Author: admin_gst

GST Section 74 notices need prima facie foundational facts; prior disclosure can cure gaps in the notice
Case-Laws
GST
In GST proceedings, invocation of the extended period under Section 74 depends on jurisdictional or foundational facts and a prima facie view, based on available material, that non-payment, short payment, wrongful input tax credit, fraud, wilful misstatement or suppression exists. The notice should ordinarily disclose the basis for alleging the mental element, but prior communication of those grounds through scrutiny, audit, inspection or pre-notice intimation can satisfy the requirement, so a detailed notice is not invalid merely because it repeats earlier allegations. Notices were upheld where the basis had already been disclosed, while an inadequately particularised order was remitted for fresh consideration under Section 73, with possible recourse to Section 74 if information remained unprovided.
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Specific GST revocation notices and reasoned orders are required; non-speaking rejection for lack of particulars was set aside.
Case-Laws
GST
Revocation proceedings under the CGST Act require a specific show cause notice, consideration of the revocation application, and a reasoned order recording written reasons. The notice here did not specify the actual government dues relied on, and the rejection order failed to disclose any real reasoning, disposing of the matter only on the ground that no reply was filed in time. The HC held that this did not satisfy fair procedure or the statutory duty to record reasons, so the rejection was quashed and the matter restored for fresh notice particulars, a meaningful opportunity to respond, and a fresh reasoned decision.
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GST registration cancellation needs specific reasons and precise notice; non-speaking orders can be quashed despite delay
Case-Laws
GST
GST registration cancellation requires a show-cause notice that states the precise defaults alleged and a cancellation order that records specific reasons; a notice referring only to continuous non-filing without identifying the relevant period, and an order merely reciting the notice and cancellation date, is a non-speaking order showing non-application of mind and is illegal. The Court also held that although the writ petition was filed belatedly, the defect went to the legality of an order carrying serious civil consequences, so delay alone did not justify refusal of relief. The cancellation was quashed and the matter remitted to the notice stage, with liberty to reply or regularise the defaults.
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Interim protection in GST adjudication preserved a writ challenge to show-cause notice jurisdiction and prevented an ex parte final order.
Case-Laws
GST
A High Court granted interim protection in a GST matter by deferring adjudication where the writ petitions directly challenged the jurisdiction and validity of show-cause notices issued in Form GST DRG-01. The court noted that the rejection of adjournment was technically in line with law because no stay had been granted, but held that fixing final personal hearing for the very next day, with an indication of an ex parte final order, reflected undue haste. On a prima facie view, interference was necessary to preserve the subject matter of the writ petitions, so the hearing was to be adjourned and refixed after the writ petitions were taken up.
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Mistaken penalty provision references are not fatal, but a higher penalty rate can show substantive misapplication.
Case-Laws
GST
A mistaken reference to the wrong tax penalty provision does not, by itself, invalidate proceedings; however, where the order imposes a penalty rate consistent with the wrong provision, the error is substantive rather than clerical. The discrepancy between a 100% penalty under one provision and a 50% penalty under the applicable provision showed that the power had been exercised on the wrong footing, making the order unsustainable. Fresh proceedings may be initiated under the correct provision in accordance with law.
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Natural justice in GST cancellation: portal-only service was invalid, and ex parte cancellation was set aside.
Case-Laws
GST
Mere uploading of a show-cause notice on the GST common portal, without service by at least two prescribed modes, was held insufficient and contrary to Section 169 and natural justice. The ex parte cancellation of GST registration was therefore vitiated and set aside. The appellate order was also found unsustainable because it overlooked the invalid foundational cancellation order and the absence of a real opportunity to respond. The authorities were left free to initiate fresh proceedings by issuing proper notice and passing a reasoned order in accordance with law.
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Limitation in GST appeals: time spent in bona fide rectification can be excluded, and condonation opportunity must be given
Case-Laws
GST
Availability of an alternative statutory remedy did not bar writ entertainability where the challenge was confined to the legality of rejection of the statutory appeal on limitation and to computation of limitation under the CGST Act. The High Court reiterated that the doctrine of merger does not apply when a filing is rejected as time-barred without consideration on merits. It further held that time spent in bona fide rectification proceedings could be excluded on Section 14 principles, as the proceeding was pursued with due diligence and good faith, and that an appellant must be given a reasonable opportunity to explain delay before dismissal as time-barred.
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GST registration cancellation needs a specific show-cause notice and reasoned order; vague default allegations cannot sustain cancellation.
Case-Laws
GST
In GST registration cancellation matters, a show-cause notice must disclose the precise default and the relevant period so the assessee gets an effective opportunity to reply. A notice that only alleges continuous non-filing of returns, without identifying the period of default, is defective; a later cancellation order cannot cure that defect by relying on reasons not stated in the notice. The cancellation order must also be reasoned in the prescribed form. Because cancellation has adverse civil consequences, compliance with Section 29 and Rule 22 is part of natural justice. The impugned cancellation was quashed and the matter restored to the show-cause stage.
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GST jurisdiction after migration: prior valid actions remain effective, while the transferee officer must continue and conclude proceedings.
Circulars
GST
Jurisdiction over GST proceedings is determined by the authority having jurisdiction on the date the power is invoked. If the transferor officer validly initiated or completed an action before the taxable person migrated to another jurisdiction, that action remains valid and the transferee officer must give effect to it. After migration, the transferor officer cannot initiate fresh proceedings; any issue noticed must be sent to the transferee officer. Where proceedings are pending at the time of migration, the transferee officer must take over at that stage, conclude the matter, and handle all consequential actions, including representation and appeals.
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Natural justice requires effective service of show cause notice; tax orders were quashed and matter remitted for fresh hearing.
Case-Laws
GST
Denial of an effective opportunity to respond to a show cause notice served through the GST portal vitiated the proceedings. The court found that the petitioner had not received the notice and was therefore unable to file a reply or be heard. On that basis, the adjudication and appeal orders were quashed, the matter was restored to the stage of reply, and fresh consideration with a reasoned order after hearing was directed. The ruling turned on natural justice and procedural fairness, not on the merits of the underlying tax demand.
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Inspection-based extended limitation upheld for tax short-payment, but erroneous liability computation led to remand for fresh orders
Case-Laws
GST
Inspection-based satisfaction was sufficient to invoke extended limitation for tax short-payment, because the notices arose from records showing discrepancies between Form 26AS and GSTR-7 and expressly referred to wilful suppression; the initiation under Section 74 was therefore upheld. At the same time, the Court found that the revenue abstract and order had erroneously treated exempted turnover as tax liability for one period and referred to the wrong period in another, so both writ petitions were remitted for fresh adjudication on merits after personal hearing and detailed replies with supporting documents.
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GST show cause notices within limitation; writ challenge to Section 74 invocation failed at notice stage
Case-Laws
GST
GST show cause notices issued before expiry of the Section 74 limitation were not time-barred, so the bar of limitation failed. Invocation of the fraud/suppression machinery was also sustained where notices were preceded by DRC-01A intimations and the petitioner had not replied for some tax periods, leaving the matter to be tested through reply and adjudication. Because disputed factual issues arose and each tax year was treated as an independent block, the writ challenge to the notices was not entertained at the notice stage. The writ petitions were dismissed, with liberty to file replies and a direction that final orders be passed after notice and hearing.
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Secured creditor priority over tax charge upheld, but existing encumbrance entry need not be quashed after SARFAESI sale.
Case-Laws
GST
Section 31B gives a secured creditor priority over tax dues in enforcement of mortgaged property, provided the mortgage particulars are uploaded in the CERSAI portal. On that basis, the creditor could proceed with sale under SARFAESI despite the tax charge. The charge entry, however, could still remain in the encumbrance record because any surplus after satisfaction of the secured debt may still meet tax dues. The auction purchaser would not be fettered by the charge, and an appropriate endorsement could be sought from the Sub-Registrar after the sale. The prayer to quash or delete the charge entry was declined, and the writ petition was disposed of accordingly.
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Charitable activity exemptions and government-funded training relief granted, while incomplete factual claims were not answered.
Case-Laws
GST
Entry 1 exemption under Notification No. 12/2017-Central Tax (Rate) was treated as available only where services were rendered by a section 12AB-registered entity by way of charitable activities: mental health awareness, public education and yoga camps were covered, and de-addiction seminars plus sanitation training were accepted as preventive health, but blood donation camps and road safety training were excluded. Entry 72 was allowed for government-funded self-defence training, PM Vishwakarma goldsmith training and vocational training at Kasturba Gandhi Balika Vidyalaya. Claims on DDU-GKY, computer or ITI training, and agricultural extension were not answered because the factual record was incomplete or speculative.
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Opportunity of hearing in GST assessment: order set aside and remanded after no detailed reply or supporting documents were filed
Case-Laws
GST
Failure to file a detailed reply and supporting documents before a GST assessment under Section 74 led the High Court to treat the impugned order as having been confirmed without full material and to grant a further opportunity on equitable grounds. The Court noted that additional relevant documents were available and that the disputed tax had already been recovered, so it set aside the assessment and remanded the matter for fresh adjudication, permitting a detailed reply and personal hearing before the assessing authority.
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Statutory GST tribunal remedy preserved limitation relief and interim protection after bona fide writ prosecution
Case-Laws
GST
Where a statutory appeal lay before the GST Appellate Tribunal and the Tribunal had been constituted, the High Court declined to examine the merits and directed the petitioner to pursue that appellate remedy. As the writ petition had been prosecuted bona fide before the wrong forum, the Court protected the petitioner on limitation for appeals filed within the time granted, continued the existing interim protection for the limited period specified or until disposal of the stay application, and left all merits open for the Tribunal.
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Estoppel in writ proceedings bars a taxpayer from disputing Section 74 findings after unchallenged payment and admissions.
Case-Laws
GST
In writ proceedings, a taxpayer who received a show cause notice alleging wilful suppression and invoking Section 74, but filed no reply, made payment without protest, and accepted before the adjudicating authority that tax, interest and penalty would be paid, was held estopped from taking a contrary stand later. The Court treated the recorded admission and unchallenged adjudication note as decisive, and held that prior voluntary payment after audit detection did not by itself defeat Section 74 where the allegation of suppression remained uncontested. On that basis, no interference under Article 226 was made and the writ challenge failed.
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World MSME Day 2026: 5 in 10 MSMEs continue to face supplier management, invoice compliance, price volatility and credit challenges; Digital Procurement adoption accelerating
GST
Dated:- 26-6-2026
PTI
New Delhi [India], June 26: India’s 7.4 crore-plus MSMEs registered on the Udyam and Udyam Assist platforms form the backbone of the economy, generating employment for over 32 crore people and contributing around 31% of GDP, 35.4% of manufacturing output and nearly half of the country’s exports. For these businesses — manufacturers, traders, retailers, service firms and millions of micro-entrepreneurs — procurement of raw materials, inventory, packaging, IT and office supplies remains one of the largest operating expenses and a critical daily activity. Key drivers for rising adoption of digital procurement are wide selection of products, ease of comparison across suppliers, centralised spend visibility and GST compliant invoicing
• 8 in 10 Indian MSMEs surveyed e

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nt, ONDC clocked around 218 million transactions in FY26, and Union Budget 2026–27 backs the sector with a dedicated INR10,000 crore SME Growth Fund.

The World MSME Day, observed every year on June 27th is a day that was designated by the United Nations General Assembly in 2017 to raise awareness of the contribution that micro, small and medium enterprises make to sustainable, inclusive economic growth, decent work and the UN Sustainable Development Goals. It is in this context that LocalCircles conducted this national study, with responses from over 16,000 MSMEs across 137 districts. The findings show the MSME procurement landscape, the challenges associated and how an increasing number of MSMEs are taking to digital procurement.
7 in 10 MSME businesses surveyed have 10 or less employees
The survey first asked MSME respondents, “What is the size of your business?” Of the 4,540 respondents, 34% said they are a “one-person business”; 35% reported “2–10 employees”

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Manufacturing, Business Services, Retail & Trading/Wholesale constitute 70% of MSMEs in India
The survey next asked, “Which sector does your business operate in?” Of the 4,619 respondents, 28% were in “Business Services (technology, financial, creative services etc.)”; 21% in “Manufacturing”; 21% in “Retail & Trading/Wholesale”; 8% each in “Hospitality & Restaurants”, “Education” and “Automotive”; 7% in “Healthcare”; and the balance in “Real Estate & Construction” and “Others”. To sum up, Business Services, Manufacturing and Retail & Trading/Wholesale together constitute roughly 70% of MSMEs in India, in line with the Udyam-registered base. Given their combined weight, this release presents dedicated sector cuts for Business Services and Manufacturing.

7 in 10 MSMEs regularly procure IT equipment, office stationery & supplies, packaging materials for their business
Moving to procurement itself, the survey asked, “In what all categorie

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Input tax credit on purchases from a supplier later retrospectively cancelled was remitted for fresh consideration
Case-Laws
GST
Input tax credit on purchases made while the supplier was shown as registered on the GST portal was not finally decided on merits, because the High Court found a prima facie case for interference and required fresh, reasoned reconsideration. The impugned order denying credit was quashed, and the authority was directed to reconsider the claim in the light of the Division Bench rulings in Shyamal Mal Paul and Jyoti Tar Products, including the effect of later retrospective cancellation of the supplier's registration on invoices issued during the relevant period. Entitlement to the disputed credit was left open.
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Separate show cause notices required for each taxation period; common notice clubbing multiple years was struck down.
Case-Laws
GST
A common show cause notice covering multiple taxation periods was held unsustainable because assessment of tax and allied amounts must be initiated separately for each financial year or tax period. Following its earlier ruling, the HC held that different taxation periods cannot be clubbed in one notice, and the impugned notice was therefore set aside. The authorities were left free to initiate fresh proceedings in accordance with law.
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Notice to a non-existent amalgamating company is jurisdictionally void after merger, while fresh proceedings remain open.
Case-Laws
GST
Proceedings based on a show cause notice issued to a company that had already merged and ceased to exist are without jurisdiction, because a notice to a non-existent amalgamating entity cannot validly found recovery action. The note applies the principle from Maruti Suzuki and later Bombay HC decisions, stating that where the merger and dissolution were undisputed and communicated to the department, the consequential adjudication is void ab initio. It also records that merger provisions do not authorise notice to a post-merger non-existent entity, while leaving the tax demand open for any fresh proceedings otherwise permissible.
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Unsigned GST assessment orders are invalid; delayed writs may proceed if a patent defect exists and tax is partly deposited.
Case-Laws
GST
A GST assessment order in Form GST DRC-07 issued without the assessing officer's signature is inherently invalid, because the signature is an indispensable requirement and its absence is a patent irregularity. Although the respondents objected on delay and relied on portal upload as service, the writ challenge was entertained in view of the defective order and practical difficulties under the online GST regime. The Court held that such delayed writ petitions may be considered on deposit of 20% of the disputed tax. The unsigned order was set aside and the matter remanded for fresh assessment after giving the assessee an opportunity of hearing.
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Personal hearing under GST: multiple opportunities satisfied Section 75(4), and no second hearing was required before adverse order.
Case-Laws
GST
Under GST, a personal hearing under Section 75(4) is required when a written request is made or when an adverse order is contemplated; the text states that this requirement was satisfied because the taxpayer was given three hearings after replying to the show cause notice, and its authorised representative treated the written defence as final at the last hearing. The challenge for denial of personal hearing was rejected, and a second hearing before the final adverse order was held unnecessary. The separate grievance on premature recovery was left open for further instructions.
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Delegated GST notifications cannot exceed recommendations; added “enforceable right” wording is invalid and ratification cannot cure it.
Case-Laws
GST
GST notifications issued under Sections 9 and 11 operate as subordinate legislation and cannot travel beyond the GST Council's recommendation. The HC held that the impugned notifications were ultra vires only to the extent they added the expression “enforceable right in a court of law”, because that phrase went beyond the recommendation's reference to an actionable claim; the remaining part of the notifications stayed valid. It further held that the GST Council has no constitutional power of ratification under Article 279A, so the 22nd meeting could not cure the unsupported addition and was without jurisdiction. The writ petitions were allowed and notices founded on the invalid part were set aside, with liberty to issue fresh notices in line with the sustained notifications.
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FAQs on Index of Services Production – Trial Indices with Base year 2024 -25
GST
Dated:- 25-6-2026

The Ministry of Statistics and Programme Implementation (MoSPI) is preparing to launch Index of Services Production (ISP) in July, 2026, which shall be a new macro indicator to measure the short-term changes in the growth of the services sector. As counterpart of the IIP which measures the economic growth of the industrial sector, ISP will cover the formal services sector and will be released on a monthly basis.

To assist MoSPI in the finalization of the conceptual & methodological framework for compiling ISP, a Technical Advisory Committee (TAC) on compilation of ISP, was constituted in May, 2025, under the chairpersonship of Ms. Debjani Ghosh, distinguished fellow, NITI Aayog. Apart from representatives from academia and the Industry associations, the TAC – ISP has members from the Ministries / departments of the services sector.

Based on the deliberations held in

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of Incorporated Services Sector Enterprises (ASISSE) are released.

The base year of ISP is selected as 2024 -25. The trial monthly indices for the year 2025 -26 and for the month of April, 2026 are slated for release on 14^th July, 2026. Thereafter, regular release of the monthly trial indices will be made with a lag of about 60 days on the 29^th Day (or next working day in case of a holiday) of every month.

To assist users and other stakeholders in appreciating the methodological & conceptual framework of compilation of ISP series, MoSPI is releasing, through this press release, a booklet on Frequently Asked Questions (FAQs).

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FAQs on Index of Services Production

1. What is the Index of Services Production (ISP)?

The Index of Services Production (ISP) is a short-term indicator designed to measure changes over time in the volume of output produced by the services sector relative to a specified base period. It measures changes in the real output of service-producing

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vices industries, thereby, strengthening monitoring of economic activity and supporting evidence-based policy decisions. In addition, ISP will serve as a high-frequency indicator of services sector growth and will provide timeseries data to enable better economic forecasting and business cycle analysis. Main users of ISP would be National Accounts, economic Ministries / departments, domain experts and researchers.

5. What were the major challenges that India was not able to compile an ISP earlier?

The compilation of an ISP requires high-frequency, reliable and representative indicators of service sector output. Unlike manufacturing, where production can often be measured through physical quantities of goods produced, services are largely intangible and many service activities do not have directly observable output measures. Historically, compilation of ISP in India faced several challenges, including:

• Limited availability of administrative datasets covering service

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be released?

MoSPI will utilize three main data sources for ISP namely administrative data, GST and ASISSE. As some of these sources are still evolving and GST data will be used for the first time in statistical applications, trial or experimental ISP indices will be released for some time to observe their stability and resilience. Thereafter, regular compilation and dissemination will take place.

8. What are the major data sources proposed for ISP?

The three principal data sources are:

• Administrative/secondary data for ISP of Air Transport, Railway Transport, Banking and Insurance;

• GST data for Wholesale Trade, Retail Trade, Repair and Maintenance, Accommodation and Food, Road Transport, Water Transport, Warehousing and support activities for transportation, Postal & courier, Telecommunications, Information and Broadcasting, Real estate, Information and computer related services, Professional, scientific & technical services including R & D, Admi

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• Activities of private households with employed persons

• Activities of extraterritorial organisations

• Health and Education services provided by Government and

• Gambling and betting activities

11. How are Health and Education sub – sectors, exempt from GST will be covered in ISP?

Indices of Health and Education sub – sectors (excluding government contribution) are planned to be compiled on the basis of estimates from ASISSE surveys.

12. What will be the frequency of release of All India ISP?

ISP will be released with a monthly frequency with a lag of about 60 days.

13. What are quantity-based indicators?

Quantity based indicators directly measure the output in physical quantities terms such as passenger-kilometers travelled in case of Air Transport. In ISP, indices of only two sub – sectors, namely, Air Transport and Railways are based on quantity output.

 14. What are value-based indicators?

Indicator

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cations adapted for the Indian context by the Central Board of Indirect Taxes and Customs (CBIC). SAC is used to classify different types of services for the purposes of taxation, invoicing, and filing GST returns. SACs facilitate mapping of GST outward supplies to the National Industrial Classification (NIC) codes of the services industries.

 18. How are GST data transformed into output measures?

Aggregated data on SAC wise Taxable Value of Sales (outward supplies), as obtained from the return GSTR 1, can be considered as the output variable in value terms. GSTN has made available product / service wise (SAC codes) data on 'outward supplies' for different service activities as extracted from monthly GST returns.  MoSPI does not have access to nor does it require individual unit level data for this purpose.

The production of services directly results into its sale / consumption. Hence, use of GST data of outward supplies essentially reflects production of services. O

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e Service Producer Price Indices (SPPIs) are preferred as deflators for ISP, in case of non-availability of SPPI, CPI is recommended.

22. Why has SPPI not been used for ISP?

The data on SPPI is available only for limited services. In respect of the sub – sectors being covered under ISP; SPPIs are available only for five sub- sectors, namely, Air Transport, Railways, Telecom, Banking and Insurance for which SPPI were available. In case of Air Transport and Railways, as the output indicator of ISP is in terms of quantity, no deflator is required.

Further, as the SPPIs are available with a quarterly frequency and lag of 60 days their use in monthly ISP may not be feasible. Thus, use of CPI (communications) as a deflator for telecom sub – sector will be made. In case of financial sub – sectors (Banking and Insurance), in accordance with the report of the sub – committee on 'Methodological improvement for the base year revision of GDP (base year 2022 -23), use of general CPI as a d

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nearly 28% of the total weight of overall CPI and nearly 44.44% of the non- food weight.

• Another significant division in the non – food items category is “Housing, Water, Electricity, Gas and Other Fuels”, this accounts for nearly 17.67% of the total weight of the overall CPI and 28% weight in the non – food category. 'Housing, Water, Electricity, Gas and Other Fuels' are significant contributors to inflation in services. They act as major cost-push factors by either directly driving up operating expenses for businesses & producer prices or increasing the cost of living for employees leading to higher wage demands & in turn higher producer prices.

• Other significant cost push factor items in the non – food category include petrol, diesel and CNG which are under the Transport Division of CPI which account for nearly 4.85% of the total weight of the overall CPI and 7.7% weight in the non -food category.

• Thus, in all more than 80% of th

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