GST Fraud: DGGI Gurugram officials bust racket involving 539 fake entities and fraudulently claiming ITC of Rs. 1,124.66 crore, one held In another operation, GST evasion of Rs. 97.44 crore through a network of 19 fake entities busted

In an intelligence-based operation, the Directorate General of GST Intelligence (DGGI), Gurugram Zonal Unit, has unearthed a major fraudulent Input Tax Credit (ITC) racket involving 539 fake entities, which have passed on fraudulent ITC of Rs. 1,124.66 crore. So far, one key operative has been arrested. So far, a network of 19 fake entities has been unearthed during a investigation and a detection of GST evasion of Rs. 97.44 crore has been made, resulting in recovery of Rs. 18.35 crore. In one such recent detection involving fraudulently availed ITC of Rs. 9.58 crore, a key person has been arrested.

Sarvoday Impex Vs Union of India (Gujarat High Court) Appeal Number: R/Special Civil Application No. 903 of 2023 Date of Judgement: 07-06-2023

Gujarat High Court vide above judgment held that the show cause notice proposing cancellation of GST registration without specifying reasons for cancellation is cryptic and deserved to be quashed. 

Pankaj Khare Vs Union of India (Allahabad High Court) Appeal Number : Writ Tax No. 148 of 2023 Date of Judgement: 07-06-2023

Hon’ble Allahabad High Court vide above judgement directed the Commissioner, GST to issue a clear direction to the GST Commissionerate in Lucknow that no notices regarding payment of service tax /GST is issued to the lawyers rendering legal service falling in the negative list so far as service tax is concerned.

In re Seetharamnjaneya Sortex (GST AAR Andhra Pradesh) Appeal Number : Advance Ruling AAR No. 08/AP/GST/2023 Date of Order: 08-05-2023

Andhra Pradesh GST Authority for Advance Ruling (AAR) has ruled on the applicability of GST on the export of pre-packaged and labelled rice.

Question: Whether GST would be leviable on export of pre-packaged and labelled rice upto 25 Kgs, to foreign buyer? Answer : affirmative

Question: Whether GST would be applicable on supply of pre-packaged and labelled rice upto 25 Kgs, to exporter on “bill to ship to” basis i.e., bill to exporter and ship to customs port. Exporter ultimately exports the rice to foreign buyer? Answer : affirmative

Question: Whether GST would be applicable on supply of pre-packaged and labelled rice upto 25 Kgs, to the factory of exporter. Exporter will export the rice? Answer : affirmative.

In re Vedmutha Electricals India Private Limited  (GST AAR Andhra Pradesh) Appeal Number : AAR No.05/ AP/ GST/ 2023 Date of Order : 26-05-2023

RULING (Under Section 98 of Central Goods and Services Tax Act, 2017 and the Andhra Pradesh Goods and Services Tax Act, 2017) Question 1 : Whether the applicant is duly eligible to take full credit of GST Charge in Tax invoice issued by supplier and GST was paid by such supplier to government even though later commercial/ financial credit note is issued for part invoice. Answer: Affirmative

Question 2 : Whether the applicant is required to reverse the ITC proportionately to the extent of financial/ commercial credit note Issued try supplier Answer : Negative, provided the dealer pays the value of the supply as reduced after adjusting the amount of post-sale discount in terms of financial/commercial credit notes received by him from the supplier of goods plus the amount of original tax charged by the supplier. 

In re MEK Peripherals India Private Limited (GST AAAR Maharashtra) Appeal Number : Advance Ruling Order No. Mah/AAAR/DS-RM/04/2023-24 Date of Judgement/Order : 13/06/2023

Hon’ble AAAR, Maharastra dismissed the Appeal filed by the Appellant and uphold the Advance Ruling No. GST-ARA-59 2020-21 B-56 dated 27.04.2022, pronounced by the MAAR which is as under:

Question 1): – Whether the Incentive received from Intel inside US LLC under Intel Approved Component Supplier Program (IACSP) can be considered as Trade Discount? Answer: – Answered in the negative. 

Question 2):- lf not considered as Trade Discount then whether it is consideration for any supply? Answer:- Answered in the affirmative. 

Question 3): – If it is considered as supply than whether it will qualify as export of service? Answer: – Answered in the negative.

Gargo Traders Vs. Joint Commissioner, Commercial Taxes (State Tax) & Ors. (Calcutta High Court) Appeal Number : W.P.A. 1009 of 2022 Date of Judgement/Order : 12/06/2023 

In a significant decision, the Calcutta High Court clarified that Input Tax Credit (ITC) cannot be denied to a genuine buyer when the registration of the supplier is cancelled retrospectively. The case in point, Gargo Traders Vs. Joint Commissioner, Commercial Taxes, underscores the rights of the registered taxable person (RTP) who had claimed credit of input tax against supply from a supplier.

CGST Instruction No. 03/2023-GST Dt. 14.06.2023 issued by CBIC to Proper Officers on the manner of scrutinising each and every applications for GST Registration received by them on their ACES-GST Portal.

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