Indirect Tax Amicus, May 2026

Article

TCS under Section 52 of CGST Act, 2017 – A toothless provision? 

Absence of recovery mechanism in case of default

By Hanisha Jatania

Section 52 of the CGST Act, 2017 introduces a special compliance framework, applicable to e-commerce operators facilitating taxable supplies through their digital platforms. The scheme of Tax Collection at Source (‘TCS’) under the said section however deserves closer attention in respect of enforceability, as there is no express recovery mechanism under the law (CGST Act or Rules). The author in this article investigates the question as to whether an e-commerce operator be made liable to pay TCS in the event of default in collection. It also explores the plausible explanation for such absence of recovery provision.

Goods and Services Tax (GST)

Notifications and Circulars

• GSTAT – Classification of cases in categories and allocation to Members
• Lenient GSTAT portal filing guidelines extended up to 31 December 2026

Ratio decidendi

• ITC when supplier not paid tax – Gujarat HC disagrees with Tripura HC and declines to read down Section 16(2)(c); Government advised to implement tracking mechanism enabling verification of payments by suppliers – Gujarat High Court
• Common/consolidated show cause notice for multiple financial years or tax periods is permissible, however, each period forming part of notice must satisfy scrutiny on limitation – Karnataka High Court
• Transit State GST Authorities cannot impose penalty for any violation of law by goods in transit through that State – No cross-empowerment provided between GST Authorities of two or more States – Allahabad High Court
• Corporate Guarantees provided to subsidiaries without consideration are not liable to GST – Bombay High Court
• Multiple refund applications for same tax period are maintainable – Bombay High Court
• Late fee imposable for delayed filing of reconciliation statement under Form GSTR 9C – Madras High Court
• Solar power generating system – 70:30 mechanism available even when separate invoices issued for goods and services, if supply made under a contract – Andhra Pradesh High Court
• Pre-deposit deposited in cash ledger but not debited therefrom – Procedural glitch – Jharkhand High Court
• E-commerce – TCS liability – Section 52 applicable only when consideration collected by operator – Karnataka High Court
• Input Tax Credit – Promotion of own platform where other service providers located is not free service to the latter requiring reversal of ITC under Section 17(2) – Karnataka High Court
• Release of detained consignment under Section 129 – Adjudication of ownership is not relevant – Calcutta High Court
• Preferential Location charges are not to be taxed independently – CBIC Circular No. 234/28/2024-GST dated 11 October 2024 is applicable retrospectively – Punjab & Haryana High Court
• Scrap arising from manufacturing process is eligible for reimbursement under Budgetary Support Scheme – Jammu & Kashmir High Court
• Appeal – Limitation – Assessee if files appeal declaring a date as communication date, presumption arises in its favour; Burden on Department to prove otherwise – Allahabad High Court
• Appellate AAR – Time period of 90-days for disposal of appeal is not mandatory – Rajasthan High Court
• Appeal against AAR ruling – Both CGST and State GST Authorities can file appeal against AAR; non-representation by anyone before AAR is not material – Rajasthan High Court
• Damages paid in settlement of arbitral award do not constitute ‘supply’ for GST liability – Bombay High Court

Customs and FTP

Notifications and Circulars

• India-Oman Comprehensive Economic Partnership Agreement comes into force from 1 June 2026
• West Asia conflict – Special procedures introduced to ease exporters’ hardships extended
• Hazardous cargo – Identification and import clearance procedure prescribed
• Cotton, not carded or combed – BCD and AIDC exempted till 31 October 2026

Ratio decidendi

• n-Hexane is classifiable as organic chemical compound and not as petroleum product – Supreme Court
• Import of parts vs. Import in CKD form – Aggregation of disparate imports over a period of time to claim CKD form is not correct – CESTAT Chennai
• Interest on refund of amount deposited on directions of Court – Customs Sections 27 and 27A are not applicable – CESTAT New Delhi
• Demand – Extended period not invocable in case of oversight both by importer and customs officers – CESTAT New Delhi
• Integrated drive generator and starter generator are classifiable under TI 8501 of Customs Tariff Act, 1975 – CESTAT New Delhi
• Refund – Unjust enrichment – Duty burden should be passed on to the party who is part of the same transaction – CESTAT Prayagraj
• Automatic soap dispensers are classifiable under Heading 8424 – Difference is there between ‘dispensing’ and ‘spraying’ – CESTAT Bengaluru
   

Central Excise, Service Tax and VAT

Ratio decidendi

• Process of cutting, grooving, and assembling of the aluminium composite panels, for use in structures, does not amount to ‘manufacture’ – Supreme Court
• Appeal to High Court against CESTAT decision – Maintainability – Excisability always fell within the expression ‘rate of duty’ for purpose of assessment – Supreme Court
• Defective show cause notice – Failure to indicate specific sub-clause in SCN [for classification of service] is fatal – CESTAT Mumbai
• Training and coaching in direction, cinema photography and film processing by Vocational Training Institute – Service tax liability for various periods – CESTAT Chennai
• Cash incentives accruing on usage of commercial credit card, provided by the Bank, are not liable to service tax – CESTAT Chandigarh
• Refund – No unjust enrichment when goods sold below cost of production – CESTAT New Delhi