Retrospective GST on SEZ insurance supplies stayed where prima facie jurisdiction and statutory interpretation issues were raised.

A prima facie challenge was raised to retrospective GST demands on insurance policies supplied to SEZ units for the period from 1 July 2017 to 30 September 2023, on the basis that the amendment inserting the words "for authorised operations" into Section 16 of the IGST Act took effect only from 1 October 2023. The Court noted that the designated officer may lack jurisdiction to levy tax retrospectively on such supplies and referred to Section 2(93) of the CGST Act, which defines the recipient by reference to the person liable to pay consideration. Finding arguable issues requiring final examination, interim protection was granted and the impugned orders were stayed pending final hearing.

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Issues: Whether the petitioners made out a prima facie case for interim protection against retrospective demand of GST on insurance policies supplied to SEZ units, pending final adjudication.

Analysis: The challenge was to show cause notices and consequential orders seeking to levy GST retrospectively for the period from 01 July 2017 to 30 September 2023 on the footing that the amendment inserting the words "for authorised operations" into Section 16 of the Integrated Goods and Services Tax Act, 2017 came into force only from 01 October 2023. The Court recorded that, prima facie, the designated officer may not have jurisdiction to retrospectively levy tax on the supplies in question, and noted that Section 2(93) of the Central Goods and Services Tax Act, 2017 defines the recipient by reference to the person liable to pay consideration. The Court found that arguable issues were raised requiring consideration at final hearing.

Conclusion: Interim protection was warranted and the impugned orders arising from the show cause notices were stayed pending final hearing.

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