Gujarat AAR Rules Paper Bags Attract 5% GST, Not 18%

The Gujarat Authority for Advance Ruling (AAR) has held that paper bags manufactured from paper or paperboard are liable to GST at 5% under the entry covering paper sacks, paper bags and biodegradable bags, and not under the competing 18% entry applicable to certain goods falling under the same tariff heading. Holding that the concessional entry was introduced to encourage environmentally friendly alternatives to plastic bags, the Authority observed, "The very purpose of the Government in...

Rent-a-Cab, Air Travel, Hotel Services Qualify As Input Services If Used For Business: CESTAT Chennai

The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that services such as rent-a-cab, air travel, hotel accommodation, restaurant, telecommunication, insurance and business support services qualify as input services where they are used directly or indirectly for providing output services and are not meant for employees' personal consumption. The tribunal accordingly allowed a refund of unutilised CENVAT credit claimed by Olam Information Services Pvt....

CESTAT Mumbai Sets Aside Excise Duty Demand On Crompton Greaves, Rules Type Test Charges Not Taxable

The Mumbai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has set aside a Central Excise duty demand against Crompton Greaves Ltd., holding that charges recovered separately for conducting "type tests" on transformers at the request of customers cannot be included in the assessable value of the goods. A bench of Judicial Member S.K. Mohanty and Technical Member M.M. Parthiban passed the ruling while allowing an appeal filed by Crompton Greaves Ltd. (Transformer...

CESTAT Mumbai Allows Mahindra & Mahindra's Appeals On Valuation Of Prototype Vehicles Sent For Testing

The Mumbai bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that Mahindra & Mahindra Ltd. correctly valued prototype commercial vehicles cleared to its own unit for testing on the basis of comparable goods and not at 110% of their cost of production. The tribunal held that the valuation method under Rule 8 of the Central Excise Valuation Rules, 2000, which applies where goods are used in the manufacture of another article, was not attracted on the facts of...

Duty-Free Gold Cannot Be Confiscated If DGFT Later Regularises Supporting Manufacturers: CESTAT Kolkata

The Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), Kolkata Bench, has held that duty-free gold imported under the Advance Authorisation Scheme cannot be confiscated merely because it was sent to job workers who were not initially listed as supporting manufacturers. The tribunal held that the Directorate General of Foreign Trade (DGFT) had later regularized their inclusion and that there was no evidence the gold had been diverted to unauthorised entities in violation of the...

Mere Intimation To GST Authorities Does Not Create ITC Right Or Bar Section 74 Action: Madras High Court

The Madras High Court has held that mere communication to GST authorities expressing an intention to avail Input Tax Credit (ITC) does not create any legal entitlement to such credit and cannot shield a taxpayer from proceedings for wrongful availment under the GST law. Justice C. Saravanan dismissed the petition filed by RMZ Infinity (Chennai) Pvt. Ltd., now known as Chennai Business Tower Private Limited, which had challenged an order confirming denial of ineligible ITC of Rs. 92.29 crore for...

E-Rickshaw Parts Without Motors, Batteries Not Complete Vehicles In CKD Form: CESTAT Kolkata

The Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) on 2 July held that imported e-rickshaw parts without essential components such as motors and batteries cannot be treated as complete e-rickshaws in a completely knocked down (CKD) condition. A Bench comprising Judicial Member Ashok Jindal and Technical Member K. Anpazhakan allowed cross-appeals filed by Zeniak Innovation India Ltd and the Revenue in a dispute over customs classification of imported...

CESTAT Kolkata Sets Aside Confiscation Of 1.75 Kg Gold, Holds Suspicion Insufficient To Prove Smuggling

On 2 July, the Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that Customs cannot treat gold as smuggled merely on suspicion and set aside the confiscation of 1.75 kg of gold along with penalties imposed by the department. Judicial Member Ashok Jindal and Technical Member K. Anpazhakan allowed the appeal filed by Dinesh Prasad and Raj Kumar Soni and quashed the confiscation order passed by Customs. The Bench observed: “...the Revenue has merely relied...

No Confiscation Of Exotic Birds Without Section 123 Notification Or Proof Of Smuggling: CESTAT Kolkata

On 3 July, the Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that Customs authorities cannot confiscate exotic birds and mammals or impose penalties merely on suspicion of smuggling, where the goods are not notified under Section 123 of the Customs Act and the Department fails to discharge the burden of proving illegal import. A Bench comprising Judicial Member Justice (Dr.) Ashok Jindal and Technical Member K. Anpazhakan allowed the appeals filed by...

CESTAT Delhi Sets Aside Service Tax Demand, Allows CENVAT Credit For Reverse Charge Payments Before July 2012

The Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that service recipients could use CENVAT credit to discharge service tax under the reverse charge mechanism on imported services before 1 July 2012. It ruled that the restriction barring use of CENVAT credit for payment of service tax where the recipient was liable to pay tax came into force only from 1 July 2012 and could not be applied retrospectively. The tribunal also held that a show cause notice...

LiveLawBiz Indirect Tax Half-Yearly Digest: January - June, 2026

SUPREME COURTSupreme Court Refuses To Entertain Ola Parent ANI's Plea Against Delayed Service Tax OrderCase Title : ANI TECHNOLOGIES PRIVATE LIMITED VS THE UNION OF INDIA & ANR. Case Number : SLP(C) NO. 3185/2026 CITATION : 2026 LLBiz SC 33The Supreme Court of India has declined to interfere with a Bombay High Court order directing ANI Technologies Private Limited, the parent company of Ola Cabs, to pursue a statutory appeal against a service tax demand. A Bench of the Chief Justice of...

Interest On Unspent Government Grants Cannot Be Treated As Separate Income: ITAT Chandigarh

The Income Tax Appellate Tribunal (ITAT) has recently held that interest earned on unspent government grants parked in fixed deposits retains the same character as the grants themselves. It cannot be treated as an independent source of income while determining whether an educational institution is substantially financed by the government. A Chandigarh tribunal comprising Judicial Member Laliet Kumar and Accountant Member Manoj Kumar Aggarwal allowed the appeal filed by Hydro Engineering...