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Corporate News *  Missing seized records must be considered while testing ITC claim; duplicate GST demands ordered corrected: Delhi High Court. *  GST appeal can’t be rejected without addressing taxpayer’s grounds: Allahabad High Court. *  Surplus IGST credit can offset CGST, SGST shortfall: GSTAT. *  GST refund can’t be denied when cancelled airfares are returned with tax: GSTAT. *  3 Hearing notices issued within 2 minutes: Gujarat High Court flags portal flaw, seeks report. *  GSTR-9, GSTR-9C filing for FY 2025-26 enabled; pending GSTR-1 and GSTR-3B must be filed first. *  Dupattas are exempt fabrics, can’t be taxed as fibres at 4%: Madras High Court. *  Full transitional credit allowed on capital goods received after GST rollout: GSTAT denies Rs. 6.99 lakh export duty credit. *  GST return mismatch alone can’t justify fraud proceedings: GSTAT orders fresh adjudication under section 73. *  Supplier found non-existent later can’t alone justify input tax credit denial: GSTAT. *  GST interest stops once tax reaches government account, can’t run until return filing: GSTAT. *  Cancelled flat booking- GST refund can’t be denied without excluding COVID period from limitation: GSTAT. *  India notifies rules of origin for India–New Zealand FTA. *  Incomplete E-bike kits classifiable as complete vehicles, but not eligible for CKD duty concession: CESTAT. *  Same GST rate on main input and output can’t by itself bar inverted duty refund: GSTAT. *  Unjust enrichment doesn’t apply to customs refunds from assessments finalised before July 13, 2006: Gujarat High Court. *  CENVAT credit can’t be denied solely because plant And machinery are embedded in earth: Karnataka High Court. *  DFIA exports ineligible for RoDTEP benefits; customs directs repayment with applicable interest. *  Second E-Way bill alone doesn’t prove another supply: GSTAT. *  Bail denied in Rs. 1.19 crore fake GST refund case over risk of accused absconding again: Punjab and Haryana High Court. *  GST registration can be restored after revocation deadline if outstanding dues are paid: Gauhati High Court. *  Multiple GST proceedings over same suppliers: Calcutta High Court directs dept. to share findings for adjudication. *  E-Governance portal services not OIDAR, fixed deposit interest not taxable: CESTAT. *  Rs. 500 Stamp duty required on authority letters for CAs, CMA and GST practitioners in Pune GST division.  *  Rs. 1.10 crore GST refund must be paid in cash after business closure: Allahabad High Court. *  Godown rent attracts 18% GST even when used exclusively for exempt agricultural warehousing: AAR. *  GST portal launches "Multi-State Registration" facility: one master TRN for registration applications across multiple States/UTs. *  RoDTEP scheme extended till 31st December, 2026.  *  Mere disagreement with order can’t override Rs. 20 lakh appeal limit: GSTAT. *  Customs interest can’t be backdated before confiscation liability is determined; nearly 8 year period excluded: Delhi High Court.
Subject News *  GST summons: anticipatory bail maintainable without arrest order, but relief denied in evasion case: Allahabad High Court. *  GST Appeal can’t be decided without hearing taxpayer’s objections to fresh evidence: Allahabad High Court. *  GST ITC can’t be reversed merely because supplier grants discount without reducing tax liability: GSTAT. *  Mere quoting of GST provision is not a valid charge: GSTAT quashes ITC denial. *  Personal hearing mandatory before adverse GST order, even without taxpayer’s request: Rajasthan High Court. *  Parallel bail pleas without full disclosure amount to abuse of process Rs. 43.08 crore GST case sent for fresh hearing: Supreme Court. *  GST refund based on unchallenged advance ruling can’t be recovered using later circular: GSTAT. *  Payment of GST alone doesn’t end interest and penalty liability when tax and interest remain unpaid beyond 30 days of notice: GSTAT. *  GST demand over builders’ 80% procurement rule requires reasoned adjudication: GSTAT. *  Eligible ITC doesn’t automatically entitle taxpayers to compensation cess refund on domestic sales: GSTAT. *  GST confiscation order passed before reply deadline invalid: GSTAT. *  GST interest can’t be retained after tax refund on delayed export receipts: Punjab & Haryana High Court. *  GST appeal can’t be dismissed over pre-deposit shortfall without opportunity To respond: Bombay High Court. *  DGGI SCN can’t be challenged before reply and adjudication:Chhattisgarh High Court. *  GST input tax credit can’t be denied solely due to supplier’s retrospective registration cancellation: GSTAT. *  GST notice must explain fraud allegations; merely repeating section 74 Is not enough:  Himachal Pradesh High Court. *  Audit detection alone can’t justify GST fraud penalty; specific suppression must be proved: GSTAT. *  GST order uploaded only under ‘Additional Notices’ tab without separate intimation set aside: Calcutta High Court. *  Service Tax appeal can’t be rejected for missing pre-deposit proof when payment is already recorded: CESTAT. *  SGST dept. can’t hear appeal against CGST order: Calcutta High Court. *  Mere dispatch of tax order can’t prove service or make appeal time-barred: CESTAT. *  Dealer incentives can’t be taxed merely on ledger entries: CESTAT. *  DGFT orders quashed for failure to supply DRI letter relied upon in SCN: Bombay High Court. *  GST penalty u/s 122(1A) can’t apply to Pre-2021 transactions; unregistered beneficiaries also covered: Delhi High Court. *  Expired E-way bill caused by wrong PIN code can’t justify GST penalty without intent to evade tax: GSTAT. *  Used railway rails can’t be taxed as track material without proof they are fit for reuse: CESTAT. *  Earlier DGGI notice doesn’t bar separate GST demand on different issue: Delhi High Court. *  ITC dispute involves no question of law: GSTAT directs appeal to Vice-President. *  Earlier DGGI notice doesn’t bar separate GST demand On different issue: Delhi High Court. *  No E-way bill required for interstate goods movement in november 2017: GSTAT quashes detention and penalty.  

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GST update No 300 on whether pre-deposit can be made by utilising credit?

GST update No 300 on whether pre-deposit can be made by utilising credit?
The question regarding making pre-deposit using electronic credit ledger has been a moot question and a controversial matter since the very inception of GST. There had been various judicial rulings in favour and against the motion. On similar parameters, one case was reported before Bombay High Court in the case of OASIS REALTY V/S UNION OF INDIA. The decision imparted in this case is the subject matter of discussion of our present update.
The petitioner filed a petition as to whether the pre-deposit amount can be paid through utilising electronic credit ledger. The petitioner referred to provisions of Section 49 and 107 of CGST Act, 2017. It was submitted that before filing an appeal, the assessee is required to make payment of admitted amount of tax, interest, fine, fee and penalty. This case will arise only when the part order is accepted and part is not accepted. Further, the assessee shall make payment of 10% of remaining amount of “tax” in dispute arising from the order against which appeal is preferred. Therefore, no payment of disputed interest, penalty, fine or fee is to be made. Further, it was submitted that there is a pre-condition to filing of appeal which states that unless the pre-deposit is paid, appeal cannot be filed. Provisions of Section 49 of CGST Act, 2017 were referred to and it was contended that as per the said section, amount available in the Electronic Cash Ledger may be used for making any payment towards tax, interest, penalty, fee or any other amount payable and amount available in the Electronic Credit Ledger may be used for making any payment towards output tax in the prescribed manner.The counsel of revenue argued that the amount available in credit ledger can be used for making payment of output tax and cannot be utilised for making payment of pre-deposit as under Section 107 of the Act. The amount of pre-deposit can be made only throughelectronic cash ledger. Reliance was placed on decision of Orissa High Court in the case of M/S JYOTI CONSTRUCTION V/S DEPUTY COMMISSIONER CT & GST. It was further argued that the Circular as referred to be the Court will not stand applicable in the case of reverse charge mechanism.
The Court referred to Section 107 of the Act wherein a pre-condition is provided i.e. “unless the appellant has paid (not deposited)” an amount of 10% of tax in dispute. Further, the credit available in electronic credit ledger can be used towards making payment of output tax only. Therefore, in the considered view the petitioner can use electronic credit ledger for making payment of pre-deposit amount. Further, the same can also be made by utilising the electronic cash ledger. It was further stated that any payment towards output tax, whether self-assessed in the return or payable as a consequence of any proceeding can be made by utilisation of the amount available in the Electronic Credit Ledger. Therefore, the pre-deposit amount can be paid through cash as well as credit ledger. The case referred to by the revenue was not considered since subsequently, CBIC issued clarification in the form of a Circular No. CBIC-20001/2/2022-GST dated 6th July 2022 wherein it clarified that any amount towards output tax can be paid by utilisation of the amount available in the Electronic Credit Ledger. Therefore, the impugned order was set aside and the appeal was restored stating that petitioner can debit the Electronic Credit Ledger towards pre-deposit amount.
The above favourable decision will prove to be beneficial for the trade and industry since now the assessees will not have to face tough situation explaining their point of view to the revenue department and further resulting into blocking of working capital. There had been various decisions against the motion as well such as held by Allahabad CESTAT in the case of JOHNSON MATTHEY CHEMICAL INDIA PVT. LTD. V/S ASSISTANT COMMISSIONER CGST wherein it was concluded that electronic credit ledger cannot be used by assessee to make payment of pre-deposit amount. The said decision was also discussed by us in our Update No. 269/2022. On the Contrary, favouring ruling is delivered by Allahabad High Court in the case of TULSI RAM AND COMPANY V/S COMMISSIONER. Although it is well settled that the rulings of High Courts have a binding effect on the decisions CESTAT and its subordinate authorities, yet a suitable clarification in this respect from the Government is anticipated at the earliest.
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