Goods and Services Tax

Extended GST limitation requires a notice to plead fraud, wilful misstatement or suppression with supporting factual particulars.
Notes
GST
Section 74 of the CGST Act permits the extended limitation route only where a show cause notice states factual grounds showing that tax short-payment, erroneous refund, or wrongful input tax credit arose by reason of fraud, wilful misstatement, or suppression intended to evade tax. Bare statutory labels, audit objections, later affidavits, or new grounds in an order cannot cure a notice lacking that jurisdictional foundation. Section 75(7) confines confirmation to grounds specified in the notice, while Section 75(2) may deem a validly founded Section 74 notice to be under Section 73 if aggravated conduct is not established. Deliberate conduct, causal nexus, and taxpayer disclosure are central to extended limitation.
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Electronic GST authentication validates portal-issued demand notices, while portal upload starts limitation and RFN can replace DIN.
Case-Laws
GST
Electronically authenticated GST show-cause notices, adjudication orders and DRC summaries uploaded on the common portal remain valid even where taxpayer-facing PDFs display no physical or digital signature. Registered digital signature certificates, immutable electronic records, hash values and officer-certificate mapping satisfy electronic-authentication requirements; form signature fields cannot add to the Rules. Portal uploads constitute valid service and begin limitation; after the portal expressly identified the Additional Notices and Orders tab, taxpayers cannot claim ignorance of communications uploaded there, while challenges concerning earlier uploads remain open. GST communications may bear either a DIN or an independently verifiable RFN, but communications bearing neither identifier are invalid. Conflicting coordinate-bench views require reference to a larger bench rather than a contrary departure.
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Assessment of unregistered persons must precede GST recovery proceedings, leaving educational institution exemption claims open for determination.
Case-Laws
GST
Section 63 assessment of a person liable to GST who failed to obtain registration must precede tax-recovery proceedings under section 74. The proper officer must issue notice and make a best-judgment assessment for the relevant period after providing an opportunity of hearing. An educational institution may raise its exemption claim in those assessment proceedings. A recovery show-cause notice issued without first initiating the section 63 process was quashed, while the Department retained liberty to issue notice in ASMT-14 and pursue assessment; the exemption claim and other contentions remained open.
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Leasehold rights assignments in industrial plots remain outside GST where treated as benefits arising from immovable property.
Case-Laws
GST
Assignment and transfer for consideration of leasehold rights in industrial plots allotted by GIDC constitute transfer of benefits arising from immovable property and are not subject to GST. The jurisdictional High Court's ruling on that characterisation remained binding on the Tribunal absent a stay or recall. The department's stated intention to seek review did not diminish the ruling's binding effect. Accordingly, GST was not leviable on the assignments, and the departmental appeals were dismissed.
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Pre-deposit timing turns on final acknowledgement, allowing a timely defect cure before appeal registration and merits consideration.
Case-Laws
GST
Under the Explanation to Rule 110(4) of the CGST Rules, an appeal is filed only upon issuance of the final acknowledgement. A mandatory pre-deposit made after provisional acknowledgement, but within the time allowed to rectify a defect and before final acknowledgement, satisfies the pre-deposit requirement under Section 112(8). The timing objection is therefore treated as cured, enabling registration and admission of the appeal for consideration on merits.
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Premature GST summons challenges fail where summons merely seek information and no coercive recovery or arrest threat is evidenced.
Case-Laws
GST
Writ jurisdiction was not invoked against repeated GST summons that only sought information and documents, where the recipient had already submitted a representation with relevant copies. In the absence of evidence of coercive recovery or a threat of arrest, the summons did not establish a basis for judicial interference. The writ petition was treated as premature and rejected.
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GST appellate hearing rights protect appeals from dismissal over limitation, authority and interest-only pre-deposit objections.
Case-Laws
GST
GST appellate procedure requires a hearing before disposal, including where limitation, signatory authority or pre-deposit is disputed. Delay may be condoned on sufficient cause within the further statutory period; no separate affidavit is prescribed. A company's authorised signatory may validate an appeal under a general power of attorney, and deficient proof of authority is curable. In interest-only appeals, alternative computations do not constitute an admitted liability, and statutory pre-deposit is confined to tax in dispute. Interest on differential GST runs from invoice-based tax liability despite customer non-reimbursement; cum-tax valuation applies only where the stated value includes tax. Interest demands for delayed GSTR-3B payments must account for documented interest already paid through reasoned adjudication.
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Input tax credit mismatch requires documentary verification; non-appearance alone cannot end a GST appeal without merits review.
Case-Laws
GST
GST appeals should not be rejected solely for non-appearance where sufficient cause exists and the substantive input tax credit dispute remains unexamined. A mismatch between GSTR-3B and GSTR-2A/GSTR-2B does not, by itself, establish wrongful ITC availment; compliance must be verified against invoices, books of account, supplier details, payment records and other transaction evidence. For FY 2017-18 pending proceedings, the applicable verification mechanism should be applied. A subsequently issued CA/CMA certificate may be considered as corroborative evidence if verifiable from contemporaneous records. Fresh determination should address the mismatch, certificate, ledgers and reconciliation before sustaining tax, interest or penalty.
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Retrospective invalidity of ocean-freight IGST supports refunds despite non-party status and prior credit utilisation, subject to authorised appeal grounds.
Case-Laws
GST
Judicial declarations invalidating the reverse-charge IGST levy on imported ocean freight operate retrospectively unless expressly limited, rendering the levy void from inception. Taxpayers who were not parties to the invalidating proceedings may rely on that declaration for refunds, except where their own unsuccessful challenge to the levy has attained finality. A departmental representative may challenge only grounds authorised by the Commissioner. Utilisation of IGST credit does not by itself create double benefit or unjust enrichment where unutilised CGST and SGST credits of equivalent value can be debited. Refunds are therefore supportable, with statutory interest for delay.
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E-Way Bill Omissions Without Tax Evasion Attract General Penalty, Not Detention Penalty for Bonded-Warehouse Return Transit
Case-Laws
GST
Return transit of duty-paid imported goods to a bonded warehouse after an aborted delivery, supported by import and customs-clearance documents and showing no quantity discrepancy, is treated as a logistical fallback rather than an unrecorded commercial movement. Section 129 detention and confiscatory penalty should not apply to a fresh e-way bill omission where the transaction is accounted for, duty has been paid, and no intent to evade tax or revenue loss exists. Such bona fide transit-documentation defaults attract only the general penalty under Section 125; the Section 129 penalty and related orders were set aside.
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Statutory delay limits in GST appeals remain binding, but restored registrations can render departmental challenges infructuous.
Case-Laws
GST
Statutory appellate authorities may condone delay in GST appeals only within the enactment's prescribed outer limit; equitable considerations or High Court directions issued under extraordinary jurisdiction cannot enlarge that power. Where the Department implemented an appellate order by restoring cancelled GST registrations, its subsequent challenge became infructuous because reversal could disrupt intervening transactions and input tax credit without workable consequential relief. Taxpayers retain an independent right to appeal registration cancellation when the common portal prevents a delayed revocation application; failure to seek revocation under Rule 23 does not extinguish that appellate remedy.
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Additional evidence in departmental appeals may include show-cause-notice material without introducing a new case where it merely corroborates existing record.
Case-Laws
GST
Documents already relied upon in a show cause notice do not constitute new evidence when placed before the appellate forum. An additional ground may identify the corroborative effect of existing record material without introducing a new case. Further judicial authorities may be cited, and reliance on previously cited authorities may be withdrawn. The departmental appellant was permitted to file the existing documents and amend the appeal, subject to supplying copies to the respondent.
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Inverted-duty ITC refunds cover higher-rated component inputs, not just principal materials, subject to statutory exclusions and formula-based limits.
Notes
GST
Refund of accumulated ITC under an inverted duty structure depends on whether higher-rated input goods cause credit accumulation relative to output supplies, not solely on whether the principal raw material and output carry the same rate. Section 54(3)(ii) permits the claim subject to notified exclusions, credit eligibility, and proof of a causal nexus between qualifying inputs and accumulation. Input services and capital goods are excluded from Net ITC for the Rule 89(5) calculation. Rule 89(5) limits refundable quantum, while the prescribed process requires electronic filing, invoice details, ledger debit and verification. Administrative circulars cannot add a principal-input condition beyond the statutory test; claimants must substantiate rate inversion, manufacturing nexus, computation and procedural compliance.
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Statutory timing for GST detention: delayed penalty orders are invalid despite administrative obstacles or intervening regulatory action.
Notes
GST
Section 129(3) of the CGST Act imposes separate mandatory deadlines: the penalty notice must be issued within seven days of detention or seizure, and the penalty order must follow within seven days after service of that notice. The latter period runs from service, not from a reply, valuation exercise or other intervening event. Because detention and seizure are coercive restraints on goods and conveyances, administrative difficulty, minimal delay and inspection-stage timelines cannot extend either deadline; a delayed Section 129 order is invalid. The affected person must receive an opportunity of hearing. Invalidity of Section 129 proceedings does not preclude separately lawful action under other GST provisions.
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Supplier tax payment remains a cumulative input tax credit condition, while reversal demands require transaction-specific evidence and reasons.
Notes
GST
Section 16(2)(c) of the CGST Act constitutionally requires tax charged on a supply to be actually paid to the Government before input tax credit is available; invoice possession, receipt of supply and recipient payment do not substitute for this cumulative condition. The Supreme Court affirmed that a bona fide-purchaser exception cannot be read into the provision by relying on the distinct Delhi VAT framework. Section 41 and Rule 37A require reversal where supplier tax payment conditions are unmet, while permitting re-availment after subsequent compliance. Constitutional validity does not permit mechanical denial of credit: authorities must establish the relevant statutory facts, consider transaction-specific evidence, provide a hearing and issue reasoned findings.
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Vested appellate rights protect penalty-only GST appeals from later pre-deposit burdens when adjudication began before amendment.
Notes
GST
Section 107(6)'s substituted proviso, requiring a ten per cent pre-deposit for penalty-only appeals, does not apply where a formal show-cause notice commenced adjudication before 1 October 2025. The High Court treated the right of appeal and its associated conditions as substantive and vested when the lis begins. Because the new filing-stage deposit may bar access to the appellate forum, it is an onerous condition rather than merely procedural. In the absence of express retrospective operation or necessary intendment, appeals from pre-amendment proceedings remain governed by the earlier regime, while admitted amounts remain payable. The Appellate Authority has no inherent power to waive an applicable mandatory deposit.
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Section 74 extended limitation requires pleaded facts establishing fraud, wilful misstatement or suppression, not a mere tax mismatch.
Notes
GST
Section 74 extended limitation under the CGST Act applies only where a tax shortfall, erroneous refund or wrongful input tax credit arose by reason of fraud, wilful misstatement or suppression of facts to evade tax. A show cause notice must plead foundational facts linking deliberate conduct to the alleged evasion; a mismatch, short payment, audit objection or mechanical use of statutory terms is insufficient. The proper officer must independently form the required satisfaction. Section 75 prevents an adjudicating order from adding grounds beyond the notice, so deficient fraud allegations cannot be cured later. Section 74 applies through Financial Year 2023-24, while Section 74A introduces a unified notice regime for later periods.
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An Approach Paper on Expanding the scope and coverage for the Index of Services Production
GST
Dated:- 7-10-2026

MoSPI invites comments/ feedback from stakeholders on the Approach Paper

The services sector has firmly established itself as the primary engine of India's economic growth, driving more than half of the national Gross Value Added (GVA). To monitor this vital performance accurately, MoSPI initiated a monthly compilation of the ISP for the formal sector with 2024-25 as the base year, on a trial basis in July 2026.

The initial framework tracks 19 broad service sub-sectors-relying on high-frequency administrative data sources and data of outward supplies from GST which collectively accounted for approxima

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uccessfully incorporating them, MoSPI will elevate the total coverage of the monthly ISP to approximately 78.4 per cent of the entire services-sector GVA.

This expanded framework will enable aggregation of the sub-sectoral indices into a unified, all-encompassing Index of Services Production that provides a representative reflection of short-term movements of India's services sector.

MoSPI invites views and comments from experts, academicians, central government ministries/departments, state governments, financial institutions and other stakeholders on the proposed methodology. The Approach Paper is available on the MoSPI's website www.mospi.gov.in. Comments and suggestions may be sent to the email to ddgec.esd@mospi.g

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Interest on wrongly availed and utilised input tax credit runs from actual utilisation until reversal under GST rules.
Case-Laws
GST
Interest on wrongly availed and utilised input tax credit must be computed from the actual date of utilisation until the date of reversal. Section 50(3), read with rule 88B(3), does not permit interest to be calculated from an earlier date merely because the credit was wrongly availed. Where interest has been computed from an incorrect earlier date, the assessment order requires modification to apply the revised computation. Statutory appeal or revision remains available for any other disputed issue.
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Natural justice in GST appeals requires hearings and reasoned orders; non-prosecution cannot end appeals without merits review.
Case-Laws
GST
Section 107 of the GST law requires the Appellate Authority to provide a hearing, make necessary inquiry, and issue a written order identifying the issues, decision, and reasons. An appellant's non-appearance may permit ex parte consideration but does not permit dismissal for non-prosecution. An appellate order that ignores an adjournment request and merely records that no interference is warranted, without reasoned consideration of the appeal grounds, breaches those requirements. The matter was remanded for fresh merits adjudication after hearing.
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Portal service of GST show cause notices requires effective intimation; absent notice invalidates adjudication and requires fresh hearing.
Case-Laws
GST
Uploading a GST show cause notice solely under the portal's “Additional Notice and Orders” tab, without separate intimation, denied the taxpayer an effective opportunity to reply and breached the principles of natural justice. As the statutory appeal was dismissed solely on limitation without consideration on merits, the show cause notice, adjudication order and appellate order were quashed. Fresh proceedings were directed through a fresh show cause notice, an opportunity of hearing, and a reasoned adjudication.
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Input Tax Credit reconciliation requires examination of return records before excess-credit demands are reconsidered and bank attachments released.
Case-Laws
GST
Input Tax Credit reconciliation through GSTR-2A/2B, GSTR-3B and the annual return may provide prima facie evidence of available credit. A tax demand alleging excess utilisation of Input Tax Credit requires reconsideration where those material records were not duly examined, with an opportunity to establish the credit claimed. Verification of asserted recovery of part of the demand is also required before releasing a bank attachment. The tax demand was set aside for fresh consideration, and the attachment was to be lifted subject to verification of recovery.
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Statutory limitation bars appellate condonation beyond the prescribed outer limit, but implemented registration restoration made departmental challenges infructuous.
Case-Laws
GST
Statutory appellate jurisdiction does not permit the First Appellate Authority to condone delay beyond the enactment's prescribed outer limit; equitable relief available in writ jurisdiction cannot enlarge that power. Condonation beyond that limit renders consequential appellate orders legally unsustainable. Where the Department has implemented those orders by restoring cancelled registrations, altering the registrants' legal and commercial position and permitting business continuation, it cannot seek annulment without addressing the consequences of restoration. The absence of effective, workable relief makes the Department's challenge infructuous and not maintainable.
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Statutory GST Appeal Channels Challenges to Consolidated Notices into Appellate Review Rather Than Writ Adjudication
Case-Laws
GST
Availability of an efficacious statutory GST appeal generally weighs against writ adjudication of challenges to a consolidated show-cause notice. Objections that the notice is barred by limitation, issued without jurisdiction, or impermissibly combines separate financial years may involve disputed questions of fact and law suitable for appellate examination. The statutory appeal under Section 107 of the CGST Act preserves those objections for determination. The writ petition was relegated to that remedy, subject to an adjusted pre-deposit, with no coercive action until the appeal attains finality.
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Anticipatory bail after CGST summons remains maintainable, but requires circumstances justifying pre-arrest protection during investigation.
Case-Laws
GST
Anticipatory bail following a CGST summons is not premature merely because no arrest order exists: summons alone neither establishes arrest nor makes a person an accused, but tangible circumstances may create a real and reasonable apprehension of arrest. Such apprehension only engages anticipatory-bail jurisdiction; it does not establish entitlement to pre-arrest protection. In an investigation concerning alleged clandestine manufacture and clearance, outstanding inquiries, a co-accused's arrest, and alleged non-cooperation supported the need for possible further interrogation. The application was therefore refused, as investigation requirements outweighed the requested extraordinary protection.
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