Author: admin_gst

Doctrine of merger distinguishes refusal of special leave from appellate adjudication, preserving review and remanded proceedings where appropriate.
Notes
GST
Doctrine of merger under Article 136 depends on whether the Supreme Court granted leave and exercised appellate jurisdiction, not merely on disposal of a special leave petition. A non-speaking refusal of leave neither merges the challenged order nor confirms its reasoning, creates automatic res judicata, or independently bars review or writ proceedings. A speaking refusal likewise does not cause merger, although legal propositions expressly declared may bind under Article 141. Merger follows when leave is granted and the appeal is decided. In remanded GST proceedings, an earlier dismissal of special leave therefore does not prevent consideration of residual grounds or reliance on a later binding ruling, subject to applicable review, limitation, and procedural requirements.
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Manual show-cause replies in GST adjudication require consideration; orders issued before permitted evidence deadlines breach natural justice.
Case-Laws
GST
Natural justice in GST adjudication requires the Proper Officer to consider a taxpayer's representation under section 74(9) read with rule 142(4). Form GST DRC-06 need not be furnished exclusively through the electronic portal; a manually filed reply acknowledged at personal hearing cannot be disregarded solely because it was unavailable online. Issuing a demand order before expiry of time allowed for supporting documents, without addressing the reply or jurisdictional objection, denies a meaningful hearing. Such procedural defects support writ intervention despite an alternative statutory remedy. The demand order was set aside and remitted for fresh adjudication, with jurisdictional and merits objections left open.
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Input tax credit reversal on supplier credit notes was not mandatory; bona fide IGST adjustment did not attract fresh demand.
Case-Laws
GST
Recipient input tax credit did not require reversal solely because a supplier issued credit notes during the relevant period: neither the Act nor the Rules imposed that obligation, the statutory matching mechanism was inoperative, and Rule 37 concerned non-payment to suppliers. Accordingly, the premise for reversal failed. Excess IGST adjusted against CGST and SGST liabilities was procedurally irregular because the prescribed refund, re-credit or subsequent IGST-adjustment route was not used. However, as a bona fide first-year GST correction causing no revenue loss, it did not justify a fresh tax demand, interest or penalty; the departmental appeal was dismissed.
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Leasehold rights assignment transfers benefits of immovable property, keeping industrial plot transfers outside the GST supply net.
Case-Laws
GST
Assignment of leasehold rights in an industrial plot to a third party is treated as a transfer of benefits arising from immovable property rather than a GST-taxable supply. A binding High Court ruling on that characterisation remains operative absent a stay or recall, notwithstanding an intended review. GST is therefore not leviable on such assignment, and the appellate order rejecting the departmental challenge stands sustained.
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Retrospective price escalation triggers interest from original clearance, while bona fide transitional compliance does not attract tax penalty.
Case-Laws
GST
Retrospective contractual price escalation fixes the true value of pre-GST clearances from their original clearance date. Section 142(2)(a) permits GST-compliant debit notes and post-transition reporting of differential tax, but does not create a new taxable event or defer accrual of the enhanced value. Differential tax on the increased value is therefore due from inception, making statutory interest mandatory despite the absence of formal provisional assessment. Penalty under section 122 is not warranted where the differential tax is voluntarily paid after price finalisation under a bona fide understanding of complex transitional provisions, without suppression, fraud, wilful misstatement or deliberate evasion.
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Adjusted total turnover requires inclusion of time-barred credit notes, but the zero-rated supply refund remained permissible.
Case-Laws
GST
Credit notes validly issued for returned or rejected supplies reduce taxable turnover and are deductible from adjusted total turnover under the zero-rated supply refund formula. Credit notes issued during the refund period against invoices for Financial Year 2019-20 after expiry of the statutory time limit cannot be excluded from adjusted total turnover and must be included on recomputation. As the recomputed refund remained within the maximum permissible amount, the refund already sanctioned remained admissible and the Revenue challenge failed.
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Belated Credit Notes Increase Adjusted Total Turnover and Reduce Inverted Duty Structure Input Tax Credit Refunds
Case-Laws
GST
For inverted duty structure refunds, credit notes issued for returned or rejected supplies generally reduce taxable turnover and adjusted total turnover. Credit notes relating to invoices from an earlier financial year but issued after the statutory period for issuing and declaring them cannot be excluded from adjusted total turnover. Their value must therefore be included when recomputing accumulated input tax credit refund under Rule 89(5), reducing the refund to the permissible amount and requiring recovery of any excess refund.
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Monetary-limit policy requires Revenue to prove a recognised exception before pursuing a GST penalty appeal on merits.
Case-Laws
GST
Departmental GST appeals challenging only a penalty must assess the disputed penalty against the applicable monetary threshold under the departmental litigation policy. An exception to that policy must be specifically identified and supported by the relevant facts and basis; it cannot be presumed. Commissioner authorisation to file an appeal under section 112(3) does not independently establish an exception or dispense with compliance with the monetary-limit policy. Absence of material showing a recorded case-specific opinion under a residual exception makes the appeal non-maintainable, without determination of the underlying tax merits.
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Bogus Inward Supply Allegations Require Proof of Supplier Non-Existence or Tax Evasion Before GST Demands Survive
Case-Laws
GST
GST demands alleging bogus inward supplies require proof that the supplier firm was non-existent or that tax evasion occurred. Registration of the firm and filing of relevant statutory returns supported its existence. In the absence of evidence disproving those facts or establishing tax evasion, the allegation of a bogus or non-existent firm could not sustain the GST demand or penalty. The deletion of the demand and penalty was consequently maintained, and the Revenue's appeal failed.
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Monetary-limit policy binds departmental GST appeals; absent a recognised exception and recorded Commissioner opinion, below-threshold appeals fail.
Case-Laws
GST
Departmental GST appeals below the prescribed monetary limit are governed by binding litigation-policy circulars. The disputed amount must be computed under the circular, and Revenue must establish a recognised exception. Reliance on the residual interest-of-justice-or-revenue exception requires the Commissioner's recorded, case-specific opinion and its basis; a general appellate authorisation is insufficient. Without such exception or supporting record, the departmental appeal was unmaintainable and dismissed at the threshold, leaving the underlying tax merits undecided.
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Assignment of Industrial Leasehold Rights Is Treated as Immovable Property Transfer, Excluding GST on Third-Party Assignments
Case-Laws
GST
Assignment by sale and transfer of leasehold rights in industrial plots allotted by GIDC is treated as a transfer of benefits arising from immovable property rather than a taxable supply under GST. On that basis, GST is not leviable on assignments to third-party assignees. An intention to seek review does not displace a binding ruling unless it is stayed or recalled.
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Recommendations of the 57th Meeting of the GST Council
GST
Dated:- 8-10-2026

GST Council recommends removal of arrest provisions under GST

GST Council recommends raising prosecution threshold from Rs.1 crore to Rs.5 crore

GST Council recommends reduction in general penalty from Rs.25,000 to Rs.10,000

GST Council recommends wider eligibility for input tax credit and refunds

GST Council recommends further simplification of registration and compliance processes

GST Council recommends faster refunds to improve working capital for businesses

GST Council recommends common standards for GST notices and proceedings

GST Council recommends measures for smoother movement of goods across states

GST Council recommends intelligence-based and authorised interception of goods

GST Council recommends simplified GST registration for small sellers on e-commerce platforms

GST Council recommends measures to facilitate export of services

GST Council approves in-

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tion; clarifications regarding applicability of GST on supply of certain goods and services; and other measures for trade facilitation and streamlining compliances in GST. FAQs are being issued for clarification of doubts. Major recommendations made in the 57^th GST Council meeting are as below:

A.  Process Reforms

A1.  Registration related reforms

1.   Streamlining registration process with clear guidelines on filing and processing

1.1      As per recommendations of GST Council made in 56^th meeting, automatic registrations, without officer intervention, are being granted by the portal under rule 14A of the CGST Rules, 2017, in cases where the applicant does not intend to pass on ITC more than Rs.2.5 lakh per month. To streamline processing of registration applications in remaining cases, the GST Council made the following recommendations in the 57^th meeting:

• issuance of a comprehensive circular specify

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sp; The GST Council recommended an amendment to rule 19 of the CGST Rules, 2017, to provide for automatic acceptance of amendments to all registration particulars on the portal, except those relating to the Principal Place of Business (PPoB). Further, for taxpayers registered under rule 14A of the CGST Rules, 2017 (automatic route), amendments of all registration particulars, including those relating to the PPoB, will be accepted automatically on the portal.

2.2 This will facilitate easy and almost real time updation of registration details on the portal in such cases, without interface with the tax officers.

3.   Rationalization of registration cancellation process under GST:

3.1  The GST Council recommended amendments in the CGST Act, 2017 and the CGST Rules, 2017, to simplify the registration cancellation process, as follows:

3.1.1    Automatic cancellation of registration on the application of the taxpayer

Phase 1: The applications for c

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he CGST Rules, 2017 and insertion of rule 23A in CGST Rules, 2017, to provide for a mechanism of system based cancellation and revocation of registration based on non-compliance and subsequent compliance of the defaults of non-filing return or non-furnishing of the details of the bank account, within specified time period.

3.2  These measures will simplify and expedite the process of cancellation of registration and will reduce officer interface and bring more transparency to the cancellation process.

4.  Simplified GST registration mechanism for small sellers on the Electronic Commerce Operators (ECO) platform:

4.1  The GST Council, in its 56^th meeting had given an in-principle approval to provide a Simplified GST registration mechanism for small sellers on the Electronic Commerce Operators (ECO) platform. In continuity of the same, the Council in the 57^th meeting recommended insertion of rule 14B in the CGST Rules, 2017, to provide for a simple mechanism for

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to streamline return filing process, so as to minimize mismatches in liability and input tax credit (ITC) in returns:

• Enhancements in FORM GSTR-1/1A/IFF to enable better reconciliation of the details furnished in these forms with the details reported in the return in FORM GSTR-3B.

• Insertion of a rule 86D in the CGST Rules, 2017, to provide for a facility namely, “Electronic Statement of tax paid on Reverse charge basis and input tax credit claimed” on the portal, to facilitate the taxpayers in correct reporting of tax liability and ITC on supplies liable to RCM in returns.

• Insertion of sub-rule (1A) in rule 61 of the CGST Rules, 2017 to provide a mechanism of correct reporting and correction/rectification of liability in the return, so that liability in the return in FORM GSTR-3B aligns with the details of liability furnished in FORM GSTR-1/1A/IFF.

• Amendment in FORM GST DRC-03, to declare the details of the underlying invoice

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e in FORM GSTR-2B.

• Issuance of a circular to clarify the manner of furnishing correct and proper information of ITC and reversal thereof in return in FORM GSTR-3B, in the context of IMS, Electronic Credit Reversal and Reclaim Statement and Electronic Statement of tax paid on Reverse charge basis and input tax credit.

5.2   The Council recommended that the provisions regarding alternate mechanism for amendment of liability and ITC in the GST return, may be brought into force from the return of April, 2027.These measures will considerably reduce mismatches in liability and ITC in returns, thus not only reducing demand notices and system generated intimations on account of such mismatches, but also improving the integrity of ITC across the supply chain, thereby facilitating taxpayers.

5.3   Further, the Council recommended placing the proposed revised mechanism in the public domain for a time-bound consultation. Union Finance Minister was authorize

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• For refund claims on account of zero-rated supplies and inverted duty structure, 90% of the amount claimed will be sanctioned on provisional basis automatically by the system, without officer intervention, on the basis of identification and evaluation of risk by the system.

Phase 2:

• System-based automated acknowledgment (without officer intervention) on due verification of the refund application by the system.  

• In such acknowledged cases, automated sanction of full refund claim by the system (without officer intervention), in respect of claims pertaining to zero rated supplies, after adjusting pending dues, if any, on the basis of identification and evaluation of risk by the system.

6.2  For expediting and streamlining the refund process, the Council further recommended amendments in the CGST Act, 2017 and the CGST Rules, 2017, to inter-alia provide for:

• Amendment in refund application in FORM GST RFD-01, to

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d of such pre-deposit amount, and

• issuance of a circular to clarify issues regarding rate of interest on refund of pre-deposit.

6.4.  These measures will streamline and expedite refund processing through greater automation and reduced manual intervention, thereby facilitating timely sanction of eligible refunds and reducing compliance burden for taxpayers as well as interface with the department. Introduction of automation will ensure transparency, certainty, and uniformity and will also improve cash flows for taxpayers.

A4.  Reforms related to dispute resolution

7.1  The GST Council recommended issuance of a circular to  provide comprehensive guidelines to the tax officers to streamline process of issuance of  demand notices, adjudication orders and appeal orders, inter alia, covering issues relating to, quality of demand notices and adjudication/appeal orders, timely issuance such notices/orders, proper invocation of grounds of fr

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gwith interest and penalty, within the specified time limit.

• for a reduced penalty of 5% in non-fraud cases, where tax along with interest is discharged within 30 days (under section 73) or 60 days (under section 74A) of the adjudication order.

• removal of condition of minimum penalty of Rs. 10,000/-, in non-fraud cases.

7.3  The GST Council recommended reducing the maximum general penalty under section 125 of the CGST Act, 2017 from Rs. 25,000/- to Rs. 10,000/-.

7.4  The Council recommended amendment in the provisos to section 107(6) and section 112(8) of the CGST Act, 2017 to provide an upper limit of Rs.40 crore (Rs. 20 crore under CGST and Rs. 20 crore under SGST/UTGST) on the pre-deposit payable for filing an appeal before the Appellate Authority or the Appellate Tribunal, respectively, in cases where the order involves only penalty and no demand of tax. This will ease the financial burden on taxpayers and make it easier for them t

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inverted duty structure, the Council recommended that refund of ITC on capital goods will be spread over 60 months, and shall be available in respect of ITC availed on capital goods on or after 1^st April, 2027.  

8.4   This will ease working capital constraints for taxpayers and remove blockage of ITC on account of input services and capital goods in such cases. 

9.     Rationalization of blocked ITC by amendment in section 17(5) of the CGST Act, 2017: The Council recommended amendment in section 17(5) of the CGST Act, 2017 to remove the restrictions on availment of ITC  inter-alia on the supplies of outdoor catering, health and life insurance, telecommunication towers, pipelines laid outside factory premises, free samples, goods destroyed or written off on expiry of shelf life as required by law. This will reduce the cascading of taxes and ensure a smoother flow of ITC across the supply chain.

B2.  Reforms relating to exports/zer

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r, will be determined as per the default provision under section 13(2) of the IGST Act, 2017 i.e. the location of the recipient of such services. This will facilitate access to export-related benefits under GST for Indian service providers providing such services to foreign recipients.

• insertion of an explanation to section 16(1) of the IGST Act, 2017 to provide that in the cases where goods are supplied to an overseas buyer, but the delivery of goods is made to the said buyer in an SEZ/FTWZ, and the payment for such supply is received in convertible foreign exchange or in Indian Rupees wherever permitted by the RBI, then such a supply will be deemed to be supply of goods to an SEZ/FTWZ. This will provide certainty regarding zero rating benefit to Indian manufacturers making supply of goods for overseas buyers by making delivery to them in an SEZ/FTWZ for warehousing or further processing.

B3.  Ease of living and doing business

11.  Rationalization of pro

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various offences under section 132 of the CGST Act, 2017.

12.  Rationalization of provisions relating to E-way Bill

12.1  The GST Council recommended amendments in section 68, section 129 and section 130 of the CGST Act, 2017 so as to inter-alia provide that, –

• a conveyance carrying goods can be intercepted only on specific intelligence and with the authorisation of an officer not below the rank of Joint Commissioner.

• Inspection and further action for detention or seizure can be taken when either the supplier, or the recipient, is located or registered in the State where interception is being made. No interception in the transit States.

• Where no e-way bill has been generated, or the conveyance is not carrying any document to show the origin or destination of the goods, as the case may be, the goods can be inspected, detained or seized, irrespective of the jurisdiction.

• Provision of confiscation of goods/c

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decision on such objection.

15.  Extending relief for small taxpayers on late fees: The GST Council recommended waiver of late fee on delayed filing of return under section 39(1) of the CGST Act, 2017, for taxpayers with an annual turnover up to Rs. 5 crore in the preceding financial year, if the said delayed return is filed by the end of the month in which it was due.

16.  Clarification in respect of various issues through circulars: The GST Council recommended issuance of circulars to provide clarity and to remove ambiguities arising due to varied interpretations by the field formations, in respect of the following issues:

• Issues relating to Input Service Distributor (ISD) mechanism for distribution of input service credit.

• Availment of input tax credit by banking companies and financial institutions including NBFCs who opt for section 17(4) of the CGST Act, 2017.

• Various issues relating to payment of pre-deposits.

Ã

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elating to time limit for availment of input tax credit under section 16(4) of the CGST Act, 2017.

• amendment in section 9(5) of the CGST Act, 2017, to provide clarity regarding liability of the ECO to pay tax for the notified services, irrespective of the business models being followed by him.

• introduction of a validation clause in CGST Act, 2017, for validation of notices which have been held invalid by various courts on the ground of having been issued for multiple financial years.

• extending e-invoicing to domestic supplies received from an unregistered person where the tax is payable under reverse charge mechanism, as well as to the import of services, for taxpayers having aggregate annual turnover of Rs. 5 crore and above.

19.  The Council approved various amendments to the CGST Act, 2017 and the GSTAT (Appointment and Conditions of Service of President and Members) Rules, 2023 to align the provisions in respect of the GST Appell

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ed bio-stimulants, which are registered under Schedule VI to the Fertiliser (Inorganic, Organic or Mixed) (Control) Order, 1985, are classifiable under heading 3101 as fertilisers. Further, it has been decided to regularise the past cases on “as is where is” basis (Explanation to be inserted in Sr. No. 237 of Schedule I of notification No. 09/2025-CTR).

4.   To clarify that the suppliers of second-hand vehicles, under the GST margin scheme, are allowed to avail Input Tax Credit (ITC) on various inputs (other than second-hand vehicles) or input services such as spares, repair and maintenance services, technology services, rent, marketing and advertisement services, etc. The restriction on availment of ITC under the said scheme applies only on the tax paid on the procured second-hand vehicles. [notification No. 8/2018-Central Tax (Rate), notification No. 9/2018-Integrated Tax (Rate) and notification No. 1/2018-Compensation Cess (Rate)].

5.   To bring waste and s

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he Compensation Cess not levied by the Canteen Stores Department (CSDs) on two and four wheelers for the period 01.07.2017 to 30.09.2022, and by CSDs and Unit Run Canteens on aerated drinks for the period 01.07.2017 to 31.03.2022.

C2.  Recommendations relating to services

1.   Passenger transport and rental of motor vehicles using Electric Vehicles

• To provide an option to pay GST at the rate of 5%, with restricted input tax credit, on passenger transport services and rental services of motor vehicles with operators, where the service is supplied using an electric vehicle, and the cost of battery charging is included in the consideration.

2.   Transportation and delivery services supplied through Electronic Commerce Operators

• To bring delivery services, other than courier and postal, supplied through an ECO under Section 9 (5) of CGST Act, 2017, where the person supplying such services is not liable for registration un

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of business, for the supply of restaurant/outdoor catering services, hotel accommodation services for value up to Rs. 7500 per unit per day, and gym/fitness services in the same manner as is currently available for passenger transportation services, tour operator services and renting of motor vehicles services.

5.   Transport of passengers by Helicopters from/to specified states

• To exempt from GST, the services of passenger transportation by helicopter on seat-sharing basis from/to airports/helipads located in north-eastern states, Sikkim and Bagdogra in West Bengal.

6.   Storage or warehousing of seeds meant for sowing:

• To exempt from GST, the services by way of storage or warehousing of seeds meant for sowing.

7.   Curing of coffee

• To exempt from GST, the agricultural support services of curing coffee provided by the coffee curers to the cultivators.

8.   Taxability of the services of Se

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Upfront/concession amount paid to NHAI under Toll Operate Transfer Model for highway projects

• To exempt from GST, the services of the grant of exclusive right, license and authority by the Government including local Authority, governmental authority and government entity to the concessionaire for highway projects to demand, collect and appropriate toll fee.

12.  Operation and Maintenance services for highway projects under TOT model

• To provide a special procedure regarding the valuation and time of payment of GST on Operation and Maintenance (O&M) services provided by concessionaires to the concessioning authority for highway projects in TOT model.

13.  Fund Transfer Pricing mechanism in banks

• To clarify that the notional amount regarded as “interest” in the books of accounts for the activity of notional transfer of funds between the branches of the banks by the head office as part of Funds Transfer Pricing transact

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Extended GST limitation requires a notice to plead fraud, wilful misstatement or suppression with supporting factual particulars.
Notes
GST
Section 74 of the CGST Act permits the extended limitation route only where a show cause notice states factual grounds showing that tax short-payment, erroneous refund, or wrongful input tax credit arose by reason of fraud, wilful misstatement, or suppression intended to evade tax. Bare statutory labels, audit objections, later affidavits, or new grounds in an order cannot cure a notice lacking that jurisdictional foundation. Section 75(7) confines confirmation to grounds specified in the notice, while Section 75(2) may deem a validly founded Section 74 notice to be under Section 73 if aggravated conduct is not established. Deliberate conduct, causal nexus, and taxpayer disclosure are central to extended limitation.
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Assessment of unregistered persons must precede GST recovery proceedings, leaving educational institution exemption claims open for determination.
Case-Laws
GST
Section 63 assessment of a person liable to GST who failed to obtain registration must precede tax-recovery proceedings under section 74. The proper officer must issue notice and make a best-judgment assessment for the relevant period after providing an opportunity of hearing. An educational institution may raise its exemption claim in those assessment proceedings. A recovery show-cause notice issued without first initiating the section 63 process was quashed, while the Department retained liberty to issue notice in ASMT-14 and pursue assessment; the exemption claim and other contentions remained open.
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Electronic GST authentication validates portal-issued demand notices, while portal upload starts limitation and RFN can replace DIN.
Case-Laws
GST
Electronically authenticated GST show-cause notices, adjudication orders and DRC summaries uploaded on the common portal remain valid even where taxpayer-facing PDFs display no physical or digital signature. Registered digital signature certificates, immutable electronic records, hash values and officer-certificate mapping satisfy electronic-authentication requirements; form signature fields cannot add to the Rules. Portal uploads constitute valid service and begin limitation; after the portal expressly identified the Additional Notices and Orders tab, taxpayers cannot claim ignorance of communications uploaded there, while challenges concerning earlier uploads remain open. GST communications may bear either a DIN or an independently verifiable RFN, but communications bearing neither identifier are invalid. Conflicting coordinate-bench views require reference to a larger bench rather than a contrary departure.
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Input tax credit mismatch requires documentary verification; non-appearance alone cannot end a GST appeal without merits review.
Case-Laws
GST
GST appeals should not be rejected solely for non-appearance where sufficient cause exists and the substantive input tax credit dispute remains unexamined. A mismatch between GSTR-3B and GSTR-2A/GSTR-2B does not, by itself, establish wrongful ITC availment; compliance must be verified against invoices, books of account, supplier details, payment records and other transaction evidence. For FY 2017-18 pending proceedings, the applicable verification mechanism should be applied. A subsequently issued CA/CMA certificate may be considered as corroborative evidence if verifiable from contemporaneous records. Fresh determination should address the mismatch, certificate, ledgers and reconciliation before sustaining tax, interest or penalty.
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Statutory delay limits in GST appeals remain binding, but restored registrations can render departmental challenges infructuous.
Case-Laws
GST
Statutory appellate authorities may condone delay in GST appeals only within the enactment's prescribed outer limit; equitable considerations or High Court directions issued under extraordinary jurisdiction cannot enlarge that power. Where the Department implemented an appellate order by restoring cancelled GST registrations, its subsequent challenge became infructuous because reversal could disrupt intervening transactions and input tax credit without workable consequential relief. Taxpayers retain an independent right to appeal registration cancellation when the common portal prevents a delayed revocation application; failure to seek revocation under Rule 23 does not extinguish that appellate remedy.
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Pre-deposit timing turns on final acknowledgement, allowing a timely defect cure before appeal registration and merits consideration.
Case-Laws
GST
Under the Explanation to Rule 110(4) of the CGST Rules, an appeal is filed only upon issuance of the final acknowledgement. A mandatory pre-deposit made after provisional acknowledgement, but within the time allowed to rectify a defect and before final acknowledgement, satisfies the pre-deposit requirement under Section 112(8). The timing objection is therefore treated as cured, enabling registration and admission of the appeal for consideration on merits.
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Leasehold rights assignments in industrial plots remain outside GST where treated as benefits arising from immovable property.
Case-Laws
GST
Assignment and transfer for consideration of leasehold rights in industrial plots allotted by GIDC constitute transfer of benefits arising from immovable property and are not subject to GST. The jurisdictional High Court's ruling on that characterisation remained binding on the Tribunal absent a stay or recall. The department's stated intention to seek review did not diminish the ruling's binding effect. Accordingly, GST was not leviable on the assignments, and the departmental appeals were dismissed.
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Retrospective invalidity of ocean-freight IGST supports refunds despite non-party status and prior credit utilisation, subject to authorised appeal grounds.
Case-Laws
GST
Judicial declarations invalidating the reverse-charge IGST levy on imported ocean freight operate retrospectively unless expressly limited, rendering the levy void from inception. Taxpayers who were not parties to the invalidating proceedings may rely on that declaration for refunds, except where their own unsuccessful challenge to the levy has attained finality. A departmental representative may challenge only grounds authorised by the Commissioner. Utilisation of IGST credit does not by itself create double benefit or unjust enrichment where unutilised CGST and SGST credits of equivalent value can be debited. Refunds are therefore supportable, with statutory interest for delay.
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E-Way Bill Omissions Without Tax Evasion Attract General Penalty, Not Detention Penalty for Bonded-Warehouse Return Transit
Case-Laws
GST
Return transit of duty-paid imported goods to a bonded warehouse after an aborted delivery, supported by import and customs-clearance documents and showing no quantity discrepancy, is treated as a logistical fallback rather than an unrecorded commercial movement. Section 129 detention and confiscatory penalty should not apply to a fresh e-way bill omission where the transaction is accounted for, duty has been paid, and no intent to evade tax or revenue loss exists. Such bona fide transit-documentation defaults attract only the general penalty under Section 125; the Section 129 penalty and related orders were set aside.
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Additional evidence in departmental appeals may include show-cause-notice material without introducing a new case where it merely corroborates existing record.
Case-Laws
GST
Documents already relied upon in a show cause notice do not constitute new evidence when placed before the appellate forum. An additional ground may identify the corroborative effect of existing record material without introducing a new case. Further judicial authorities may be cited, and reliance on previously cited authorities may be withdrawn. The departmental appellant was permitted to file the existing documents and amend the appeal, subject to supplying copies to the respondent.
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GST appellate hearing rights protect appeals from dismissal over limitation, authority and interest-only pre-deposit objections.
Case-Laws
GST
GST appellate procedure requires a hearing before disposal, including where limitation, signatory authority or pre-deposit is disputed. Delay may be condoned on sufficient cause within the further statutory period; no separate affidavit is prescribed. A company's authorised signatory may validate an appeal under a general power of attorney, and deficient proof of authority is curable. In interest-only appeals, alternative computations do not constitute an admitted liability, and statutory pre-deposit is confined to tax in dispute. Interest on differential GST runs from invoice-based tax liability despite customer non-reimbursement; cum-tax valuation applies only where the stated value includes tax. Interest demands for delayed GSTR-3B payments must account for documented interest already paid through reasoned adjudication.
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Premature GST summons challenges fail where summons merely seek information and no coercive recovery or arrest threat is evidenced.
Case-Laws
GST
Writ jurisdiction was not invoked against repeated GST summons that only sought information and documents, where the recipient had already submitted a representation with relevant copies. In the absence of evidence of coercive recovery or a threat of arrest, the summons did not establish a basis for judicial interference. The writ petition was treated as premature and rejected.
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Inverted-duty ITC refunds cover higher-rated component inputs, not just principal materials, subject to statutory exclusions and formula-based limits.
Notes
GST
Refund of accumulated ITC under an inverted duty structure depends on whether higher-rated input goods cause credit accumulation relative to output supplies, not solely on whether the principal raw material and output carry the same rate. Section 54(3)(ii) permits the claim subject to notified exclusions, credit eligibility, and proof of a causal nexus between qualifying inputs and accumulation. Input services and capital goods are excluded from Net ITC for the Rule 89(5) calculation. Rule 89(5) limits refundable quantum, while the prescribed process requires electronic filing, invoice details, ledger debit and verification. Administrative circulars cannot add a principal-input condition beyond the statutory test; claimants must substantiate rate inversion, manufacturing nexus, computation and procedural compliance.
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