Goods and Services Tax

Statutory GST appeal limitation excludes Limitation Act condonation beyond the expressly prescribed appellate extension period.
Case-Laws
GST
Statutory limitation for GST appeals under Section 107 of the CGST/UKGST Act is treated as an integral and exhaustive part of the appellate remedy. The prescribed appeal period and the limited condonable extension define the Appellate Authority's jurisdiction; therefore, delay beyond that extension cannot be condoned through Section 5 of the Limitation Act. The discussion distinguishes a Supreme Court ruling under beneficial land-acquisition legislation, whose remedial purpose differs from the self-contained fiscal framework of GST. It maintains that fiscal precedents on expressly limited appellate condonation continue to govern unless expressly overruled or distinguished. Individual writ petitions remain for consideration on their respective facts.
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Capacity-based cess computation uses the month's maximum operational machines; abatement applies only to qualifying continuous inactivity.
Case-Laws
GST
Rule 12(4) of the capacity-based cess scheme for pan masala packing machines is described as valid because the Cess Act, Rule 12 and Schedule II operate as an integrated framework. Monthly cess is computed by reference to the maximum number of installed operational machines during the month, with capacity determined by rated speed and packing weight rather than installation date. The rule was found consistent with the parent statute and constitutional guarantees under Articles 14 and 19(1)(g). Abatement applies only where a machine remains continuously inoperative for at least fifteen days; machines installed later and subsequently operated cannot be treated as inoperative before installation. The reported writ petition was dismissed, subject to the statutory appellate remedy for the abatement rejection.
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Input tax credit reversal verification required fresh GST demand adjudication, subject to pre-deposit and adjustment of substantiated payments.
Case-Laws
GST
Disputed input tax credit claimed to have been reversed before issuance of the show-cause notice required verification through the rectification application and relevant returns. As that verification had not been undertaken, the GST demand was remitted for fresh adjudication on merits. The remand was conditional on deposit of 25% of the disputed tax, with adjustment for properly substantiated prior payments or recoveries. Upon compliance, any consequential bank attachment was to be vacated.
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Overlapping GST proceedings require Central and State authorities to designate one competent authority for coordinated adjudication of the same matter.
Case-Laws
GST
Parallel Central and State GST proceedings on the same subject matter require coordination to identify the competent authority. The text explains that proceedings formally commence through show cause notices and overlap where they concern identical or overlapping tax liability, deficiency or obligation arising from the same contravention. A taxable person must submit replies and supporting material to both authorities. Where the subject matter is the same, the authorities must determine between themselves which authority will continue; the other authority must transfer its material. The designated authority must then adjudicate after considering the taxpayer's material through a speaking and reasoned order.
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Input tax credit for bona fide purchasers cannot be denied solely for a supplier's return-filing default.
Case-Laws
GST
Input tax credit should not be denied to a bona fide purchasing dealer solely because the registered selling dealer, despite receiving tax, failed to file returns. Where the purchaser has paid tax against a valid tax invoice, recovery of unpaid tax should be pursued against the defaulting seller. Action against the purchaser remains available where material establishes collusion. Applying this principle, the discussed High Court decision quashed the demand based on alleged excess input tax credit for the relevant financial year, while preserving the authorities' right to recover dues from the selling dealer in accordance with law.
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Inverted duty refunds cover credit accumulated from higher-rated ancillary inputs, despite equal tax rates on principal input and output.
Case-Laws
GST
Refund of accumulated unutilised input tax credit under an inverted duty structure is available where higher-rated ancillary inputs, including chemicals and packing materials, cause credit accumulation, even if the principal input and output supply attract the same tax rate. Section 54(3) does not distinguish between major and minor inputs. The prescribed refund computation applies under Rule 89(5), and the discussed circular restricting refunds to cases involving higher-rated principal inputs had been declared unconstitutional. The text states that rejected refund claims were to be processed and sanctioned with applicable interest after personal hearing.
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Composite healthcare supplies retain exemption when patient care is the contract's essential character, despite payment through an implementing agency.
Case-Laws
GST
Healthcare services delivered through government Urban Health and Wellness Centres, Urban Ayushman Aarogya Mandirs and polyclinics are characterised by their essential and dominant nature, rather than by the contractual payer or payment structure. Activities integrally connected with delivering patient care form a composite healthcare supply and should not be artificially separated into management, manpower or support elements. The text distinguishes arrangements whose substance is only operational management or administrative support, which remain taxable despite patients being ultimate beneficiaries. It states that services provided through clinical establishments under the government project qualify as exempt healthcare services under Entry 74, while payment by an implementing agency does not alter that classification.
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Government Expands FTAs, Export Promotion Measures to Diversify Export Markets
GST
Dated:- 21-7-2026

Free Trade Agreements to Expand Export Opportunities, Enhance Market Access and Address Non-Tariff Barriers

Export Promotion Mission, E-Commerce Export Hubs and Logistics Reforms Drive Cross-Border E-Commerce Exports

Government has undertaken several initiatives to diversify export markets in light of evolving global geopolitical and economic developments. These include expanding network of Free Trade Agreements (FTAs) and Comprehensive Economic Partnership/Cooperation Agreements (CEPAs/CECAs); pursuing trade negotiations with major economies and regions to secure preferential market access for exporters; undertaking focused export promotion activities through Export Promotion Mission, Indian Missions overseas, Export Promotion Councils (EPCs), industry associations and other stakeholders; implementing district and sector-specific export promotion initiatives under th

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Technical Barriers to Trade to promote mutual understanding of each sides' standards, technical regulations, and measures to enhance transparency. These provisions facilitate smoother and more effective access to export markets for Indian goods. Government engages with its trading partners through bilateral, regional and multilateral mechanisms to address non-tariff barriers (NTBs) and improve market access for Indian exports. These includes holding regular meetings and direct talks with partners through Joint Committees and Working Groups established under trade agreements to solve specific export problems to align with emerging global requirements, consultations with partner countries to resolve market access issues, technical discussions on sanitary and phytosanitary (SPS) measures, technical barriers to trade (TBT), standards, conformity assessment procedures and regulatory requirements and continuous engagement with stakeholders to identify and address market access concerns in ke

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nding and packaging, market access initiatives, export logistics & warehousing, and trade intelligence.

2. Implementation of the E-Commerce Export Hub (ECEH) initiative on a pilot basis to create an integrated ecosystem for e-commerce exports by facilitating logistics, customs clearances and other export-related services.

3. The District Export Hub (DEH) Initiative provides the district-level framework for decentralised export promotion. In each district, the effort is to identify and prioritise 3-5 products/services with viable export potential for targeted interventions.

4. Reforms to simplify exports through courier mode and reduce compliance burden:

• The Reserve Bank of India (RBI) has relaxed export reconciliation requirements for small-value exports up to Rs.10 lakh by permitting closure of export transactions in the Export Data Processing and Monitoring System (EDPMS) on the basis of declarations furnished by exporters and reconciliation undertaken by bank

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Centers (EFCs) in its field offices across the country with the aim of providing requisite mentoring and handholding support to MSMEs in exporting their products and services.

8. International Cooperation (IC) Scheme of Ministry of MSME aims to build capacity of MSMEs by facilitating their participation in international exhibitions/fairs/conferences/seminar/buyer-seller meets abroad as well as reimbursement of various costs.

This information was given by Minister of State for Ministry of Commerce and Industry, Shri Jitin Prasada in a written reply in Lok Sabha today.

 

Annexure I

India's recent Free Trade Agreements (FTAs)

Sl.

No.

Name of the Agreement

Date of signing

Date of implementation

1

India – Mauritius Comprehensive Economic Cooperation and Partnership Agreement (CECPA)

22nd February, 2021

1st April, 2021

2

India-UAE CEPA

18th February, 2022

1 st May 2022

3

India-Australia Economic Cooperation and Trade Agreement

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Redemption fine under the Sabka Vishwas Scheme cannot independently disqualify a declaration from eligibility and merits consideration.
Case-Laws
GST
The Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 exclusions do not extend to cases involving confiscation or redemption fine. Redemption fine imposed in lieu of confiscation forms part of the amount recoverable under the applicable indirect tax law and cannot be separated from the duty demand for Scheme eligibility. A departmental communication treating redemption fine as excluded was inconsistent with the statutory Scheme. Accordingly, inclusion of redemption fine in an SVLDR-1 declaration does not by itself make the declarant ineligible; a rejected declaration must be treated as eligible and considered on merits in accordance with law.
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Regular bail in alleged fake-invoice tax credit fraud followed secured evidence and absence of prospects for early trial.
Case-Laws
GST
Regular bail in an alleged fake-invoice input tax credit fraud was discussed where invoices were allegedly issued without underlying e-top-up service supplies. The text notes that the accused had been in custody since April 2026, the complaint was filed, and documentary and electronic material had been secured. As the matter rested on documentary evidence, carried a maximum five-year sentence, and was unlikely to conclude early, continued detention was considered unnecessary. Regular bail was granted subject to stipulated conditions.
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Anticipatory bail in alleged fraudulent input tax credit cases requires demonstrated necessity for arrest and custodial interrogation.
Case-Laws
GST
Anticipatory bail in alleged fraudulent input tax credit matters is examined through the necessity of arrest and custodial interrogation. The notes state that arrest powers under the CGST Act require objectively founded reasons to believe and are investigative rather than punitive. They emphasise that the seriousness of an economic offence alone does not displace personal liberty, particularly where documentary, financial and electronic material has largely been secured and there is no indicated risk of absconding or evidence tampering. Pending tax adjudication does not prevent criminal investigation, but tax recovery concerns alone should not determine liberty. Bail may be conditioned on surrender, cooperation, travel restrictions and non-interference with evidence, while lawful future arrest remains available if valid grounds arise.
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Negative blocking of input tax credit under Rule 86A is impermissible where it restricts future ledger credits.
Case-Laws
GST
Rule 86A does not permit negative blocking of input tax credit in the electronic credit ledger by restricting credits that may arise in the future. The High Court notes that, following Rawman Metal & Alloys and subsequent consistent decisions, blocking may not exceed credit available in the ledger even where wrongful or fraudulent availment from non-genuine or non-existent suppliers is alleged. Orders producing negative blocking were quashed, while preserving the respondent's ability to take further action permitted by law, including restoring blocked credit where legally permissible.
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Composite inpatient healthcare supply may retain exemption despite MRP medicine billing, while separate taxable sale characterisation remains disputed.
Case-Laws
GST
Composite supply treatment of inpatient healthcare is examined where medicines, consumables and room rent are supplied alongside exempt healthcare services. The petitioner's position is that healthcare is the principal supply and these elements are incidental, so the entire composite supply remains exempt, notwithstanding medicine billing at MRP without separately charging GST. The competing issue is whether separate MRP billing constitutes an independent taxable sale of medicines and permits a tax demand for tax collected but not paid. The text notes a conflict between these characterisations; affidavits were directed and coercive recovery was restrained pending further hearing.
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Clarificatory duty drawback circulars operate retrospectively, preserving merchant exporters' existing entitlement and supporting refund interest after unlawful recovery.
Case-Laws
GST
A clarificatory duty drawback circular is described as operating retrospectively where it explains an existing entitlement rather than creating a new fiscal benefit. The text states that merchant exporters remained eligible for All Industry Rate customs duty drawback under earlier notifications despite availing CENVAT credit, making recovery of the drawback unsustainable. It further describes interest on the refunded drawback as payable from the filing of the writ petition until actual payment, with refund and interest directed within the stipulated period. An insolvency-related alternative prayer was left open.
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State GST officers' IGST enforcement powers extend to confiscation, with challenges routed through the State statutory appeal mechanism.
Case-Laws
GST
State GST officers are authorised under section 4 of the IGST Act to act as proper officers for IGST purposes, including detention and confiscation of goods in inter-State transit. A further Central Government notification is required only to prescribe exceptions or conditions, not for the general conferment of authority; a State Commissioner may validly allocate those functions under the State GST law. By the deeming effect of sections 4 and 20 of the IGST Act, confiscation orders issued by State proper officers are appealable under the State GST Act. The restriction on appeals to Central GST officers does not bar an appeal to the State appellate authority.
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University affiliation fees are described as non-taxable regulatory functions, alternatively protected by the educational-services GST exemption.
Case-Laws
GST
University affiliation is described as a statutory and regulatory function rather than a supply of services for consideration. The note states that affiliation fees are not consideration for a taxable activity and, alternatively, that affiliation services fall within the educational-services exemption from GST. It reports that GST demands on affiliation fees were treated as unsustainable, with refund of GST collected directed within four months and interest payable for default.
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Wrong-head integrated tax payment requires statutory adjustment before intra-State tax, interest, or penalty liability is determined afresh.
Case-Laws
GST
Adjustment of integrated tax paid under the wrong head against intra-State tax liability requires Section 77(2) to be read with Rule 92. Rule 92 contemplates setting off a refund entitlement against an outstanding demand through the prescribed adjustment order. The text states that an undisputed erroneous IGST payment for an intra-State supply should not create tax, interest or penalty liability without considering this adjustment mechanism. It describes the quashing of the adjudication, appellate and demand orders and remand for fresh consideration of adjustment under Section 77(2) and Rule 92.
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Restaurant service classification excludes hookah flavours consumed by inhalation, notwithstanding accompanying food, beverages and attendant restaurant facilities.
Case-Laws
GST
Hookah flavours supplied through a hookah apparatus in a restaurant are described as falling outside “restaurant service” under paragraph 6(b) of Schedule II to the GST Acts. The expression “food or any other article for human consumption or any drink” is analysed using common parlance, ejusdem generis and noscitur a sociis: hookah is consumed by inhalation and is not food, drink, or an article of the same class. Composite supply provisions determine tax liability only after the relevant supply category is established and cannot expand the statutory scope of restaurant service. Rate notifications likewise cannot enlarge that scope. Such supplies are treated as goods and taxed under their applicable classification and rate notifications.
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Natural justice breach from portal-only notice required restoration of the GST appeal for merits adjudication without further pre-deposit.
Case-Laws
GST
Uploading the show-cause notice only under the GST portal's 'Additional notice and orders' tab prevented a reply and violated natural justice. The HC also identified a material mismatch between the financial year covered by the appellate order and those in recovery and garnishee proceedings. It set aside the time-bar dismissal, quashed the appellate order, and required the GST appeal to be entertained and decided on merits, with all merits left open. The delay explanation was to be considered sufficient by the appellate authority, and no further pre-deposit was required. The recovery-related discrepancy warranted a further opportunity to the taxpayer.
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Advance-ruling jurisdiction excludes completed transactions and cannot affirm tax positions already implemented in statutory returns.
Case-Laws
GST
Advance-ruling jurisdiction is confined to supplies being undertaken or proposed and cannot validate a tax position already adopted for completed transactions. Where pre-GST contractual work had ended, arbitral-award amounts were received, and the taxpayer filed GSTR-3B treating them as non-taxable compensation, the application sought confirmation after the event rather than advance certainty. Questions on whether individual award components constitute consideration require examination of contracts, arbitral materials, accounts, returns and evidence by the proper officer through scrutiny or adjudication. Admission by the original authority does not prevent the appellate authority from examining maintainability. The advance ruling was set aside, without any opinion on taxability of the award amounts.
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Typographical e-way bill discrepancies without tax evasion warrant only minor penalty, not detention proceedings under Section 129.
Case-Laws
GST
A typographical discrepancy between e-way bill particulars and tax invoices, where goods otherwise correspond with the e-way bill and transport documents, is treated as a human error when it provides no benefit and does not indicate tax avoidance. The notes state that such a minor inadvertent mistake, without intent to deceive the Revenue or financial implications, should attract only the minor penalty under clause 5 of the circular dated 14 September 2018, rather than detention and penalty action under Section 129. The Section 129 penalty order was quashed, with refund of the deposited amount after deduction of the applicable minor penalty.
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Show cause notice and hearing are mandatory before penalty, making an unnotified penalty unsustainable for natural justice breach.
Case-Laws
GST
Imposition of a penalty without issuing a show cause notice or affording a hearing breaches the statutory discipline governing penalties and the principles of natural justice. As the revenue did not dispute that no notice initiating penalty proceedings was issued, the High Court found the petitioner had been denied the required opportunity to respond. The penalty was therefore unsustainable, and the writ petition was disposed of accordingly.
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Duplicate input tax credit demands cannot target identical supplier transactions, while proceedings concerning distinct suppliers remain available.
Case-Laws
GST
Multiple show cause notices for alleged wrongful input tax credit cannot duplicate tax demands arising from the same supplier transactions. The High Court treated the later notice and consequential order as unsustainable to the extent they covered seven suppliers already included in an earlier proceeding, and quashed the duplicated portion. Proceedings concerning two additional suppliers were preserved, with the taxpayer retaining the statutory appeal remedy against that part of the later order. The material therefore distinguishes impermissible duplication of liability from separate allegations involving suppliers not covered by the original notice.
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Jurisdictional facts in certificate-of-origin discrepancies can support customs show-cause proceedings, leaving factual explanations for departmental adjudication.
Case-Laws
GST
Judicial review of customs show-cause notices may be invoked where jurisdictional facts are absent, including where a notice relies on undisclosed or inconclusive overseas enquiry material. The discussion distinguishes that situation from notices supported by identifiable discrepancies in certificates of origin. A certificate not issued by the stated authority, or an unreconciled mismatch between the certificate's invoice number and the importer's invoice, can provide a factual basis for customs proceedings. Referral of a certificate for further investigation does not itself cure an apparent discrepancy. The importer's explanation is to be examined by the competent customs authority during adjudication.
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Specific grounds in GST cancellation notices are essential; cancellation based on an unnotified ground was quashed and registration restored.
Case-Laws
GST
GST registration cancellation requires a show cause notice to state the specific proposed grounds and provide supporting documents so that the registered person can respond effectively. The notes explain that the notice alleged fraudulent registration, invoicing without supply, and non-operation from the declared business premises, whereas the cancellation order relied on non-filing of consecutive returns, a ground not notified to the taxpayer. On that basis, the cancellation proceedings were quashed and registration restored, while the Revenue retained liberty to issue a fresh, specific notice and determine the matter according to law.
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