GST Viability Gap Fund Dispute: Interim Relief Granted with Conditional Deposit and No Coercive Recovery

HC ruled on GST dispute regarding Viability Gap Fund treatment. Court issued notice and granted interim relief, allowing no coercive recovery if specified amount is deposited. Parties were directed to serve petition copies, with jurisdictional dispute remaining unresolved between state and central tax authorities pending further proceedings.

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Issues:
Challenge to order under Odisha Goods & Services Tax Act, 2017 regarding Viability Gap Fund treatment and tax liability.

Analysis:
The petitioner challenged an order passed under Section 74(9) of the Odisha Goods & Services Tax Act, 2017, concerning the treatment of Viability Gap Fund and the imposition of tax liability. The petitioner had registrations under the Odisha Value Added Tax Act, 2004, and the Finance Act, 1994, which were migrated to separate registrations under the GST regime. The petitioner claimed exemption from GST on funds received from the government as "Viability Gap Fund," citing the exclusion of government subsidies from the definition of "consideration" under Section 2(31) of the Act.

The Additional Standing Counsel for CT & GST argued that the Viability Gap Fund, deposited under the CGST registration, should have been disclosed under the OGST registration, and contended that it did not qualify as a subsidy, justifying the tax levy. He emphasized the factual dispute and suggested the petitioner pursue alternative remedies under the statute. The petitioner's counsel objected, stating that the assessment should have been conducted by Central Government Authorities, not State Government Revenue Authorities.

The court issued notice for further proceedings, with the Addl. Standing Counsel (CT & GST) waiving notice on behalf of the Opposite Parties. An interim measure was granted, allowing no coercive recovery steps if the petitioner deposited a specified amount by a certain date. The court directed the service of petition copies and issued an urgent certified copy of the order as per rules.

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