Allahabad High Court Issues Notice In Oppo's Challenge To S.15(3)(b) CGST

The Allahabad High Court has granted interim protection to Oppo Mobile India Private Limited in its challenge to the validity of Section 15(3)(b) of the Central Goods and Services Tax Act, 2017.

Section 15(3) deals with exclusion of discounts from the taxable value under GST. While discounts given at the time of supply are allowed if recorded in the invoice, post-supply discounts are excluded from taxable value only if they were agreed upon at or before the time of supply, specifically linked to relevant invoices, and the recipient reverses the input tax credit attributable to the discount.

The petitioner has questioned the validity of these statutory requirements.

A Division Bench of Justice Saumitra Dayal Singh and Justice Indrajeet Shukla observed, “To the extent validity of the law has been put in question and prima facie case is made out to invite deeper scrutiny.”

The petitioner relied on the Supreme Court's decisions in Deputy Commissioner of Sales Tax (Law), Board of Revenue (Taxes), Ernakulam v Advani Oerlikon (P.) Ltd. and Southern Motors v State of Karnataka. It was stressed that trade discounts arising from pre-existing agreements but computed later may not give rise to any disability with the supplier vis-a-vis the transaction value or the amount receivable under such agreement

The Court also recorded the submission that deletion of the offending provision has been proposed in the Finance Bill, 2026 on the recommendation of the GST Council

On merits, objection was raised to the invocation of Section 74 of the Act

Section 74 applies in cases where tax is alleged to have been short paid or input tax credit wrongly availed by reason of fraud, wilful misstatement or suppression of facts.

Issuing notice to the Attorney General of India, the bench directed that subject to deposit of 10 percent of the disputed tax including any amount already deposited or recovered, no further recoveries shall be made from the petitioner during pendency of the writ petition