Goods and Services Tax

Concessional GST on co-operative mill construction depends on Government Entity status and non-industrial use of the completed buildings
Notes
GST
Concessional GST on specified works contracts supplied to a Government Entity requires an eligible recipient and civil or original works predominantly intended for use other than commerce, industry, business or profession. Registration under co-operative societies legislation does not itself establish that a society was created by statute, while project funding and supervision do not prove governmental establishment. The governmental-establishment route also requires at least 90% participation through equity or control, and procurement must relate to entrusted work. For the disputed spinning-mill works, governmental establishment was not proved, and the factory buildings were independently intended for industrial and commercial use, so the residual 18% aggregate GST rate applied. Social objectives and administrative approvals do not override the notified conditions or rate.
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Own-account subcontracted services escape intermediary classification when suppliers perform substantive obligations rather than arrange another person's supply.
Notes
GST
Subcontracted services performed on a supplier's own account, wholly or partly, fall outside the intermediary definition in section 2(13) of the IGST Act. Intermediary status requires an agent-like role arranging or facilitating a separate supply between other persons; participation in a wider commercial chain is insufficient. Contractual obligations, authority, actual performance, invoicing and remuneration must be assessed together. Export treatment separately requires an Indian supplier, an overseas recipient, a place of supply outside India, permitted payment and parties who are not merely establishments of a distinct person. Separately incorporated Indian and foreign group companies are separate persons. For the relevant earlier periods, intermediary services had their place of supply at the supplier's location. Zero-rated refund claims remain subject to applicable documentation and other requirements.
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GST audit officers cannot issue demand notices or adjudicate their own audit findings, requiring a different proper officer.
Case-Laws
GST
An officer who conducts a GST audit under section 65 cannot subsequently issue the notice and adjudicate the demand. Where the audit officer has also passed the original order, fresh consideration is required by a different proper officer. For the demand concerned, reconsideration begins at the stage of reply to the intimation under section 73(5), subject to a deposit of 10% of the tax demanded. The merits and all contentions remain open.
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Input tax credit for purchases from non-existent suppliers requires actual receipt of goods, not merely invoices or registration.
Case-Laws
GST
Input tax credit under the Odisha Goods and Services Tax Act, 2017 requires actual receipt of goods and an underlying supply. Invoices, e-way bills, weighment slips and bearer-cheque payments do not necessarily establish receipt. Apparent supplier registration, return filing and GSTR-2B entries cannot validate paper transactions where no supply occurred. Admission of a stock register or affidavit as additional evidence of receipt requires a formal application explaining reasonable cause for earlier non-production. Fraudulent availment permits recovery of credit with interest and penalty under section 74. Taking or utilising credit without receipt of goods also attracts a penalty under section 122(1)(vi).
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Export refund calculations include invoices from the relevant period despite later shipment, subject to proof of actual export.
Case-Laws
GST
For refund of accumulated input tax credit on exports, invoices issued during the relevant period for goods cleared under bond or a letter of undertaking are included in that period's zero-rated turnover, even if physical export occurs later. Section 31 and the time-of-supply provisions of section 12 of the CGST Act distinguish supply of goods for export from completion of actual export. Refund under rule 89(4) remains conditional on proof that the goods have actually been exported.
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Export invoices count towards zero-rated turnover in their issue period despite later export, subject to proof of export.
Case-Laws
GST
For goods supplied for export under a bond or letter of undertaking, supply takes place on removal and preparation of the tax invoice, although export is completed only when the goods leave India. Invoices issued during the relevant period form part of that period's zero-rated turnover under Rule 89(4), even if the goods are exported later. Refund of accumulated input tax credit on such supplies remains conditional on proof of actual export.
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Suppressed sales records can establish tax liability, while taxpayer-initiated remands cannot worsen an appellant's position.
Case-Laws
GST
Rule 56(10) creates a rebuttable presumption of maintenance for a registered person's records, even when found away from registered premises. Records linked to a trader by their contents, custody and an admission can establish suppressed sales on a balance of probabilities. Section 74 applies to deliberate suppression with intent to evade tax, attracting a penalty equal to tax; a shortfall or bona fide mistake alone is insufficient. Enhancement-notice requirements do not apply where the fresh determination reduces the original demand covered by the notice. An appellant-initiated remand cannot worsen the appellant's position: the earlier appellate determination caps tax, penalty and interest accrued up to that determination, while statutory interest continues on capped tax until payment. Service through the GST common portal is valid. A full hearing on remand may cure a procedural defect where no prejudice is shown. Clerical errors do not invalidate proceedings that are substantively compliant with the Act.
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Input tax credit depends on proof of actual receipt and supplier tax payment, beyond invoices and purchaser payments.
Case-Laws
GST
Input tax credit requires the claimant to establish actual receipt of goods and payment to the Government of the tax charged on the supply. Section 155 places the burden of proving entitlement on the claimant. Where a supplier is found non-existent, invoices, e-way bills, banking entries, lorry receipts and photographs without verifiable dates or coordinates may not establish physical supply without independent, verifiable evidence. Payment to the supplier does not satisfy the separate requirement that tax be paid to the Government, whether in cash or through admissible input tax credit. Failure to establish either condition can result in denial of credit.
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Reasoned GST appellate orders must explain decisions on tax and penalties for goods transported without an e-way bill.
Case-Laws
GST
Section 107(12) of the CGST Act, 2017 and corresponding State law require GST appellate orders to state the points for determination, the decisions and the reasons for them. Reasoned orders are a statutory requirement and an essential element of natural justice. An appellate order setting aside tax and penalty for transporting goods without an e-way bill was set aside for lack of cogent reasons. The matter was remanded for a fresh reasoned decision after hearing both parties, without determining the underlying liability.
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GST refund limitation applies separately to monthly payments, while COVID-19 exclusions preserve eligible claims and shortfalls preclude refunds.
Case-Laws
GST
Limitation for refund of excess GST paid through monthly GSTR-3B returns runs separately from each payment, not from annual reconciliation or a consolidated claim. COVID-19 limitation exclusions preserve the February 2018 claim, but not claims for July 2017 to January 2018, whose limitation periods had already expired. The March 2018 claim is timely, but no refund is payable because the records show a shortfall rather than excess payment. Reconciliation differences did not establish payment without authority of law, leaving the claim subject to Section 54(1). The February 2018 refund is to be segregated, quantified and granted in accordance with law.
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Crude cashew nut shell liquid qualifies as a vegetable extract and attracts GST under the unrestricted heading entry.
Case-Laws
GST
Crude cashew nut shell liquid obtained by thermal and mechanical extraction without chemical modification or polymerisation is classified as a vegetable extract under tariff item 1302 19 20. Classification depends on the product's nature, composition, degree of processing and essential character at clearance. Its non-edible, derivative character and absence of polymerisation exclude the other identified competing classifications. A GST rate entry specified at four-digit heading level covers its subheadings and tariff items unless specifically excluded. The unrestricted Heading 1302 entry in Schedule I to Notification No. 9/2025-Central Tax (Rate) therefore applies, with GST at 5%, comprising 2.5% CGST and 2.5% SGST, effective from 22 September 2025.
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GST exemption for non-profit healthcare membership services applies where social welfare and prescribed subscription conditions are satisfied.
Case-Laws
GST
GST exemption under Serial No. 77A of Notification No. 12/2017-Central Tax (Rate), as amended, applies to a registered non-profit entity's healthcare scheme services subject to the prescribed conditions. Promotion of social welfare is construed broadly to cover cashless treatment for economically weaker and vulnerable groups, while incidental membership fees do not make the activity commercial. Registration under sections 12AA/12AB of the Income Tax Act established the entity's non-profit status. Services were confined to enrolled members and eligible family members, and the annual family contribution, apportioned per covered member, did not exceed Rs. 1,000 per member.
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Margin trading finance interest charged separately from brokerage qualifies for GST exemption as consideration for loans or advances.
Case-Laws
GST
Interest charged independently of brokerage for financing securities purchases under a Margin Trading Facility is exempt from GST as consideration for extending loans or advances. The broker funds purchases beyond the client's available margin, and the funded amount is repayable with interest for the period outstanding. Although activities involving the use of money for separate consideration constitute services under the CGST Act, the exemption for lending services applies to the extent that consideration is represented by interest or discount.
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Input tax credit for joint development services can offset GST, while procedural invoicing guidance falls outside advance ruling jurisdiction.
Case-Laws
GST
Development services supplied to landowners under a joint development agreement are taxable outward supplies subject to GST under the forward charge mechanism. Eligible input tax credit on goods or services used or intended for business may be utilised to pay GST on those services, subject to statutory conditions and restrictions. Eligible credit need not be reversed, while ineligible credit must be reversed under the Act and Rules. Advance ruling jurisdiction is limited to the matters specified in section 97(2); procedural invoicing methodology and compliance requirements fall outside its scope when they do not concern statutory valuation or another listed matter.
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Rooftop solar installations qualify as plant and machinery, with input tax credit subject to statutory conditions and restrictions.
Case-Laws
GST
Detachable rooftop solar power systems used for a trading business's electricity needs qualify as plant and machinery under the CGST and KGST Acts, including their mounting structures and associated components. Fixing equipment to a rooftop with bolts, screws or structural supports does not make it part of the building or a civil structure. Input tax credit on supplies for erection, installation and commissioning is admissible where the business nexus and statutory conditions are met; rooftop installation alone does not attract the restriction under Section 17(5)(d). Occasional surplus exports under net metering do not by themselves sever the business nexus. Credit remains subject to restrictions, including where depreciation is claimed on the tax component. Surplus electricity taxability and related credit apportionment or reversal require separate examination.
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Kulfi GST classification follows its character as a frozen dessert, rather than the predominance of milk ingredients.
Case-Laws
GST
Kulfi made from milk and sugar, with or without dry fruits, falls under Tariff Heading 2105 00 00 as ice cream and other edible ice, rather than Heading 0404 for products consisting of natural milk constituents. Classification depends on the finished product's identity, character and use, not merely its predominant ingredient. Concentration, added ingredients and freezing produce a ready-to-eat dessert commonly purchased and consumed like ice cream. Under Rule 3(a) of the General Rules for Interpretation, a specific description prevails over a general description for products not elsewhere specified or included.
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Restaurant business transfers qualify for GST exemption as going concerns when operations can continue independently despite retained past liabilities.
Case-Laws
GST
Transfers of restaurant businesses for consideration in the course or furtherance of business constitute supplies under section 7(1)(a) of the CGST Act, 2017. Transfer of a going concern, as a whole or an independent part, is an exempt supply of services where a functioning economic activity can continue independently under the transferee. Continuity may be established through the transfer of operations, staff, working assets and recurring operational responsibilities. Retention of past liabilities by the transferor does not by itself disqualify the exemption. Lump-sum consideration without item-wise allocation may support, but does not independently establish, the transfer of an operational undertaking.
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Solar electricity exemption and reverse charge rules exempt power supplies and exclude reverse charge on specified corporation charges.
Case-Laws
GST
GST exemption applies to electrical energy, including solar-generated electricity supplied to a power distribution corporation. Specified charges levied by registered government-owned electricity corporations do not attract reverse charge under section 9(3) or 9(4) in the circumstances described. Government ownership or control does not make a corporation or company Government for the reverse-charge entry concerning government services. The provision addressing specified supplies from unregistered suppliers does not apply to registered providers. The nature and taxability of the underlying services remain undetermined.
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Advance ruling applications cannot determine a tenant's input tax credit on a supplier's commercial rent debit notes.
Case-Laws
GST
Advance rulings concern an applicant's own supplies, tax liabilities and obligations. Although section 97(2)(d) permits questions about input tax credit, it covers credit on the applicant's inward supplies, not a customer's credit on the applicant's outward supplies. A lessor cannot seek an advance ruling on its tenant's entitlement to credit against debit notes for commercial rent. Under section 103, a ruling binds the applicant and its concerned or jurisdictional officer, but not the tenant.
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Handicraft GST concessions depend on classification: wooden home temples and frames qualify, but cradles and wall clocks do not.
Case-Laws
GST
Wooden home temples, idols, statuettes and decorative flower vases fall under heading 4420 as wooden ornaments; picture and mirror frames fall under the specific heading 4414 regardless of finish. Wooden baby cradles are bedroom furniture under subheading 940350 because they provide sleeping space, while wooden-cased wall clocks are classified as clocks under heading 9105 despite their decorative casings. Handicraft status alone does not secure concessional GST: goods must also fall within specified notification entries. Qualifying home temples, idols, statuettes, frames and flower vases attract 5% GST, while wooden cradles and wall clocks attract 18% GST.
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Medical treatment and delayed GST appeals: sufficient cause without negligence or substantial prejudice can support a hearing on merits.
Case-Laws
GST
Condonation of delay in a statutory GST appeal may be supported by sufficient cause where a taxpayer is preoccupied with a daughter's medical treatment and the delay involves neither negligence nor wilful default. The absence of substantial prejudice or inconvenience to the respondents is relevant to allowing the appeal to be heard on merits. Restoration of an appeal rejected as time-barred permits the appellate authority to decide it in accordance with law without deciding the underlying tax dispute at the restoration stage.
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GST return discrepancies require prior scrutiny notice before demand proceedings, with writ review available for mandatory procedural breaches.
Case-Laws
GST
GST demands under Section 73 of the AGST Act based on discrepancies found during return scrutiny require prior communication in Form GST ASMT-10, giving the registered person an opportunity to explain or rectify them. Proceedings based on independently available information stand differently, subject to Section 73. Participation in subsequent proceedings does not waive the scrutiny safeguard. A statutory appeal does not preclude writ review where proceedings breach the mandatory procedure governing jurisdiction and the resulting order violates natural justice.
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GST appeal delay beyond the statutory condonable period may be condoned, with restoration subject to an additional deposit.
Case-Laws
GST
Condonation of delay beyond the statutory period in a GST appeal was followed by restoration for consideration on merits, subject to an additional deposit. The appeal had been dismissed solely for delay. Restoration required an additional deposit of 10% of the tax demand within two weeks. Disposal was directed within four weeks of the petitioner's first appearance, with all contentions on merits left open.
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GST cancellation appeals require reasoned decisions on merits, respecting binding judicial directions and the separate right to seek revocation.
Case-Laws
GST
GST registration cancellation appeals under Section 107 must be determined on merits by reasoned orders identifying the points for determination; lack of merit is not a ground for rejection at admission. A High Court direction to decide an appeal on merits binds the Appellate Authority unless set aside, modified or suspended. Alleged misrepresentation may be raised through review, recall or appeal, but cannot justify disregarding that direction. Seeking revocation of cancellation does not admit that cancellation was correct or bar an appeal. The Appellate Authority may conduct further inquiry and confirm, modify or annul cancellation, but cannot remit the matter to the proper officer.
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Input tax credit mismatches require proof of supplier tax payment, while fraud-based recovery needs evidence of deliberate evasion.
Case-Laws
GST
GSTR-2A mismatches do not, by themselves, establish wrongful input tax credit; supplier tax payment must be proved through prescribed certificates or other cogent evidence. Amended supplier entries and ledger extracts may support verification, while certificates cannot be rejected without identified defects or verification. Credit unsupported by proof of supplier payment remains inadmissible. Section 75(7) bars confirmation of a demand on grounds outside the show cause notice. Fraud-based recovery requires foundational facts establishing fraud, wilful misstatement or suppression with intent to evade tax; a detected discrepancy or missing defence evidence cannot establish those facts. Where the fraud charge fails, section 75(2) permits redetermination under section 73 within applicable time limits. Interest on inadmissible credit is payable only if the credit was utilised.
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