Tag: Gst demand

Challenges in Filing GST Appeals When Demand Orders Show “NIL” Amount

Subject:  Difficulty in filing appeals on the GST portal in cases where adjudication orders reflect “NIL” demand due to prior voluntary payment – reg.

1. Introduction

It has come to the notice of GSTN that certain taxpayers are facing difficulties in filing appeals on the GST portal against demand orders wherein the demand amount is reflected as “NIL,” despite the existence of a dispute regarding tax liability.

This situation generally arises in cases where the taxpayer has made payment of tax, interest, or penalty (fully or partially) at the stage of issuance of the Show Cause Notice (SCN), without admitting the liability, and the adjudicating authority has subsequently issued a demand order treating such payment as full discharge of the demand without explicitly determining and recording the liability.

2. System Behaviour on GST Portal (Demand and Collection Register – DCR)

When a demand order is issued by the tax officer, the GST portal creates a Demand ID in the Demand and Collection Register (DCR), also known as the liability ledger.

In cases where the tax officer issues a demand order with a NIL amount, an entry is created with zero value, indicating that there is no outstanding liability. When the taxpayer attempts to file an appeal application (APL-01) against such a demand order, the portal restricts the filing of the appeal and may display an error such as: “Disputed amount cannot be more than demand amount itself.”

Since no liability is reported by the tax officer on the GST portal, the system blocks the taxpayer from filing an appeal.

3. Nature of Issue:

It is clarified that:

  • Payment made during the SCN stage, without explicit admission of liability, does not amount to acceptance of the demand.
  • In such cases, the taxpayer retains the right to contest the liability and file an appeal under Section 107 of the Central Goods and Services Tax Act, 2017.

However, where the adjudication order incorrectly reflects a “NIL” demand, the taxpayer is unable to exercise this statutory right due to the NIL demand reflected in the system.

4. Alternate solution:

In cases where a dispute regarding liability exists but is not captured by the department in the demand order, and payment has been made prior to the issuance of the demand order, the taxpayer is advised to approach the adjudicating authority for issuance of a rectification order.

The taxpayer may file such rectification requests using the option available on the GST portal. Upon receipt of the rectification order reflecting the correct demand amount, the taxpayer may proceed to file an appeal on the GST portal within the prescribed time limits.

Madras High Court Overturns GST Demand on Corporate Guarantee

In a significant ruling, the Madras High Court has set aside a GST demand levied on Amman Try Trading Company Private Limited, marking a pivotal moment in the interpretation of GST implications concerning corporate guarantees. The court found that the tax department had failed to consider vital circulars issued by the CBIC, which the taxpayer had relied upon during the assessment process.

Key Highlights of the Judgment

Justice G R Swaminathan presided over the case and emphasized that any assessment order is rendered invalid if the tax department overlooks the defenses presented by the taxpayer. He stated, “When a defense raised by the noticee is not considered in the final order, the order is vulnerable on that ground.”

Case Background

Amman Try Trading Company, based in Tiruchirappalli, furnished a corporate guarantee for a related party. The State Tax Officer interpreted this act as a taxable service under GST, imposing a tax at a rate of one percent on the corporate guarantee amount. Consequently, an assessment order (GST DRC-07) was issued against the company on April 28, 2025.

In response to the show cause notice, the company clarified it did not dispute the applicability of GST to corporate guarantees but contested the valuation approach taken by the tax officer. The company referenced CBIC Circular No.199/11/2023-GST and Circular No.210/4/2024-GST, asserting that since no consideration was received for the guarantee, the service’s value should be deemed nil, resulting in no invoice issuance.

Court’s Findings

The High Court scrutinized the tax officer’s final assessment order and noted that, while a show cause notice was issued, the order failed to address the specific CBIC circulars cited by the taxpayer. Recognizing this oversight, the court determined that the taxpayer’s defenses were not adequately considered.

Consequently, the Madras High Court set aside the assessment order, mandating a reconsideration of the matter. The court instructed the tax officer to thoroughly evaluate all arguments presented by the petitioner and issue a new, detailed assessment order compliant with legal standards.

Implications of the Ruling

This judgment underscores the importance of due consideration in tax assessments, particularly concerning the treatment of corporate guarantees under GST. Taxpayers must ensure that their defenses are thoroughly evaluated in assessment processes, as ignored arguments can lead to overturning of unfavorable decisions by the courts.

This ruling serves as a crucial precedent for businesses engaging in similar transactions, highlighting the necessity for the tax department to meticulously assess all relevant circulars and defenses to uphold the integrity of the tax assessment process.

UltraTech Cement Faces GST Demand of Rs. 5.49 Crore

UltraTech Cement Limited has recently been notified by the Goods and Services Tax (GST) authority regarding a demand amounting to Rs. 5.49 crore, along with accrued interest and an additional penalty of Rs. 54.9 lakh. The order was passed by the Commissioner of Appeals in Nagpur and was communicated to the company on August 20, 2025.

The Core Issue

The dispute revolves around a corporate guarantee provided by UltraTech Cement. The tax department contends that offering such a guarantee qualifies as a service under the GST framework, thereby making it liable for taxation. Earlier, the department had issued an order requesting the demand, which has now been confirmed through the appeal process.

UltraTech Cement has announced that it is currently reviewing the order in detail and will determine its course of action after thoroughly assessing the legal and financial implications. The company emphasized that the order would not materially affect its financial position or day-to-day operations.

Industry Context

Corporate guarantees have sparked considerable debate within the GST regime. Tax authorities assert that when a parent company offers a guarantee on behalf of its subsidiary, it constitutes the provision of a taxable service. This has led to several large companies across various sectors encountering similar disputes in recent years.

The case of UltraTech Cement adds to the increasing number of instances where businesses are being challenged to pay GST on financial transactions that were previously deemed non-taxable. Although the amount involved is significant, the company reassures investors that it does not anticipate a substantial impact on its overall performance.

About UltraTech Cement

UltraTech Cement is recognized as the largest producer of grey cement, ready-mix concrete, and white cement in India. Being a part of the Aditya Birla Group, one of the country’s leading industrial conglomerates, it maintains a strong foothold across India and several international markets. With an impressive capacity exceeding 140 million tonnes per annum, UltraTech plays a crucial role in supporting India’s infrastructure and housing needs.

Bombay HC Questions GST Department’s ₹2500 Crore Demand on Coca-Cola Discounts

The Bombay High Court temporarily halted a ₹2,500 crore GST demand against Hindustan Coca-Cola Beverages Pvt. Ltd. on April 1, 2025, raising questions about the tax treatment of discounts in India.

The core issue is a GST dispute regarding retrospective discounts and their effect on taxable value under Section 15 of the CGST Act, 2017.

 

In January 2025, the CGST Department issued a notice to Coca-Cola, alleging under-declaration of taxable value over seven years through retrospective discount adjustments to distributors.

The department cited Section 15(3)(a) of the CGST Act, arguing that these retroactive discounts were not known at the time of supply and thus ineligible for GST reduction. This section stipulates that discounts are only excluded from GST valuation if pre-agreed and linked to specific invoices. Section 15(1) defines the value of supply as the transaction value, i.e., the price actually paid or payable.

 

Justices B.P. Colabawalla and Firdosh Pooniwalla of the Bombay High Court found a strong initial case for Coca-Cola, stating that the CGST Commissioner’s reasoning was not prima facie correct.

The court issued an injunction, preventing any enforcement action until the next hearing on April 29, 2025.

 

The case could reshape discount and taxation practices across sectors like FMCG, pharmaceuticals, auto parts, and consumer durables, where retrospective incentives are common.

*     Discounts must be contractually defined and linked to supply invoices.
*     Post-sale discounts lacking a link to the original invoice are not GST deductible.
*     Pricing must reflect genuine transactions, not tax avoidance.

 

*   Ensure discounts are pre-agreed, documented, and linked to specific invoices.
*   Use automated systems like DMS for discount data management.
*   Maintain audit-ready records and avoid retrospective adjustments without a contractual basis.
*   Seek legal advice on Section 15 disputes, especially for bundled discounts.

IndusInd Bank Hit with ₹21.62 Crore GST Demand

IndusInd Bank Faces GST Demand Notice of ₹21.62 Crore

IndusInd Bank announced on Tuesday that it has received a demand notice from tax authorities amounting to approximately ₹21.62 crore, citing alleged short payment of Goods and Services Tax (GST).

The communication regarding this demand order was issued by the Deputy Commissioner of State Tax, Ahmedabad, Gujarat, highlighting various GST issues pertaining to the bank, as stated in a regulatory filing.

The financial implications of this order include a total liability of ₹21.62 crore, which encompasses penalties. In response, IndusInd Bank has expressed its intent to explore the possibility of filing an appeal against the order.

Madras High Court Halts ₹1,100 Crore GST Demand on TANTRANSCO

Madras High Court Directs GST Department to Defer Inquiry into TANTRANSCO Tax Liability

The Madras High Court recently issued a directive to the Goods and Services Tax (GST) department, instructing them to postpone inquiry proceedings regarding four show-cause notices alleging a tax liability of Rs 1,100 crore against the Tamil Nadu Transmission Corporation (TANTRANSCO) for the financial years spanning from 2017 to 2021.

Justice Krishnan Ramasamy presided over the case while considering the petitions filed by TANTRANSCO that contested both the validity of the notices and the ongoing inquiry processes.

Senior counsel representing TANTRANSCO argued that the power transmission system operator plays a crucial role in transmitting generated electricity throughout Tamil Nadu, as governed by The Electricity Act, 2003. Notably, these activities were exempt from service tax prior to the implementation of the GST regime.

Following the introduction of GST in 2017, the GST department conducted an audit assessment, resulting in the issuance of four show-cause notices for the financial years post-GST implementation, claiming a substantial tax liability of Rs 1,100 crore. The counsel pointed out that these notices are allegedly in violation of Section 65 of the CGST Act, 2017, along with Rule 101 of the CGST Rules, 2017. The basis of these notices stemmed solely from observations made by the audit team, which cited the inward supply of goods as capital assets belonging to the power transmission system operator.

The GST department’s demands for tax were founded on the premise that these goods represented consideration for the supply, which the counsel contended formed the cornerstone of the tax claims. Additionally, he noted that TANTRANSCO is actively contesting the applicability of the GST Act through four separate writ petitions, warranting a deferral of the GST inquiry proceedings.

Further highlighting the complexities surrounding the electricity sector, the counsel emphasized that electricity is a unique commodity. Its invisible and intangible nature, coupled with the inherent dangers of its handling, necessitates instantaneous transmission and consumption. Consequently, he argued that the sale and consumption of electricity fundamentally falls under the jurisdiction of state authorities, as outlined in Entry 53 of List II. He concluded that activities related to electric generation, transmission, and distribution should not be liable to indirect taxes.

HDFC Life Insurance Required to Pay ₹3.09 Cr Under GST Regulations

HDFC Life Insurance Faces GST Order with Significant Tax Demand

HDFC Life Insurance Company Limited has received a GST order dated December 13, 2024, from the Assistant Commissioner of CGST & Central Excise, Patna Central Division. The order entails a significant tax demand, amounting to ₹1.54 crore, along with an additional penalty of ₹1.55 crore.

The GST order pertains to the period from July 1, 2017, to March 31, 2021. It has been issued on the grounds of alleged excess availment of input tax credit, which stems from discrepancies observed between GSTR-3B and GSTR-2A. Additionally, the order claims there was a short reversal of proportionate input tax credit linked to exempt supplies and common services that are attributable to these exempted supplies.

According to HDFC Life Insurance Company Limited’s exchange filing, the order is subject to appeal. The company has asserted its commitment to filing an appeal before the Appellate Authority within the specified timeframe, seeking a resolution to the dispute.

This development highlights the ongoing complexities and challenges within the GST landscape for companies operating in India, particularly those in the insurance sector.

Zomato Faces GST Demand: Rs 17.7 Crore Penalty

Zomato Faces GST Demand Order of ₹17.7 Crore from West Bengal Authorities

Online food delivery aggregator Zomato has recently announced that it has received a GST demand order amounting to ₹17.7 crore, including interest and penalty, from the Assistant Commissioner of Revenue in West Bengal. The notification, which was received on Tuesday, pertains to the non-payment of GST on delivery charges along with associated interest and penalties.

In a regulatory filing, Zomato stated, “We believe that we have a strong case on merits and the Company will be filing an appeal against the order before the appropriate authority.” The demand order covers the period from April 2021 to March 2022 and confirms a GST demand of ₹11,12,79,712, along with an interest charge of ₹5,46,81,021 and a penalty of ₹1,11,27,971.

Zomato’s response to the initial show cause notice included clarifications on the matter supported by relevant documents and judicial precedents. However, the company claims that these factors were not sufficiently considered by the authorities during the order issuance.

In its statement, Zomato expressed confidence in its ability to contest the order before the relevant appellate authority, stating that it does not expect any financial repercussions for the company. This situation arises amidst a backdrop of Zomato receiving multiple tax demand orders from various authorities in recent times, highlighting ongoing regulatory scrutiny in the online food delivery sector.

As the company prepares to challenge the demand, it underscores its belief in the robustness of its case and commitment to navigating the complexities of the regulatory landscape effectively.

Eicher Motors’ GST Demand Reduced by 79% to Rs 26.97 Crore

Eicher Motors’ GST Demand Reduced to Rs 26.97 Crore After Appeal

Eicher Motors announced on Friday that the GST demand orders issued to them on December 30, 2023, by the CGST and Central Excise office in Chennai have been substantially reduced. Initially set at Rs 129.79 crore, the demand has now been revised to Rs 26.97 crore following an appeal by the company.

The significant reduction of over Rs 100 crore is attributed to the non-reversal of input tax credit on returned materials in FY18, which Eicher Motors had promptly addressed by paying the output tax liability. The original order comprised a tax demand of Rs 117.99 crore and a penalty of Rs 11.79 crore, which have been revised to Rs 24.52 crore and Rs 2.45 crore respectively, as per the company’s filing with the stock exchange.

In the preceding year, Eicher Motors had reported that tax authorities disallowed certain GST credits and raised a GST demand, primarily due to discrepancies in GST credits claimed by the company and those reported by their suppliers in GST returns. The issues also involved variances between turnover declared in GSTR-3B and GSTR-1 returns, as well as non-reversal of input tax credit on returned materials, which the company had proactively resolved by paying the output tax liability.

Despite the reduction, Eicher Motors’ shares experienced a decline, trading at Rs 4,725 around 2 pm, down 4.75% from the day’s high. Addressing the revised demand, the Delhi-based company expressed their stance, stating, “Based on the Company’s assessment, the revised demand is not maintainable, and the Company is evaluating all options, including filing an appeal against the order. The Company does not anticipate any significant impact on its financials, operations, or other activities.”

Eicher Motors remains resolute in considering all options, including filing an appeal against the revised demand, as they firmly believe it is unjustified. The company also reassured that they do not expect any substantial impact on their financials, operations, or other activities due to the revised demand.

Challenges Faced by Eicher Motors: Responding to a Rs 15 Lakh GST Demand Notice

Eicher Motors has reported the receipt of a Rs 15 lakh GST demand notice from the Haryana authorities. This demand order, issued by the Office of the Excise and Taxation Officer in Gurgaon (East), Ward-5, encompasses a tax demand of Rs 5 lakh, interest of Rs 9 lakh, and a penalty of Rs 1 lakh.

The company has stated in a regulatory filing that, in its assessment, the aforementioned demand is not sustainable. Eicher Motors is currently considering all available options, which may include filing an appeal against the order.

IDBI Bank Faces Rs 2.97 Crore GST Demand Order

IDBI Bank announced on May 7 that it has received a GST demand order of Rs 2.97 crore, which includes interest and penalty, for the alleged excess availment of input tax credit (ITC) during the 2018-19 fiscal year. The Dehradun state tax department issued the order under GST rules, citing alleged excess availment and utilization of ITC.

The demand order comprises a tax demand of Rs 1.42 crore, as well as interest and penalty amountsing to Rs 1.41 crore and Rs 0.14 crore, respectively. In response, the bank stated that it is currently assessing the appropriate legal remedy, including the possibility of appeal, in accordance with the law.

Despite this development, IDBI Bank reported a 44 percent increase in net profit, reaching Rs 1,628 crore during the March quarter of the 2023-24 financial year, compared to Rs 1,133 crore in the corresponding period of the previous year. The bank’s total income also saw a notable rise, reaching Rs 7,887 crore in the period under review, up from Rs 7,014 crore in the January-March period of the 2022-23 fiscal year.

The financial year 2023-24 marked a significant milestone for the bank, with a 55 percent surge in net profit to an all-time high of Rs 5,634 crore, compared to Rs 3,645 crore in the previous year. Additionally, IDBI Bank’s total income for the 2023-24 fiscal year amounted to Rs 30,037 crore, reflecting substantial growth from Rs 24,942 crore in the financial year 2022-23.

As IDBI Bank continues to navigate the implications of the GST demand order, the institution’s financial performance and strategic decisions will be closely monitored by industry analysts and stakeholders.

Big Update! Concerns Rise as GST Authorities Issue Demand Notices Totaling ₹1.45 Lakh Crore

Goods and services tax (GST) authorities issued demand notices totaling ₹1.45 lakh crore to around 1,500 businesses in December, a report said. The notices were sent due to inconsistencies in annual returns and input tax credit claims for the financial year 2018, according to officials. 

The significant volume of notices is because of the deadline for serving notices for the 2017-18 period, which was December 31, 2023, Economic Times reported, quoting a senior official, who also informed that the ₹1.45 lakh crore included penalty and interest.

Additionally, weak tax recovery in cases of evasion also led to a large number of notices issued. The GST officers have detected GST evasion of about ₹1.51 lakh crore in the current fiscal, but the recovery was ₹18,541 crore as on December 30. This was much less than the internal target of ₹50,000 crore, the report said.

The total number of GST returns filed in 2017-18 stood at 72.5 lakh, while only a small proportion of returns were picked up for scrutiny for short payment of taxes, the official told the newspaper.

Around 48,000 GST returns of 2017-18 and 2018-19 were selected for scrutiny by December 30 after discrepancies were detected or if flagged by the system, the report added.

As the deadline for the 2017-18 period has passed, the department has now turned its attention to the fiscal year 2018-19, and officials anticipate that the number of notices may rise in the coming days.

Additionally, the government has extended the deadline for issuing demand notices related to discrepancies in returns for the 2018-19 and 2019-20, now set at April 30, as opposed to the previous deadline of March 31.

Meanwhile, the government on Sunday said GST officers have detected 29,273 bogus firms involved in fake Input Tax Credit (ITC) claims of ₹44,015 crore in eight months till December 2023 during a drive against fake registration, which helped save revenue of ₹4,646 crore.

In the October-December quarter, 4,153 bogus firms that involved suspected ITC evasion of around ₹12,036 crore were detected. As many as 2,358 of these bogus firms were detected by the Central GST Authorities.