The government has detected evasion of Goods and Services Tax (GST), which also includes Central Excise and Service taxes prior to 2017, to the tune of Rs93,375 crore. This was revealed in a RTI reply by the Directorate General of GST Intelligence’s (DGGI) various zonal units in major cities across India, including Delhi, Mumbai, Pune, Ahmedabad, Chandigarh and others.
Earlier, tax evasion of Rs9,359 crore had been reported by the Delhi headquartered DGGI office over the last six financial years, again in reply to a RTI query, which was reported by TOI on January 9.

The Uttarakhand High Court has stayed the operation of a Circular issued by the Revenue Authorities, to the extent it inhibits refund claims for a period of two separate (not successive) financial years and requires filing of Refund in a chronological manner. The Bench comprising of Justices Sanjay Kumar Mishra and Alok Kumar Verma has stayed para 8 of the Circular No. 125/44//2019-GST dated 18.11.2019, which states thus

Taxpayers can seek the benefit of amnesty scheme for pre-GST dues even if the final liability isn't quantified or determined via a notice by the revenue department, the Bombay High Court has held. This as long as there's a written communication of the amount of duty payable by the taxpayer, the court clarified. For the purpose of eligibility under the scheme, completion of investigation is not neessary as a condition precedent.

In what could impact several companies and hotels, an Appellate Authority for Advance Ruling (AAAR) has denied input tax credit under the Goods and Services Tax (GST) framework on leasing of land and property.

Most companies and hotels pay GST at 18% on lease rentals and claim credit to reduce their tax outgo. Also in many instances the leased properties are treated as owned ones and the rights are transferred when the property is sold or bought by new owners.

The Tamil Nadu AAAR denied the input tax credit to Inox Air Products, a medical gas manufacturer, on leasehold rights acquired for air-separation-unit construction.

The ruling could result in additional scrutiny and notices for several companies and even hotels that work on lease models, say tax experts.

The issue of Goods and Services Tax (GST) on ocean freight has come to haunt many companies as the tax department has started raising fresh queries over tax applicability on transportation of imported goods through the sea route even as the matter is pending in various courts.

In the last month or so, the department has started issuing fresh tax demands and notices to companies over GST on ocean freight, prompting some of the companies to file writ petitions against the decision.

In one such writ petition filed by an importer, Deoleo India, in the Bombay High Court, concerns were also raised against "coercive action".
"Recovery of GST on ocean freight by the authorities at this stage is not a good idea when the matter is at the final stage before the apex court and one of the high courts in the country has already held these provisions to be ultra vires,” said Abhishek A Rastogi, partner at Khaitan and Co. “Any payment at the audit stage or at the investigation stage can only be made voluntarily by the taxpayer, and any coercive measure to recover without a fair process of adjudication needs to be challenged before the writ court."

The government and many companies, mainly importers, are fighting a battle in the Supreme Court over the imposition of integrated GST (IGST) on ocean freight.

The Bombay High Court has quashed an order by the GST authorities that had rejected the refund claim of an assessee because it was filed after two years, a time limit set by the rules. This was done since the authorities have not taken into cognizance the earlier Supreme Court verdict that excluded the period from March 15, 2020 and October 02, 2021 from the time limit due to Covid.

However, the high court did not go into the validity of the circular and the question of striking it down.


The petitioner concerned filed the first refund application for the period July 2018 to September 2018 on August 21, 2020 online on the GST portal. The said application, however, was rejected by the assistant commissioner of CentralGST (CGST) in Mumbai on September 05, 2020 on the ground that there were certain deficiencies in the said application.

Does the chief executive of a large corporation headquartered in Mumbai work for the whole company or just the head office?

Or, should certain common expenses such as salary, marketing, branding or legal expenses be distributed across branch offices or absorbed by head office alone?

A recent ruling by the Appellate Authority for Advance Ruling (AAAR) says allocation of salary of a head office employee to a branch, and its recovery from there, will be "subject to GST."

"Taxation of transactions between head office and branch office has been a contentious issue since inception of GST as the said transactions were not liable to any tax under the erstwhile regime," said Harpreet Singh, partner, indirect taxes at KPMG in India.

Healthcare services provided under a membership scheme run by multi-super specialty hospitals to its members and their families were not taxable and will not face goods and services tax, according to a recent tax ruling by Gujarat Authority for Advance Ruling.

The Gujarat Authority for Advance Ruling (AAR) has held that healthcare services, where multi-super specialty hospitals take a lump-sum amount in form of membership to provide services to their family, would not attract GST.

The ruling came in response to an application by Divyajivan Healthcare LPP. It had approached the AAR seeking clarity on levy of GST on a membership plan in its proposed multi-super specialty hospital.

The applicant had also tied up with other hospitals in India where the members can avail health care services.

Finance Minister Nirmala Sitharaman, in Union Budget 2021-22, proposed changes vide the Finance Bill, 2021, that amends the Central Goods and Services Tax Act, 2017 with respect to recovery of self- assessed tax, which is now notified vide Notification No. 39/2021–Central Tax dated December 21, 2021, by insertion of Explanation to Section 75(12) of the CGST Act with effect from January 01, 2022.

The Explanation reads as under
“Section 75. General provisions relating to determination of tax (12) Notwithstanding anything contained in section 73 or section 74, where any amount of self-assessed tax in accordance with a return furnished under section 39 remains unpaid, either wholly or partly, or any amount of interest payable on such tax remains unpaid, the same shall be recovered under the provisions of section 79.

Deciding the goods and services tax rate on fryums papad could be a messy affair with the Appellate Authority for Advance Rulings (AAAR) of Gujarat now ruling that the ready-to-eat product would draw 18 per cent rate.

In that connection, it slightly modified the ruling of the state-based Authority for Advance Rulings (AAR). The AAR had also ordered that these products would draw 18 per cent GST but under a different classification.


Earlier in two different cases, Gujarat AAAR had ruled that fryums would be exempt from GST.

In the present case, Alisha Gruh Udyog, engaged in selling ready-to-eat fryums, had submitted in its petition that it is a settled legal case that fryums would not attract any GST.

Taxmen to give ‘reasonable time’ to biz to explain reasons for mismatch in GSTR-1, 3B before recovery action
As per the changes in the GST law effective January 1, GST officers were allowed to directly initiate recovery action against those errant businesses which showed higher sales in monthly return GSTR-1 but under-report it while tax payment in GSTR-3B.

The move was aimed at curbing the menace of fake billing whereby sellers would show higher sales in GSTR-1 to enable a purchaser to claim an input tax credit (ITC) but report suppressed sales in GSTR-3B to lower GST liability.

So far, under the goods and services tax law, show-cause notices were first issued and then a recovery process was initiated in such cases of mismatch in GSTR-1 and GSTR-3B.

GST Network, which provides technology backbone for the indirect tax regime, will shortly release interest calculator functionality in monthly tax payment form GSTR-3B to help taxpayers in calculating interest for delayed tax payment.

This new functionality will compute the minimum interest applicable on the basis of the values declared by the taxpayers in GSTR-3B for a particular tax period, GSTN said in an advisory.

“To facilitate taxpayers in doing self-assessment, the new functionality of interest calculator is being released in GSTR-3B. This functionality will assist taxpayers in calculating the interest applicable for delayed filing of returns.

Accounting rule maker Institute of Chartered Accountants of India (ICAI) has asked the government to bring back the audit and certification provisions relating to Goods and Services Tax (GST) annual returns, saying that doing away with audit will disrupt compliance.
GST authorities last August dropped the provision for mandatory audit of annual returns for businesses with sales of ?2 crore and above, and introduced self-certification of a reconciliation statement for those with ?5 crore sales and more, replacing the certification needed by a chartered or cost accountant.

A revamped & enhanced version of Search HSN Functionality has been launched on the GST Portal.

As per Notification No. 35/2021 – Central Tax dated 24th September 2021, clause (a) of the sub-rule (6) of Rule 59 of CGST Rules, 2017 was amended. By way of this amendment, for the words “for preceding two months”, the words “for the preceding month” were substituted with effect from 1st January 2022. This means that from 1st January 2022 onwards, if a monthly filer has not filed the GSTR-3B for the preceding month, then such taxpayer will not be allowed to file the GSTR-1 for the subsequent month, till the GSTR-3B for the preceding month is filed.

As per the GST Council decision to notify “Restaurant Service” under section 9(5) of the CGST Act, 2017 along with other services notified earlier such as motor cabs, accommodation and housekeeping services wherein the tax on such supplies would be paid by electronic commerce operator if such supplies made through it, Notification No. 17/2021-Central Tax (Rate) and 17/2021-Integrated Tax (Rate) dated 18.11.2021 have been issued. Accordingly, the tax on supplies of restaurant service supplied through e-commerce operators, shall be paid by the e-commerce operator with effect from the 1st January, 2022.

Even as the indirect tax department initiated investigations against several crypto exchanges for escaping Good and Services Tax (GST) liability, it may have also set a precedent around the categorisation of crypto assets for taxation.

Legal experts have long debated on the categorization - and tax treatment - of cryptocurrencies. They are yet to converge on whether a cryptocurrency is indeed a currency, a commodity, a service, or something else.

The Directorate General of GST Intelligence (DGGI) conducted searches and raids on several crypto exchanges and asked them to pay GST on their transaction fees or margins.

GST revenue collected in December 2021 was over Rs 1.29 lakh crore, 13 percent higher than the same month last year, the Finance Ministry said on Saturday. Though the collection was lower than Rs 1.31 lakh crore mopped up in November, December is the sixth month in a row when revenue from goods sold and services rendered stood at over Rs 1 lakh crore.

The gross GST revenue collected in the month of December 2021 is Rs 1,29,780 crore, of which CGST is Rs 22,578 crore, SGST is Rs 28,658 crore, IGST is Rs 69,155 crore (including Rs 37,527 crore collected on import of goods) and cess is Rs 9,389 crore (including Rs 614 crore collected on import of goods),” the Finance Ministry said in a statement.

The revenues for December 2021 are 13 percent higher than the GST revenues in the same month last year (Rs 1.15 lakh crore) and 26 percent higher than December 2019.

Food aggregators like Swiggy and Zomato will have to collect and deposit tax at 5 per cent rate beginning Saturday, a move which will widen the tax base as food vendors who are currently outside the GST threshold will become liable to GST when provided through these online platforms. Currently, restaurants registered under GST are collecting and depositing the tax.

Also, cab aggregators like Uber and Ola will have to collect 5 per cent Goods and Services Tax (GST) for booking 2 and 3 wheeler vehicles effective January 1. Also, footwear irrespective of prices will attract 12 per cent tax from Saturday. These are among the many changes in the GST regime that have come into effect in this new year 2022.

The Tamil Nadu government on Friday termed the present sharing of powers of direct taxation and indirect taxation as unfair in the contest of limiting the direct powers of the States and said this has been exacerbated after the implementation of the Goods and Services Tax (GST), when even the bulk of indirect taxation powers have been curtailed.

Tamil Nadu, according to the Finance Minister P T R Palanivel Thiagarajan, is one of the major States producing handloom, power loom textiles and hosiery goods in the country and this sector is next only to agriculture in terms of employment generation.

Speaking at the 46th meeting of the GST Council held in the national capital under the chairmanship of Union Finance Minister Nirmala Sitharaman, Thiagarajan said the hike on the fabrics including handloom manufactured from the natural fibre will dampen demand and thereby the farmers and MSMEs will be indirectly affected.