Goods and Services Tax

Input Tax Credit Denied for Imported Warranty Parts When Foreign Supplier Pays Tax Under Section 16 CGST Act
Case-Laws
GST
AAR ruled that the applicant cannot claim Input Tax Credit (ITC) for IGST on imported warranty parts where the foreign supplier (M/s. MUEGGE GmbH) paid the tax. Despite importing parts in the applicant's name for warranty services, the ITC cannot be availed since the tax was discharged by the foreign supplier, and the invoice for warranty service did not include spare parts cost. The ruling interprets section 16 of CGST Act, 2017, denying ITC eligibility based on the specific transactional arrangement between the parties.
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ITC Blocked for Immovable Property Construction Under Section 17(5): Limited Exceptions Apply for Plant and Machinery
Case-Laws
GST
The AAR ruled that Input Tax Credit (ITC) is not eligible for construction of immovable property under section 17(5)(c) and (d). The SC's interpretation in Safari Retreats P Ltd clarified that ITC is blocked for works contract services involving construction of immovable property, with limited exceptions for plant and machinery. In this case, the pre-engineered building, gantry beam, and associated structures are considered immovable property. Consequently, ITC is denied for steel, cement, consumables, installation services, and capital goods like rails and electrification used in constructing the integrated factory building and crane infrastructure, as these are embedded in civil structures and do not qualify for proportionate credit.
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GST Applies to Housekeeping Services for IIITDM, Not Exempt from Standard Tax Rates Under Current Regulations
Case-Laws
GST
AAR ruled that housekeeping services provided to IIITDM do not qualify for GST exemption. The services, involving cleaning, gardening, and security, are distinct from constitutional sanitation responsibilities. IIITDM does not constitute a governmental authority, and therefore, the service provider must charge GST when invoicing. The ruling explicitly states that raising invoices without GST would be unlawful, requiring standard tax application for these housekeeping services.
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Medicines and Consumables for Inpatients Deemed Integral Healthcare Service, Fully Exempt from GST Under Notification 12/2017
Case-Laws
GST
AAR determined that medicines and consumables supplied to in-patients as part of healthcare services constitute a composite supply exempt from GST. The services, including medical, pharmaceutical, and paramedical interventions from admission to discharge, are classified under inpatient services. The hospital, as a clinical establishment providing healthcare under medical direction, qualifies for exemption under Notification No. 12/2017-CT(Rate). The supply of medicines and consumables to in-patients is naturally bundled with principal healthcare services and therefore considered a single composite supply, rendering the entire service tax-exempt. Notably, this exemption applies specifically to in-patient services and differs from out-patient medical supply treatments.
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DGGI officers bust inter-state nexus involving 3 biz; Rs 13-cr GST evasion detected
GST
Dated:- 15-5-2025
PTI
New Delhi, May 15 (PTI) GST Intelligence officers have busted an inter-state nexus by three business entities that were involved in fake billing and GST evasion of Rs 13.41 crore, the finance ministry said on Thursday.
The Directorate General of GST Intelligence (DGGI), Ludhiana, investigated three business entities based in Mandi Gobindgarh M/s Aar Dee Enterprises, M/s Aa

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GST Registration Cancellation Quashed Due to Vague Show-Cause Notice Violating Principles of Natural Justice
Case-Laws
GST
HC allowed the writ petition challenging GST registration cancellation. The show-cause notice was found vague and defective, violating principles of natural justice by failing to provide a meaningful opportunity to respond. The cancellation order dated 17.04.2025 was deemed mechanically passed without proper application of mind, thus rendering it invalid. The court emphasized that a show-cause notice must provide a fair opportunity for the affected party to effectively rebut allegations and demonstrate innocence, which was absent in this case. The retrospective cancellation without substantive reasoning was consequently set aside.
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Tax Levy Challenge Rejected: Complex Fund Expense Dispute Requires Detailed Scrutiny Beyond Writ Jurisdiction
Case-Laws
GST
The HC dismissed the writ petition challenging tax levy on fund expenses, finding that the complex factual determination regarding establishment charges and service fee classification requires detailed scrutiny beyond writ jurisdiction. The court held that the petitioner's inconsistent positions regarding establishment charges necessitate a comprehensive examination of accounts. While rejecting direct intervention, the HC permitted the petitioner to pursue appellate remedies under CGST Act, 2017, emphasizing that interpretation of service agreements involving factual nuances falls outside summary writ proceedings. The impugned order remains operative, with the petitioner directed to seek redressal through appropriate statutory channels.
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Tax Order Upheld: Petitioner's Failure to Respond and Engage Leads to Dismissal Under Section 107 of CGST Act
Case-Laws
GST
HC dismissed the petition challenging tax order, finding the petitioner failed to exercise due diligence in responding to show cause notices and personal hearing opportunities. Despite receiving multiple notices dated 22nd July, 2022 and 3rd August, 2024, the petitioner neither filed replies nor attended hearings. The court held that the administrative authority provided fair opportunity for hearing, and the petitioner's lack of proactive engagement precluded claims of procedural impropriety. The order under Section 107 of CGST Act, 2017 was upheld, and the petition was disposed of without substantive intervention.
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Ex-parte Order Invalidated: Procedural Fairness Demands Personal Hearing and Proper Notice in Tax Dispute Resolution
Case-Laws
GST
HC held that ex-parte order violated principles of natural justice by failing to serve show cause notice to the petitioner, thereby denying opportunity of being heard. Strict interpretation of tax statutes mandates procedural compliance, particularly regarding personal hearing requirements. The court emphasized that penal statutes affecting individual rights must be construed narrowly to prevent arbitrary decision-making. Consequently, the impugned order was declared unsustainable, and the petitioner was directed to be afforded a fresh opportunity to present its case before the competent authority.
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Sada Tambaku Mixed with Lime Deemed Manufactured Tobacco Product, Triggering Higher Tax Rates and Classification
Case-Laws
GST
The AAR determined that 'sada tambaku pre-mixed with lime' constitutes a manufactured tobacco product through a mixing process that creates a new product with distinct characteristics. The goods are classifiable under HSN 24039910, attracting GST at 28% and compensation cess at 0.56R per unit for products with declared retail sale price or 160% for other products. The ruling hinged on the transformation of raw tobacco leaves through lime mixing, which renders the product fit for direct consumption and qualifies as manufacturing under CGST Act, 2017, section 2(72), thus moving beyond unmanufactured tobacco classification.
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Metal Cutting Blades for Chaff Cutters Classified Under Chapter 8208, Attracting 18% GST Based on Specific Heading Rule
Case-Laws
GST
AAR ruled that metal cutting blades for chaff cutters shall be classified under Chapter Heading 8208 40 00, attracting 18% GST. Applying Rule 1 of Interpretative Rules, the specific heading for cutting blades for agricultural machines takes precedence over general machinery headings. Note 1(k) of Section XVI excludes articles of Chapter 82, rendering Note 2 to Section XVI inapplicable. The classification is based on the specific nature of the blades as cutting implements for agricultural machinery, thereby mandating classification under the more precise Chapter 82 heading rather than the broader machinery classification.
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Groundnut Heat-Drying Process Transforms Product, Disqualifies from Original HSN 1202 Classification Based on Compositional Changes
Case-Laws
GST
AAR determined that heating groundnuts with shell to reduce moisture content constitutes a roasting process, rendering the product ineligible for classification under HSN 1202. The ruling hinged on the lack of detailed documentation regarding the heating process, potential temperature controls, and infrastructure. The authority found that heat-drying can alter the physical characteristics and composition of goods, effectively transforming the groundnuts beyond their original state. Consequently, the heated groundnuts were deemed not classifiable under the specified harmonized system code.
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Procedural Defects Cannot Override Substantive Rights: Appeal Allowed with Opportunity to Rectify Technical Errors Under Section 107
Case-Laws
GST
HC allowed the appeal, finding that procedural irregularities in filing should not defeat the petitioner's substantive rights. The court held that technical defects do not warrant automatic rejection of an appeal, particularly where the delay is within the condonable period under Section 107 of the GST Act. The petitioner was granted an opportunity to rectify the procedural deficiencies in the appeal filing, emphasizing that procedural requirements are meant to facilitate justice, not obstruct it. The court's ruling underscores the principle that technical non-compliance should not supersede the fundamental right to seek judicial remedy.
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Advisory on Appeal withdrawal with respect to Waiver scheme
GST
Dated:- 14-5-2025

In the GST system, when Withdrawal application (APL 01W) for appeal is filed before issuance of final acknowledgment (APL 02) by the Appellate authority, then the system automatically withdraws the Appeal application (APL 01). In such cases, the status of the appeal application will automatically change from “Appeal submitted” to “Appeal withdrawn”.
However, if withdrawal application is filed after is

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Zero-Rated Exports: Merchant Exporters Win Relief from Compensation Cess, Ensuring Smooth Working Capital Flow Under GST
Case-Laws
GST
HC held that supplies to merchant exporters qualify as zero-rated export under IGST Act. While petitioners are technically liable to pay 160% Compensation Cess in absence of specific exemption notification, the court recognized this creates unnecessary working capital blockage. The levy is essentially revenue neutral since merchant exporters can claim full refund under sections 16 and 54(3) of GST Act. The matter was remanded to GST Council to consider granting exemption from Compensation Cess for export supplies, aligning with existing GST/IGST exemptions. Petition allowed with directions to review the Compensation Cess levy mechanism for export-oriented supplies.
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Fraudulent Tax Credit Claims Rejected: Partial Cooperation Insufficient to Secure Pre-Arrest Bail
Case-Laws
GST
HC denied pre-arrest bail application involving fraudulent Input Tax Credit (ITC) claims. Despite petitioner's partial cooperation with investigating authorities and appearing after interim bail, the court rejected the anticipatory bail. The court noted the prima facie evidence of ineligible ITC amounting to Rs. 3.42 Crores, which is below the Rs. 5 Crores threshold. The application was deemed non-maintainable, with a directive for the petitioner to fully cooperate in the ongoing investigation. The bailable nature of the offense and absence of immediate arrest risk were key considerations in the court's reasoning.
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Tax Fraud Writ Dismissed: High Court Upholds Rs. 56.2 Crore ITC Penalty Order Against 527 Firms for Contradictory Claims
Case-Laws
GST
HC dismissed writ petition challenging tax penalty order involving alleged fraudulent Input Tax Credit (ITC) of Rs. 56.2 crores across 527 firms. The Court found no violation of natural justice, noting the petitioner's contradictory statements and lack of arbitrary administrative action. The impugned order was deemed appropriate, with the Court declining to interfere under Article 226 jurisdiction, emphasizing the need for circumspection when large-scale tax fraud is alleged. Petition was consequently rejected, upholding the Department's findings and penalty order.
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Tax Authority's Power Affirmed: SGST Jurisdiction Validated Under Section 6(2)(b) for Comprehensive Tax Proceedings Review
Case-Laws
GST
HC determined the jurisdictional authority of SGST to initiate and adjudicate tax proceedings. The court held that under Section 6(2)(b) of CGST Act, the DGST Department must reconsider the prior appellate order and reassess the show cause notice and subsequent impugned order. The impugned order was set aside, with instructions to place the Commissioner's (Appeals-I) order before DGST for fresh consideration and comprehensive review of the underlying tax matter.
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Tax Authorities Cannot Double-Levy When Self-Assessed Returns Already Filed Under Section 37 of GST Act
Case-Laws
GST
HC held that Section 75(12) of WBGST & CGST Act, 2017 cannot be invoked when self-assessed tax under Section 37 is already included in returns under Section 39. The court quashed the demand notice raised by tax authorities, finding that alternative legal provisions under Sections 65, 66, 67, 73, or 74 should have been pursued if discrepancies were identified. The consequential demand for tax period 2020-21 was set aside, effectively ruling in favor of the petitioner and invalidating the original order dated 20th December, 2024.
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Taxpayer Wins Appeal: GST Return Filing Reinstated with Opportunity to Rectify Outstanding Tax Compliance
Case-Laws
GST
HC allows petitioner's appeal challenging registration cancellation, remanding matter to respondent at show-cause notice stage. Petitioner directed to file belated GST returns from April 2020 onwards, paying outstanding tax, interest, and penalties. Respondent-Authority must consider submitted returns, with discretion to pursue appropriate legal proceedings excluding non-filing of returns for over six months. Original cancellation order and subsequent appellate orders quashed, providing procedural relief while maintaining regulatory compliance obligations.
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GST Registration Dispute: Voluntary Compliance and Remedial Actions Prevail, Section 29(2)(c) Interpretation Highlights Procedural Flexibility
Case-Laws
GST
HC adjudicated a GST registration cancellation dispute, finding that while the petitioner initially failed to comply with statutory filing requirements under section 29(2)(c), subsequent remedial actions were significant. The court recognized the petitioner's voluntary compliance by paying outstanding GST, interest, and penalties, and demonstrating willingness to adhere to regulatory mandates. Consequently, the HC quashed the show cause notice and cancellation order, effectively reinstating the petitioner's registration, thereby balancing procedural compliance with principles of natural justice and providing an opportunity for rectification.
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GST Registration Restored: Procedural Flaws Invalidate Cancellation Order Despite Non-Compliance with Statutory Filing Requirements
Case-Laws
GST
HC quashed GST registration cancellation order due to procedural irregularities. Despite petitioner's non-compliance with GST Act by failing to file returns for six consecutive months, the court found a violation of natural justice principles. The petitioner demonstrated willingness to rectify defaults by paying outstanding GST, interest, and penalties. The court set aside the show cause notice and subsequent orders, effectively reinstating the petitioner's GST registration while mandating future compliance with statutory requirements.
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Tax Authority Ordered to Reconsider ITC Reversal Notice After Procedural Fairness Violation and Improper Double Recovery Attempt
Case-Laws
GST
HC held that the tax authority improperly issued a show-cause notice demanding reversal of Input Tax Credit (ITC) without considering the petitioner's prior voluntary reversal. The non-speaking order violated principles of natural justice by seeking double recovery of tax. The court remanded the matter, directing the authority to issue a fresh order focusing on potential interest or penalty for late ITC reversal, and provide the petitioner an opportunity to be heard. The order emphasizes procedural fairness and prevents excessive tax recovery, mandating a comprehensive review of actual tax compliance before imposing additional financial burden.
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Tax Appeal Dismissed: Case Remanded for Fresh Hearing with Full Opportunity to Present Evidence and Challenge Original Order
Case-Laws
GST
HC dismissed the appeal involving tax computation for the period 1st April 2018 to 31st March 2019, where the original order was passed ex parte due to non-response to show cause notice. Despite time limitation challenges, the court determined that remanding the matter to the appellate authority would be most appropriate. The HC noted the electronic availability of records and the potential for more efficient factual assessment by the appellate authority. Consequently, the petition was disposed of by remanding the case back to the appellate authority for substantive merit-based adjudication, effectively providing the petitioner an opportunity to present their case and challenge the original tax order.
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Accused Granted Bail Due to Procedural Lapses in Arrest, Violation of Constitutional Rights Highlighted in Detailed Order
Case-Laws
GST
HC granted bail to the petitioner after finding procedural irregularities in arrest. The court observed non-compliance with Sections 41/41A of Cr.P.C. and Sections 47/48 of BNSS, specifically the failure to communicate grounds of arrest and “reasons to believe” to the accused. Noting substantial investigation progress and unnecessary custodial interrogation, the court held that the arrest violated constitutional safeguards under Articles 21 and 22(1). The absence of Document Identification Number in authorization documents further strengthened the bail application. Bail was granted subject to standard conditions, emphasizing procedural compliance in law enforcement actions.
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