Reassessment procedure reform: pre-notice enquiry and show-cause compliance now govern valid reopening of income-tax assessments.
The Finance Act, 2021 and a 2022 substitution reformed reassessment procedure by requiring pre-notice enquiries and a mandatory show-cause process under Section 148A, imposing prior supervisory approvals for certain orders under Section 148B, and tightening time limits contingent on possession of documentary evidence of escaped income. The Supreme Court directed that notices issued under the old procedure after the amendments be treated as compliant with the new show-cause framework and allowed the Revenue to proceed, subject to furnishing relied-upon material, following specified reply periods, and obtaining required approvals before issuing formal reassessment notices. (AI Summary)

Input tax credit eligibility clarified for employer provided canteen and catering services; proviso applies to all clause (b) supplies.
The Circular clarifies that the proviso to the input tax restriction provision applies to the whole of clause (b), making input tax credit available where an employer is legally obliged to provide the enumerated goods or services to employees, thereby addressing prior advance rulings that denied credit for third party canteen and catering services and reducing dispute risk subject to remaining questions on the precise scope of statutory employer obligations and interaction with personal use exclusions. (AI Summary)

ITR due date revision needed to reflect form complexity and data burdens, easing compliance for small taxpayers.
The note contends that a uniform ITR due date is unjustified because different return forms vary widely in length and data requirements, and small unorganised taxpayers who are not audit bound face disproportionate difficulty assembling third party documents and tax statements; therefore, filing deadlines should be calibrated to form complexity and practical documentary dependencies rather than a single calendar date. (AI Summary)

Input Tax Credit reporting clarified: reversals, ineligible credits and net ITC computation in GSTR-3B and GSTR-1 returns.
CBIC prescribes uniform reporting of Input Tax Credit in FORM GSTR-3B: total ITC auto-populates from FORM GSTR-2B into Table 4A; permanent ineligible credits and specified reversals must be reported in Table 4(B)(1); temporary or reclaimable reversals go in Table 4(B)(2) and may be reclaimed in Table 4(A)(5) and shown in Table 4(D)(1). Net ITC equals 4A less [4B(1)+4B(2)] and is credited to the electronic credit ledger. Time-barred ineligible ITC and place-of-supply mismatches are reported in Table 4(D)(2). (AI Summary)

Input Tax Credit reversal reporting in GSTR 3B reclassified, changing filing, reconciliation and place of supply disclosures.
The return now requires specific reporting of supplies involving electronic commerce operators and place of supply breakdowns for inter state supplies to unregistered persons, composition taxpayers and UIN holders. Input tax credit reporting is restructured to distinguish absolute non reclaimable reversals from temporary reclaimable reversals, with absolute reversals reported in the primary reversal sub table and reclaimable reversals in the secondary sub table, affecting net ITC computation and necessitating bookkeeping, ERP changes, separate disclosure for goods in transit, and reconciling auto populated portal data with internal records. (AI Summary)

Interest on wrongly availed Input Tax Credit arises only upon utilisation; interest computation tied to electronic ledger utilisation.
Suspension of registration for non-filing under Rule 21A(2A) is deemed revoked upon filing all pending returns unless already cancelled; Rule 43 exempts Duty Credit Scrips from ITC reversal under Rule 42; Rule 86(4B) requires re credit to the electronic credit ledger where erroneous refunds deposited via DRC-03 were debited from the electronic cash ledger; UPI and IMPS are recognized payment modes and FORM GST PMT-09 permits transfer of electronic cash ledger balances to a distinct person absent unpaid liabilities; Rule 88B prescribes interest computation for late returns, other unpaid tax, and wrongly availed and utilised ITC based on electronic ledger utilisation rules. (AI Summary)

Compounding of FCRA offences permits pre-prosecution monetary composition with specified capped penalties and procedural conditions.
Compounding under Section 41(1) of the Foreign Contribution (Regulation) Act allows specified non-imprisonable offences to be settled by payment of prescribed sums before prosecution; applications are filed electronically with a fee and processed under Central Government supervision, compounding bars subsequent prosecution for that offence, authorities may direct belated filing of requisite returns or documents, the provision excludes offences within three years of a previously compounded similar offence, compound fees and percentage-based formulae are prescribed by notification with a cap not exceeding the value of the foreign contribution, and the Director or Deputy Secretary acts as compounding authority. (AI Summary)

Definition of goods and inputs under GST determines input tax eligibility and mixed supply classification.
Sections 2(51)-2(75) define core GST concepts and their operative tax effects: 'goods' excludes money but includes movable property severable before supply; 'input' excludes capital goods while 'input service' has broader coverage; 'input tax' and 'input tax credit' cover various GST levies and reverse charge but exclude composition levy taxes; location rules prioritize place of business or fixed establishment; 'manufacture' requires a new product with distinct name, character and use; 'market value' and 'mixed supply' definitions shape valuation and classification, with consequential scope for disputes. (AI Summary)

Revocation of arbitration clauses found to transgress judicial power, undermining court authority over finalized awards.
The Kerala statute sought to cancel arbitration clauses, revoke arbitrators' authority, extend limitation for suits, and enable the State to challenge past awards; the State defended competence under Concurrent List entries and Presidential assent, while opponents argued arbitrariness, discrimination, and encroachment on Union fields and judicial functions. The court applied pith-and-substance analysis and noted that awards made rules of court involve judicial determination; it concluded the legislation targeted concluded awards, thereby transgressing judicial power and violating separation of powers. (AI Summary)

Refund of unutilised input tax credit now accounts for input services proportionally, changing the refund calculation.
Rule 89(5) originally limited refund of unutilised input tax credit under inverted duty structure to ITC on input goods by defining Net ITC to exclude input services, causing denial of refunds and an assumption that output tax was discharged only from input goods ITC. After judicial consideration and a GST Council recommendation, CBIC amended Rule 89(5) to apportion reduction for output tax in the ratio of ITC on inputs to total ITC (inputs plus input services), enabling proportionate refunds for taxpayers availing input service credit but still excluding capital goods ITC. (AI Summary)

Interest on wrongly availed input tax credit applied retrospectively; rules distinguish net versus gross liability calculations.
Transfers of cash ledger balances between distinct GSTINs under the same PAN are permitted where the transferor has no unpaid liabilities and must be effected via FORM GST PMT-09. Section 50(3) amendments (retrospective) and new rules prescribe interest on wrongly availed and utilized ITC, distinguishing interest on net liability (where returns for the period are filed late but declared timely) from interest on gross liability in other cases. Wrongful availment is treated as utilized when the credit ledger balance falls below the wrongfully availed amount; the utilized amount equals the shortfall and the utilization date is the earlier of the return due date or filing date, or the ledger debit date. (AI Summary)

Definition of exempt supply clarifies scope and includes non-taxable supply, affecting GST liability and litigation risk.
Analysis of clauses 36-50 of section 2 shows that GST definitions import meanings from other enactments, rely on notifications, and create litigation risk where "includes" expands scope-particularly for exempt supply. Specific terms addressed include Council, credit and debit notes as supplier documents, deemed exports, designated authority, electronic ledgers and commerce, drawback limited to inputs for exported manufactured goods, family dependent-membership, and the criteria for fixed establishment (permanence and suitable human and technical resources). (AI Summary)

Composite supply principle challenged as proposed GST on hospital room charges above threshold may erode healthcare exemption.
The GST Council recommended taxing hospital room rent (excluding ICU) charged above a specified daily threshold at 5% without input tax credit, effectively withdrawing part of the exemption for healthcare services. This raises whether room provision to inpatients is a composite supply of health care services (and thus exempt) or a separate taxable service, with implications for bundled supplies such as medicines and food. Prior administrative guidance and advance rulings treated inpatient supplies as components of an exempt composite supply, prompting a call for Council clarification to avoid disputes. (AI Summary)

Right to livelihood impacted by strict appeal limitation on GST registration cancellations, risking denial of ability to earn.
Strict limitation on appellate review of GST registration cancellations can deprive professionals of the ability to bill, obtain work, and earn a livelihood; cancellation for procedural default without effective remedy results in practical starvation risks and denial of subsistence. Application of judicial discretion and practical wisdom is necessary to avoid disproportionate consequences where procedural bars render a remedy illusory and significantly impact a person's right to life and livelihood. (AI Summary)

Interest on wrongly availed input tax credit redefined and electronic ledger transfers authorised, with revised refund and payment procedures.
Notifications dated 05.07.2022 bring into force Finance Act amendments and amend GST rules to permit transfer of amounts within the electronic cash ledger on the common portal, replace the interest provision for wrongly availed and utilized input tax credit with an interest rate to be notified and a prescribed calculation method, extend and exclude specified limitation periods affected by the pandemic, exempt certain small registered persons from filing an annual return for a specified year, permit new electronic payment modes, revise refund documentation and processing (including special requirements for exported electricity), and update multiple GST forms. (AI Summary)

Show cause notice lacking material particulars violates natural justice, invalidating cancellation based on undisclosed investigative facts.
Show cause notice that only recites rule-based grounds without stating the material particulars by which the authority concluded registration was obtained through fraud or suppression is not tenable. Cancellation based on investigative material not disclosed in the notice breaches principles of natural justice by depriving the registrant of a reasonable opportunity to respond, making the action legally infirm. (AI Summary)

GST rate changes revise sectoral rates and withdraw exemptions, altering compliance, refund processing and taxpayer obligations for taxpayers
Proposed GST Council measures include sectoral rate revisions and selective withdrawal or narrowing of exemptions across industries, procedural amendments to expedite and control IGST refunds and re crediting, limitation period relief for a pandemic interval, substitution of interest liability to apply only upon utilization of wrongly availed credit, transferability of cash ledger balances between distinct persons, and multiple compliance and return filing relaxations and clarifications including automated revocation of suspension and e commerce registration relief. (AI Summary)

Definitions under GST determine taxable scope and create interpretive disputes over inclusions, exclusions, and adopted meanings.
Section 2 (clauses up to 35) sets out operative definitions that determine levy, compliance and entitlement under the Act, using devices such as means, includes and adoption of external enactment meanings. Definitions reviewed-aggregate turnover, business, capital goods, composite supply, consideration, continuous supply, casual taxable person and audit-illustrate a pattern of broad inclusions coupled with targeted exclusions, cross references to other statutes, and illustrative provisions that materially affect tax treatment and are likely to generate interpretive disputes. (AI Summary)

Moratorium under IBC bars continuation of tax adjudication proceedings, suspending GST adjudication until insolvency process concludes
Moratorium under Section 14 of the Insolvency and Bankruptcy Code prohibits initiating or continuing proceedings against a corporate debtor-including proceedings under the GST law-during the corporate insolvency resolution process. The moratorium protects against recovery, enforcement of security interests and other actions that would deplete the debtor's assets, and it remains effective until completion of the resolution process or earlier cessation upon approval of a resolution plan or liquidation; the non-obstante clause in Section 60(6) excludes the moratorium period from limitation calculations. (AI Summary)

Classification of vouchers as goods clarifies GST treatment for traded vouchers and their redemption as taxable supplies.
Vouchers that are purchased and resold at face value exhibit value and transferable ownership and, being movable property in the claimant's possession prior to redemption, qualify as goods rather than actionable claims, distinguishing them from money and linking their GST treatment to the supply and time-of-supply rules applicable to vouchers. (AI Summary)