The Central Board of Indirect Taxes and Customs (CBIC) issued Instruction regarding coordination between CGST authorities and State Mining Authorities for sharing information relating to illegal mining and transportation of minerals. The Instruction seeks to strengthen information sharing between the Central and State authorities to identify cases where taxable supplies of minerals are not properly reported under GST.<\/p>\n
Information relating to mining permissions, transportation of minerals, dispatches, e-way bills, invoices and other relevant records may be used for cross-verification. The initiative is particularly relevant for businesses dealing in sand, stone, aggregates, iron ore and other minerals, where the Department can compare mining\/transport records with GST returns and e-way bill data.<\/p>\n
Businesses engaged in mining and mineral transportation should ensure proper reconciliation between mining permits, weighbridge records, delivery challans, e-way bills, tax invoices and GST returns. Any mismatch between physical movement of minerals and GST reporting may attract departmental scrutiny.<\/p>\n
The Goods and Services Tax Appellate Tribunal (GSTAT) issued Office Order providing for reconstitution of specified Benches and revision of classification and assignment of cases, with effect from 1 August 2026.<\/p>\n
The revised arrangements provide for changes in the roster of specified Benches and categorisation of cases. The Bengaluru Bench is also subject to a specific three-category framework. The order is intended to facilitate appropriate allocation of matters among the GSTAT Benches and streamline the hearing and disposal process.<\/p>\n
Taxpayers and professionals filing or pursuing GSTAT appeals should verify the applicable Bench and category of the matter and ensure that filings are made in accordance with the revised allocation and procedural requirements.<\/p>\n
GSTN has introduced an additional verification requirement for accessing GST registration applications through the Temporary Reference Number (TRN). Under the updated process, the applicant is required to provide the TRN, registered e-mail details and CAPTCHA before accessing the registration application. The measure is intended to strengthen security and prevent unauthorised access to GST registration applications.<\/p>\n
Applicants and GST practitioners handling registration applications should ensure that the registered e-mail credentials and TRN are readily available and that access details are not shared through unsecured channels.<\/p>\n
CBIC issued Circular prescribing the procedure for payment of exempted IGST at the time of import of raw sugar which was originally imported under the Advance Authorisation Scheme and is subsequently converted into the Tariff Rate Quota (TRQ) Scheme. The Circular follows DGFT Notification concerning allocation of the 10-lakh MT TRQ for raw sugar and one-time conversion from Advance Authorisation to TRQ.<\/p>\n
The Circular provides a mechanism for reassessment of the relevant Bill of Entry and payment of the applicable IGST. Importantly, CBIC clarified that the IGST should not be paid through the Voluntary Payment Challan module, since the process needs to ensure proper transmission of the relevant details between Customs and GSTN so that eligible ITC can be availed by the importer.<\/p>\n
Importers who convert eligible raw sugar imports from Advance Authorisation to TRQ should follow the prescribed Customs reassessment\/payment mechanism and ensure that the IGST payment is correctly reflected for subsequent ITC purposes.<\/p>\n
The Government has operationalised the Inventory-Based Cross-Border E-Commerce Export Framework under the Foreign Trade Policy, 2023. The framework provides a structured mechanism for inventory-based cross-border e-commerce exports, including an exporter-on-record framework and safeguards intended to provide greater clarity regarding responsibility for export transactions. The framework is aimed at facilitating Indian businesses selling goods internationally through e-commerce platforms while maintaining appropriate customs and foreign trade controls.<\/p>\n
E-commerce exporters should review their arrangements relating to inventory ownership, exporter-of-record responsibilities, export documentation, customs declarations and reconciliation between marketplace transactions and shipping\/export records.<\/p>\n
Case:<\/strong> Bhandari Scrap Traders vs. Union of India & Ors \u00a0(Supreme Court)<\/p>\n The Supreme Court considered the constitutional validity of Section 16(2)(c) of the CGST Act, which links the recipient’s entitlement to ITC with payment of the corresponding tax by the supplier to the Government. The provision has been the subject of considerable litigation because the recipient may face denial or reversal of ITC even where the recipient itself has complied with its obligations, if the supplier fails to discharge the tax liability.<\/p>\n The Court upheld the constitutional validity of the provision. The reasoning recognises the statutory framework under which ITC is subject to prescribed conditions and the recipient carries the burden of establishing eligibility to credit.<\/strong><\/p>\n The Court held that merely because the recipient has acted in good faith and complied with other conditions for claiming ITC, it cannot automatically claim protection where the supplier has failed to discharge the corresponding tax liability. The Supreme Court also distinguished the earlier decisions under the Delhi VAT regime, observing that the statutory framework under the GST law is materially different.<\/p>\n The judgment however, recognised that where the supplier subsequently pays the tax, the recipient may be entitled to re-avail the ITC, subject to the provisions of the CGST Act. The decision provides significant clarity on the responsibility of recipients to ensure supplier compliance and reinforces the linkage between the supplier\u2019s payment of tax and the recipient\u2019s entitlement to ITC.<\/p>\n The decision is particularly significant because earlier High Court decisions had adopted differing approaches to the issue.\u00a0 Businesses should exercise greater diligence while onboarding suppliers and maintaining evidence relating to supplier compliance. Merely possessing a tax invoice may not, by itself, protect the recipient where the statutory conditions for ITC are not ultimately satisfied.<\/p>\n Case: <\/strong>Torrent Power Ltd. vs. Union of India & Ors. (Gujarat High Court)<\/p>\n The Gujarat High Court examined the constitutional validity and interpretation of the GST provisions relating to corporate guarantees furnished by a holding company to its subsidiary or other related person. The batch of petitions challenged, among other things, Rule 28(2) of the CGST Rules, 2017, Section 15(4) of the CGST Act and the CBIC Circulars dealing with valuation of corporate guarantees.<\/p>\n The principal issue was whether furnishing a corporate guarantee without charging any separate consideration constitutes a taxable supply under GST, and, if so, whether the valuation mechanism under Rule 28(2)\u2014which prescribed a value of 1% of the amount of guarantee per annum or the actual consideration, whichever is higher\u2014was legally sustainable.<\/p>\n The Court held that a corporate guarantee furnished by a holding company for the benefit of its subsidiary can constitute a supply of service under Section 7(1)(c) read with Schedule I of the CGST Act, even where no separate monetary consideration is charged. The Court also held that the transaction can be regarded as being in the course or furtherance of business where the guarantee facilitates the financial and commercial activities of the subsidiary and advances the business interests of the holding company. Further, the court has read down the clause \u201cwhichever is higher\u201d restricting the liability to \u2013 <\/strong><\/p>\n Case: <\/strong>M\/s GSN Granites v. Assistant Commissioner (ST) & Ors (Andhra Pradesh High Court)<\/p>\n The Andhra Pradesh High Court considered whether an assessment order\/summary issued in Form GST DRC-07 without the signature of the Assessing Officer could be treated as a valid assessment order.<\/p>\n The petitioners challenged the assessment orders on the ground that the orders uploaded on the GST portal did not bear either the physical or digital signature of the Assessing Officer. The Department sought to rely, inter alia, on the provisions relating to service of orders under the GST law.<\/p>\n The High Court held that the absence of the Assessing Officer’s signature is an inherent defect in the assessment order. Referring to Rule 26(3) of the CGST Rules and its earlier decisions, the Court held that an assessment order cannot dispense with the requirement of authentication by the concerned officer. The defect is not merely a procedural irregularity.<\/p>\n The Court further held that Sections 160 and 169 of the CGST Act cannot cure the absence of the Assessing Officer’s signature. In other words, the statutory provisions protecting proceedings from certain procedural defects or providing for electronic service cannot be used to validate an order which itself suffers from the fundamental defect of being unsigned.<\/p>\n Accordingly, the unsigned assessment orders were set aside and the matters were remanded to the respective Assessing Officers for fresh adjudication, after providing an appropriate opportunity of hearing. The Court also directed the petitioners to deposit 20% of the disputed tax within six weeks, with amounts already paid\/recovered being adjusted against such deposit. The period spent in the writ proceedings was excluded for limitation purposes.<\/p>\n Case:<\/strong> Gaurav Jain & Anr. v. Joint Commissioner (Appeals-II), CGST Delhi Zone & Anr. The Delhi High Court examined an important transitional issue concerning the amendment to Section 107(6) of the CGST Act, 2017, which came into effect from 1 October 2025. Prior to 1 October 2025, there was no general percentage-based pre-deposit requirement for an appeal against a penalty-only order, where no tax demand was involved, under provisions such as Section 122(1A).<\/p>\n The Finance Act, 2025 substituted the relevant proviso to Section 107(6) and introduced a requirement to deposit 10% of the penalty amount for filing an appeal against an order demanding penalty without any corresponding demand of tax.<\/p>\n The High Court held that the 10% pre-deposit requirement introduced from 1 October 2025 cannot be retrospectively applied to adjudicatory proceedings that had already commenced through a Show Cause Notice issued before that date.<\/p>\n The Court applied the principle that a right of appeal is a substantive right and that the applicable appellate regime, including the conditions governing exercise of that right, becomes attached when the underlying lis\/proceedings commence.<\/p>\n According to the Court, the crux in the present case commenced with the issuance of the Show Cause Notice, and not with the subsequent Order-in-Original or the filing of the appeal. Therefore, the subsequent amendment imposing a more onerous 10% pre-deposit could not be applied to those proceedings.<\/p>\n Case: <\/strong>Commissioner, CGST Appeal-I, Delhi & Ors. v. Bharti Airtel Ltd. & Ors. (Supreme Court \u2013 Review Petition)<\/p>\n The Supreme Court dismissed the review petitions filed by the Revenue challenging its earlier order concerning the eligibility of Input Tax Credit (ITC) on goods and services used for the installation of telecom towers. The dispute arose from the Delhi High Court’s decision which had held that telecom towers could not be treated as immovable property merely because they were affixed to the earth and, consequently, ITC could not be denied under Section 17(5)(d) of the CGST Act, 2017.<\/p>\n The Revenue had subsequently approached the Supreme Court, which had declined to interfere with the Delhi High Court’s decision in August 2025. The Revenue thereafter filed review petitions contending that the earlier Supreme Court order required reconsideration.<\/p>\n The Court found no error apparent on the face of the record warranting reconsideration of its earlier order. Consequently, the review petitions were dismissed and the pending applications were also disposed of.<\/p>\n The underlying controversy relates to Section 17(5)(d) of the CGST Act, which restricts ITC on goods or services used for construction of an immovable property. The Revenue’s case was that telecom towers, being attached to concrete foundations or rooftops, constituted immovable property and therefore ITC should be blocked. The telecom companies, on the other hand, contended that the towers are capable of being dismantled and relocated and that their attachment to the earth is only for operational stability and does not make them permanently attached to the earth.<\/p>\n The Supreme Court’s present order is significant because the Revenue’s review challenge has now also failed. However, the order dated 19 August 2026 is a brief review order and does not independently re-examine the interpretation of Section 17(5)(d), the definition of \u201cplant and machinery\u201d or the tests for determining whether telecom towers constitute immovable property. The practical position flowing from the earlier Delhi High Court judgment therefore remains undisturbed.<\/p>\n Case: <\/strong>M\/s Tata Steel Ltd. v. Union of India & Ors-(Supreme Court)<\/strong><\/p>\n The Supreme Court considered the validity of proceedings initiated against Tata Steel Limited under Section 74 of the CGST Act, 2017 in respect of FY 2018-19, FY 2019-20 and FY 2020-21. The proceedings arose out of audit observations relating to alleged mismatch in Input Tax Credit and alleged short payment of tax. A Show Cause Notice dated 13 June 2025 was issued invoking the extended limitation under Section 74 on the allegation of fraud, wilful misstatement and suppression of facts.<\/p>\n The principal issue before the Supreme Court was whether the Department could invoke the extended limitation period under Section 74 merely by making a general or mechanical reference to fraud, wilful misstatement or suppression of facts, without setting out the factual foundation supporting such allegations in the Show Cause Notice.<\/p>\n The Supreme Court held that the foundational facts constituting fraud, wilful misstatement or suppression of facts must be discernible from the Show Cause Notice itself. Merely reproducing the statutory expressions contained in Section 74 does not satisfy the requirement of the law. The Court emphasised that the invocation of the extended limitation period has serious consequences and therefore the notice must disclose the facts and circumstances from which the alleged fraud, wilful misstatement or suppression can reasonably be inferred.<\/p>\n The Court further observed that the Proper Officer must independently apply his mind before invoking Section 74. An audit objection may form part of the material considered by the officer, but it cannot by itself substitute the statutory satisfaction required from the Proper Officer. The subsequent pleadings or explanations of the Department also cannot cure a fundamental defect in the Show Cause Notice by supplying facts which were absent from the notice itself.<\/p>\n The Supreme Court accordingly found the Section 74 proceedings unsustainable and set aside the Show Cause Notice as well as the consequential Order-in-Original. The Court clarified that its decision was on the validity of the invocation of Section 74 and did not adjudicate upon the underlying merits of Tata Steel’s ITC claim or determine whether the alleged ITC mismatch or short payment was factually correct.<\/p>\n Case: <\/strong>M\/s G.R. Infra Projects Limited, Ratlam v. State of Madhya Pradesh & Ors. The Supreme Court examined the validity of a Show Cause Notice dated 13 June 2025 issued to M\/s G.R. Infra Projects Limited for FY 2018-19 under Section 74 of the CGST Act, 2017 read with the MPGST Act, 2017. The notice was issued after the normal limitation period under Section 73 had expired. The taxpayer contended that the notice did not contain the allegations or facts necessary for invoking the extended limitation under Section 74.<\/p>\n The Madhya Pradesh High Court had upheld the validity of the notice. Before the Supreme Court, the Department sought to justify the invocation of Section 74 by relying upon the counter-affidavit filed in the proceedings, in which allegations of fraud and suppression were sought to be elaborated.<\/p>\n The Supreme Court rejected this approach and held that the validity of a statutory notice has to be determined from the contents of the notice itself. Where a notice is alleged to be invalid for non-application of mind or for failure to satisfy the statutory requirements, the Department cannot subsequently supplement or improve the notice through a counter-affidavit filed before the Court.<\/p>\n The Supreme Court held that, to invoke the extended limitation under Section 74, the allegations and foundational facts leading to an inference of fraud, wilful misstatement or suppression of facts must emanate from the SCN itself. Merely reproducing the expressions appearing in Section 74, without setting out the circumstances which persuaded the Proper Officer to arrive at such a conclusion, would amount to a mechanical invocation of the extended period.<\/p>\n Case:<\/strong> M\/s Sumetco Alloys Private Limited v. Union of India & Ors. The Rajasthan High Court considered a challenge by M\/s Sumetco Alloys Private Limited to the constitutional validity of Section 16(2)(c) of the CGST Act, 2017, which links the recipient’s entitlement to Input Tax Credit (ITC) with payment of the corresponding tax by the supplier.<\/p>\n The petitioner contended that it was a bona fide purchaser and had fulfilled the requirements within its control, including possession of tax invoices, actual receipt of goods, payments through banking channels and maintenance of relevant records. It was argued that ITC could not be denied merely because certain suppliers subsequently defaulted or their registrations were cancelled. The petitioner also relied upon decisions of the Tripura and Karnataka High Courts which had read down Section 16(2)(c) to protect bona fide purchasers.<\/p>\n The Rajasthan High Court, however, noted that the constitutional validity of Section 16(2)(c) had already been considered by the Gujarat High Court in Maruti Enterprise v. Union of India. The said judgment was subsequently upheld by the Supreme Court in Bhandari Scrap Traders v. Union of India & Ors., decided on 24 July 2026. The Supreme Court had expressly held that there were no grounds either to declare Section 16(2)(c) unconstitutional or to read down its provisions.<\/p>\n Following the Supreme Court’s decision, the Rajasthan High Court held that the constitutional challenge to Section 16(2)(c) was no longer res integra. The provision was therefore held to be constitutionally valid, and the petitioner’s challenge to its vires was rejected.<\/p>\n Case:<\/strong> Chelliah Rangaraj (Authority for Advance Ruling, Tamil Nadu)<\/p>\n The Tamil Nadu Authority for Advance Ruling examined whether the amount collected by a temple for granting a licence to collect hair offered by devotees could qualify for the exemption applicable to human hair. The applicant contended that since human hair is covered by an exemption under the GST law, the amount collected in connection with its collection should also receive the benefit.<\/p>\n The AAR distinguished between the supply of human hair as goods and the licence granted by the temple to collect the hair. It held that the licence granted to successful bidders constitutes a distinct commercial supply of service and is not the supply of human hair itself.<\/p>\n Accordingly, the Authority ruled that the licence fee or auction amount received for permitting collection of devotees’ hair is liable to GST at 18%. The exemption applicable to human hair as goods cannot be extended to the separate licensing service.<\/p>\n Case:<\/strong> Plantlipids Pvt. Ltd. (Authority for Advance Ruling, Kerala)<\/p>\n The Kerala Authority for Advance Ruling examined the GST implications of amounts recovered by an employer from employees towards meals supplied through a statutory canteen maintained in compliance with the requirements of the Factories Act.<\/p>\n The Authority considered the fact that the employer was required to provide the canteen facility under the applicable labour law and that the employer recovered only a portion of the actual cost of the meals from employees.<\/p>\n The AAR held that the subsidised recovery from employees towards statutory canteen meals does not constitute an independent supply of goods or services by the employer to its employees. Accordingly, the amount recovered from employees towards such statutory canteen meals was held not liable to GST.<\/p>\n Case:<\/strong> Ramandeep Upkarsingh Bindra (Black Rock Crusher) (Authority for Advance Ruling, Maharashtra)<\/p>\n The Maharashtra Authority for Advance Ruling examined the GST treatment of royalty paid to the State Government in respect of a mining lease. The applicant contended that the service should be taxed at the same rate applicable to the minerals extracted under the relevant GST entry.<\/p>\n The AAR held that a mining lease represents the grant of a licence to explore and extract natural resources and does not amount to transfer of the right to use pre-existing goods. Accordingly, the transaction is classifiable as a licensing service relating to the right to use minerals under SAC 997337.<\/p>\n The Authority held that the service falls under the residual rate entry and attracts GST at 18%, with the tax payable by the recipient under the Reverse Charge Mechanism in accordance with the applicable notification.<\/p>\n","protected":false},"excerpt":{"rendered":" CBIC Instruction on Coordination with State Mining Authorities to Curb GST Evasion The Central Board of Indirect Taxes and Customs (CBIC) issued Instruction regarding coordination between CGST authorities and State Mining Authorities for sharing information relating to illegal mining and transportation of minerals. The Instruction seeks to strengthen information sharing between the Central and State […]<\/p>\n","protected":false},"author":5,"featured_media":16751,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9],"tags":[209,33,190,38],"class_list":["post-17132","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-indirect-tax","tag-cbic","tag-gst","tag-gstat","tag-indirect-tax"],"yoast_head":"\nGST on Corporate Guarantees between Related Persons \u2013 Valuation mechanism examined<\/h2>\n
\n
Unsigned Assessment Order in Form GST DRC-07 is Invalid<\/h2>\n
No 10% Pre-Deposit Required for Penalty-Only Orders Where SCN Was Issued Before 1 October 2025<\/h2>\n
\n(Delhi High Court)<\/p>\nSupreme Court Dismisses Review Petitions in Telecom Tower ITC Matter<\/h2>\n
Section 74 Cannot Be Invoked Merely by Using the Expressions \u201cFraud\u201d, \u201cWilful Misstatement\u201d or \u201cSuppression of Facts\u201d<\/h2>\n
Department Cannot Supplement Deficient Section 74 Show Cause Notice Through Counter-Affidavit<\/h2>\n
\n(Supreme Court)<\/p>\nConstitutional Validity of Section 16(2)(c)-Bona Fide Purchaser Defence Left to be Examined in Statutory Appeal<\/h2>\n
\n-(Rajasthan High Court)<\/p>\nLicence to Collect Temple Hair is a Taxable Service at 18%<\/h2>\n
Statutory Canteen Meal Recoveries from Employees Not Taxable as Supply<\/h2>\n
Mining Lease Royalty Taxable at 18% under Reverse Charge<\/h2>\n