Author: admin_gst

Refund of Excess IGST: Clerical GSTR-3B misreporting cannot justify retention of tax paid twice on zero-rated exports.
Case-Laws
GST
Excess IGST paid on zero-rated cashew-kernel exports because of a clerical GSTR-3B classification error remains refundable where export turnover and tax were correctly declared in GSTR-1. Incorrect reporting in the domestic-supply column may block automated Customs processing, prompting a second correctly reported payment and refund of only that later payment. Reconciliation establishing the original payment as excess supports refund, as retaining tax paid twice lacks authority of law. Procedural difficulties in GST refund processing cannot justify withholding the unrecovered original IGST payment.
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Proof of principal place of business governs GST registration; missing additional-premises rent agreement cannot justify cancellation.
Case-Laws
GST
GST registration cannot be cancelled solely because a rent agreement for an additional place of business was not produced where the prescribed registration application requires proof only of the principal place of business. Cancellation for contravention applies when statutory conditions, including non-conduct of business from the declared place, are established. Reliance exclusively on non-submission of documentation for an additional place of business conflicts with the statutory scheme and prescribed form. The cancellation and show-cause notice were quashed, and registration was restored from the suspension date.
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Input tax credit on retail-shop interiors remains available where the GST component is not capitalised in fixed-asset cost.
Case-Laws
GST
Input tax credit on joinery, carpentry and painting services used for shelves and display fixtures in rented retail shops is available where the services are used in furtherance of business and the GST component is not capitalised. The restriction for construction of immovable property applies only to the extent expenditure is capitalised. Although furnishing expenditure was capitalised as furniture and fixtures, the separately accounted GST was neither included in fixed-asset cost nor subjected to depreciation. The supplier-service classification, not disputed in the show-cause notice, could not be raised later to deny credit. Denial of the disputed credit was unsustainable and was set aside with consequential relief.
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Input tax credit claims require transaction-specific proof of goods receipt; restored supplier registration supports entitlement despite bogus-supplier allegations.
Case-Laws
GST
Input tax credit on purchases from an allegedly bogus supplier was allowed where the recipient produced purchase, transportation and goods-receipt records. Entitlement required examination of statutory conditions and transaction-specific evidence, rather than reliance solely on allegations against the supplier. Restoration of the supplier's registration also undermined the claim that it was bogus or non-existent. Documents submitted as additional evidence did not prejudice the adjudicating authority because they were forwarded for examination and its report was considered. The procedural objection was rejected, and the Revenue's appeal against allowance of input tax credit was dismissed.
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Input tax credit claims require evidence beyond a supplier's later non-existence and unsupported fraud allegations.
Case-Laws
GST
Input tax credit on purchases from a supplier later reported non-existent must be assessed on the totality of evidence. Contemporaneous invoices, transport records, GST records and banking-channel payments require independent verification and cogent rebuttal; a supplier's later non-existence alone does not establish fictitious purchases or non-receipt of goods. Recovery of allegedly wrongful credit under Section 74 requires positive evidence of fraud, wilful misstatement or suppression with intent to evade tax. Non-appearance before authorities or delayed invoice payment followed by proportionate credit reversal with interest does not, by itself, establish those statutory ingredients or justify equal penalty.
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Deferred input tax credit under section 16(5) remains available despite GSTR-2A mismatches when supporting records establish genuine business credit.
Case-Laws
GST
Section 16(5) of the CGST Act retrospectively permits input tax credit relating to FY 2017-18 to be claimed through a return filed up to 30 November 2021. A mismatch between GSTR-2A and GSTR-3B is a reconciliation issue and, by itself, does not require reversal where verifiable accounts, invoices and payment evidence establish genuine credit. Banking services received in furtherance of business are not within the blocked-credit categories under section 17(5) of the CGST/UPGST Act and may qualify for input tax credit.
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Curable GST pre-deposit defects require an opportunity to correct cash-ledger allocation before an amnesty appeal is rejected.
Case-Laws
GST
GST amnesty appeals should not be rejected solely because the prescribed cash component of a pre-deposit was debited through the electronic credit ledger rather than the electronic cash ledger, where portal glitches prevented the required cash-ledger debit. Such misallocation is a curable pre-deposit defect when the amount has otherwise been secured. The appellate authority must allow the taxpayer to rectify the cash-ledger component or rebalance the ledger debits, including re-credit of excess electronic credit ledger debit. Following rectification within the stipulated period, the first appeal must be admitted and decided on merits after hearing both sides.
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Show-cause notice limits prevent input tax credit disallowance on an unalleged supplier tax-payment ground during adjudication.
Case-Laws
GST
Section 75(7) prevents confirmation of an input tax credit demand on a ground not set out in the show-cause notice. Where the notice alleged ineligibility only under section 16(2)(aa), which was inapplicable to the relevant period, adjudication could not instead rely on the separate condition under section 16(2)(c) that suppliers must pay tax to the Government. Mere reproduction of section 16(2)(c), without allegations or supporting facts identifying its breach, does not provide adequate notice. A provision protecting proceedings from formal defects cannot cure this substantive defect in the notice and adjudication process.
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GST refunds for cancelled air tickets remain available when passenger reimbursements defeat unjust enrichment and credit-note adjustment is unavailable.
Case-Laws
GST
GST refunds on cancelled air tickets may be available where ticket, passenger, invoice, refund voucher, credit note and BSP records establish that the airline refunded both fare and tax and retained no amount. On those facts, unjust enrichment does not bar the refund. Where credit notes cannot be adjusted because no output tax liability remains after cancellations, refund may be claimed in FORM GST RFD-01 as excess payment of tax. For B2C passenger-ticket transactions, input tax credit reversal is not applicable where no recipient credit is involved; a later proviso requiring reversal of credit attributable to credit notes does not apply to earlier periods. Refund claims should consequently be processed with applicable interest.
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Actual transport movement determines goods-detention liability; acknowledged notice service stands, while release payments await fresh adjudication.
Case-Laws
GST
Section 129 liability for detained goods must be determined from the actual transport movement, including the route, destination and timing; a later e-way bill cannot retrospectively cure a contravention, and later invoices alone cannot establish onward movement. Conflicting interception accounts, incomplete carrier records and unavailable primary material require fresh, reasoned adjudication of the diversion defence. Acknowledged receipt of and response to FORM GST MOV-07 bars a later service objection, but does not remove the duty to consider the defence and grant statutory hearing. Payment to secure release does not conclude liability and must be adjusted or refunded following the fresh determination.
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Input tax credit verification governs GSTR-2A mismatches, while unutilised reversals and sales-return credit notes avoid additional tax consequences.
Case-Laws
GST
Input tax credit claimed in Form GSTR-3B is not denied merely because it is absent from Form GSTR-2A, which operated as a facilitative mechanism during the relevant period; the claimant must nevertheless prove statutory credit conditions, including supplier tax payment. Section 35(6) applies only to goods not accounted for, so verified reconciliation of e-way bills with invoices and ledger entries prevents a demand based on deemed outward supplies. Interest on wrongly availed credit arises only on utilisation, determined where the electronic credit ledger balance falls below that credit; pre-notice tax payment without interest bars notice and penalty. Sales-return credit notes can reduce taxable value and output tax liability subject to statutory conditions, and non-reporting in Form GSTR-1 is a compliance lapse rather than an independent tax liability.
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Input tax credit limitation and effective notice requirements require quashing barred credit denial and remanding remaining GST issues.
Case-Laws
GST
Input tax credit denied as time-barred under section 16(4) of the CGST Act was quashed because the issue was covered by a common order that had quashed the departmental determination. On the remaining adjudication issues, portal uploads of notices and reminders, without any response, did not provide an effective opportunity of hearing where statutory alternative service modes were available. The balance of the adjudication was set aside and remanded for fresh consideration, conditional on agreed pre-deposit, reply filing and effective notice of personal hearing.
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GST short-payment interest and penalty apply when tax and interest remain unpaid within the show-cause notice period.
Case-Laws
GST
Delayed payment of a GST shortfall attracts statutory interest. Payment of tax after the prescribed period does not remove that liability. Where tax and interest remain unpaid within 30 days of a show-cause notice, the statutory penalty for short-payment demands applies. The discretionary penalty principle concerning failure to register as a dealer is distinguishable; interest and penalty were sustained.
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Fraud threshold for extended tax limitation curbs unsupported penalties, while consolidated notices across financial years remain permissible.
Case-Laws
GST
Section 74 requires foundational facts of fraud, wilful misstatement, or deliberate suppression with intent to evade tax; mechanical allegations cannot support extended limitation or penalty. Where credit entries were disclosed in statutory returns, the Section 74 demand and penalty were set aside, with any tax payable to be determined under the Section 73 framework through Section 75(2). A consolidated show cause notice spanning multiple financial years is permissible where the full demand is within limitation and no appellate prejudice results. Input tax credit discrepancies require factual verification and an opportunity to provide supporting evidence, requiring fresh adjudication. Interest follows tax ultimately determined payable and must be recomputed.
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Expired e-way bill transport attracts GST detention penalties without proof of any tax-evasion intent being required.
Case-Laws
GST
Section 129(1) of the GST Act applies where goods in transit are transported or stored contrary to the Act or Rules; proof of intent to evade tax is not a condition for detention or penalty because the provision addresses breach of a civil obligation and does not require mens rea. Transportation under e-way bills that had expired remained non-compliant where the asserted vehicle breakdown lacked supporting evidence and no extension or amendment was sought. Stock-transfer documentation and e-invoices did not cure the e-way bill lapse, while circular-based exceptions applied only to consignments accompanied by valid e-way bills. Penalties were sustained.
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Forum shopping in bail proceedings led to fresh merits consideration after parallel remedies and adverse orders were withheld.
Case-Laws
GST
Forum shopping and suppression of material facts undermine the good faith required for discretionary bail jurisdiction. Pursuing parallel bail or release remedies while withholding rejection orders and refusal of interim release constitutes abuse of process. Urgent vacation listing of a pending bail petition, without a returnable date, Vacation Bench direction, or adequate notice to the opposing party, improperly seeks to steal a march and mislead the Court. The bail petition was revived for fresh consideration on merits, while the existing bail continued as interim bail pending further orders.
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IGST refunds for exports under manual shipping bills fall within Customs processing jurisdiction, requiring consideration under Rule 96(3).
Case-Laws
GST
Rule 96(3) assigns processing of IGST refunds on exported goods, including goods covered by manual shipping bills, to the Customs system or the proper Customs officer after receipt of information on a valid Form GSTR-3B return. Where the GST Department disclaims jurisdiction to sanction the refund, Customs cannot reject the claim by asserting that it falls within the GST Department's jurisdiction. Customs must process the claim and sanction any admissible IGST refund with applicable interest in accordance with law.
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Road restoration charges for commercial pipeline works are taxable Government services, with reverse charge liability and no public-function exemption.
Case-Laws
GST
Road restoration charges paid to a Public Works Department for repairing roads excavated for a commercial gas pipeline constitute consideration for a taxable service because the planned arrangement involved reciprocal obligations, not compensation for a wrongful act. Non-supply treatment and public-function exemptions do not apply where restoration is a targeted, fee-based service supplied to facilitate a business activity. The registered recipient remains liable under reverse charge for taxable Government services absent evidence of supplier tax payment; alleged revenue neutrality does not displace that liability. Electronic GST adjudication remains valid without a physical Document Identification Number where portal authentication establishes source and integrity and the notice adequately permits a response. The refund rejection was sustained and the appeal dismissed.
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GST interest computation requires month-wise ledger verification, while pre-notice voluntary payment protects against penalty for inadvertent turnover reporting omissions.
Case-Laws
GST
GST interest remains payable despite voluntary tax payment before a show cause notice, but must be calculated month by month by identifying the tax liability, due date, actual payment date, and amount payable through the Electronic Cash Ledger under section 50 read with rule 88B. Interest calculated on the entire liability without verification of the electronic cash and credit ledgers requires fresh computation. Where omitted B2C turnover was accounted for, disclosed in the annual return, and fully paid before notice, section 73(5) applies; penalty under section 73(6) is unsustainable. The interest demand was remitted for recomputation and the penalty was set aside.
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Condonation of delay in GST appeals restored merits review after illness and death disrupted the firm's affairs.
Case-Laws
GST
Serious illness and death of a proprietor's spouse, disrupting the firm's affairs, justified condonation of delay in statutory GST appeals. The High Court set aside appellate orders rejecting the appeals as time-barred and remitted them for determination on merits, based on the parties' concession and subject to payment of costs. Failure to pay costs forfeited the benefit of restoration, while all merits remained open before the appellate authority.
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Effective GST notice service requires meaningful delivery, with defective portal-only notice leading to fresh adjudication after hearing.
Case-Laws
GST
Effective service of GST notices requires more than uploading statutory notices and hearing intimations under an additional-notices portal tab when the taxpayer receives no physical service through RPAD. SMS and email reminders do not cure the resulting lack of a meaningful opportunity to file explanations and supporting records, which breaches principles of natural justice. GST adjudication and the consequential Form GST DRC-07 may therefore be set aside for fresh consideration, subject to a 10% deposit of disputed tax. The taxpayer must be allowed to submit objections and documents, followed by a clear 14-day personal-hearing notice and a merits-based order.
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Expired e-way bills trigger GST detention penalties without proving tax-evasion intent when no timely extension or evidence supports delay.
Case-Laws
GST
Section 129(1) treats transportation of goods in contravention of GST requirements as sufficient for detention and penalty; proof of an intention to evade tax is not required because the penalty arises from breach of a civil obligation. Expired e-way bills may therefore attract penalty even for interstate stock transfers where a claimed vehicle breakdown lacks supporting evidence and no timely extension or amendment is sought. Invoices or the stock-transfer character of the movement do not replace a valid e-way bill, and exceptions requiring a valid e-way bill do not apply after expiry. Procedural objections concerning hearing, notices, or forms do not alter the position where a full opportunity to provide explanations and evidence is available before the final fact-finding authority.
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Excess output tax set-off can negate a tax shortfall, while vague notices and portal-based rejections breach natural justice.
Case-Laws
GST
Excess output tax paid beyond monthly liability may be set off against ineligible input tax credit where no overall tax short payment arises, avoiding an unnecessary payment-and-refund cycle. Refund of such excess output tax falls within the stated statutory exception and is not subject to unjust-enrichment scrutiny. Sales-return claims supported by valid credit and debit notes cannot be rejected solely for non-uploading on the GST portal where no mandatory upload requirement applied. Reasoned appellate orders must address material submissions, and demands cannot rest on grounds beyond the show cause notice. Interest for delayed return filing requires a notice identifying the relevant defaults, tax base and computation.
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E-way bill accuracy in diverted transit sales determines Section 129 penalties despite no independent proof of tax evasion.
Case-Laws
GST
Section 129(1) of the CGST Act imposes civil penalty for substantive contraventions of transit movement-document requirements without requiring independent proof of intent to evade tax. Authorities must nevertheless assess the taxpayer's explanation and distinguish material discrepancies from minor or technical errors. A sale during transit may occur without prior physical receipt by an intermediary, but the continuing movement must be supported by a valid e-way bill accurately stating the actual origin and destination. E-way bills that do not cover the diverted route, falsely identify the dispatch point, or have expired may constitute substantive non-compliance. Payment through DRC-03 to secure release of goods does not conclusively admit liability or waive statutory appeal rights and may be credited against any liability.
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GST refund limitation exclusions preserve unregistered purchasers' claims after cancelled flat bookings, with no unjust-enrichment bar.
Case-Laws
GST
GST refund limitation for an unregistered flat purchaser following cancellation of a construction-linked booking must exclude the period prescribed in Notification No. 13/2022-Central Tax when computing the two-year period under section 54(1). The refund application was therefore within time. Where the developer deposited GST but refunded only the non-tax consideration, the purchaser may claim refund if the GST incidence was borne by the purchaser and the requirements of Statement 8 and Rule 89(2) are met. As the ultimate consumer, the purchaser is not barred by unjust enrichment. Refund was admissible with applicable interest after sixty days from the refund application.
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