Goods and Services Tax

Binding GST appellate orders require consequential refunds unless statutory withholding safeguards, including hearing, are satisfied.
Case-Laws
GST
Binding GST appellate orders remain operative unless modified, stayed or set aside through statutory remedies; departmental review, an intended challenge, or a later appeal does not suspend them. Refund authorities must process a consequential refund arising from annulment of the underlying demand and cannot revisit adjudicated input tax credit entitlement during refund processing. Withholding pending proceedings requires compliance with statutory safeguards, including the prescribed opinion based on malfeasance or fraud and an opportunity of hearing; a proposed challenge to the appellate order is insufficient. Writ jurisdiction may be invoked despite an alternative appeal where refund rejection disregards a binding order and the appellate remedy is ineffective. The refund rejection was quashed and remanded for fresh consideration.
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Parallel GST proceedings for one tax period were quashed while earlier exemption proceedings continue for fresh consideration.
Case-Laws
GST
Parallel GST proceedings for the same tax period cannot continue while earlier proceedings on alleged nil or exempt turnover remain pending. The later show-cause notices, adjudication orders and consequential recovery action were quashed as duplicative proceedings. The exemption claim remains for examination in the earlier proceedings upon production of documents and after a personal hearing. Those earlier proceedings must be reconsidered afresh without limitation impeding consideration because the now-quashed parallel proceedings had been initiated.
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Rule 88C mismatch proceedings require examination before a Section 73 adjudication can be lawfully sustained.
Case-Laws
GST
Section 73 adjudication requires consideration of the taxpayer's claim that its Rule 88C(2) explanation was accepted and that the mismatch proceedings concluded in its favour. Where that claim remains unexamined, the taxpayer must receive an opportunity to provide the relevant details and response. The adjudication was quashed and restored for fresh consideration of whether the Rule 88C proceedings had concluded in the taxpayer's favour and whether that conclusion affected the sustainability of the Section 73 proceedings.
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GST refund limitation permits writ-based delay condonation where double reversal of transitional credit requires statutory reconsideration.
Case-Laws
GST
GST refund applications remain subject to a mandatory two-year limitation period, but writ jurisdiction may be available to condone delay. An asserted double reversal of TRAN-I credit, discovered only on examining records, can constitute just cause for such condonation. The time-bar rejection was set aside, and the refund claim was restored for fresh examination by the statutory authority upon production of supporting documents.
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Differential GST on government works contracts must be reimbursed by the service recipient, subject to verification of records and calculations.
Case-Laws
GST
Government recipients of works-contract services must bear and reimburse the differential GST liability caused by the VAT-to-GST transition during contract execution. Reimbursement is limited to the incremental tax attributable to GST, rather than the full tax burden, and depends on verification of the contractor's records and calculations. A writ of mandamus required consideration of the contractor's representation, determination of the verified differential amount, and reimbursement within the stipulated period.
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Advance ruling jurisdiction under GST requires the applicant's own supply, barring questions on another person's obligations.
Case-Laws
GST
GST advance ruling jurisdiction is confined to questions concerning supplies undertaken or proposed to be undertaken by the applicant. Questions concerning consultancy services allegedly supplied by a consultancy in-charge or faculty member to the applicant, including that person's GST registration and tax-invoice obligations, fall outside that scope. The advance ruling application was therefore not admitted because it did not concern any supply made or proposed to be made by the applicant.
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Going-concern business transfers qualify as services, but exemption requires proof; otherwise transferred stock and assets are taxable goods.
Case-Laws
GST
Under GST, a comprehensive transfer of an entire proprietorship business to an LLP without consideration, including assets, liabilities, employees and business rights, constitutes a supply even if not made in the ordinary course of business. Transfer of a business as a going concern is classified as a supply of services because it is excluded from treatment as a supply of goods. The going-concern exemption applies only where the business is established as a going concern under applicable standards. If that status is not established, transferred stock and other business assets are treated as taxable supplies of goods at the applicable rates.
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Battery-free electric vehicles retain preferential GST classification, while input-tax-credit refund claims lie outside advance-ruling jurisdiction.
Case-Laws
GST
Electrically operated E-Rickshaws, E-Carts, Ecovat Hydraulic vehicles and E-Scooters retain that classification when supplied without batteries if their traction derives solely from electrical energy and the fitted motor, inverter, control module and drivetrain enable passenger or goods transport. The three-wheeled vehicles fall under heading 8703 and E-Scooters under heading 8711; each attracts GST at 5 per cent whether supplied with or without batteries. Refund claims for accumulated input tax credit arising from an inverted duty structure fall outside the specified scope of advance-ruling questions and remain undecided on merits.
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Self-invoice value for imported related-party services is deemed open market value where full input tax credit is available.
Case-Laws
GST
Imported IT support services from a related foreign entity constitute imports of services liable to integrated tax under reverse charge. For such supplies, the recipient's self-invoice qualifies as the invoice contemplated by the second proviso to Rule 28(1) and the reverse-charge self-invoicing requirement. Where the recipient is eligible for full input tax credit, the value declared in that self-invoice is deemed to be the open market value. This treatment applies only subject to full input tax credit eligibility on the reverse-charge tax payable.
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Water-supply exemption excludes infrastructure construction and repair works, leaving pipeline works contracts taxable under GST.
Case-Laws
GST
Water-pipeline construction involving transfer of goods incorporated into immovable property is a works contract. New main-pipeline installation falls under SAC 995422 as construction of water mains and lines, while distribution-network revamping falls under SAC 995429 as repair and maintenance of civil engineering works. The water-supply exemption is confined to direct water-supply services and does not cover related construction, repair, or ancillary infrastructure works. Supplies to a statutory governmental authority also fail the relevant exemption conditions where they are neither pure services nor qualifying composite supplies. Both services are taxable as works contracts at 9 per cent CGST and 9 per cent SGST.
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FinMin allays fears of increase in cash transactions post UPI MDR levy: Sources
GST
Dated:- 17-9-2026
PTI
New Delhi, Sep 17 (PTI) The Finance Ministry does not expect an increase in cash transactions due to the levy of 0.4 per cent Merchant Discount Rate (MDR) for UPI transactions above Rs 2,000, which comes into effect from October 15, sources said on Thursday.

Sources said it is anticipated that the imposition of MDR would not lead to a reduction in UPI transactions as only 4 per cent of total volume is getting impacted due to the decision.

Asked about the concerns leading to an increase in cash transactions post October 15, sources said it is unlikely to happen as transactions through RuPay debit cards are completely free regardless of amount.

The ministry is also preparing to put a monitoring mechanism in place to ensure that the UPI MDR burden is not passed on to customers, sources added, assuaging widespread concerns of transfer of MDR charges to end users

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ain UPI transactions above Rs 2,000 is aimed at creating a sustainable revenue framework for the digital payments ecosystem.

The MDR is a fee paid by merchants to payment service providers for processing digital transactions.

From October 15, a 0.4 per cent MDR will apply to person-to-merchant UPI payments above Rs 2,000. The charge will be paid by merchants, not consumers, and will be capped at Rs 300 for transactions of Rs 75,000 or more. Payments between individuals, as well as the vast majority of everyday merchant payments, will remain free.

Essential services, such as railways, telecom, fuel and insurance, will attract a flat Rs 5 fee per transaction above Rs 2,000. Capital markets transactions (mutual funds, stockbroking) get a lower 0.02 per cent rate, also capped at Rs 300.

Small merchants collecting up to Rs 1 lakh a month via UPI QR codes remain fully exempt from any new charge – a carve-out, officials say, shields about 96 per cent of all merchant transactio

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Department of Financial Services (DFS) issued the clarification in response to observations in the US Trade Representative's (USTR) 2026 report on the inability of US electronic payment service providers to participate in the UPI ecosystem, including credit transactions on UPI, on a level playing field with RuPay.

“The NPCI circular of September 15, 2026, does not allow credit transactions on UPI by any other credit card other than the RuPay credit card. There is a clear policy of only allowing the RuPay credit card on UPI to enable the RuPay credit card to become the preferred choice of credit card amongst users in India,” the DFS said in a post on X.

“The allegation that MDR has been introduced under any external influence is patently false and misleading,” it added.

The rejection comes amid allegations by some Opposition parties, including the Congress, that the government had succumbed to US pressure in deciding to impose a 0.4 per cent MDR on UPI transactions above Rs

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Diwali 2026 Is Late 26 Things Every Clothing Business Must Fix Now
GST
Dated:- 17-9-2026
PTI
SURAT – With Diwali 2026 falling on November 8, significantly later than last year, apparel manufacturers, wholesalers and retailers across India should begin festive planning much earlier than usual to stay ahead of inventory, cash flow and operational challenges, according to Ritesh Modi, Founder of Kesaria Textile Company.

Modi has released a comprehensive 26-point festive readiness guide highlighting how the delayed festival calendar is expected to reshape buying cycles, production schedules and retail demand across the clothing industry.

According to Modi, the additional lunar month in the Hindu calendar has pushed major fest

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estive businesses are distinguished more by disciplined planning than by the size of their product catalogue.

His recommendations urge clothing businesses to work backwards from the Diwali calendar instead of relying on conventional planning timelines. He advises manufacturers and retailers to finalise procurement schedules early, create phased inventory plans, secure reorder commitments from suppliers and prepare separate inventory strategies for the post-Diwali wedding season.

The guide also recommends adopting a structured purchasing strategy rather than exhausting festive budgets at the beginning of the season. According to Modi, businesses should maintain flexibility to replenish fast-moving products while also establishing a c

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o minimise disputes during the busiest sales period.

The guide further highlights operational readiness within retail stores, including hiring and training seasonal staff by early September, improving trial room efficiency, reducing billing time and refreshing visual merchandising throughout the festive calendar to reflect changing consumer preferences from Navratri through Diwali.

Recognising the growing role of digital commerce, Modi also urges businesses to strengthen their presence on WhatsApp, maintain updated Google Business Profiles, create regional-language short-form video content and pay greater attention to emerging demand from Tier-2 and Tier-3 markets.

He additionally recommends locking marketplace and e-commerce ca

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Supplier tax payment is a substantive ITC condition, requiring reversal for default but permitting re-availment after payment.
Notes
GST
Input tax credit under the CGST Act is conditional on the supplier's actual payment of tax to the Government; invoice possession, receipt of supplies and GSTR-2B reflection do not independently establish final eligibility. Section 16(2) conditions operate cumulatively, with the claimant bearing the burden of proving eligibility. Under Section 41(2) and Rule 37A, credit attributable to supplier non-payment must be reversed with applicable interest where prescribed, but may be re-availed when the supplier furnishes the relevant return and pays tax. The condition is treated as substantive, not as unconstitutional deprivation or double taxation, and cannot be read down to exempt bona fide recipients absent fraud or collusion.
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Actionable claims in stake-based gaming attract GST on gross stakes, with specialised valuation rules for online gaming and casinos.
Notes
GST
GST applies to the platform's supply of actionable claims created when players commit stakes to uncertain outcomes, including skill-based games played for stakes. Each participant obtains a contingent beneficial interest in pooled funds, while the platform is supplier where it controls rules, funds, participation and payouts. Committed stakes cease to be mere deposits and constitute consideration; valuation follows the gross stake or applicable deposit measure rather than retained platform revenue. Schedule III's negative-list treatment does not cover betting-and-gambling claims. Rule 31A governs earlier stake-based valuation, while Rules 31B and 31C prescribe online gaming and casino valuation. The online-money-gaming changes are clarificatory and apply to pending matters, subject to factual verification of deposits and computation.
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GST writ challenges requiring factual ITC verification must proceed on appeal, while central enforcement may investigate State-assigned taxpayers.
Case-Laws
GST
GST writ challenges requiring factual verification of input tax credit claims should ordinarily proceed through the statutory appellate remedy. Where adjudication turns on correlating work orders, subcontracts, invoices, payments and evidence of actual execution, the appellate authority may examine both factual and legal questions, including the applicability of a relevant circular; non-reproduction of a reply alone does not establish non-consideration. Specified DGGI officers appointed as Central tax officers may investigate State-assigned taxpayers, particularly in alleged multi-State transaction chains. A common show-cause notice may be adjudicated by the Commissionerate allocated under applicable notifications and allocation criteria. The merits of input tax credit, interest and penalty demands remain open in appeal.
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Common GST adjudication jurisdiction permits notification-based allocation; highest-demand selection leaves merits issues to statutory appeal.
Case-Laws
GST
Pan-India jurisdiction of specified Additional and Joint Commissioners to adjudicate composite DGGI show cause notices rests on the governing notifications. A circular may operationalise that jurisdiction by selecting a common adjudicating authority from officers already competent, but cannot itself confer or enlarge jurisdiction. Selection based on the highest-demand criterion is objective, uniformly applicable and rationally connected to consistent single adjudication, rather than impermissible sub-delegation or arbitrary classification. The notified appellate forum corresponds to the Commissionerate of the common authority. Once a jurisdictional challenge fails, challenges on merits, evidence and natural justice must proceed through the statutory appeal, with merits remaining open.
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Electronic authentication of GST notices determines validity; unsigned adjudication orders lack legal existence, permitting writ relief despite appellate remedies.
Case-Laws
GST
Mandatory authentication under Rule 26(3) requires every electronic GST notice and adjudication order to bear a digital signature, e-signature, or another notified verification mode. An officer's portal login authenticates access only; it does not authenticate or attribute a document's contents. Electronic documents issued without a signature or notified authentication mode lack legal existence, and the defect is jurisdictional rather than curable. The unsigned show cause notice, adjudication order, and consequential recovery action were set aside, while fresh proceedings remained available in accordance with law. A statutory appeal does not bar writ jurisdiction where the challenged order lacks legal existence.
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GST show cause notice timing follows calendar-month intervals, while ex parte adjudication may permit a conditional reply opportunity.
Case-Laws
GST
GST show cause notices required at least three months before the outer deadline for adjudication are assessed by the minimum interval between notice and final determination, rather than by mechanically deriving an independent limitation date through backward counting. The intervening period is computed in calendar months, excluding the date of notice; this may render a notice timely before expiry of the adjudication deadline. Where an ex parte adjudication order is made while challenge proceedings and interim protection are pending, a conditional opportunity to reply may be granted, with merits left open; the order may revive if no reply is filed within the stipulated period.
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Adjustment of recovered electronic credit can satisfy GST appellate pre-deposit, restoring an appeal for merits determination.
Case-Laws
GST
Electronic credit already recovered from a taxpayer's electronic credit ledger may be adjusted against the mandatory GST appellate pre-deposit where the recovered balance exceeds the required pre-deposit and the taxpayer seeks adjustment rather than refund. On that basis, dismissal of the GST appeal for non-payment of pre-deposit was quashed and the appeal restored for merits determination. The adjustment was permitted on the particular facts, with all merits contentions left open and without precedential effect.
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Section 129(3) notice deadline: a one-day delay invalidates GST detention and penalty proceedings for breach of mandatory timeline.
Case-Laws
GST
Section 129(3)'s seven-day deadline for issuing notice after detention of goods and conveyance under GST is mandatory. The timeline limits coercive detention and seizure powers, protects against arbitrary or prolonged detention, and requires strict compliance because the provision uses “shall” and affects taxpayer rights. A delay of even one day in issuing the notice vitiates the resulting detention and penalty proceedings. Penalty orders issued or affirmed despite breach of this timeline are liable to be set aside, without preventing other proceedings permissible under the Act. Deposited penalty may be released following due verification.
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Parallel GST adjudication cannot continue under Section 74 after Section 73 adjudication, while ex parte orders require reconsideration.
Case-Laws
GST
Parallel GST adjudication under Sections 73 and 74 for the same financial period was treated as incongruous once adjudication under Section 73 had concluded; the show cause notice, adjudication order and summary order under Section 74 were quashed. The ex parte Section 73 adjudication was also quashed and restored for fresh consideration because the taxpayer asserted that exemption documents and a reply could substantiate its position on the alleged mismatch or erroneous declaration. Reconsideration must occur after receiving the taxpayer's reply and supporting documents, while the merits of the exemption claim remain open.
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Parallel GST proceedings are barred when State adjudication begins first; separate orders require a meaningful chance to respond.
Case-Laws
GST
Section 6(2)(b) of the CGST Act bars a Central Tax proper officer from initiating proceedings on a subject matter already taken up by a State GST proper officer. Subsequent Central Tax show-cause and adjudication proceedings on the same matter were therefore quashed. For street-light works contracts, the claimed exemption depended on demonstrating that the value of goods supplied remained below the prescribed proportion of the contract value. State Tax adjudication orders and consequential garnishee notices were quashed to permit responses and supporting material, subject to deposit of 10% of the tax demand; the exemption merits remain open.
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Input tax credit claims require proof of purchaser fraud or collusion; supplier default alone does not justify arrest.
Case-Laws
GST
Input tax credit of a registered purchaser cannot ordinarily be denied merely because the supplier later becomes non-existent or defaults, where the purchaser holds valid registration, invoices, banking-channel payment evidence and filed returns, unless fraud or collusion is established. Documentary proof of actual receipt of goods and absence of prima facie collusion ordinarily make custodial interrogation unnecessary. Arrest for cognizable CGST offences requires the Commissioner's recorded reasons to believe, based on material satisfying statutory conditions rather than suspicion alone. Anticipatory bail in alleged wrongful input tax credit availment was granted subject to cooperation, document production and other safeguards.
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Concurrent anticipatory-bail jurisdiction permits applications before either forum, while secured evidence may negate custodial interrogation in GST evasion.
Case-Laws
GST
For anticipatory bail, the expression “jurisdictional Court” includes both the High Court and the Court of Session, allowing applicants to choose either forum rather than requiring an approach to the Principal Sessions Court. In alleged GST evasion, custodial interrogation was not considered necessary where the maximum punishment was five years, the offences were compoundable, documentary and digital evidence was substantially secured by authorities, and the applicants had business roots and agreed to cooperate. Anticipatory bail was granted subject to conditions including deposit, passport surrender, reporting requirements, bonds, and continued cooperation with the investigation.
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GST transition in works contracts separates contractual reimbursement disputes from statutory assessment, recovery and enforcement obligations.
Case-Laws
GST
GST liability arising from works contracts spanning the pre-GST and GST regimes must be determined under the applicable statute, while reimbursement of any incremental GST burden depends on the contractor-employer contract. Contractual directions may govern work calculation, representations and GST adjustment, but cannot alter statutory assessment, recovery, interest, penalty, return limitations or enforcement by tax authorities. Assessment orders may be challenged through appropriate proceedings, with the time spent pursuing writ petitions excluded when calculating limitation.
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