GSTAT Bengaluru Blocks Resort Construction ITC, Rules Safari Retreats Functionality Test Inapplicable

The Bengaluru Bench of the GST Appellate Tribunal (GSTAT) on 30 September held that the functionality test laid down by the Supreme Court in Chief Commissioner of CGST v. Safari Retreats (P) Ltd. cannot be applied to claim Input Tax Credit (ITC) on the construction of a hotel or resort building, particularly after the retrospective amendment to Section 17(5)(d) of the Central Goods and Services Tax (CGST) Act, 2017. A Bench comprising Judicial Member Prabhakaran P.M. and Technical Member...

GSTAT Bengaluru Sets Aside ₹20.13 Lakh Penalty On Valuecart For E-Way Bill Lapse, Imposes ₹25,000 Fine

The Bengaluru Bench of the GST Appellate Tribunal (GSTAT) on 30 September partly allowed an appeal filed by Valuecart Private Limited against a penalty of Rs. 20,13,640 imposed under Section 129 of the Central and Karnataka Goods and Services Tax Acts, and reduced the penalty to Rs. 25,000 under Section 125 of the GST Acts for the procedural lapse. A Bench comprising Technical Member Sudha Koka and Judicial Member Srikanth Venkatraman held that failure to generate a fresh e-way bill for...

GST Notices Not Invalid Without Visible Digital Signature If Authenticated On Portal: Telangana High Court

The Telangana High Court has recently held that GST show-cause notices and adjudication orders cannot be invalidated merely because downloaded PDF copies do not display a visible digital signature. This is provided they have been electronically authenticated by the proper officer and uploaded on the GST common portal.“The case of the petitioners based upon the contention that the PDF format does not contain the visible digital signature of the proper officer is untenable in law,” the Full Bench...

Madras High Court Sets Aside ₹5.50 Crore GST Demand Based On Projected Revenue From Unbuilt Construction

The Madras High Court has set aside a ₹5.50 crore GST demand against Shree Velu Builders Private Limited, holding that tax cannot be levied on projected revenue from two building blocks merely because their plans had been approved. The court noted that construction had not commenced in either block.Justice Krishnan Ramasamy remanded the matter to the State Tax Officer for fresh consideration, subject to the company depositing ₹50 lakh within four weeks.The case arose from an order passed against...

Supplier Cannot Automatically Recover GST From Recipient Without Contractual Basis: Kerala High Court

The Kerala High Court has held that a supplier's statutory obligation to pay Goods and Services Tax (GST) does not automatically entitle the supplier to recover the tax separately from the recipient of the service.“The liability of a supplier to discharge the tax payable under the statute and the question as to whether the supplier is entitled to pass on the burden of such tax to the recipient are distinct and separate matters," the court ruled"However, the right to collect tax from the...

GST Council Recommends Dropping Arrest Powers, Raising Prosecution Threshold To ₹5 Crore

The GST Council has recommended dropping arrest powers under the Goods and Services Tax (GST) law by omitting Section 69 of the Central Goods and Services Tax Act, 2017.Section 69 currently allows the tax authorities to authorise the arrest of a person suspected of committing specified GST offences. These offences are set out under Section 132 of the Act and include certain cases involving tax evasion and fraudulent input tax credit.It has also proposed raising the monetary threshold for...

Kerala High Court Upholds GST Recovery Against Satwa Solutions For Failure To Raise Timely Objection

The Kerala High Court on 26 September refused to interfere with GST recovery proceedings against Satwa Solutions and upheld the dismissal of its writ petition challenging the proceedings arising from a statutory notice and subsequent final order. A Division Bench comprising Justices Devan Ramachandran and Basant Balaji held that the taxpayer had failed to raise its objection to the notice at the appropriate stage. It observed: “It is unmistakable from the attendant circumstances, that the...

Time-Barred GST Refund Claim Cannot Trigger Deficiency Memo: Madras High Court

The Madras High Court has held that a GST deficiency memo cannot be issued merely because a refund application is time-barred, as such a memo is meant to address a remediable defect in the application. Justice Senthilkumar Ramamoorthy on 1 September, disposed of a deficiency memo issued to L.S. Pacific Wood Tech Pvt. Ltd. after it sought a refund under Section 54 of the GST enactments. The Bench observed that “a deficiency memo cannot be issued on the ground that the refund application is time...

Madras High Court Quashes GST Notice To Queen Mira School, Says Assessment Must Precede Recovery

The Madras High Court on 24 September quashed a show cause notice issued to Queen Mira International School, while granting the department liberty to initiate fresh proceedings in accordance with law. Justice C. Saravanan held that the GST authorities must first assess the tax liability of an unregistered person under the prescribed statutory mechanism before proceeding against such person for tax recovery. The Bench observed: “Under the GST enactment, the Department has to first invoke the...

Commissioner's Approval Alone Cannot Sustain Departmental Appeal Below ₹20 Lakh: GSTAT Ghaziabad

On 1 October, the Goods and Services Tax Appellate Tribunal (GSTAT), Ghaziabad, held that a departmental appeal cannot be maintained when the disputed tax demand is below the prescribed monetary limit unless the Revenue establishes a recognised exception to the limit. A Division Bench comprising Judicial Member Dr. Sanjay Kumar Chandhariyavi and Technical Member Sungita Sharma dismissed the Revenue's appeal involving a disputed amount of Rs. 11.88 lakh at the threshold, without examining its...

GST Not Payable On Amounts Recovered From Employees For Canteen Meals: Gujarat AAR

The Gujarat Authority for Advance Ruling has ruled that GST is not payable on amounts recovered by Torrent Pharmaceuticals Ltd. from employees towards canteen meals at its Indrad plant, R&D facility and corporate office.The AAR held that the deductions made from employees do not amount to a “supply” under Section 7 of the CGST Act. The Authority observed, “We hold that the deduction made by the applicant from the employees who are availing food in the factory/corporate office would not...

GSTAT Lucknow Quashes ₹6.62 Lakh Demand Against Jai Enterprises, Says Suspicion Can't Prove Tax Evasion

The Lucknow Bench of the Goods and Services Tax Appellate Tribunal (GSTAT) on 16 September held that tax and penalty cannot be sustained merely on an inference that goods had been transported earlier or that e-way bills had been reused without evidence establishing either. A Two-Member Bench comprising Judicial Member Santosh Kumar Srivastava and Technical Member Arvind Kumar allowed Jai Enterprises' appeal and set aside the order of the Additional Commissioner Grade-2 (Appeals), Kanpur, which...