Goods and Services Tax

GST Council to take a view on GST on UPI MDR: Sources
GST
Dated:- 24-9-2026
PTI
New Delhi, Sep 24 (PTI) The GST Council, chaired by the Union Finance Minister, will take a view on GST levy on merchant fees for UPI transactions above Rs 2,000, government sources said on Thursday.

Effective October 15, UPI payments to merchants (P2M) above Rs 2,000 will attract a 0.4 per cent merchant discount rate (MDR) with an overall cap of Rs 300.

Sources said services attract GST, decided by the Goods and Services Tax Council, chaired by the Finance Minister and comprising state counterparts.

“We are hopeful that the GST Council will take a view on the 18 per cent GST on merchant fee on UPI transactions in the larger interest of cons

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GST registration cancellation for return default requires a hearing, while full compliance can prevent or conditionally reverse cancellation.
Notes
GST
GST registration may be cancelled for continuous non-filing of returns under Section 29, but cancellation does not extinguish pre-cancellation tax liabilities. Rule 22 requires notice and an opportunity to respond; where pending returns are filed and tax, interest and late fee are fully paid before cancellation, the officer must drop proceedings. Post-cancellation revocation under Rule 23 requires compliance with prescribed filing, payment and limitation conditions, while appellate authorities cannot exceed statutory condonation limits. Defective notices, absence of reasons, denial of meaningful hearing, or unexplained retrospective cancellation may invalidate the process. Conditional restoration may be available in appropriate non-fraud cases upon full regularisation of returns, tax, interest, late fee and penalty.
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Expired e-way bill alone cannot justify detention where transaction documents are accurate and vehicle breakdown is unrebutted.
Case-Laws
GST
Section 129(3) detention and penalty provisions should not be applied solely because an e-way bill has expired where invoices and transport documents are accurate. An unrebutted vehicle breakdown, coupled with no independent enquiry, does not support an adverse inference that goods were moved to evade tax. In these circumstances, expiry alone does not establish intent to evade tax, and detention, consequential tax and penalty cannot be sustained; deposited amounts are refundable in accordance with law.
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Proper-officer assignments to appointed Central Tax Officers remain valid, while GST demand disputes generally require statutory appellate review.
Case-Laws
GST
Proper-officer functions under the CGST Act may be assigned by circular to Central Tax Officers already appointed under a statutory notification, including demand-related functions allocated by monetary limits. Such assignment does not constitute delegation requiring a separate notification. Challenges to the circulars and to the officer's competence on that basis were rejected. A writ challenge to a GST demand order should ordinarily not proceed where an effective statutory appeal is available, unless a recognised exception applies. Where the authority considered the defence, examined documents and granted a personal hearing, reassessment of disputed material lies with the appellate authority. The demand challenge was therefore directed to the statutory appeal, with limitation protection for filing within 30 days.
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Unutilised ITC refunds for SEZ units cannot be denied by limiting applications to supplying vendors alone.
Case-Laws
GST
GST refund provisions for unutilised input tax credit do not restrict refund applications to suppliers making supplies to SEZ units. The relevant refund rule identifies suppliers as one category of applicants but does not exclude an SEZ unit from claiming its own refund. Reading such a restriction into the statutory scheme would impermissibly add a limiting condition. SEZ units are therefore entitled to have eligible refund claims processed under the GST refund framework, and orders rejecting the claim on that restrictive basis were set aside.
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Interest on loans and advances remains GST-exempt, but State-specific turnover claims require cogent documentary proof.
Case-Laws
GST
Entry 27 exempts services of extending deposits, loans or advances where consideration is represented by interest or discount, except interest in credit-card services; qualifying interest recovery is therefore exempt from GST. A taxpayer claiming that turnover reported in one State actually comprised exempt interest attributable to another State must prove that assertion through cogent documentary evidence. Form GSTR-09C and a Chartered Accountant's certificate without disclosed findings or identifiable documentary support do not discharge that burden. Failure to provide supporting evidence permits an adverse inference, leaving the disputed turnover unestablished as exempt interest and resulting in rejection of the claim.
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GST exemption for written-off housing loan recoveries may be raised at appellate stage, subject to reliable documentary proof.
Case-Laws
GST
GST exemption under Notification No. 12/2017 may apply to recovery of amounts under written-off housing loan accounts. As a statutory notification has force of law, its applicability constitutes a pure question of law capable of being raised at the appellate stage. Entry 27 covers services by way of extending loans, while entitlement to exemption for a particular recovery depends on cogent proof that it arose from a written-off housing loan in the relevant financial year. Certified banker's books are admissible as prima facie evidence, but supporting loan write-off records are required. A cross-objection is unnecessary where the respondent has received complete relief and may operate as a reply. Factual applicability remains for determination after consideration of the records.
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Statutory show cause notice under Section 74 is indispensable; GST DRC forms cannot validate suppression-based tax demands.
Case-Laws
GST
Section 74 tax determinations based on suppression of facts require service of a statutory show cause notice and consideration of the taxpayer's representation. The notice must specify the demand, foundational facts and necessary particulars so the taxpayer can respond effectively. GST DRC forms or other communications cannot substitute for the statutory notice. Determining a demand without serving such notice denies the taxpayer knowledge of the allegations and an effective opportunity of representation, vitiating the proceedings; the first appellate order was set aside and the appeal allowed.
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GST route deviation alone cannot justify detention or penalties where goods travel with valid documents and no evasion evidence.
Case-Laws
GST
GST law does not require a transporter to declare or follow a particular route. Transporting goods by a longer route for logistical safety reasons, while carrying valid documents, does not establish mala fide intent to evade tax without material showing an intended diversion or other tax evasion. Route-based obligations under earlier VAT regimes do not apply under the GST Acts or Rules. Accordingly, detention of goods and penalty under section 129 were unsustainable solely because a longer route was used; the detention-penalty orders were quashed and refund of the penalty paid under protest was directed in accordance with law.
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Statutory pre-deposit applies to surviving disputed tax, eliminating further deposit where the existing amount meets the prescribed threshold.
Case-Laws
GST
Statutory pre-deposit for a Tribunal appeal must be assessed against the disputed tax remaining after the first appellate authority reduces the tax demand. The deposit made at the first appellate stage represents a prescribed portion of the dispute, not payment of a separate liability. No further pre-deposit under section 112(8) is required where the amount already deposited equals or exceeds the aggregate prescribed percentage of the surviving disputed tax. Requiring an additional deposit in those circumstances would mechanically duplicate the pre-deposit obligation and produce an anomalous, unworkable result.
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Fresh e-way bills after expiry risk tax penalties when duplicate invoice details lack credible explanation.
Case-Laws
GST
Rule 138 permits extension of an e-way bill only within eight hours after expiry and does not authorise a fresh e-way bill on the same invoice. A second bill generated after expiry may be treated as fraudulent where the claimed vehicle breakdown, repair, and subsequent goods movement lack reliable evidence. Unexplained delay, a different loading location, and modification of invoice details to generate another bill are indicators supporting an inference of intent to evade tax on a preponderance of probabilities. Such transportation may attract penalty under section 129.
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Intermediary student recruitment services gain export treatment when the recipient-location place-of-supply rule applies to overseas universities.
Case-Laws
GST
Student-enrolment services supplied to overseas universities are intermediary services where the Indian representative facilitates the university's educational supply to prospective students rather than providing courses or instruction on its own account. Representative status, restricted authority, commission disclosure, and remuneration linked to enrolment and fee receipt support that classification. Until 29 March 2026, the special intermediary place-of-supply rule placed the supply in India, preventing export treatment. From 30 March 2026, omission of that rule applies the general recipient-location rule, causing the services to satisfy the export requirement.
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Government-funded health insurance qualifies for GST exemption when the State Government alone pays the entire scheme premium.
Case-Laws
GST
Health insurance services supplied under MEDISEP Phase-II to Clause A beneficiaries qualify for GST exemption where the State Government pays the entire premium under the insurance scheme. The State Government is the recipient of the insurance service because it alone bears the premium liability; employees, pensioners and family members remain insured beneficiaries without changing that status. The exemption under Sl. No. 40 of Notification No. 12/2017-Central Tax (Rate) is not conditional on the Government being the insured person or receiving insurance benefits. Premium received for this exempt supply is not taxable, subject to continued full Government payment. The position excludes Clause B beneficiaries.
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Common-parlance and primary-use classification places turmeric wellness supplements under Heading 2106; MRP does not affect their GST rate.
Case-Laws
GST
Turmeric Extract / Curcuma Elixir, sold for direct human consumption as a general wellness nutraceutical or dietary supplement, falls under Heading 2106 as a food preparation. Classification follows primary function, essential character, common parlance and consumer perception, rather than medicinal qualities of ingredients; products intended for general well-being without specific therapeutic claims or drug recognition are not medicaments. The water-based product was also outside Chapter 33 because it contained no extracted essential oil and was not aromatic or intended for perfumery, cosmetics or flavouring. GST applied at 18% until revision and 5% from 22 September 2025. MRP does not affect classification or rate unless a rate notification makes it conditional on a value threshold.
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Regular bail after charge-sheet filing granted where custody was no longer required in alleged GST input-tax-credit fraud.
Case-Laws
GST
Regular bail in an alleged fraudulent input tax credit offence under the CGST Act was granted after the charge sheet was filed. Continued pre-trial detention was considered unnecessary because the accused had remained in custody, no flight risk or criminal antecedents were shown, further custodial detention was not required, and the maximum punishment was five years. Bail was subject to stringent conditions requiring cooperation in the ongoing investigation and trial involving co-accused, attendance, and non-interference with proceedings.
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Prospective GST liability limits tax on taxi-stand land rentals, while allotment claims require a reasoned determination.
Case-Laws
GST
Goods and Services Tax on rental dues for land used as a Sumo Taxi Stand applies only from 08.07.2017, when the levy came into operation; payment for an earlier period cannot be compelled. The demand was consequently restricted to liability accruing from that date, with outstanding dues recoverable accordingly. The land-allotment claim was not determined on its merits and must be decided by the competent respondent through a reasoned speaking order in accordance with law within three months.
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E-way bill delivery-address compliance supports Section 129 penalties even where tax is paid and the address is later registered.
Case-Laws
GST
E-way bill delivery to an address not declared as the recipient's principal or additional place of business constitutes a contravention attracting penalty under Section 129, even where tax has been paid. The e-way bill tracking framework requires the declared delivery location to be a registered business address at the time of supply and interception. Subsequent registration of that location as an additional place of business does not cure the earlier contravention. The penalty order therefore remained undisturbed, while the supplier retained the option to seek recovery of the penalty from the recipient through appropriate remedies.
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Contractual GST allocation: Writ remedy upheld where acceptance terms required GST payment beyond quoted rates.
Case-Laws
GST
Writ jurisdiction may remain available for recovery of a GST component withheld from contractual dues where contractual performance, bills and the underlying transaction are undisputed, and the issue can be resolved from the acceptance letter and record. A term providing that GST is payable in addition to quoted rates binds the paying authorities and cannot be displaced by later calculations or correspondence. The contractor's independent payment of GST does not justify deduction from contractual consideration. Reconsideration of dues may defeat delay and laches objections, while GST and other authorities need not be joined where the dispute concerns the payment-processing authority's contractual liability. Release of the withheld GST component with interest was directed.
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Kerala Flood Cess refund limitation runs from correct remittance, treating claims filed within the statutory period as timely.
Case-Laws
GST
Relevant date for refund of Kerala Flood Cess mistakenly paid through GSTR-3B is the date of subsequent remittance into the correct account. Where the cess was initially paid with GSTR-3B and later deposited through the prescribed mechanism, the two-year refund limitation under Section 54 runs from the latter payment rather than the erroneous earlier payment. The refund application is therefore treated as timely, requiring the competent authority to reconsider it and issue orders within one month.
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Printing on customer-owned inputs qualifies under Heading 9988, while printer-supplied religious book printing attracts residual-rate GST.
Case-Laws
GST
Printing on paper and content owned by a GST-registered customer constitutes job work under Heading 9988; where the customer is unregistered, it is a service of treatment or processing of goods belonging to another person under the same heading. Concessional GST treatment applies only to specified printing and to qualifying goods under Chapters 48 or 49 that themselves attract the prescribed concessional or nil rate; other printing services fall under residual entries. Printing religious books using the printer's paper and consumables is a composite supply in which printing is the principal supply. It is classifiable as a printing service under Heading 9989, rather than as a supply of printed books, and attracts the residual GST rate.
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Project management services for government infrastructure remain taxable, and invoices must identify the administrative department as recipient.
Case-Laws
GST
Centage-based project management services for construction projects, including project reports, technical sanctions, tendering, supervision, monitoring and coordination, are classifiable as construction project management services under SAC 998339 and taxable at 18% GST. The pure-services exemption does not apply because State and coastal highways and tourism corridor roads were not established as roads or bridges within functions entrusted to Panchayats or Municipalities. The concerned Government Administrative Department is the recipient because it owns the projects, requisitions the services and assigns implementation. A funding agency that only disburses consideration, reviews and monitors does not become the recipient; invoices must be issued to the Administrative Department.
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NSQF-aligned vocational training qualifies for GST exemption when supplied by appropriately accredited bodies under approved qualification packages.
Case-Laws
GST
GST exemption applies from 10 October 2024 to NSQF-aligned vocational training supplied by a training body accredited with an Awarding Body recognised by NCVET, where NCVET has approved the relevant qualification package. Training in handheld-device repair and telecom-product assembly meeting those conditions falls within item (e)(iii) of Entry 69. Such structured, nationally recognised skill training is distinguished from generic commercial coaching and is classifiable as other education and training services not elsewhere classified under SAC 999294.
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Residual food-preparation classification places fermented Nata De Coco outside fruit-jelly categories, changing its GST treatment across notified periods.
Case-Laws
GST
Fermented Nata De Coco is classified under Tariff Item 21069099 as a food preparation not elsewhere specified or included, rather than under Chapter 20. Heading 2007 covers fruit jellies made by cooking or concentrating fruit juice or pulp with sugar, and a jelly-like appearance alone is insufficient. Microbial fermentation produces a distinct edible preparation, while Heading 2008 requires retention of the identity and essential character of an edible plant part. GST applies at 18% from 1 July 2017 to 21 September 2025 and at 5% from 22 September 2025.
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Contractual GST reimbursement depends on tax-risk allocation, while statutory compliance remains unaffected by any employer-payment adjustment.
Notes
GST
GST liability on works or composite supplies remains governed by the applicable statute, whereas reimbursement of an incremental GST burden depends on the contract's allocation of tax risk. An inclusive-tax clause must be read with any change-in-law, price-adjustment, tender or award provisions to determine whether the employer owes an adjustment; GST becoming payable alone does not establish reimbursement. Contract-wise reconciliation of pre- and post-GST work may determine a revised GST-inclusive value and support a supplementary agreement where adjustment is contractually justified. Such contractual relief operates only between contractor and employer and cannot permit revised returns contrary to statute or waive statutory limitation, interest or penalties.
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Successive GST writ petitions fail when an earlier challenge was withdrawn without liberty to refile the same adjudication dispute.
Case-Laws
GST
Withdrawal of a writ petition without liberty to file afresh abandons the Article 226 remedy for the same cause of action, although it does not create res judicata. Applying the public-policy principle underlying Order XXIII Rule 1 CPC to writ proceedings, the High Court treated a later GST challenge seeking substantially identical relief against the same adjudication order as non-maintainable. Altering the grounds did not create a fresh basis for relief. The unavailed statutory appellate remedy and unexplained delay in invoking writ jurisdiction further supported dismissal; pending interlocutory applications were disposed of.
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