Goods and Services Tax

High Court Grants Bail to GST Official in Bribery Case After 55 Days Custody Under Section 483 BNSS
Case-Laws
GST
HC granted regular bail to petitioner accused of demanding bribes for GST registration. Despite prima facie evidence linking petitioner to the alleged crime under Section 483 of Bharatiya Nagarik Suraksha Sanhita, 2023, the court determined that extended pre-trial detention was unwarranted. Key factors in the decision included: pre-trial custody duration of 1 month 25 days, principle that pre-trial detention should not mirror post-conviction sentencing, nature of allegations, and case-specific circumstances. The court emphasized this ruling was based on case-specific facts without commenting on substantive merits. Bail order effective upon upload to court's official webpage.
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DGGI uncovers Rs 3,200 cr GST fraud, two held
GST
Dated:- 29-1-2025
PTI
Bengaluru, Jan 29 (PTI) The Directorate General of GST Intelligence (DGGI) in Bengaluru has uncovered a massive GST fraud amounting to Rs 3,200 crore and arrested two people in connection with the case.
A third suspect remains at large, Sucheta Sreejesh, Additional Director General of DGGI Bengaluru zone, said in a statement.
The DGGIÂ’s Bengaluru zonal unit conducted searches at more than 30 locations across Bengaluru and Mumbai, uncovering a complex scam.
The accused created bogus companies with no legitimate business operations, engaged in circular trading to inflate turnover, listed these companies on stock exchanges, and facilitated the fraudulent a

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the share price, sell the shares subsequently and exit the company, duping common public of their money invested in shares of such companies,” the statement said.
The probe also revealed that GST returns for most of these companies were filed from common IP addresses, suggesting that they were all operated by the same accused.
Further searches at the companies' premises uncovered original documents such as invoices and financial records, stored across several locations, indicating that the same individuals were managing the affairs of multiple companies.
“Considering the magnitude of the fraud and its impact on the common public, the Directorate General of GST Intelligence, Bengaluru Zonal Unit has initiated thorough investigation in

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GST Council Exempts Loan Penalty Charges, Payment Aggregator Settlements Under 2000, and Training by NSDC Partners
Circulars
GST
CBIC clarified multiple GST applicability issues based on 55th GST Council recommendations. Key determinations: No GST payable on penal charges levied by regulated entities for loan contract breaches. GST exemption extended to RBI-regulated Payment Aggregators for settlements up to 2000 per transaction. Research and development services by Government Entities against grants regularized for period July 2017-October 2024. DDA not classified as local authority under GST law. GST applicable on facility management services to MCD headquarters. Training services by NSDC-approved partners exempted from January 2025, with past period regularized. Goethe Institute services' GST payments regularized for July 2017-March 2023 period.
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Insurance Premium Sharing Between Lead Insurers and Co-insurers Not GST Taxable Under Schedule III CGST Act
Circulars
GST
GST Council's 53rd meeting recommendations led to amendments in Schedule III of CGST Act, clarifying two key insurance transactions. First, co-insurance premium apportionment by lead insurers to co-insurers is neither goods nor services supply, provided lead insurer pays all applicable taxes on full premium. Second, ceding/reinsurance commission deducted from reinsurance premium similarly excluded, conditional on reinsurer paying taxes on gross premium including commission. These changes, effective from 01.11.2024, also include retrospective regularization from 01.07.2017 to 31.10.2024 on 'as is where is' basis, resolving historical tax treatment ambiguities in insurance sector transactions.
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High Court Reverses GST Registration Cancellation u/s 29(2)(c), Allows One Month Window for Restoration Application.
Case-Laws
GST
HC set aside GST registration cancellation order issued u/s 29(2)(c) of CGST Act 2017 for non-filing of returns for six continuous months. Following precedents from coordinate benches and considering Rule 22(4) of CGST Rules 2017, the court directed petitioner to approach concerned authority within one month for revocation of cancellation and restoration of registration, subject to payment of all statutory dues. Court determined continuing the petition would serve no purpose given established precedent in similar matters. Original cancellation order dated 10.02.2021 was set aside with specific directions for restoration process.
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High Court Upholds 200% GST Penalty for E-way Bill Fraud Using Unregistered Consignor to Mask Real Service Recipient.
Case-Laws
GST
HC upheld penalty u/s 129(3) of WB GST Act 2017 due to deliberate discrepancies in transportation documents. The E-way bill listed an unregistered person (URP) as consignor from Arunachal Pradesh, while delivery challan showed a GST-registered entity as consignor. This mismatch was deemed intentional to conceal the actual recipient's identity and evade GST on rental/lease services of JCB machinery. Court found sufficient evidence of tax evasion intent, noting that using URP details in E-way bill while actual service recipient was GST-registered constituted willful attempt to evade tax liability. Appeal dismissed, affirming 200% penalty of tax payable.
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West Bengal High Court Upholds GST Penalty u/s 129 for Transportation Document Discrepancies and Invalid Input Tax Claims.
Case-Laws
GST
HC upheld penalty u/s 129 of WBGST Act 2017 regarding discrepancies in vehicle transportation documentation. The petitioner failed to establish legitimate purchase chain from Mr. X to Company Y, with Input Tax Credit already claimed by Company Z. Documentation inconsistencies included contradictory e-way bill and invoice details, with no tax payment evidence. The margin value scheme was deemed inapplicable. The Court found proper procedural compliance by authorities in issuing notice and providing opportunity for hearing. Despite petitioner's reliance on precedents, the Court distinguished them from present circumstances. The petition challenging penalty order dated May 30, 2023, was dismissed, affirming appropriate invocation of Section 129 provisions.
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High Court Allows Fresh Hearing in GST Dispute After 25% Tax Deposit, Sets Aside Time Limitation Order.
Case-Laws
GST
HC set aside the impugned order regarding time limitation and GSTR-3B/GSTR-2A mismatch dispute. The petitioner's willingness to deposit 25% of disputed tax amount was considered favorably. Court granted relief by directing petitioner to deposit the agreed percentage within four weeks from order receipt, allowing a final opportunity to present objections before the adjudicating authority. The decision balances tax compliance requirements with procedural fairness, enabling the petitioner to pursue substantive arguments while ensuring partial tax recovery. Matter remanded for fresh consideration upon compliance with deposit condition.
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No GST on penal charges levied by banks, NBFCs: CBIC
GST
Dated:- 28-1-2025
PTI
New Delhi, Jan 28 (PTI) Goods and Services Tax (GST) will not be applicable on penal charges levied by banks and non-banking finance companies (NBFCs), the CBIC has said.
The Central Board of Indirect Taxes and Customs (CBIC) through a circular has also clarified that GST will not be levied on transactions of up to Rs 2,000 facilitated by payment aggregators on online platforms.
Clarifying the issue of GST applicability on penal charges levied by banks and NBFCs, the CBIC said penal charges levied by Regulated Entities governed by the RBI are essentially in the nature of charges for breach of terms of contract and hence, do not attract GST.
“As rec

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dded.
With regard to taxation on payment aggregators, the CBIC said it has received representations seeking clarity on the applicability of GST exemption to Payment Aggregators (PAs) in relation to settlement of up to Rs 2,000 in a single transaction, transacted through credit card, debit card, charge card or other payment card services.
Payment Aggregators (PAs) are entities that facilitate e-commerce sites and merchants to accept various payment instruments from their customers without the need for the e-commerce sites and merchants to create a separate payment integration system of their own. In the process, PAs receive payments from customers, pool and transfer them on to the merchants within a specified time period.
The CBIC also qu

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Advisory for Biometric-Based Aadhaar Authentication and Document Verification for GST Registration Applicants of Tamil Nadu and Himachal Pradesh
GST
Dated:- 28-1-2025

Dear Taxpayers,
This is to inform taxpayers about recent developments concerning the application process for GST registration. It is advised to keep the following key points in mind during the registration process.
1. Rule 8 of the CGST Rules, 2017 has been amended to provide that an applicant can be identified on the common portal, based on data analysis and risk parameters for Biometric-based Aadhaar Authentication and taking a photograph of the applicant along with the verification of the original copy of the documents uploaded with the application.
2. The a

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oint 3(a), she/he can proceed with the application as per the existing process.
5. However, if the applicant receives the link as mentioned in point 3(b), she/he will be required to book the appointment to visit the designated GSK, using the link provided in the e-mail.
6. The feature of booking an appointment to visit a designated GSK is now available for the applicants of Tamil Nadu and Himachal Pradesh.
7. After booking the appointment, the applicant gets the confirmation of appointment through e-mail (the appointment confirmation e-mail), she/he will be able to visit the designated GSK as per the chosen schedule.
8. At the time of the visit of GSK, the applicant is required to carry the following details/documents
(a) a copy (hard

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High Court Denies Bail in 10.67 Crore GST Fraud Case Involving Fake Firms and Fabricated Bills u/s 132.
Case-Laws
GST
HC denied bail in GST fraud case where petitioner allegedly availed fraudulent Input Tax Credit worth 10.67 crores through fictitious firms. Evidence included seized fake rubber stamps, fabricated E-bills, and transport company testimony confirming route discrepancies. Court distinguished this case from Prabir Purkayastha and Pankaj Bansal precedents regarding arrest procedures under PMLA, noting different statutory requirements under GST Act. Following Y.S. Jaganmohan Reddy principle that economic offenses warrant stringent treatment, HC found prima facie evidence of deliberate fraud through sham bills and non-existent firms sufficient to deny bail. Court emphasized gravity of economic offenses affecting national economic fabric.
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High Court: UP GST Revision Allowed Without Exhausting Appeals, Section 108 Only Requires Appeal Filing Not Completion.
Case-Laws
GST
HC quashed the revisional order regarding maintainability u/s 108 of U.P. GST Act, 2017. The court clarified that Section 108(2) language “order has been subject to appeal” means an appeal must have been actually filed, not that appeal must be exhausted before seeking revision. The Revisional Authority's approach was contradictory – discussing merits while questioning maintainability. The order failed either as a merit-based decision (inadequate consideration of facts) or as a maintainability ruling (misinterpreting Section 108). The provision does not require exhaustion of appeal before revision petition. Matter remanded for fresh consideration of revision petition on merits.
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High Court Rules GST Not Applicable When Transferring Leasehold Rights in Property Between Lessee and Third-Party Assignee.
Case-Laws
GST
HC determined GST is not applicable on assignment of leasehold rights in immovable property. Following precedent from Gujarat Chamber of Commerce case, the court held that transfer of leasehold rights constitutes assignment of benefits arising from immovable property when a lessee transfers rights to third-party assignee. The impugned show cause notice demanding GST on such transfer was quashed, as assignment of leasehold rights falls outside GST purview. The court recognized this as settled law (res integra) based on established jurisprudence. Original lessee's transfer to assignee who becomes new lessee does not attract GST liability under GST Act, 2017.
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Court Rules Personal Hearing Required Before Denying GST Transitional Credit Claims u/s 140(5) of CGST Act.
Case-Laws
GST
HC determined that authorities erred in denying transitional ITC claim under CGST Act s.140(5) without providing personal hearing. While petitioner incorrectly filed Form TRAN-1 by entering service tax credit details in column 5(a) instead of 7(a) for invoices received post June 30, 2017, principles of natural justice required opportunity to demonstrate compliance with statutory requirements. Authorities must allow petitioner to prove receipt of amounts after June 30, 2017, recorded in books within 30 days. Matter remanded for fresh consideration with directions to provide personal hearing and issue reasoned order on petitioner's transitional ITC claim. Petition allowed through remand.
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High Court Dismisses Input Tax Credit Refund Claim Filed After Two-Year Limitation Period u/s 54.
Case-Laws
GST
HC found the refund claim for unutilized input tax credit time-barred u/s 54. The court interpreted Section 54(1) and 54(3) to establish that while refund claims can be initiated from the end of the relevant tax period, there exists a two-year limitation period from the relevant date. The petitioner's application filed on 21.03.2024 exceeded the statutory deadline of 09.03.2024. The court emphasized that Section 54(3) determines the starting point for refund claims, while Section 54(1) sets the outer time limit of two years. Given the clear statutory framework and the petitioner's failure to file within prescribed time limits, the petition was dismissed.
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High Court Rules Cross-Utilization of IGST Input Tax Credit for CGST and SGST Payments Is Legal and Penalty-Free.
Case-Laws
GST
HC determined that utilizing Input Tax Credit (ITC) available in IGST under CGST and SGST heads does not constitute improper availment warranting penalties. The electronic credit ledger functions as a wallet with separate compartments for IGST, CGST, and SGST. Despite petitioner's pending appeal, HC exercised jurisdiction under Article 226 to set aside the assessment order, finding that the method of ITC utilization was legitimate. The Court directed proper officer to reconsider the assessment, emphasizing that cross-utilization between different tax heads within the electronic credit ledger is permissible and does not attract penalties. Petition allowed with assessment order set aside for reconsideration.
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Court Orders Release: CGST Act Section 69 Does Not Override CrPC 41/41A Safeguards in Arrest Procedures.
Case-Laws
GST
DSC examined judicial remand application under Sec 167 CrPC and Sec 187 BNSS Act. While arrest grounds were properly documented with accused's acknowledgment, the court found procedural deficiencies. Despite prosecution's argument that Sec 69 CGST Act exempted compliance with Sec 41/41A CrPC requirements for arrests, the court relied on SC precedents (Arnesh Kumar and Gujarat State cases) mandating these safeguards for offenses punishable up to 7 years. The court ordered accused's release, finding arrest illegal due to non-compliance with Sec 41/41A CrPC and Sec 35 BNSS Act procedures. Prosecution retained liberty to re-arrest following proper procedures under relevant sections of CrPC, BNSS Act, and CGST Act.
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Attention – Hard – Locking of auto-populated liability in GSTR-3B
GST
Dated:- 27-1-2025

1. Please refer to the advisory dated October 17, 2024 , regarding the restricting the editing of auto-populated liability in GSTR-3B from the January 2025 tax period.
2. However, various requests have been received from the trade seeking time for the same. Therefore, the decision of making non-editable of auto-populated liability in GSTR-3B is currently not being implemented from January tax pe

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Advisory on the Introduction of E-Way Bill (EWB) for Gold in Kerala State
GST
Dated:- 27-1-2025

It is hereby informed that a new option for generating E-Way Bills (EWB) for gold has been introduced in the EWB system, effective from January 20, 2025. This feature has been made available to facilitate taxpayers in Kerala State to generate EWB for goods classified under Chapter 71, excluding Imitation Jewellery, for intrastate movement, in compliance with the notification issued by th

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Input Tax Credit Claims Under GST Rejected Due to Procedural Violations of Sections 107(8) and 107(12), HC Orders Fresh Hearing.
Case-Laws
GST
HC set aside orders from Appellate Authority and Primary Authority regarding disputed Input Tax Credit claims under GST. The court found procedural violations, specifically non-compliance with Sections 107(8) and 107(12) of JGST Act 2017. The Appellate Authority failed to provide mandatory hearing opportunity and issue a reasoned written order stating determination points and decisions. Court noted petitioner had submitted required documents including ASMT-11 response, contradicting respondents' claim of no reply. Matter remanded to Primary Authority with directions to issue hearing notice, consider submitted documents including online ASMT-11 response, and pass reasoned order in accordance with law.
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High Court Upholds Additional Commissioner's Authority to Adjudicate DGGI Show Cause Notices Under CGST Act Per Notification 31/2018.
Case-Laws
GST
HC dismissed petitions challenging territorial jurisdiction of Additional Commissioner, Kanpur to adjudicate show cause notices (SCNs) issued by DGGI Ahmedabad under CGST Act. Petitioners contested jurisdiction based on Circular 169/2022 and Notification 2/2022, arguing Additional Commissioner lacked All-India jurisdiction. Court held that as per Notification 31/2018, Additional/Joint Commissioner has authority to determine tax liability for SCNs issued by DGGI. Court directed petitioners to raise jurisdictional and other contentions during adjudication proceedings, declining to exercise extraordinary writ jurisdiction under Article 226 at this preliminary stage.
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High Court Grants Bail in GST Fraud Case After 1-Year Custody, Citing Trial Delays and Personal Liberty Concerns.
Case-Laws
GST
HC granted bail to accused in GST fraud case involving unauthorized Input Tax Credit (ITC) passed through fictitious firms. The court considered material factors including filing of complaint, ongoing investigation status, and accused's custody period since November 2022. Given likelihood of prolonged trial duration, court deemed accused eligible for bail release. Release ordered upon furnishing personal bond with two local sureties subject to specified conditions. The ruling balanced prosecutorial interests with personal liberty, applying standard bail jurisprudence principles where continued detention appeared unwarranted given case circumstances.
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High Court Orders Prompt Processing of GST Refund Claim After State Authorities' Delay, Sets Verification Guidelines.
Case-Laws
GST
HC directed state authorities to process petitioner's GST refund claim promptly following inaction on previous requests. The authorities must verify facts, assess entitlement, and consider the state government's order dated 10.10.2018 along with subsequent relevant orders. Court noted petitioner's argument that GST had been refunded in similar cases. State authorities were instructed to examine the claim comprehensively, factoring in both verification requirements and precedent of comparable refund situations. The decision emphasizes administrative duty to process tax refund claims efficiently while maintaining proper verification protocols. Petition disposed with specific directions for immediate processing of refund claim.
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E-Commerce Operators Can Keep Input Tax Credits While Paying GST on Sec 9(5) Services Through Cash Ledger.
Circulars
GST – States
ECOs liable for tax under Sec 9(5) of WBGST Act are not required to reverse input tax credit on inputs and input services proportionately for specified services supplied through their platforms. While ECOs must pay full tax liability for Sec 9(5) supplies through electronic cash ledger only, they can utilize their ITC for tax obligations on their own account services like platform fees. The clarification extends the principle previously established for restaurant services to all specified services under Sec 9(5). ECOs operate in dual capacity – as deemed suppliers for notified services and as platform service providers charging commission. Their ITC remains valid for platform operations but cannot offset Sec 9(5) tax liabilities.
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Government Waives Excess Late Fees for GSTR-9C Reconciliation Statement Filing u/s 47 Until March 2025.
Notifications
GST
The Central Government has waived excess late fees u/s 47 of CGST Act for registered persons who failed to file GSTR-9C reconciliation statements alongside GSTR-9 annual returns for FY 2017-18 through 2022-23. This waiver applies to late fees exceeding the prescribed amount u/s 47, provided the pending GSTR-9C is filed by March 31, 2025. The notification, issued u/s 128 of CGST Act upon GST Council's recommendation, specifically excludes refunds of any late fees already paid for delayed GSTR-9C submissions during these financial years. The waiver aims to facilitate compliance for taxpayers who have outstanding reconciliation statement obligations.
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