Goods and Services Tax

Input tax credit on genuine GST invoices when supplier fails to remit tax: Section 16(2)(c) read down, denial set aside
Case-Laws
GST
Section 16(2)(c) CGST Act, requiring that the supplier must have paid tax to enable the purchaser's ITC, was examined where the purchaser had paid GST to the supplier under genuine invoices but the supplier allegedly failed to remit it. The provision was held constitutionally valid, but was read down to avoid disproportionate consequences and arbitrariness under Article 14 by distinguishing bona fide purchasers from collusive or fraudulent transactions. Since there was no allegation of fraud, wilful misstatement, or suppression by the purchaser and recovery mechanisms against the defaulting supplier existed, ITC could not be denied to the bona fide purchaser; the impugned denial order was set aside and the petition partly allowed. – HC
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Belated GST annual return filings under amnesty: late fee capped at ₹10,000 per Act; no s.125 penalty
Case-Laws
GST
For belated filing of GST annual returns made before the cut-off date under the amnesty notifications, the late fee under s.47 was held to be in the nature of a penal levy, and the notifications issued under s.128 required extension of the capped late fee benefit to all eligible filers; consequently, no late fee could be demanded beyond Rs.10,000 under each GST enactment. Since s.125 general penalty operates only where no specific penalty is otherwise provided, imposition of general penalty alongside the statutory late fee regime was impermissible; consequently, no s.125 penalty could be levied. Petition allowed. – HC
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Tax demand confirmed after show-cause notice, taxpayer sought more time to reply; order quashed, deposit 25% required.
Case-Laws
GST
The dominant issue was whether confirmation of a tax demand proposed in a show cause notice should be sustained when the taxpayer sought a further opportunity to file a detailed reply with supporting documents. The court held that, consistent with its approach in similar matters, the impugned confirmation order warranted interference to secure a merits-based adjudication; accordingly, it was quashed and the matter remitted for fresh decision, subject to the taxpayer depositing 25% of the disputed tax in cash within 30 days and filing a comprehensive reply, with any existing bank account attachment to stand vacated upon such compliance – HC
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GST assessment demands based on GSTR-3B/GSTR-2A mismatch and ineligible ITC-orders quashed, remand allowed with 50% deposit
Case-Laws
GST
Where the statutory time limit to file an appeal under s.107 of the GST enactments had expired, the court held that the assessee could still be granted limited writ relief by quashing the assessment orders and remitting the matters for fresh adjudication, consistent with prior practice of conditioning remand on a substantial deposit proportionate to delay. Accordingly, the impugned orders were set aside and the matters remanded, subject to the assessee depositing, in cash through the electronic cash ledger within 30 days, 50% of the disputed tax relating to demands confirmed on account of GSTR-3B/GSTR-2A mismatch and ineligible input tax credit. – HC
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GST input mismatch in GSTR-2A vs GSTR-3B and unclear notice; s.74 extended period order quashed, remanded after 10% deposit
Case-Laws
GST
Challenge to invocation of the extended period under s.74 of the TNGST Act was considered in light of an unclear show-cause notice and the alleged mismatch between GSTR-2A and GSTR-3B. The court held that proper adjudication on limitation and tax liability required the taxpayer to furnish a comprehensive reply on merits along with legal submissions, which had not been effectively done, warranting a fresh determination. Accordingly, the impugned order was quashed and the matter remitted to the proper officer for reconsideration, subject to deposit of 10% of the disputed tax from the taxpayer's electronic cash ledger within 30 days. – HC
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ED attaches multi-crore assets in railway freight charge 'fraud' case
GST
Dated:- 7-1-2026
PTI
New Delhi, Jan 7 (PTI) The Enforcement Directorate on Wednesday said it has attached properties worth Rs 2.67 crore as part of a money laundering investigation against a Guwahati-based company and its promoter in a railway freight charges and GST “evasion” case.
A four-storey commercial building and another immovable property located in Gurugram (Haryana) of companies named Vinayak Logistics India, Vinayak Logistics and their owner and director, Pravesh Kabra, have been provisionally attached under the Prevention of Money Laundering Act (PMLA).
The ED case stems from a chargesheet filed by the CBI in a case where it was alleged tha

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DGGI arrests two persons for evading over Rs 50 crore GST
GST
Dated:- 7-1-2026
PTI
Hyderabad, Jan 7 (PTI) Two persons have been arrested in connection with separate cases of alleged GST evasion to the tune of Rs 50 crore, officials said on Wednesday.
The Directorate General of GST Intelligence (DGGI), Hyderabad zonal unit, carried out these arrests on January 6 to sustain pressure on the organised tax fraud network, a release said.
“Sunil Kumar, Managing Director of Orange Passenge

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Composite GST assessment order spanning multiple financial years u/ss 73-74 struck down; fresh year-wise proceedings allowed.
Case-Laws
GST
A composite assessment order covering more than one financial year was challenged as violating Sections 73 and 74 of the GST Act, 2017. Applying binding precedent, it was held that a single show-cause notice or composite assessment order cannot validly relate to more than one tax period-either more than one month where proceedings are initiated before the due date for filing the annual return, or more than one year where the due date has been reached. Consequently, the impugned assessment order and the appellate order affirming it were set aside, with liberty to the department to initiate fresh proceedings separately for each assessment year. – HC
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Accumulated ITC refund under inverted duty structure: 2019 time-limit amendment held non-retrospective; Section 54 claims revived, remanded.
Case-Laws
GST
Whether the 01.02.2019 amendment curtailing the time for refund applications could retrospectively extinguish accrued entitlement to refund of accumulated ITC under an inverted duty structure was determined by applying the presumption against retrospectivity to substantive curtailment of vested rights; absent express retrospective operation, the unamended “relevant date” continued to govern periods prior to the amendment, and the refund claims were not time-barred, including for July 2017-December 2018 (also within extended time under a notification) and January-March 2019 under Section 54. The rejection for January-March 2019 for alleged non-receipt of eligible inputs was found unreasoned. The impugned order was set aside and the matter remanded for fresh determination. – HC
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Second-hand motor vehicle dealers u/r 32(5) margin scheme: GST on margin only; ITC allowed for repairs
Case-Laws
GST
Where a registered person trades in second-hand motor vehicles and does not avail ITC on the purchase of such vehicles, GST is payable only on the margin under Rule 32(5) read with N/N 8/2018-CT (Rate). The restriction on ITC applies only to tax paid on purchase of the used vehicles themselves; it does not bar ITC on other inward supplies used in the course or furtherance of business, including repairs, refurbishment, spare parts, and common expenses, subject to Sections 16-21 and Rules 36-45 compliance. Supplies under the margin scheme with nil margin remain taxable (value becomes zero), not exempt, hence no reversal of common ITC under Rules 42/43. – AAR
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Project management consultancy “centage” charges for government works treated as pure services; GST exemption upheld, refunds limited by Section 54
Case-Laws
GST
Centage charges collected for project management consultancy, involving only supervision, coordination and administrative management without any transfer of property in goods or works contract, were held to constitute “pure services.” As such services were supplied to Government/local authorities in relation to functions entrusted to Panchayats/Municipalities under Articles 243G/243W read with the Eleventh and Twelfth Schedules, they were held exempt under Entry 3 of Notification No. 12/2017-CTR, rendering the centage charges non-taxable under GST. Refund of GST already paid was held to be governed solely by Section 54, requiring filing within two years from the date of tax payment; the authority lacked jurisdiction to relax this limitation. – AAR
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Dermatology treatment services vs cosmetic hair transplants: therapeutic care exempt under Sl. No. 74, aesthetic procedures taxed
Case-Laws
GST
Healthcare services rendered for diagnosis, treatment, or care of dermatological diseases such as psoriasis, dandruff, dermatitis, fungal infections, folliculitis, and similar ailments were treated as “health care services” and held exempt under Sl. No. 74 of Notification No. 12/2017-Central Tax (Rate), since they are therapeutic services aimed at treating medical conditions; exemption was allowed for such services. Services in the nature of hair transplant/hair fixing or other cosmetic/plastic procedures were held not to qualify for the exemption where undertaken for aesthetic enhancement, and would be exempt only if performed to restore or reconstruct anatomy or bodily functions affected by congenital defect, developmental abnormality, injury, or trauma; exemption was denied for purely cosmetic services. – AAR
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Manual GSTR-3B filing for March 2021 quarter to claim omitted ITC allowed, without cancelling existing tax demand order
Case-Laws
GST
Whether a registered person could be permitted to file a manual GSTR-3B for the quarter ending March 2021 to claim additional ITC omitted due to an error was determined by balancing procedural facilitation with preservation of existing tax demands. The court accepted that allowing manual filing would not, by itself, nullify or dilute the demand raised under the order dated 19.02.2025, which would continue to operate subject to any permissible challenge before the competent authority. Accordingly, the respondents were directed to accept the manual return, without automatic impact on the demand order, and the petition was disposed of. – HC
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Seized silver and cash stolen in state custody: compensation awarded for negligent loss; relief limited to undisputed shortfall
Case-Laws
GST
Compensation was sought for loss of seized silver and cash stolen from a police station while in State custody. The seizure was an exercise of sovereign power, but the subsequent loss was attributable to negligence of public officials, amounting to a constitutional tort infringing the claimant's right to carry on trade under Article 19(1)(g); compensation was therefore maintainable and granted. On quantification, the forum declined to adjudicate disputed purity of returned silver for lack of material, and confined relief to the undisputed shortfall between seized and returned quantities. The claimant was held entitled to return of 23.44 kg silver valued as on the date of compliance, with Rs. 7,95,000 adjusted against that value; petition allowed. – HC
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Provisional tax attachment on GST property u/s 83: one-year limit enforced, attachment lapsed and cannot be renewed.
Case-Laws
GST
Provisional attachment under Section 83 of the CGST/KGST Act was challenged as time-barred. The court held that Section 83 expressly limits the attachment's operation to one year, and on expiry the attachment and all consequential proceedings and notices cease to have effect; accordingly, the impugned attachment was declared non-subsisting due to lapse of the statutory period. Relying on binding precedent, it further held that after expiry of the one-year period, the Revenue is precluded from re-invoking Section 83 to issue a fresh or new provisional attachment in respect of the same matter. Petition was disposed with directions. – HC
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GST tax demand with interest and penalty decided without show-cause reply; taxpayer given another chance, orders set aside.
Case-Laws
GST
Challenge to confirmation of GST tax demand with interest and penalty on the ground that the adjudication proceeded without a reply to the show-cause notice. The court held that where the taxpayer asserted bona fide and unavoidable reasons constituting sufficient cause for not filing a reply, a justice-oriented approach warranted one further opportunity to contest on merits; accordingly, the adjudication order under s.73 and the appellate order under s.107 were set aside and the matter was remitted for fresh consideration from the stage of filing reply to the show-cause notice, subject to payment of costs to the Legal Services Authority. – HC
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Accountant's illness delaying s.107 tax appeal filing after s.73 order; 57-day delay condoned, rejection set aside, remanded.
Case-Laws
GST
Delay of about 57 days in filing an appeal under s.107 of the 2017 Act against an order under s.73 was held to be supported by sufficient cause where the delay was attributable to the illness of the appellant's accountant, affirmed by affidavit and not disbelieved by the appellate authority; rejection solely because the accountant was not an authorized signatory ignored the accountant's material role in preparing the appeal and did not establish gross negligence. Applying s.5 of the Limitation Act, the delay was condoned, the appellate rejection was set aside, and the matter was remanded for fresh decision on merits. – HC
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Rs 24-crore hawala, GST fraud racket busted in Bareilly, 2 held
GST
Dated:- 6-1-2026
PTI
Bareilly (UP), Jan 6 (PTI) Police in Uttar Pradesh's Bareilly district have uncovered a suspected hawala and GST fraud network involving illegal financial transactions worth around Rs 24 crore, with the arrest of two men who allegedly used fake firms and so-called “mule accounts” to move money, officials said on Tuesday.
The racket surfaced after a small zari (embroidery) artisan received an income tax notice of nearly Rs 1.5 crore for transactions he was unaware of, Bareilly Superintendent of Police (South) Anshika Verma said on Monday.
According to police, the accused targeted small traders and daily wage workers, offering to help them

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Advisory on Filing Opt-In Declaration for Specified Premises, 2025
GST
Dated:- 5-1-2026

Dear Taxpayers,
The relevant declarations issued vide Notification No. 05/2025 – Central Tax (Rate), dated 16th January 2025, are now made available electronically on the GST Portal. These declarations may be opted for and filed by persons who are applying for registration or are already registered and supplying hotel accommodation services by declaring the premises as “specified premises”.
Kindly take note of the following key points:
1. Who may opt and file the declaration
* Regular taxpayers (active and suspended) supplying hotel accommodation service who want to declare their premises to be a “specified premises”
* Applicants for

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vailable separately in due course of time.)
3. Timeline for Filing Declarations
(A) Existing Registered Taxpayers – Annexure VII
* Can be filed for the subsequent financial year during the specified window: 1st January to 31st March of the preceding financial year.
* For FY 2026-27, Annexure VII can be filed from 01.01.2026 to 31.03.2026.
(B) New Registration Applicants – Annexure VIII
* Can be filed within 15 days from the date of generation of ARN of the registration application.
* Filing is allowed irrespective of whether GSTIN has been allotted, provided the application is not rejected.
* After the lapse of 15 days, the opt-in declaration can be filed only when the window for Annexure VII is available, i.e., 1st January to

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rate PDFs with reference numbers will be generated for each premise.
* If any premises are left for opt-in, the taxpayer may again file Annexure VII for that premise for the same financial year during the eligible window period.
* Suspended taxpayers are allowed to file the declaration. However, cancelled taxpayers are barred from filing such declarations.
* The option exercised will continue for subsequent financial years unless an opt-out declaration (Annexure IX) is filed within the prescribed time.
6. Downloading of Filed Declarations
* Filed Annexures (VII / VIII) can be downloaded from: Services -> Registration ->Declaration for Specified Premises -> Download
* Separate reference numbers are generated for each declared prem

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Arunachal GST collection rises 36pc in first 9 months of FY26
GST
Dated:- 5-1-2026
PTI
Itanagar, Jan 5 (PTI) Arunachal Pradesh has recorded a sharp 35.7 per cent rise in Goods and Services Tax (GST) collections in the first nine months of the 2025-26 financial year, compared to the figure in the same period in the previous fiscal, officials said on Monday.
The collection exceeded the national growth average of 6.8 per cent, reflecting strong economic activity and improved tax compliance in the state, they said.
The state collected Rs 1,519 crore between April and December 2025 as GST, while the collection was Rs 1,324 crore in the corresponding period of 2024, with an absolute increase of Rs 195 crore.
According to the centr

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Frequently Asked Questions (FAQs) for Health Security se National Security (HSNS) Cess Act, 2026 and HSNS Cess Rules, 2026
GST
Dated:- 5-1-2026

Q1. Who is required to get registered under the HSNS Cess Rules?
Ans. Every taxable person as per section 3 of the Health Security se National Security Cess Act, 2025 (hereinafter referred to as 'the Act') must register. An application for registration shall be made in FORM HSNS REG-01 through the ACES portal. Where machines are installed in more than one factory, separate registration shall be required for each factory.
Q2. I am an existing manufacturer of Pan Masala. By what date must I apply for registration under the new HSNS Cess Rules?
Ans. You must apply for registration immediately upon the commencement of the Act and the HSNS Cess Rules, i.e., on 1st February, 2026. Since the liability to pay cess begins from that date, you must submit the registration application in FORM HSNS REG-01 on the portal at the earliest. Your

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ent may be done on the portal by utilizing the said temporary registration number even if the registration certificate (which shall be issued within seven working days) is still being processed.
Q5. Once I get my registration, when must I file the declaration regarding my machines?
Ans. You must file the declaration in FORM HSNS DEC-01 on the portal within seven days of the grant of your registration. This declaration must specify the parameters of your machines (maximum rated speed, weight of specified goods, etc) relevant for the computation of the cess.
Example: 'ABC Ltd' receive their Registration Certificate on February 10, 2026. They must file FORM HSNS DEC-01 by February 17, 2026.
Q6. What if I add a new machine? Do I need to inform the department?
Ans. Yes. You must file a fresh declaration under section 9(3) of the Act and rule 9(2) of the HSNS Cess Rules within fifteen days of any change in the parameters relevant for the computation of cess, which includes the installat

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ification.
* You will have to pay the amount of cess so determined for the subsequent period and the past period as per rule 11(3) which mandates that you are liable to pay the differential amount of cess along with interest for the period commencing from the date of installation (for initial declarations) or the date of change in parameters (for fresh declarations) until the date of actual payment and also, pay the determined cess amount for the subsequent period.
Example: On 1st February, a manufacturer installs a machine with a speed of 300 pouches/minute and declares its details to the Department. On 1st April, the proper officer, after verification, concludes that the machine's maximum rated speed is actually 700 pouches/minute. The proper officer shall issue an order by April 30th detailing the computation of cess after giving a reasonable opportunity to be heard. The registered person shall pay the differential cess amount for February, March, and April, along with intere

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s required to be paid fully for that entire month within five days of such addition or installation.
Example: 'M/s ABC Ltd' (an existing registered entity) operates 4 machines. On August 20, 2026, they install a 5th Machine with a monthly cess liability of Rs. 1,01,00,000. They must pay the monthly cess of Rs. 1,01,00,000 by August 25, 2026. In case of any delay in payment, interest would be payable from August 26, 2026 to the date of actual payment.
Q13. What are the due dates for payment and return filing?
Ans. You must pay the monthly cess electronically by the 7th day of the current month. You must file the monthly return in FORM HSNS RET-01 by the 20th day of the succeeding month.
Q14. What happens if I file my return late?
Ans. If you fail to furnish the return by the due date, the proper officer will issue a notice requiring you to furnish such return within fifteen days of the receipt of the said notice. Further, as per section 18(1)(c) of the Act, failure to furni

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he machine or manual unit is non-operative for a continuous period of fifteen days or more. If a machine is sealed for 10 days, then desealed for two days and again sealed for another 10 days, you cannot claim abatement because the continuous period is less than 15 days.
Q18. Can I simply switch off the machine and claim abatement later?
Ans. No. You must inform the proper officer at least 3 working days before the intended closure. The proper officer will visit your factory and officially seal the machine so it cannot be operated within three days of the receipt of the intimation.
You must ensure that no manufacturing takes place on that machine during the period the machine was sealed.
Q19. Can I stop paying Cess if my machine is not working or if there is no demand?
Ans. You can claim abatement (adjustment) only if the machine is non-operative for a continuous period of 15 days or more. The procedure for claiming abatement under Chapter V of the HSNS Cess Rules should be follow

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er on or before 20th October. Say, they file the claim on 25th September, and the abatement order is passed on 7th October, they can adjust this amount against their liability for November.
Example 2: 'ABC Ltd' has installed a High-speed pouch packing machine (700 ppm). Their monthly liability (C) is Rs. 2,02,00,000. The machine is sealed on July 20th and de-sealed on August 8th. Since the shutdown (21 days) is more than 15 days, they are eligible for abatement which will be calculated separately for each month as below:
* For July:
* N: 31 days
* D: 12 days (July 20-31)
* Abatement (A1):
A1=2,02,00,00031×12=Rs. 78,19,355
For August:
*
* N: 31 days
* D: 9 days (Aug 1-9)
* Abatement (A2):
A2=2,02,00,00031×9=Rs. 58,64,516
* They can claim the abatement amount of Rs. 1,36,83,871 (A1 + A2) by applying to the proper officer on or before 20th September. Say, they file the claim on 25th August, and the abatement order is passed on 5th September, they can adjust this amo

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t inform the proper officer 3 working days in advance. The officer will supervise the uninstallation and removal. If removal is not feasible, it will be sealed.
Q25. My machine has a maximum rated speed of 700 pouches/minute, but I only run it at 300 pouches/minute. Which Schedule II slab applies to me?
Ans. You must pay the amount of cess based on the Maximum Rated Speed, not the actual operating speed. As per Rule 12 the maximum rated speed of a machine shall be taken as the maximum speed achievable by the machine, irrespective of the actual operating speed at which the machine is used to manufacture goods of any weight.
Q26. If I do not produce the specified goods in a month, but the machine was not sealed, do I still pay Cess?
Ans. Yes.
Q27. My machine was sealed from September 1st to September 15th. On September 15th evening, it was de-sealed. Am I eligible to claim an abatement?
Ans. No. Since the machine was non-operational for a continuous period of only 14 days, you are

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y manual” if no machine capable of assisting or completing any part of the manufacturing or production is installed in the factory. The amount of cess payable shall be as per Table 2 of Schedule II of the Act (11 lakhs per month).
Q 31. I am planning to start a new Pan Masala manufacturing unit in March 2026 (after the rules are notified). If I install my machines and start production on the 10th of the month, do I have to pay the Cess for the entire month?
Ans. No. As per the proviso to rule 12 of the HSNS Rules, if a newly registered person installs machines during a month, the cess payable for that specific month is calculated on a pro-rata basis. You will only pay for the number of days remaining in that month, starting from the date of installation of the machine or the start of the manual process unit, as the case may be. Further, you must pay this proportionate cess amount within five days of such installation or start.
Example: If you start a new unit and install the machine

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GST refund claim after deficiency memo: limitation u/s54(3) runs from first filing; time-bar rejection quashed, remanded.
Case-Laws
GST
Refund was rejected as time-barred under s.54(3) CGST Act by treating a later revised application (filed after a deficiency memo) as the relevant date for limitation. The Court held that limitation must be computed from the date of the initial refund application, and a subsequent revised filing pursuant to a deficiency memo cannot shift the limitation start point; the contrary approach was erroneous and liable to be quashed. Consequently, the impugned orders were set aside and the matter was remitted for fresh consideration of the refund claim on merits in accordance with law, and the petition was allowed. – HC
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Alleged bogus firms and fake e-way bills under CGST ss. 67, 132, with seized digital evidence; anticipatory bail granted
Case-Laws
GST
Anticipatory bail was sought in a prosecution alleging creation of bogus firms and facilitation of fake e-way bills under ss. 67 and 132 of the CGST/SGST Act. The court held that the allegations were chiefly founded on documentary and digital material already seized during the search, with no pending recovery shown, reducing the necessity of custodial interrogation. Considering the maximum punishment of five years and the non-violent nature of the alleged offence, the court found pre-trial incarceration unwarranted, and observed that conditional liberty would not likely enable absconding or evidence tampering given seizure of relevant data. Anticipatory bail was granted subject to conditions – HC
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Pending tax refund application seeking interest and penalty: authority ordered to decide claim and issue orders within four months
Case-Laws
GST
The dominant issue was whether the tax authority should be directed to act on a pending refund application and consider interest and penalty. The court held that the authority must decide the refund application in accordance with law, specifically taking into account the claim for refund along with applicable interest, and bearing in mind binding precedents on such refund claims. Consequently, the authority was directed to consider, process, and pass appropriate orders on the refund application within four months from receipt of the order, and the writ petition was disposed of. – HC
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Parallel GST show-cause proceedings by State after Central notice u/s 6(2)(b) barred; State order quashed.
Case-Laws
GST
State GST authorities were held to lack jurisdiction to initiate or continue proceedings where Central GST authorities had already initiated proceedings against the taxpayer by issuing a show-cause notice, since dual/parallel proceedings are barred under Section 6(2)(b) of the CGST Act, 2017. Applying the binding precedent on identical facts, the impugned order-in-original and its summary were treated as without jurisdiction and liable to be set aside. Consequently, the order-in-original and the summary were quashed and the writ petition was allowed. – HC
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