leaders, logistics stakeholders, WCO experts and Authorised Economic Operators to reflect on the p

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eholder-centric reforms, the Chairman announced the launch of a structured feedback response form on the AEO portal to enable continuous and systematic inputs from AEO entities and other stakeholders.

Drawing on Pillar 2 of the WCO SAFE Framework and the CBIC Citizens' Charter, he emphasised that trade is an equal partner in building a trusted ecosystem and that feedback must be continuous. He also referred to the Eligible Manufacturer Importer (EMI) Scheme, highlighted by the Union Finance Minister's in the Union Budget speech, as an important stepping stone that rewards early compliance and creates a natural pathway to higher AEO tiers.

In his address, Member (Customs), CBIC, recalled the transformation of Customs from a transaction-centric approach to a risk-based and trust-oriented model of administration since the introduction of the current AEO framework through Circular No. 33/2016-Customs. He underlined that voluntary compliance promotes good governance, reduces supply-ch

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26-Customs dated 3rd September 2026, bringing down the documents to be uploaded from ten to three, with effect from 15th September 2026.

The event marked the launch of the commemorative publication “A Decade of AEO in India: Celebrating Trusted Trade Partnerships”, documenting the evolution, milestones and impact of India's AEO Programme over the past ten years, and incorporating contributions from CBIC officers, international partners, trade and industry. A stakeholder feedback survey on the AEO Programme was also announced to obtain structured inputs from industry for guiding future reforms. In addition, new AEO certificates were presented to select businesses, recognising their commitment to secure and compliant international trade.

In her welcome address earlier, Dr. Kavita Bhatnagar, Principal Commissioner and National AEO Programme Manager, highlighted the remarkable growth of the programme since its inception and emphasised the importance of continued collaboration between

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CGST Delhi South Commissionerate busts firm for fraudulent availment of ITC of over Rs. 15.78 crore; arrests partner of firm
GST
Dated:- 16-9-2026

As part of its ongoing enforcement drive against fraudulent Input Tax Credit (ITC) claims, the officers of Anti-Evasion Branch of the Central Goods & Services Tax (CGST), Delhi South Commissionerate, have arrested a partner of the firm engaged in trading of iron and steel goods in a case involving fraudulent availment, utilisation and passing on of inadmissible ITC aggregating to over Rs. 15.78 crore through bogus invoices of approximately Rs. 87.67 crore.

Investigation revealed that the firm had availed inadmissible ITC on the basis of invoices issued by multiple firms, several o

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Rectification of apparent GST record errors may correct inconsistent portal recitals without creating a fresh adjudication.
Case-Laws
GST
GST adjudication orders that expressly incorporate annexures must be read as composite instruments. A digitally signed portal-generated order can validly authenticate an accompanying annexure containing the reasons, input tax credit determination and consequential liability; an inconsistent portal recital that proceedings were dropped does not sever or invalidate the incorporated annexure. Rectification may correct an error apparent from the record to reflect the decision actually made, but cannot reopen merits or create a fresh adjudication. No further hearing is required where the correction does not adversely alter the taxpayer's original position. FORM GST DRC-07 is a statutory summary rather than the adjudication itself, but DRC-07 and corresponding DRC-08 must be made available within a reasonable time to permit appeal and demand enforcement.
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Unconditional omission of GST refund restriction invalidates proceedings based solely on the deleted rule after its removal.
Case-Laws
GST
Unconditional omission of Rule 96(10) of the CGST/WBGST Rules, 2017, without a saving clause, rendered the rule nonexistent for proceedings founded solely on it. Applying Supreme Court law on the effect of such omission, the High Court found that the impugned proceedings had no independent statutory basis. The show-cause notice and consequential orders concerning July 2017 to March 2021 were therefore quashed, and the writ petition was disposed of.
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Pre-GST service completion governs taxability despite later approval and billing, preventing GST-based withholding of payment for manpower services.
Case-Laws
GST
Services rendered and completed before the GST appointed day remain subject, if taxable, to the erstwhile Service Tax regime even where work approval and billing occur after GST commenced. Post-facto approval and subsequent invoices do not alter the date of supply or bring an already completed manpower service within the WBGST Act. Payment cannot be withheld solely for non-compliance with GST formalities; the payable amount may be released after deduction of applicable pre-GST tax. Where a genuine taxability dispute and pending civil proceedings contribute to delayed payment, interest may be set at the prevailing banking rate; interest at 8% per annum was directed from bill submission until payment.
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Year-wise GST tax periods make composite show cause notices impermissible, requiring separate proceedings despite contrary non-jurisdictional precedent.
Case-Laws
GST
GST treats each financial year as a separate tax period for assessment, annual returns, demand limitation and recovery. A composite show cause notice covering multiple financial years improperly combines distinct periods with different due dates, limitation requirements, grounds and response obligations, and is therefore impermissible. Jurisdictional High Court precedent requiring year-wise notices remains binding on authorities notwithstanding a contrary High Court view and an in-limine dismissal of a special leave petition against that view, which does not trigger merger. The composite notice was quashed, with liberty to issue a fresh notice under the CGST Act if legally permissible.
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Assignment of GIDC leasehold rights falls outside GST supply, defeating blocked credit demands and fraud-based proceedings.
Case-Laws
GST
Assignment or transfer of leasehold rights in a GIDC industrial plot is characterised as a transfer of benefits arising from immovable property, not a taxable GST supply. GST charged on that transfer therefore lacks legal basis, and input tax credit reversal and interest premised on the assumed levy cannot stand. The blocked-credit restriction for goods or services used in construction of immovable property does not apply where no construction activity occurred. As the underlying transaction is not taxable and the blocked-credit premise fails, allegations of wrongful credit, fraud, wilful misstatement or suppression for section 74 proceedings, including consequential penalty, cannot be sustained. The adjudication and appellate demands were quashed, with refund of tax and interest directed.
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Separation of GST audit and adjudication functions requires fresh determination by an officer other than the audit officer.
Case-Laws
GST
GST audit and adjudication should not be undertaken by the same officer where the adjudication order is issued under Section 73(9). The High Court, following a co-ordinate Bench ruling, quashed an order passed by the officer who had conducted the audit. Fresh adjudication was directed from the stage of the reply to the show-cause notice, to be undertaken by a proper officer other than the audit officer after providing an adequate hearing opportunity.
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Works contract GST reimbursement requires recipients to bear verified differential tax arising from the VAT-to-GST regime change.
Case-Laws
GST
Differential GST arising from the replacement of VAT by GST during an ongoing works contract is to be borne by the recipient of the works contract service. Where the contractor has discharged that additional liability and the State has received the benefit of the completed work, the contractor is entitled to reimbursement of the verified differential amount. High Court directed the respondents to determine the GST differential attributable to the tax-regime change, verify the relevant records and calculations, and reimburse the amount in accordance with law within the stipulated period.
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Valid show cause notice is indispensable to GST adjudication; DRC-01 cannot replace notice addressed to the taxable person.
Case-Laws
GST
Service of a valid show cause notice upon the person chargeable with tax is presented as indispensable to GST demand adjudication. Section 73(1) requires notice to that person, while Form GST DRC-01 under Rule 142(1)(a) operates only as an electronic summary of the notice. The notice must specify the allegations, proposed liability and factual basis, enabling an effective response. A DRC-01 merely tabulating tax dues, particularly when accompanied by a notice addressed to another taxpayer, does not provide the required cause or opportunity of defence and cannot replace the statutory notice. Defective notice undermines consequential demand and appellate proceedings.
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Input tax credit under incorrect tax heads was reversed despite IGST reflection in GSTR-2A records.
Case-Laws
GST
Input tax credit recorded under incorrect CGST and SGST heads in GSTR-3B, despite corresponding IGST credit appearing in GSTR-2A, remained subject to reversal. Eligible IGST-related credit was allowed after record verification, but the remaining CGST and SGST credit was not supported by new facts or records justifying interference. Precedents cited for the taxpayer were inapplicable because of differing factual circumstances. The Tribunal sustained reversal of the disputed credit, together with consequential interest and penalty, and confirmed dismissal of the appeal.
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CBI Arrests CGST Superintendent and a Consultant in Bribery Case
GST
Dated:- 15-9-2026

The Central Bureau of Investigation (CBI) has arrested Superintendent, Land and Building Section at office of Commissioner of CGST and Central Excise, Raigad and a CGST consultant, in a bribery case.

The CBI registered the instant case on 09.09.2026 against the accused Superintendent and unknown others based on a complaint by the Project Head of a private realty company at New Panvel.  The realty company had undertaken a redevelopment project of two Buildings at Sector 17, New Panvel.  A total of 24 of these flats are owned by the CGST & Central Excise, Raigad Commissionerate for which the necessary approvals from the local autho

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Common Portal Service requires accessible full GST communications and meaningful hearing before limitation or recovery consequences follow.
Notes
GST
Portal-only GST service may be inadequate where it does not provide effective notice of the complete show cause notice or reasoned order and thereby denies a meaningful opportunity to respond. Section 169 permits Common Portal availability as a mode of service, but Rule 142 distinguishes FORM GST DRC-01 and DRC-07 electronic summaries from the underlying notice or order. Section 75 requires a hearing where an adverse decision is contemplated and reasons in the adjudication order. Retrospective expansion of Common Portal functions does not by itself cure deficient communication. For appellate limitation, proof of upload or dispatch may not establish effective communication where accessibility, actual or constructive knowledge, or retrieval of the complete communication remains unproven.
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Inter-State transit goods cannot be detained by GST authorities of a State merely because they pass through its territory.
Case-Laws
GST
State GST authorities cannot detain or seize goods merely passing through their territory during inter-State transit where the goods are destined for another State. The territorial power to detain and seize does not extend to goods moving from Delhi to West Bengal solely because they transit Uttar Pradesh. On that basis, the appellate order upholding detention was quashed, the goods were directed to be released, and any amount deposited was directed to be refunded.
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Alternative GST remedies limit writ review where registration-cancellation disputes require factual examination by appellate authorities.
Case-Laws
GST
Availability of a statutory appeal against rejection of a GST registration-cancellation application does not bar writ jurisdiction under Article 226, but strongly informs its discretionary exercise. Where the challenge requires resolution of disputed facts and appraisal of the record, the statutory Appellate Authority is the appropriate forum. The writ petition was therefore not entertained, with liberty to pursue the statutory appeal; the Appellate Authority must decide it independently of observations made in the writ proceedings.
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Retrospective input tax credit limitation extension protects eligible belated claims and requires reversal of time-barred credit disallowance.
Case-Laws
GST
Retrospective extension of the input tax credit limitation under section 16(5) protects eligible registered persons whose belated claims were barred under section 16(4) but fall within the extended period. Input tax credit cannot be denied solely on limitation in such circumstances. The assessment disallowance was quashed to that extent, consequential recovery was restrained, and amounts already recovered were to be refunded or adjusted against future tax liabilities.
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Defective GST portal service justified condonation of delay, requiring the appellate authority to hear the appeal on merits.
Case-Laws
GST
Defective service of a GST show-cause notice and adjudication order through an incorrect common-portal tab justified condonation of delay in filing the GST appeal. Uploading a notice on the portal alone was treated as insufficient service where there was no acknowledgement or reply, and belated recovery action supported the taxpayer's claim that the order appeared under “Additional Notices and Orders” rather than the designated tab. Although the Appellate Authority was bound by the statutory limitation period, refusal to hear the appeal would cause grave prejudice where the delay arose from circumstances beyond the taxpayer's control. The appeal was directed to be entertained and decided on merits if filed within the stipulated period.
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Sufficient cause for delayed GST appeals permits merits review where portal placement prevented effective notice.
Case-Laws
GST
Sufficient cause supported condonation of delay in a GST appeal where the taxpayer lacked effective knowledge of the show-cause notice and adjudication order because they were uploaded under a non-designated portal tab. Although the Appellate Authority remained bound by the limitation prescribed under section 107 of the RGST/CGST Act, circumstances beyond the taxpayer's control and the risk of grave prejudice justified merits review. The delay was condoned, with a direction to entertain and decide the appeal on merits if filed within the stipulated period.
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Conditional pre-deposit enables fresh adjudication after non-participation and expiry of appellate limitation, subject to a timely reply.
Case-Laws
GST
Fresh adjudication was permitted where the petitioner had not participated in the original proceedings and the statutory appellate limitation had expired. The impugned order was quashed, subject to an additional pre-deposit of 25% of the disputed tax and submission of a reply to the show-cause notice within the stipulated period. The earlier order was to operate as an addendum to the show-cause notice for the fresh proceedings. No further extension or concession was available; failure to comply allowed recovery proceedings to continue in accordance with law after due notice.
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Retrospective input tax credit limitation extension preserves eligible claims filed within the extended return-filing deadline.
Case-Laws
GST
Retrospectively inserted section 16(5) extends the time for eligible registered persons to claim input tax credit for specified financial years where the section 39 return was filed by 30 November 2021. It overrides the limitation in section 16(4) for claims falling within that extended period, while preserving the requirement to satisfy all other statutory conditions. Input tax credit claimed through a March 2019 return filed within the extended deadline cannot be denied solely for delay. Limitation-based disallowance, consequential recovery, and related demands are to be removed, with recovered amounts refunded or adjusted against future tax.
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Tribunal appeal limitation governs filing deadlines, not the Commissioner's review period, preserving departmental appeal maintainability.
Case-Laws
GST
Section 112(3) confines the prescribed limitation period to filing an appeal before the Tribunal and does not impose a separate six-month deadline on the Commissioner to review the first appellate order. A departmental appeal filed within the applicable extended filing period therefore remains maintainable even where the Commissioner's review occurred after six months. The maintainability objection was rejected, and the appeal was admitted for adjudication on merits.
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Urgent listing for GST registration cancellation appeals may bypass Registry scrutiny where delay threatens effective appellate relief.
Case-Laws
GST
Urgent listing of an appeal against GST registration cancellation may be granted without awaiting ordinary Registry scrutiny where sufficient cause and continuing prejudice are shown. Procedural rules permit exemption from procedural requirements and directions necessary for substantial justice, reflecting the principle that procedure should facilitate adjudication rather than defeat substantive rights through technicality. Cancellation preventing the appellant from conducting its sole business justified limited urgent listing, as delay could make appellate relief ineffective. The exemption applies only to listing and does not waive statutory requirements or determine maintainability or merits, which remain open.
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