GST Update

 Regulatory Updates

• GSTAT Procedure Rules Clarified: A corrigendum issued for the GST Appellate Tribunal Procedure Rules, 2025, introduces technical amendments, ensuring clarity regarding overriding provisions and correction of form references.

• Review and Appeals Mechanism for Common Adjudication Authority (CAA): The government has outlined the authorities responsible for review, revision, and appeal for orders issued by the CAA, streamlining the dispute redressal process.

• E-Way Bill 2.0 Launch: Effective July 1, 2025, the E-Way Bill 2.0 portal will provide real-time interoperability with the existing system, enabling seamless operations, instant data sync, and improved resilience.

• Restriction on Precious Metal Compound Imports: Imports of gold, silver compounds, and other precious metal chemicals under CTH 2843 are now restricted, requiring DGFT authorization.

• Export Obligation Period for QCO-Regulated Textile Imports Aligned: The EO period for textiles under Quality Control Orders is aligned with general policy norms, while chemical products retain stricter timelines.

• ICETAB Extended to Export Processes: The successful use of Indian Customs Electronic Tablets for imports is now extended to exports, enhancing paperless clearance and examination.

Judicial Developments

• Carbon Credit Project – Stay Granted: The Andhra Pradesh High Court granted a stay on tax demands in a case concerning carbon credit-linked agricultural services, clarifying composite supply interpretations.

• Exemption on Relay Components Upheld: The CESTAT Bangalore ruled that relay components, lacking control features of Intelligent Electronic Devices (IEDs), are eligible for customs duty exemption.

• Rule 86A – Negative Blocking Held Invalid: The Supreme Court upheld the Delhi High Court’s ruling that Rule 86A of the CGST Rules cannot be misused to create negative ITC balances beyond available credits.

• Correction of ITC Reversals Permitted: The Calcutta High Court allowed rectification of ITC reversal errors in GST DRC-03 forms, emphasizing voluntary compliance and technical flexibility.

• Omission of Rule 96(10) Applies to Pending Cases: The Gujarat High Court ruled that the omission of Rule 96(10) of CGST Rules applies to all pending refund claims, benefiting exporters.

• Seizure and Foreclosure Charges Not Taxable: The CESTAT Mumbai ruled that charges for foreclosure and seizure of vehicles are not consideration for taxable banking services.

• OIDAR Services – Air India Relief: A Larger Bench of the CESTAT held that services by foreign Computer Reservation System (CRS) providers to Air India are not taxable under OIDAR provisions, reinforcing the principle of data ownership.