Article
The jurisdictional tussle between GST and Customs authorities
By Sahana Rajkumar, Derlene Joshna and Prabal Karthikheyan
Jurisdictional issues stemming from the intersection of Customs Act, 1962 and Integrated Goods and Services Tax Act, 2017 are galore. With different High Courts giving diverging views, the lingering question which begs answer is as to whether the officer of Customs Department or the GST Department would be the ‘proper officer’ in respect of recovery proceedings relating to short payment of IGST on import of goods or erroneous refund of IGST paid on export of goods, and other related issues. The article in this issue of Indirect Tax Amicus, for this purpose, explores various situations if IGST on import of goods is deemed a Customs levy or IGST levy. Observing that a resolution of the jurisdictional conflicts between the customs and the GST authorities is urgently required, the authors state that it is also imperative that taxpayers take adequate grounds on jurisdiction in their litigation on these issues.
Goods and Services Tax (GST)
Notifications and Circulars
- Tobacco products – GST regime, including rates, set for overhaul from 1 February
Ratio decidendi
- Sub-leasing of hostel is exempt as ‘residential dwelling’ under Sl. No. 13 of Notification No. 9/2017-IGST (R) [till 18 July 2022] – Supreme Court
- IGST, and not CGST, is payable when goods are handed over to common carriers for transportation to another State – Karnataka High Court
- Interest and penalty recovered by foreman from defaulting chit fund subscribers are not liable to GST – Andhra Pradesh High Court
- Service provided to foreign parent company when not covered as ‘intermediary’ and eligible for benefit of exports – Gujarat High Court
- Supply of Solar Power Generating Systems – Benefit of Entry No. 234 of Schedule-I in Notification No. 1/2017-CT(R) available irrespective of whether contract was works contract relating to immovable property – Andhra Pradesh High Court
- GST authorities can consider documents and material seized during Income-tax search – Delhi High Court
- Statements used as evidence in Income-tax proceedings can be starting point for GST investigations – Delhi High Court
- Recovery of tax determined when not permissible in excess of amount required for pre-deposit for filing appeals – Calcutta High Court
- Input Tax Credit – Section 16(2)(aa) read down to state that purchaser ought to be given an opportunity to prove his bona fides – Gauhati High Court
- ITC not to be denied to purchaser on sole ground of retrospective cancellation of supplier’s registration – Calcutta High Court
- Supply to SEZ – Endorsement by SEZ Commissionerate is not required for period from July 2017 till 20 September 2018 – Karnataka High Court
- Confiscation of goods and conveyance intercepted in transit is permissible in case of intention to evade – Gujarat High Court
- Appeal to Appellate Authority – Limitation – Date of communication of impugned order to be considered as day zero – Punjab & Haryana High Court
- Appeal to Appellate Authority – Exclusion of time during which rectification was pending – Section 14 of Limitation Act is applicable – Allahabad High Court
- Appeal – Limitation – Date of communication of impugned order by physical mode to prevail over service through electronic mode – Allahabad High Court
Customs and FTP
Notifications and Circulars
- FTA imports from Australia, Iceland, Norway and Switzerland – Customs duties further cut
- Diamond Imprest Authorization – Exemption from IGST and Compensation Cess to be available
- Natural honey – Minimum Export Price to remain effective till 31 March 2026
Ratio decidendi
- SEIS benefit not deniable even if foreign exchange received in subsequent financial year – Karnataka High Court
- Foreign Trade Policy benefits cannot be issued or withdrawn retrospectively – Exporters can claim benefit only when valid scheme is in operation – Delhi High Court
- EPCG imports – Non endorsement of vendors, with whom machines installed, in EPCG licences, when is not fatal – CESTAT Chennai
- Drawback – Supplementary claims filed nearly 4 years after the original sanction, when is not time-barred – CESTAT Kolkata
- Reimport benefit available even to goods which were part of bigger consignment of exports in SKD condition – CESTAT Chennai
- Adjudication – Non communication of extension of time-period is not fatal – Delhi High Court
Central Excise, Service Tax and VAT
Notifications and Circulars
- Tobacco products – Central Excise regime set for change from 1 February 2026
- CESTAT – Appeals to be mandatorily filed online from 1 January 2026 – Old pending appeals to be uploaded by Registry
Ratio decidendi
- Processing by continuous series of operations across two units when amount to ‘manufacture’ – Supreme Court
- Interest for delayed payment of duty is not payable in case of revenue neutrality – Calcutta High Court
- No service tax under Design services for import of technical know-how leading to permanent transfer – CESTAT Mumbai
- Part of service performed through a foreign subsidiary is not liable to service tax under RCM – CESTAT Chennai