Author: admin_gst

E-way Bill Violation: Invalid Documentation Leads to Penalty Confirmation for Goods Transportation Under GST Regulations
Case-Laws
GST
HC upheld the penalty order for non-compliance with e-way bill requirements under the Uttar Pradesh GST Act, 2017. The goods were intercepted on 19.01.2023 with invalid e-way bills: one bill was for a different vehicle than declared, and the other had expired prior to transportation. The Court followed precedential rulings establishing that absence of a valid e-way bill creates a rebuttable presumption of tax evasion. The petitioner failed to provide sufficient evidence to rebut this presumption. Consequently, the Court dismissed the petition, affirming the mandatory nature of e-way bill compliance post-01.04.2018 and sustaining the imposed penalty.
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Renting Property to Social Justice Department for Girls' Hostel Qualifies as Exempt Service Under GST Notification 12/2017
Case-Laws
GST
The AAR determined that renting immovable property to the Social Justice and Special Assistance Department for a girls' hostel constitutes an exempt service under GST. The service falls within constitutional functions related to Panchayat (Article 243G) and Municipality (Article 243W) provisions. Since the activity involves residential accommodation for backward class girls, it qualifies for tax exemption as per Notification No. 12/2017-Central Tax (Rate). The service is considered a pure service without goods supply, and therefore, is completely exempt from GST levy.
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Employee Service Recoveries Taxable Under GST: Canteen and Transport Charges Subject to Specific Rate Structures
Case-Laws
GST
The AAR ruled that recoveries from employees for canteen and transportation services are taxable under GST laws. Transportation services fall under SAC 9964, taxable at 5% without ITC or 12% with ITC. The taxable value is limited to the actual amount recovered from employees, with the perquisite portion considered non-taxable. Notice pay recoveries for premature employment termination are not considered taxable, as they are penalties designed to discourage non-serious employment candidates. The ruling clarifies the tax treatment of various employee-related recoveries, emphasizing the distinction between recoveries, perquisites, and penalty payments.
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High Court Rules Physical Tax Invoice Essential for Goods Transport Under WB GST Rules, Electronic Display Insufficient for Statutory Compliance
Case-Laws
GST
HC held that under West Bengal GST Rules, 2017, a physical tax invoice is mandatory during goods transportation. While electronic display was attempted, it did not constitute statutory compliance with Rule 138A(1)(a). The court noted no evidence of tax evasion intent and referenced prior precedent in Ashok Sharma case. Critically, the revenue authority did not dispute tax invoice authenticity or allege tax payment default. Consequently, the court set aside the penalty order, finding Section 129 invocation unjustified without demonstrable tax evasion intention. The appellate authority's order affirming the original penalty was quashed, and the petitioner was deemed entitled to penalty refund.
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Employee Canteen and Transportation Services Trigger Complex GST Implications for Salary Deductions and Benefit Provisions
Case-Laws
GST
The AAR ruled that deductions from employee salaries for factory canteen services constitute a taxable supply under Section 7 of CGST Act, 2017. Recoveries from employees are liable for GST as consideration for canteen services. ITC is not available for catering services under Section 17(5)(b). Regarding transportation services, the AAR determined that employee bus transportation provided as a contractual perquisite is not a GST supply. ITC is also disallowed for transportation services under Section 17(5)(g), as these are considered personal consumption services not mandated by statutory obligations. The decision effectively distinguishes between taxable and non-taxable employee benefits within the GST framework.
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Land Rights Transfer Triggers 18% GST, Covering Leasehold, Buildings, and Infrastructure Under Comprehensive Service Classification
Case-Laws
GST
The AAR held that: (i) assignment of leasehold land rights constitutes a taxable service under GST Laws, classifiable as “Other miscellaneous service” (SAC 999792) and taxable at 18%; (ii) transfer of building does not qualify as a separate goods or services transaction, but is part of leasehold rights assignment, also taxable at 18%; and (iii) sale of plant and machinery qualifies as goods supply, with GST applicable based on input tax credit rules or agreed price, subject to Section 18(6) of CGST Act. The ruling emphasizes that leasehold rights transfer, including associated buildings and infrastructure, is a comprehensive service subject to GST taxation.
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Geo Membrane Water-Proof Lining Classified as Technical Textile Under Tariff Item 59111000 with 12% GST Rate
Case-Laws
GST
AAR held that Geo Membrane for Water Proof Lining-Type-II is classifiable under Tariff Item 59111000, a textile article laminated with plastic used for technical purposes. The product comprises HDPE woven fabrics manufactured with specific weaving patterns to create water-impermeable characteristics. Despite involving plastic components, the item does not fall under Chapter 39's residuary entries but is specifically classified under Chapter 59. Consequently, the product attracts 12% GST rate, recognizing its technical textile nature and specialized manufacturing process involving precise weaving and lamination techniques.
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Accused in Fraudulent ITC Case Secures Conditional Bail Following Comprehensive Investigation Review and Preliminary Allegations Assessment
Case-Laws
GST
HC grants bail to accused in fraudulent ITC case after considering investigation completion, potential five-year maximum sentence, and pending trial. The court recognized the applicant's ongoing incarceration and noted that the specific role in creating fake firms remains an evidentiary matter. Bail was conditionally granted, acknowledging the preliminary nature of allegations and the absence of trial commencement. The decision reflects a balanced approach to pre-trial detention, prioritizing the applicant's liberty while maintaining judicial oversight through prescribed bail conditions.
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Taxpayer Wins Challenge to Input Tax Credit Denial, Court Orders Comprehensive Review of Transaction Evidence Under Section 16(2)(b)
Case-Laws
GST
HC allowed the petitioner's challenge to the rejection of ITC claim, finding a procedural error in the original orders. The court determined that physical movement of goods is not the sole criterion for ITC eligibility. The matter was remanded to the Deputy Commissioner to re-examine the case, specifically focusing on verifying the memorandum of understanding between the dealer and supplier, and assessing the documentation related to goods delivery. The court directed a fresh review of the ITC claim under Section 16(2)(b) of CGST Act, emphasizing the need for comprehensive examination of transaction details and supporting evidence.
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CBIC issues revised instructions for processing applications for GST registration by CBIC formations
GST
Dated:- 18-4-2025

Revised guidelines to field formations will reduce compliance burden on taxpayers and facilitate transparency
Several grievances have been received by the Central Board of Indirect Taxes and Customs (CBIC), Department of Revenue, Ministry of Finance, regarding difficulties being faced by applicants during the GST registration process, mainly on account of queries raised by officers on the grounds of seeking additional documents.
To resolve these grievances and to smoothen GST registration process, CBIC has issued instructions on 17th April, 2025 (Instruction No. 03/2025-GST) to the officers for proc

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Clubs and Associations Win: Retrospective Tax Amendments Struck Down, Mutuality Principle Preserved Under CGST and KGST Acts
Case-Laws
GST
HC held that amendments to CGST and KGST Acts regarding deemed supply of services by clubs/associations to members are unconstitutional. The court determined that the principle of mutuality survives constitutional interpretation, and the retrospective amendments violate the Rule of Law. The statutory provisions improperly expanded the definition of “supply” and “service” without constitutional basis. The amendments were declared void, with the court emphasizing that legislative actions must respect fairness and cannot impose unexpected tax liabilities retrospectively. The judgment upholds the principle that taxation mechanisms cannot arbitrarily redefine fundamental legal concepts without appropriate constitutional amendments.
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Legal Challenge Rejected: Section 161 GST Application Dismissed Due to Lack of Substantive Grounds and No Adverse Impact
Case-Laws
GST
HC dismissed petitioner's application under Section 161 of Goods and Services Act, 2017, holding that principles of natural justice are not mandatory when no actual rectification is performed and the applicant suffers no adverse impact. The court determined that the rectification provision requires adherence to natural justice only when specific conditions are met: (i) rectification is being carried out and (ii) such rectification potentially adversely affects the assessee. In this instance, the application was deemed vague and without substantive grounds, thus justifying rejection without a personal hearing.
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GST Rate Fixed at 12% for Real Estate Project Based on Original Promoter's Election, Binding Subsequent Buyers
Case-Laws
GST
The AAR held that the GST rate for the project is governed by the one-time option exercised by the original promoter at 12% with input tax credit. The applicant is bound by this project-specific election and cannot switch to a 5% rate without input tax credit. The ruling emphasizes that the tax treatment is project-based, not promoter-specific. Consequently, the applicant must discharge GST at 18% (9% CGST + 9% SGST) with input tax credit, applying a one-third deduction for land value. The option applies uniformly to existing and new buyers, preventing differential tax rates within the same project.
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Procedural Defects in Tax Notice Invalidate SCN, HC Grants Stay Based on Jurisdictional and Electronic Filing Irregularities
Case-Laws
GST
HC adjudicated a challenge to a SCN under Section 74 of CGST Act, 2017, primarily contesting non-compliance with Rule 142 of CGST Rules. The petitioners argued that the SCN was issued without jurisdictional validity, as no tax evasion was alleged, and the notice was not electronically uploaded. The court found a prima facie case in the petitioners' favor, noting that the subsequent final order issued on 21.01.2025 was potentially non-est due to procedural irregularities. Applying the legal maxim “sublato fundamento cadit opus”, the HC admitted the petitions and stayed the operation of the impugned order pending final adjudication, emphasizing that procedural non-compliance could invalidate subsequent proceedings.
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Textile-Based Geo-Membrane Water Proofing Material Classified Under 5911 10 00 as Technical Textile Product
Case-Laws
GST
AAR ruled that Geo-Membrane for Water Proof Lining – Type-II manufactured from HDPE woven fabrics with specific weaving patterns is classifiable under Tariff Heading 5911 10 00. The determination was based on the product's manufacturing process, technical textile characteristics, and compliance with IS Standards. Despite being laminated with plastic and involving textile components, the product's technical use and Chapter 5911 specifications dictate its classification, prioritizing Section Notes and Chapter Notes over commercial understanding or trade interpretation.
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Cancer Diagnostic Research Services Denied GST Exemption Under Notification 12/2017-CT(R) Due to Research Classification
Case-Laws
GST
AAR ruled that the applicant's cancer diagnostic services do not qualify for GST exemption under Notification No. 12/2017-CT(R). The tests were determined to be clinical research and experimental development, primarily focused on acquiring new knowledge in biotechnology and cancer prognostic technologies. Without proper licensing from CDSCO or ICMR, the services were classified under Service Accounting Code 9981 for research services, rendering them ineligible for tax exemption. The determination hinged on the nature of the service being research-oriented rather than a direct diagnostic healthcare service.
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Railway Infrastructure Services Blend Multiple Contract Types, Determined as Mixed Supply Under GST Rule 995419 for Maintenance and Construction Work
Case-Laws
GST
AAR held that services provided by the applicant for reconstruction, maintenance, housekeeping, and security at Kalamboli Goods Shed constitute a mixed supply, primarily classified under works contract services. The services are not considered a composite supply and will be taxed at 18% under Heading 995419. The services involve cement concreting, platform construction, drainage, and water supply systems. The ruling explicitly notes that the input tax credit (ITC) entitlement for Central Railway cannot be determined within the scope of this advance ruling, leaving that aspect unresolved. The key determination is the tax classification and rate applicable to the mixed service contract.
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GST Rate Reduction Not Automatically Applicable: Council Recommendation Insufficient Without Formal Notification
Case-Laws
GST
HC ruled on GST rate applicability for works contract services. The retrospective reduction of GST rate from 18% to 12% recommended by GST Council on 5th August, 2017 was not legally binding until formal notification on 21st September, 2017. The court held that the original GST rate of 18% prescribed in the 8th July, 2017 notification remained valid for tenders submitted before the final notification date. The GST Council's recommendation alone cannot be construed as a statutory rate change, particularly considering constitutional provisions. Consequently, the petitioner's claim for retrospective rate reduction was rejected, and the petition was dismissed.
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Taxpayers Granted Right to Rectify GST Returns Beyond Standard Timelines, Emphasizing Procedural Flexibility and Substantive Justice
Case-Laws
GST
HC dismissed SLP challenging rectification of GST returns beyond prescribed timelines. The court held that the right to correct clerical or arithmetical errors is inherent in conducting business and should not be denied without substantial justification. Software limitations cannot be a valid reason to prevent error correction, as technological systems can be reconfigured to facilitate compliance. The ruling emphasizes taxpayers' procedural flexibility in addressing inadvertent mistakes in tax documentation, affirming the principle of substantive justice over rigid procedural constraints.
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Bail Granted in Tax Fraud Case: Procedural Lapses Expose Critical Flaws in Arrest Mechanisms Under Criminal Procedure Code
Case-Laws
GST
HC allows bail for accused involved in fake invoice tax fraud, finding procedural irregularities in arrest. The court determined that mandatory provisions under Cr.P.C. and BNSS were not followed, specifically Sections 41/41A and 47/48, which violated constitutional protections under Articles 21 and 22(1). Considering substantial investigation progress and collected documents, further custodial interrogation was deemed unnecessary. Bail granted upon furnishing a bond of Rs. 50,000 with an equivalent surety, subject to CJM's satisfaction, effectively releasing the accused from custody due to technical non-compliance in arrest procedures.
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Systematic Denial of Personal Hearing Violates Natural Justice, Rendering Ex-Parte Proceedings Under Section 75(4) Invalid
Case-Laws
GST
HC held that systematic failure to provide personal hearing violates principles of natural justice under Section 75(4) of GST Act, 2017. The ex-parte assessment and cancellation of GST registration without ensuring personal service of notices constitutes procedural impropriety. The court critically emphasized the recurring administrative malpractice of uploading notices on portal without guaranteeing actual service. Consequently, the matter was remanded to the Joint Commissioner SGST, Corporate Circle-1, Ghaziabad to pass a fresh order after affording petitioner a proper opportunity of personal hearing, thereby allowing the petition and rectifying the procedural defect.
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Flavoured Milk Tax Classification Resolved: Tariff Heading 0402 Confirmed, Remanded for Fresh Assessment Under Specified Guidelines
Case-Laws
GST
HC determined that flavoured milk sold by petitioner falls under tariff heading 0402, not CH 2202. The conversion charges for milk to milk powder were remanded for reassessment, with the appellate authority previously indicating a potential 5% tax rate instead of 18%. The original assessment order and appeal order were set aside, directing the Assessing Officer to conduct a fresh assessment, specifically levying tax on flavoured milk under the specified tariff heading. The petition was subsequently disposed of, effectively returning the matter for reconsideration with specific guidance on tax classification and rate.
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Exporters Can Seek IGST Refund by Submitting Representation and Providing Copy to Respondent Within 2 Weeks
Case-Laws
GST
HC determined that the petitioner seeks refund of IGST paid on export goods, with a representation submitted on 03.10.2022 pending consideration. The court directs the petitioner to submit a copy of the representation to the 2nd respondent within 2 weeks of receiving the order. The petition is disposed of, mandating administrative review of the refund claim and providing procedural guidance for further action on the IGST refund request.
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GST Registration Cancellation Can Be Revoked by Filing Pending Returns and Clearing Outstanding Tax Dues Under Section 29(2)(c)
Case-Laws
GST
HC held that GST registration cancellation under Section 29(2)(c) of CGST Act, 2017 for non-filing of returns for six continuous months can be revoked. The court directed the petitioner to approach the empowered officer within two months, submit pending returns, pay tax dues, interest, and late fees. Upon compliance, the officer has discretionary authority to drop proceedings and restore GST registration, effectively providing an opportunity to rectify the administrative non-compliance and reinstate the registration.
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Taxpayer's Challenge Rejected: Appellate Remedies Mandated for CGST Penalty Dispute Under Section 107
Case-Laws
GST
HC dismissed the writ petition, directing the petitioner to pursue appellate remedies under Section 107 of CGST Act. The court held that factual issues regarding penalty imposition, transaction benefits, and financial year challenges should be adjudicated through the appellate process. The petitioner retains the right to contest the CGST Department's penalty under Section 122(1A) through appropriate appellate channels, with the appellate authority deemed most suitable to comprehensively examine the matter.
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