Goods and Services Tax

GST sanction objections cannot invalidate an entire FIR also alleging BNS offences at the preliminary stage
Case-Laws
GST
GST prosecution restrictions do not apply to an entire FIR that also alleges offences under the Bharatiya Nyaya Sanhita. At the preliminary stage, alleged lack of prior sanction or non-compliance with the applicable notification cannot invalidate the whole FIR. Ad interim protection was refused, while objections to the inclusion of GST offences remain open for consideration at trial or another appropriate stage under the Bharatiya Nagarik Suraksha Sanhita. The parties may pursue their substantive contentions before the Writ Court and other appropriate forums.
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GST appeal delays may be condoned in writ jurisdiction to restore appellate review of unadjudicated tax computation.
Case-Laws
GST
Writ jurisdiction may be used to reopen a GST appeal dismissed solely for delay where the computation of tax remains unadjudicated. Condonation of delay allows the appeal under Section 107 of the J&K GST Act, 2017 to be treated as filed within time and returned to the appellate authority for a decision on merits. The authority considers the tax computation after hearing both parties; the merits remain for that authority to determine.
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GST notice service and hearing rights require alternative delivery where portal service fails in input tax credit proceedings.
Case-Laws
GST
Effective service of GST notices and an opportunity to answer a show cause notice are required for compliance with natural justice. Where portal-based service is ineffective, the department must use alternative statutory modes under Section 169 of the GST Act, such as registered post with acknowledgement due. Proceedings conducted without a hearing or opportunity to respond breach natural justice. The proceedings concerned IGST credit inadvertently reported under CGST and SGST and corrected in a subsequent GSTR-3B return.
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Transitional input tax credit cannot be denied for an incorrect Form TRAN-1 provision or column when eligibility is undisputed.
Case-Laws
GST
Transitional input tax credit is a vested and indefeasible right where eligibility is undisputed and the unutilised credit arises from duty or tax paid. Credit declared on time in Form TRAN-1 cannot be denied solely because it is reported under Section 140(5) instead of Section 140(1) of the CGST Act, 2017, or in an incorrect column, where eligibility and quantum are undisputed.
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Concessional GST on works contracts depends on recipient status and non-commercial use, with interest and penalties for short-payment.
Case-Laws
GST
The concessional GST rate for works contracts requires a qualifying recipient and predominantly non-commercial use. Co-operative society registration and government funding or supervision do not by themselves establish Government Entity status, while buildings intended for manufacturing yarn for sale serve a commercial purpose. Interest on unpaid differential GST is compensatory and is not waived for bona fide reliance. Section 73(9) penalties apply without fraud and cannot be waived for bona fides; payment of tax and interest within 30 days of notice provides the statutory route to avoid penalty. Cum-tax valuation requires tax-inclusive receipts, not consideration invoiced exclusive of tax. Input tax credit requires proof of suppliers' tax payment; a return mismatch accompanied by failure to prove payment can result in disallowance. Interest under Section 50(3) applies to credit wrongly availed and utilised.
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GST departmental appeal limits bind tax officers, and unjustified appeals below the threshold can attract costs upon withdrawal.
Case-Laws
GST
Monetary-limit directions issued by CBIC under section 120 of the CGST Act are mandatory for Central Tax officers. The applicable circular directs that departmental appeals involving amounts below Rs. 20 lakh must not be filed before GSTAT. Indiscriminate litigation contrary to the National Litigation Policy wastes judicial time and imposes unnecessary expenditure on respondents. An appeal filed below the threshold without a valid explanation or exceptional circumstances was permitted to be withdrawn, with litigation costs payable by the appellant to the respondent within one month.
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Input tax credit demands cannot rest on unnotified supplier tax payment charges, with related interest and penalties also unsustainable.
Case-Laws
GST
Section 75(7) of the CGST Act confines confirmation of a demand to the grounds specified in the show cause notice. A charge concerning suppliers' non-filing of GSTR-3B returns under section 16(2)(aa), which was not in force during the relevant financial year, cannot be replaced at adjudication by a distinct charge of suppliers' non-payment of tax under section 16(2)(c). Omission of a statutory sub-clause is distinguishable where the relevant facts and charge were conveyed. An input tax credit demand confirmed on an unnotified ground is unsustainable, as are the associated interest and penalty.
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Input tax credit under incorrect heads requires reconciliation, while supplier tax payment remains essential despite invoice reflection.
Case-Laws
GST
Input tax credit reported under an incorrect tax head does not, by itself, establish excess credit. The aggregate credit balance and actual availability, admissibility and utilisation require verification against original records and the electronic credit ledger, rather than annual-return figures alone. Differences in reported figures require reconciliation. Consequential interest and penalty cannot independently survive if the principal demand is unsustainable. For purchase-related credit, invoice reflection in GSTR-2A alone does not establish entitlement. The statutory conditions apply cumulatively, including actual payment of the tax charged to the Government, and the claimant bears the burden of establishing entitlement.
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GST appeal amnesty and import credit: ledger choice does not make appeals late, and return misclassification does not defeat eligibility.
Case-Laws
GST
GST appeal amnesty separates the filing deadline from the prescribed pre-deposit and its payment mode. Paying the pre-deposit through the Electronic Credit Ledger does not make an otherwise timely appeal time-barred; a deficiency in the stipulated cash component should be open to rectification. Requiring further cash while retaining the entire prescribed pre-deposit already paid through credit would exceed the prescribed amount. Import IGST credit is supported by bills of entry and reconciliation with GSTR-2A; domestic-supplier payment and reporting requirements do not apply to tax paid by the importer at customs clearance. GSTR-9 Table 8A covers domestic inward supplies, while reporting import credit in the wrong GSTR-3B row affects classification rather than substantive eligibility. Section 16(2)(aa) did not apply during FY 2018-19.
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Import tax credit cannot be denied solely for portal integration failures when taxpayers have documented payment of IGST.
Case-Laws
GST
Input tax credit on imports should not be denied solely because IGST is absent from the GST portal where the apparent cause is an ICEGATE-GSTN integration failure and the taxpayer has no role in transmitting the data. Documents supporting payment of tax should be considered, and IGST paid on imports reconciled and duly reflected in the electronic credit ledger. Non-reflection caused by a systemic lapse does not itself determine credit entitlement; the merits and other contentions remain open for fresh consideration.
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GST registration cancellation requires specific notice grounds and a fair opportunity to rebut adverse evidence introduced on appeal.
Case-Laws
GST
GST registration cancellation notices must disclose the specific contravention and material particulars needed for an effective reply. Where wrongful input tax credit is alleged, relevant particulars may include the suppliers and the period involved. Fundamental omissions cannot be cured by invoking statutory provisions on appeal or relying on particulars in separate proceedings. Additional evidence in GST appeals must comply with Rule 112 and its procedural safeguards. An inquiry report relied on adversely must be open to an effective and reasonable opportunity for rebuttal.
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Stock confiscation requires proof of intent to evade tax; statutory interpretation disputes fall outside departmental appeal limits.
Case-Laws
GST
Confiscation for stock discrepancies requires independent proof of the statutory ingredients, including intent to evade tax; a discrepancy alone does not establish clandestine supply or deliberate evasion. Visual estimates unsupported by actual weighment and internally contradictory verification sheets do not reliably establish excess stock. Stock-accounting discrepancies must be examined under the regular demand and assessment provisions rather than treated as grounds for automatic confiscation. Departmental appeals involving interpretation of the GST Act fall outside prescribed monetary limits, including disputes over whether confiscation or regular demand provisions apply to stock discrepancies.
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E-way bill exemptions cover short feeder movements, while recurring legal issues fall outside departmental appeal monetary limits.
Case-Laws
GST
Rule 138(3) exempts qualifying intra-State feeder movements of up to 50 kilometres from furnishing e-way bill Part-B conveyance details when goods move from the consignor's business to the transporter's business for further transportation. The e-way bill remains valid, and an automated portal warning cannot override the exemption. A minor procedural omission unconnected with intent to evade tax cannot sustain a penalty under section 129(3). Route deviation alone does not establish evasion without corroborating evidence, which the Revenue must produce. Recurring legal issues fall outside the prescribed monetary limits for departmental appeals.
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Ophthalmic chairs and surgical tables fall under medical furniture classification and attract GST at the prescribed rate.
Case-Laws
GST
Specialised ophthalmic chairs, stools, refraction chair units, operating tables, instrument tables and trolleys fall under heading 9402 as medical or surgical furniture, rather than heading 9018 for medical or ophthalmic instruments and appliances. The HSN Explanatory Notes exclude medical and surgical furniture from heading 9018 and cover specialised operating and examination tables, eye-treatment seats and medical instrument tables and trolleys under heading 9402. Motorised surgeon's chairs, doctors' stools and refraction chair units fall under subheading 94021090; operating tables and instrument tables and trolleys fall under 94029090. Their supplies attract 18% GST, comprising 9% CGST and 9% SGST.
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Compostable polymer carry bags are classified as plastic and qualify for concessional GST only if biodegradable.
Case-Laws
GST
Carry bags made from compostable polymers or biodegradable plastic substitutes fall under Chapter 39 as plastic articles, rather than Chapter 48 as paper articles. Where headings 3901 to 3925 do not apply and no specific entry covers the product under heading 3926, residual HSN 39269099 applies. Entry 319 of Schedule I to Notification No. 09/2025-Central Tax (Rate) covers biodegradable plastic bags and provides a 5% GST rate, strictly subject to their biodegradability. Interim testing indicated conformity with IS/ISO 17088, while the final test report remained pending.
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Tea and utensil mixed supplies attract the highest component GST rate, with HSN selection based on component rates.
Case-Laws
GST
Tea packaged with spoons, glass cups or wooden honey dippers for a single price constitutes a mixed supply where the items are independently marketable and not naturally bundled in the ordinary course of business. Tea's predominance alone does not establish a composite supply. A mixed supply attracts the highest GST rate applicable to its components: 18% for tea paired with stainless steel or plastic spoons or glass cups, and 5% for specified teas paired with wooden honey dippers. For these combinations, the HSN code corresponds to the higher-rated component; where both components attract the same rate, either component's code may be used.
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Rice husk composite board qualifies as fibreboard for tariff classification, while specific GST entries govern its applicable rates.
Case-Laws
GST
Rice husk composite board made from extracted fibres bonded with PVC resin exceeding 15% by weight falls under heading 4411 as fibreboard, rather than heading 4410 as particle board. The HSN notes to heading 4410 exclude boards with organic binder exceeding that threshold. Classification depends on the interpretative rules, tariff notes and HSN, having regard to composition, manufacturing process and essential character; Indian Standard specifications are not mandatory for primary tariff classification. Specific GST rate entries for rice husk board apply across Chapter 44 or any other chapter: the rate was 12% before 22 September 2025 and 5% from that date.
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Revision in E-Way Bill and Consolidated E-Way Bill Numbering Formats w.e.f. 1 January 2027
GST
Dated:- 4-11-2026

It is hereby informed that, in view of the substantial volume of E-Way Bills generated, the existing numbering capacity is expected to be exhausted. Accordingly, the following revisions in the numbering formats are proposed with effect from 1 January 2027

Document Type
Existing Format
Proposed Format

E-Way Bill Number
12 digits
14 digits

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Corporate guarantees without fees may attract GST, with deemed valuation applying only after taxable supply is established.
Notes
GST
Corporate guarantees between related parties may constitute taxable supplies without consideration when made in the course or furtherance of business. Taxability must be determined before valuation; Rule 28(2) does not itself create a GST charge. For qualifying guarantees furnished to banks or financial institutions for related recipients in India, the rule generally deems the value to be one per cent of the guaranteed amount per annum or the actual consideration, whichever is higher. Where the recipient is eligible for full input tax credit, the invoiced value is deemed to be the supply's value. Relief granted for particular unremunerated subsidiary guarantees does not invalidate the rule or establish a general exemption.
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GST appeal pre-deposits may be met by verified earlier payments after demand reduction, but filing fees remain separate.
Notes
GST
GST Tribunal appeals require full payment of admitted tax, interest, fines, fees and penalties, plus a 10% deposit of the remaining disputed tax in addition to the first appellate deposit. Where the demand is substantially reduced, an earlier deposit may satisfy the Tribunal-stage requirement, subject to verification; it does not automatically replace that requirement. Filing fees remain independently payable, subject to a minimum of Rs. 5,000 and a maximum of Rs. 25,000, and cannot be paid from the electronic credit ledger. An appeal is treated as filed when final acknowledgement is issued after removal of defects. Payment of the required pre-deposit triggers a deemed stay of recovery of the balance until disposal of the appeal.
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Input tax credit and supplier non-payment: credit cannot be reversed mechanically without transaction scrutiny and supplier recovery review
Notes
GST
Section 16(2)(c) requires actual payment of tax to the Government and is not limited to fraud or collusion, but supplier default alone does not justify mechanical reversal of a recipient's input tax credit. Eligibility requires scrutiny of transaction evidence, the nature of the default, supplier recovery proceedings and the law applicable to the tax period. Supplier cancellation or fraud does not automatically establish recipient ineligibility or complicity. The recipient bears the burden of proving eligibility, while fraud allegations require supporting facts in the notice. Section 41 permits re-availment after supplier payment, and Rule 37A provides a reversal and re-availment mechanism for specified return defaults. Later conditions and mechanisms must not be applied to earlier periods.
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Export payments through repatriable accounts, permitted set-offs and net retention satisfy payment conditions; unrealised goods proceeds affect refunds.
Circulars
GST – States
Export service payments received in convertible foreign exchange or repatriable rupee accounts, including SNRR and INR Nostro accounts, satisfy the payment condition under section 2(6)(iv) of the IGST Act. Stockbrokers' payments through NRO accounts must be routed through repatriable SNRR or NRE accounts to satisfy that condition. Export receivables set off against import payables in accordance with RBI directions, and reinsurance brokers' commission retained through net settlement, also satisfy the condition. For exported goods, proceeds unrealised beyond the FEMA-prescribed or extended period make the corresponding refund liable to deposit or recovery with interest within 30 days. Recovery does not apply to amounts written off by the RBI or an authorised dealer bank.
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Input tax credit on used vehicle trading expenses remains available under the GST margin scheme, subject to statutory conditions.
Circulars
GST – States
Under the GST margin scheme for old and used motor vehicles, the input tax credit restriction applies only to tax paid on the procured vehicles. Credit on other inputs and input services remains available, subject to the WBGST Act. Sublimation paper falls under tariff heading 4809 and attracts 18% GST. The toy entries cover all categories under heading 9503, with 5% GST for non-electronic toys and 18% for electronic toys. Seaweed extract-based bio-stimulants registered under Schedule VI to the Fertiliser (Inorganic, Organic or Mixed) (Control) Order, 1985 fall under heading 3101. Past classification and rate disputes concerning sublimation paper, and classification disputes concerning these bio-stimulants, are recommended for regularisation on an 'as is where is' basis.
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GST exemptions and valuation rules clarify treatment of grant-funded research, vehicle lease recoveries, bank fund transfers and co-lending.
Circulars
GST – States
Eligible government entities and notified institutions may support the GST exemption for grant-funded research and development with a certificate from their head distinguishing it from consultancy. Services imported without consideration by Indian establishments of foreign shipping companies from overseas related persons or establishments are exempt from 1 November 2026; GST payments for 1 July 2017 to 31 October 2026 are regularised on an as-is-where-is basis. Vehicle lessors' recoveries for registration, insurance and incidental costs form part of the composite lease supply and attract its GST rate. TRAI is not Government under GST law. Notional interest on loans or advances under banks' fund transfer pricing qualifies for the interest exemption. NBFC lending services to banks under co-lending arrangements are taxable at the value specified in the contract.
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GST arrest safeguards require the Commissioner's recorded reasons and document identification numbers on specified arrest-related communications.
Case-Laws
GST
GST arrest under Section 69 of the CGST Act requires the Commissioner personally to form and record reasons to believe, based on credible material, concerning the specified offence, the requisite intent and the justification for arrest. The reasons must identify the underlying material, show due application of mind and be communicated to the arrestee; a bare recital is insufficient. Grounds of arrest and reasons to believe require an electronically generated Document Identification Number, subject to limited exceptions and prescribed regularisation. Inclusion in an arrest memo does not dispense with that requirement.
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