Goods and Services Tax

GST invoice penalties require evidence review and an effective hearing where material transaction facts need further verification.
Case-Laws
GST
GST penalties for invoices without actual supply require collective assessment of contemporaneous records. Absence of stock at premises vacated before inspection cannot alone establish fictitious trading, while assertions of past trading do not establish genuineness. Subsequent cancellation of a supplier's registration requires verification of its status during the transactions and whether supplies were made. Books and supporting evidence must be examined, including whether the taxpayer substantiated the transactions. An ex parte penalty order is not set aside merely because the taxpayer was absent; reconsideration with an effective hearing and a reasoned order is warranted where material factual questions require further verification.
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Non-consecutive GST invoice numbers alone do not justify detention or severe penalties for documented transactions without tax evasion.
Case-Laws
GST
Non-consecutive invoice numbering under rule 46(b) is a technical irregularity that does not by itself make a duly documented movement of goods unlawful or untaxed. Detention and penalty under section 129(3) are not justified for a bona fide numbering lapse where transport documents are valid, the goods match their recorded quantity and description, and no tax evasion or revenue loss is established. Section 125 is the potential general penalty route for such an infraction, although the required deliberate non-compliance was absent. The transaction between registered dealers was recorded in their accounts and was revenue-neutral.
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Transitional CENVAT credit survives portal-related filing delays, while fraud demands and penalties require evidence and proper notice.
Case-Laws
GST
Transitional CENVAT credit under section 140(1) remains available where an undisputed balance is declared in a timely TRAN-1 and an outstanding ER-1 return is filed at the first available opportunity after departmental portal failures prevented timely filing. Such filing constitutes substantial compliance; procedural requirements cannot defeat substantive credit when compliance is impossible for reasons beyond the taxpayer's control. Section 75(7) confines adjudication to the grounds in the show-cause notice, so a fraud-based penalty cannot be imposed when the notice proposes only a non-fraud penalty. A demand under section 74(1) requires evidence of fraud, wilful misstatement or suppression to evade tax; disclosed portal difficulties and unsupported allegations do not establish those grounds.
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Input tax credit mismatches and incorrect tax-head reporting do not by themselves justify denial when eligibility is established.
Case-Laws
GST
Mismatches between Form GSTR-3B and Form GSTR-2A warrant verification but do not alone establish failure to meet the supplier tax payment condition. Reflection of IGST in GSTR-2A, bank evidence of payment inclusive of tax, and reconciliation can discharge the recipient's burden where no material showing supplier non-payment is produced. Verification certificates under the relevant circular are not additional eligibility conditions; its specified mismatch scenarios do not apply where IGST is reflected in GSTR-2A. Inadvertently reporting otherwise admissible IGST credit under CGST and SGST heads is a reporting error, not wrong availment. Provisions governing tax paid under an incorrect head do not prescribe an exclusive remedy for recipient credit. Where appellate relief makes a statutory pre-deposit refundable, interest runs from payment until refund, even without a specific request.
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Kraft paper bag classification and GST rates: qualifying bags attract concessional tax with conditional input tax credit.
Case-Laws
GST
Unbranded kraft paper bags without handles and with a base width below 40 cm fall under tariff item 48194000 as other sacks and bags, rather than the entry for bags with a base width of 40 cm or more. They are not covered by the specified GST exemptions. Kraft paper bags manufactured using adhesive glue attract GST at 5% under entry 319 of Schedule I, which covers paper sacks and bags as well as biodegradable bags. Input tax credit on inputs and input services used in manufacture is available subject to the conditions in section 16 of the CGST and TNGST Acts.
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GST exemptions for government-facing incubation services depend on recipient status, while enterprise-support funds and incubator recognition affect tax treatment.
Case-Laws
GST
GST exemptions requiring supply to the Government do not extend to government societies. Consultancy to establish incubators for a rural livelihoods society does not directly perform functions under Article 243G; the claimed government-recipient exemptions are unavailable, and the consultancy attracts GST at 18%. Incubation and capacity building form a composite supply, with incubation and enterprise development as the principal supply. Under the contractual arrangement, enterprise-support grants and loans form part of taxable value; passing them on to enterprises alone does not establish a pure-agent exclusion. That exclusion requires written authorisation, actual-cost recovery, separate invoicing and no ownership or benefit to the supplier. The technology business incubator exemption applies only from the effective date of NSTEDB recognition, subject to its conditions.
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GST exemption for examination services covers printing, scanning, result processing and associated delivery supplied to educational institutions.
Case-Laws
GST
Examination-related printing using content supplied by educational institutions is a composite supply of services under Heading 9989, with printing as the principal supply and paper as an ancillary input. The institutions retain ownership and usage rights in the content, while the supplier provides the physical inputs. GST exemption applies to services supplied to educational institutions in relation to conducting examinations, including printing question papers, hall tickets, OMR sheets and answer booklets. Post-examination scanning, result processing and printing of marksheets and certificates also qualify, as does associated transportation and delivery.
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Advisory on Key Changes in the GST Registration Amendment Process
GST
Dated:- 2-11-2026

Vide Notification No. 05/2026-Central Tax Dated: 26.10.2026, Rule 21 of Central Goods and Services Tax Rules, 2017, the provisions relating to amendment of registration under Rule 19 of the CGST Rules, 2017 have been substituted. The corresponding changes have been implemented on the GST portal.

1. Amendment of Principal Place of Business

• In case of amendment relating to the Principal Place of Business (PPOB), the application will continue to be examined by the Proper Officer in accordance with Rule 19 of Central Goods and Services Tax Rules, 2017.

2. Amendment of other registration particulars

Taxpayers are advised

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tner/Director/Karta/Member/Trustee, etc., is mandatory.

• The said online verification of the mobile number and email address (OTP verification), can be done through the Common Portal using the following link:https://services.gst.gov.in/services/otpVerification which can also be accessed through: Services->Registration->OTP verification of GSTIN.

• A period of 3 days from the date of submission of the application will be provided for completing the prescribed OTP verification. If verification is not completed successfully within this period, the Application Reference Number (ARN) will not be generated.

• PAN, Director Identification Number (DIN) and Corporate Identification Number (CIN), wherever appli

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Advisory on Enhancements Related to Composition Levy Functionality under GST
GST
Dated:- 2-11-2026

Some changes have been introduced on the GST portal for taxpayers registered under or opting for, the Composition Scheme. These changes will apply to applications filed through Form REG-01, CMP-02, CMP-04 and REG-14.

• Introduction of New Composition Category

A new category has been introduced for composition taxpayers: “Person eligible for composition levy under Section 10(2A)”

Accordingly, taxpayers will now have the following options related to composition scheme:

Option A (Existing categories – multiple selections allowed)

• Manufacturers, other than manufacturers of such goods as may b

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Advisory on the Revised Process for Approval of Registration Cancellation application under Form GST REG-16
GST
Dated:- 2-11-2026

The self-cancellation process has been revised to incorporate system-based validations and facilitate the electronic approval of cancellation of registration, subject to the fulfilment of the prescribed conditions as per rule 20 of the Central GST Rules, 2017. The revised process is outlined below:

• Validation of Due Returns: The system will verify whether the taxpayer has filed all applicable returns that are due to be furnished on or before the effective date of cancellation specified in Form GST REG-16. The application for cancellation can be submitted only if all such returns have b

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will be assigned to the jurisdictional tax officer for further action.

• Filing of Returns Within the Prescribed Timelines: If the taxpayer furnishes the required returns within the prescribed timelines, the application will be processed as follows:

a. Composition Taxpayers, Non-Resident Taxable Persons (NRTPs), OIDAR Taxpayers and Input Service Distributors (ISDs): Registration will be cancelled through electronic approval without officer intervention.

b. Regular, Casual and SEZ Taxpayers: The system will check the output tax liability (OTL) for each tax period, as follows:

• OTL of Rs.2.5 lakh or less for each tax period: Registration will be cancelled through electronic approval without officer interventio

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Advisory on Important Changes in FORM GST REG-01 for GST Registration
GST
Dated:- 2-11-2026

Taxpayers intending to obtain registration under GST are hereby informed that FORM GST REG-01 has been revised on GST portal to incorporate certain changes in the registration application process. The revised form introduces additional information requirements and standardises the documentary requirements relating to constitution of business, principal and additional places of business and other registration particulars.

The important changes are highlighted below for the information and guidance of taxpayers:

1. Constitution of Business: One Person Company (OPC) has been introduced as a separate category under the constitution of

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, where applicable, details of their authorised representative.

4. Existing Registrations: The particulars of existing registrations required to be furnished in the application have been revised. The revised form specifically provides for disclosure of GSTIN, Professional Tax Registration Number and Professional Tax Enrolment Registration Number, along with other applicable registration particulars.

5. Principal Place of Business (PPoB) and Additional Place of Business (APoB): The classification of possession of business premises has been revised and standardised. Separate categories have been provided for owned premises, premises in the name of a deceased ancestor, rented/leased premises, consent-based premises, co-working spaces and

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Details of up to 10 bank accounts may be reported. Where bank account details are not available at the time of application, the same are required to be furnished within 30 days from the date of issuance of the registration certificate in FORM GST REG-06.

8. DIN of Designated Partners: In case of a Limited Liability Partnership (LLP), the Director Identification Number (DIN) of the designated partners is required to be furnished in the registration application.

9. Online Validation of Identification Numbers: The Corporate Identification Number (CIN), Foreign Company Registration Number (FCRN), Limited Liability Partnership Identification Number (LLPIN) and Foreign Limited Liability Partnership Identification Number (FLLPIN), wherever a

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GST appeal monetary limits bind tax officers, with composite-order aggregation and exceptions for recurring or interpretative issues.
Notes
GST
GST departmental appeal monetary limits bind Central tax officers but do not automatically bar adjudication of appeals below the threshold. The limits are Rs. 20 lakh for the GST Appellate Tribunal, Rs. 1 crore for the High Court and Rs. 2 crore for the Supreme Court, subject to specified exclusions. The disputed amount is calculated according to the nature of the dispute; for a composite order, relevant amounts are aggregated across the appeals or demand notices it disposes of. Specified recurring or interpretative issues may be excluded, but the Department should identify and support the applicable exclusion. Exceeding a limit does not automatically justify an appeal: its merits and the objectives of reducing litigation and providing certainty must also be considered. Non-filing under the policy does not establish acquiescence or prevent an appeal on similar issues elsewhere.
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E-way bill re-use allegations require proof of the same goods' earlier movement, not merely repeated vehicle journeys.
Notes
GST
Section 129 detention requires an identifiable contravention. Where re-use of invoices and e-way bills is alleged, the revenue authority must establish with cogent evidence that the intercepted goods were previously transported under those documents. Toll records, vehicle movements and photographs are relevant, but do not alone establish the identity of the consignment or a completed earlier journey. Valid documents do not rule out re-use, and an explanation that an earlier journey involved different goods requires verification. Absence of prescribed documents at interception or expiry of an e-way bill presents a distinct issue and may attract statutory consequences. Penalties require an opportunity to be heard.
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Escrow-based taxation of toll-road maintenance applies central tax when concessionaires charge or debit operating expenses to escrow.
Notifications
GST
Registered concessionaires supplying road or highway operation and maintenance services to a concessioning authority under the Toll-Operate-Transfer model must pay central tax on amounts charged or debited from the escrow account towards those expenses, in the tax period of the charge or debit. The concession agreement must grant exclusive toll collection and appropriation rights, require operation and maintenance during the concession period, and require an upfront concession fee. The concessioning authority may be a government, local authority, governmental authority or government entity. The procedure takes effect on 1 November 2026.
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GST enforcement reforms halt arrests, limit transit checks and set a minimum threshold for tax notices pending amendments
Circulars
GST
Until the recommended CGST amendments take effect, CGST field formations must not make GST arrests or confiscate goods or conveyances in transit. Interception requires specific intelligence and authorisation by an officer of at least Joint Commissioner rank, who must record reasons to believe the goods are being transported in contravention. Inspection is limited to movements involving a supplier or recipient registered or, if unregistered, located in the officer's State or Union territory. For suspected contraventions outside that jurisdiction, officers must allow transit and refer information to the jurisdictional officer. Inspection, detention or seizure is permitted regardless of jurisdiction if neither an e-way bill nor documents showing origin or destination are produced. Show cause notices under sections 73, 74 and 74A must not be issued where the combined tax and cess involved is below Rs. 10,000.
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GST rules for services clarify research exemptions, vehicle lease recoveries, banking transactions and co-lending fees.
Circulars
GST
Grant-funded research and development by eligible entities qualifies for GST exemption; certification by the entity head that the work is research rather than consultancy may suffice. Imports of services without consideration by Indian establishments of foreign shipping companies from related persons or other establishments outside India are exempt from 1 November 2026, with GST payments for 1 July 2017 to 31 October 2026 regularised on an as-is-where-is basis. Statutory and ancillary costs recovered by vehicle lessors form part of the composite leasing supply and attract its GST rate. TRAI is not Government under GST law. Notional interest on loans or advances under banks' fund transfer pricing mechanism qualifies for the interest exemption. Lending services provided by NBFCs to banks under co-lending arrangements are taxable, with their value determined by the contractual agreement.
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GST classification and input tax credits clarified for sublimation paper, toys, seaweed bio-stimulants and used motor vehicles.
Circulars
GST
Sublimation paper falls under tariff heading 4809 and attracts 18% GST. Toy entries cover all toys under heading 9503, including dolls, scale models and puzzles; non-electronic toys attract 5% GST and electronic toys attract 18%, including their parts and accessories. Under the used-vehicle margin scheme, the input tax credit restriction applies only to tax paid on procured second-hand vehicles; credit on other inputs and input services remains available subject to the CGST Act. Seaweed-extract bio-stimulants registered under Schedule VI of the Fertiliser Control Order fall under heading 3101. Past disputes concerning sublimation paper classification and rates and bio-stimulant classification are recommended for regularisation on an “as is where is” basis.
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Effective GST notice service requires alternative steps when portal uploads fail to secure a meaningful hearing.
Case-Laws
GST
Effective service of GST notices requires more than portal upload where a taxpayer repeatedly does not respond. Although uploading notices on the common portal is a valid mode of service, officers must consider other available statutory modes to ensure effective service and a meaningful opportunity of hearing. Mere portal upload without such effort is an empty formality that violates principles of natural justice in an ex parte assessment. The ex parte assessment and consequential summary order were quashed and remanded for fresh adjudication, with an opportunity to file objections and receive a personal hearing subject to a stipulated condition. The related bank-account attachment could not continue, and the accounts were to be de-frozen upon compliance.
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Personal hearing rights require fresh GST adjudication where adverse demands were confirmed without an oral hearing.
Case-Laws
GST
Personal hearing before an adverse GST demand is a distinct statutory safeguard: a written reply does not replace it, and appellate proceedings do not cure its denial. The adjudication, appellate and rectification orders, including the tax, interest and penalty demand, were set aside and remitted for fresh adjudication after a personal hearing. An alleged input tax credit mismatch between GSTR-3B and GSTR-9 requires verification against books and invoices; a return mismatch alone does not establish excess credit. Although taxpayers bear the burden to prove eligible credit, they must have an opportunity to do so. Fresh proceedings are confined to the show cause notice and require reasoned verification.
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Specificity of show-cause notices protects job-work movements from detention penalties where no tax liability arises.
Case-Laws
GST
Section 129(1) detention-penalty proceedings require a show-cause notice to identify the specific statutory provisions and rules allegedly contravened. A generic allegation of breach of the Act and Rules prevents an effective response and breaches natural justice, invalidating a demand founded on unstated provisions. Goods accepted as having been sent for job work may move without payment of tax. Where the transaction's job-work character and supporting material are accepted, delayed generation of an e-way bill does not change that character; consequently, a detention penalty computed by reference to tax not payable is unsustainable.
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Clerical GSTR-1 cess errors cannot sustain demand when tax liabilities are consistent and correctly paid.
Case-Laws
GST
Cess demand based solely on an erroneous GSTR-1 entry was unsustainable where the declared cess did not correspond with the taxable value or CGST and SGST liabilities. CGST and SGST liabilities in GSTR-1 and GSTR-3B were consistent and correctly paid. In the absence of allegations or evidence of suppressed outward supplies, understated taxable value, or short payment of tax, the cess mismatch was accepted as a clerical error. A bare allegation of cess short payment could not support the demand; the appellate order, consequential interest, and penalty were quashed.
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E-way bill exemption for agricultural rubber latex covered transport under a delivery challan despite a clerical GSTIN error.
Case-Laws
GST
Intra-State transport of natural rubber latex from an agriculturist's premises to a taxable recipient's registered business place is exempt from e-way bill requirements when accompanied by a delivery challan under Notification No. 3/2018-State Tax. The exemption applied where the supplier established the agricultural origin of the latex and the prescribed challan accompanied the transport. An incorrect GSTIN in the challan, belonging to an unrelated person and unsupported by evidence of connection with the transaction, was treated as a genuine and condonable clerical error. Penalties imposed for transporting the latex without an e-way bill were set aside, with consequential relief.
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Input tax credit mismatches for specified years require Circular-based review when proceedings remain pending and evidence is produced.
Case-Laws
GST
Circular No. 183/15/2022-GST governs mismatches between input tax credit claimed in GSTR-3B and reflected in GSTR-2A for FY 2017-18 and FY 2018-19. Its verification instructions extend to pending adjudication and appellate proceedings for those periods. Where a FY 2017-18 dispute involves excess input tax credit claims and additional documentary evidence, the claim requires fresh examination under the Circular, with observance of natural justice. The appellate order was set aside and remanded for de novo consideration of the mismatch and additional evidence within the prescribed period.
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Legal representative liability after a proprietor's death is limited to inherited estate, while substantiated B2B credits remain available.
Case-Laws
GST
Post-death GST liability of a legal representative for a discontinued proprietary business is confined to the deceased proprietor's inherited estate and its capacity to meet the charge under Section 93(1)(b). Proceedings cannot validly continue where no notice is issued to the legal heir and no inquiry identifies an inherited estate; the proceedings and appellate order were therefore without jurisdiction and set aside. Input tax credit remained available despite a GSTR-2A mismatch where supplier certificates established tax payment and showed that invoices were incorrectly reported as B2C rather than B2B supplies.
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GST refund limitation: COVID-19 exclusion preserves timely advance-tax refunds, while deficiency-memo corrections relate back to the original application.
Case-Laws
GST
GST refund limitation for tax paid on a taxable advance runs from the tax-payment date, and the COVID-19 exclusion applies where that relevant date falls within the notified excluded period. Applying exclusion of the first day and inclusion of the last day, a payment made on 19 May 2020 permitted filing until 29 February 2024. Rectified applications submitted after deficiency memos relate back only to a timely original application. GST validly paid on a taxable advance is not a deposit outside the statutory refund mechanism, and the two-year filing period is a substantive eligibility condition. Appellate authorities must decide limitation issues with reasons after considering the taxpayer's reply.
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