GST WEEKLY UPDATE :12/2026-27 (21.06.2026) By CA Vipul Khandhar

Reading Time: 9 minutes

-By CA VIpul Khandhar

1. GSTN Advisory: Crucial Updates to e-Invoice & e-Way Bill APIs (Effective August 1, 2026):

Introduction & Background

Following the GSTN advisory dated May 20, 2026, which mandated the capture of “Ship-to GSTIN” in Bill-to/Ship-to transactions, various trade bodies, ERP vendors, GSPs, and ASPs sought clarifications regarding its integration with e-Invoices and Invoice Reference Numbers (IRN). Stakeholders also requested details regarding the newly conceptualized Voluntary Closure of e-Way Bill (EWB) facility.

To address these representations, the GSTN issued an advisory on June 17, 2026, outlining critical API modifications across the e-Invoice, e-Way Bill by IRN, and EWB Closure modules. These updates are scheduled for a strict Production implementation on August 1, 2026.

1. Mandatory Capture of “Ship-to GSTIN” & Schema Changes

The requirement to capture the Ship-to GSTIN impacts multiple transactional flows where an EWB is generated alongside or subsequent to an IRN:

• Generate IRN and e-Way Bill Together: In the unified payload schema, the field Ship Dtls. Gstin will become conditionally mandatory. If Ship-to Legal Name and Address are provided, the Ship-to GSTIN must be supplied.
• e-Way Bill by IRN API: A new field named Gstin has been added under the ExpShipDtls block. This field is strictly mandatory for subsequent EWB generation via IRN. Additionally, an optional Trade Name field (TrdNm) has been introduced.
• Handling Unregistered Persons (URP): If the consignee is unregistered or a domestic registered GSTIN is not applicable, users must input “URP” in the Ship-to GSTIN field.

Strict Validation Rules & Error Codes

The system will deploy rigorous validations in the backend to ensure data integrity:

• Distinct Parties: In a Bill-to/Ship-to transaction, the Ship-to GSTIN cannot be identical to the Bill-to GSTIN, as they are expected to be distinct persons.
• Cross-Field Matching: The Ship-to State Code must match the state prefix of the entered GSTIN, and the PIN code must accurately belong to that designated State Code. 

Key Sandbox Validation & Error Code Matrix:

Validation Rule	Flow Type	Error Code
Ship-to GSTIN is mandatory if Ship details are provided	Generate IRN + EWB Together	5002
Bill-to GSTIN and Ship-to GSTIN should not be the same	Generate IRN + EWB Together	2323
GSTIN field in ExpShipDtls is mandatory	e-Way Bill by IRN	5001
Ship-to State Code should match with GSTIN State Code	Both Flows	2325 / 4074
Ship-to PIN Code should belong to Ship-to State Code	Both Flows	3039

2. Transaction-Specific Behavior (Export vs. B2B/SEZ)

• B2B and SEZ Transactions: Ship details provided during the initial IRN generation cannot be replaced during subsequent EWB generation. However, if the GSTIN was omitted during IRN setup, it can be provided during the EWB phase. (Note: For legacy IRNs generated with identical Bill-to/Ship-to GSTINs, the API will generate a regular EWB).
• Export e-Way Bills: To maintain operational flexibility, ship details (including GSTIN) provided during IRN generation can be replaced while generating the EWB. “URP” can be utilized if no domestic registered GSTIN applies.

3. Introduction of the “Voluntary Closure” Facility

To provide an official system record indicating the successful completion of goods movement, GSTN has rolled out a “Voluntary Closure” mechanism.

• Who can initiate closure? The Supplier, Recipient, Transporter, or an authorized Driver/person (via verified mobile number).
• Portal-Based Operations: Available under the EWB section post-login. For drivers, active EWBs linked to their mobile number will be displayed on the portal for seamless closure. Mobile numbers can be declared at EWB generation or updated during transit/extensions.
• API-Based Operations: System integrators can execute closures via the EWB Closure API by transmitting three specific fields: E-Way Bill Number, Closure Date, and Remarks.

Current API Limitations to Note: > 1. At present, there is no API parameter to capture or specify the driver’s mobile number; this stream must be managed directly via the portal. 2. There is currently no retrieval API to pull historical data or date-wise lists of closed EWBs.

Post-Closure Actions & Transition Phase

While a distinct “Closed” system status is slated for future release, the initial stabilization phase will keep the EWB under its existing status framework (Active, Cancelled, Discarded) to protect trade operations. Consequently, modifications like Update Transporter, Extend Validity, and Vehicle Updation will temporarily remain available even after an EWB is marked as closed. These permissions will be strictly curtailed once the feature stabilizes.

Action Required by Taxpayers & IT Vendors

The GSTN has already deployed all revised schemas and validation rules in the Sandbox environment.

With the Production implementation date set for August 1, 2026, all taxpayers, ERP vendors, GSPs, and ASPs are strongly urged to immediately initiate rigorous sandbox testing. System architectures must be reconfigured to prevent potential compliance disruptions, validation rejections, or blocking of EWB generations starting this August.

2. GSTAT Introduces Facility for Higher Court Exemption and Self-Calculation Correction of Pre-Deposit Amount in Appeal Filing:

A Major Digital Reform in GST Appellate Compliance

The Goods and Services Tax Appellate Tribunal (GSTAT) has introduced an important enhancement in its e-Filing Portal by enabling taxpayers to claim exemption from statutory pre-deposit requirements granted by higher judicial authorities and to rectify discrepancies in auto-populated pre-deposit figures through a self-calculation correction mechanism.

However, in several situations taxpayers have encountered practical issues such as:

• Exemption from pre-deposit granted by the High Court or Supreme Court.
• Differences between auto-populated figures and actual liability calculations.
• Partial stays granted by judicial authorities.
• Errors in demand allocation resulting in excess pre-deposit computation.

Since the auto-populated figures cannot be edited directly by users, GSTAT has now provided a structured mechanism for addressing such situations.

Applicability of the Facility

The facility is available where appeals are being filed through the ARN/CRN-based appeal filing process on the GSTAT Portal.

In such cases, demand details are automatically fetched from GSTN and displayed to the appellant. Where the taxpayer believes that the auto-populated pre-deposit amount requires modification due to judicial exemption or computational variation, the newly introduced option can be utilized.

Where ARN/CRN details are unavailable, taxpayers shall continue to furnish demand particulars manually under the Demand Details section while filing the appeal.

Higher Court Exemption Facility

A significant feature of the advisory is the recognition of judicial relief granted by constitutional courts.

Where a High Court or the Supreme Court has granted exemption from the statutory pre-deposit requirement either wholly or partially, the appellant can now record such exemption directly on the GSTAT Portal.

The taxpayer is required to:

• Select the Higher Court Exemption option.
• Specify the percentage of exemption granted.
• Upload the relevant judicial order.
• Verify the revised demand and pre-deposit computation.

This ensures that taxpayers are not compelled to deposit amounts contrary to judicial directions merely because of system-generated calculations.

Self-Calculation Correction Mechanism

The portal also provides a self-calculation correction facility where the taxpayer believes that the pre-deposit amount calculated by the system differs from the amount actually payable under law.

Under this option, the appellant may:

• Select the “Self-Calculation Correction” facility.
• Enter the revised correction percentage.
• Upload supporting computation sheets.
• Reconcile the corrected figures before proceeding further.

The mechanism is expected to substantially reduce procedural disputes arising from incorrect system-generated computations.

Stepwise Workflow Prescribed by GSTAT

The advisory prescribes the following digital workflow:

Step 1 – Verification of Demand

The taxpayer must first verify the demand details appearing under the “Demand Confirmed” section.

Step 2 – Review of Admitted and Disputed Amounts

The admitted liability and disputed liability figures must be carefully examined.

Step 3 – Access Correction/Exemption Module

The appellant may then navigate to the newly introduced “Amount Exempted or Self-Calculation Correction” tab.

Step 4 – Enter Relevant Details

Depending upon the circumstances, the taxpayer may:

• Enter exemption percentage granted by a higher court; or
• Enter correction percentage based on self-computation.

Step 5 – Re-Verification

The revised demand details and corresponding pre-deposit amount must be re-verified before moving to the next stage of appeal filing.

Mandatory Verification of Pre-Deposit Payment

The advisory reiterates that payment of the applicable pre-deposit amount must be made through the GSTN portal.

Upon successful payment, the GSTAT portal automatically validates the transaction through GSTN integration and displays a confirmation message indicating that the pre-deposit requirement has been verified.

Thereafter, the appellant may proceed with:

• Payment of appeal fees;
• Submission of appeal documents; and
• Final filing of the appeal.

The automated verification process is expected to eliminate manual scrutiny and reduce delays in appeal registration.

Requirement of Supporting Documents

To ensure authenticity and transparency, GSTAT has mandated uploading of documentary evidence supporting the claim of exemption or correction.

Depending upon the nature of the claim, taxpayers may upload:

For Higher Court Exemption

• High Court Order;
• Supreme Court Order;
• Interim Stay Order;
• Modification Order; or
• Any judicial direction granting waiver or reduction of pre-deposit.

For Self-Calculation Correction

• Computation Sheets;
• Demand Reconciliation Statements;
• Working Papers;
• Tax Calculation Notes; and
• Supporting Financial Records.

The portal maintains an electronic record of such documents for examination during appellate proceedings.

Significance of Form GST DRC-03A

The advisory also draws attention to Form GST DRC-03A introduced through Notification No. 12/2024–Central Tax dated 10 July 2024.

The form facilitates adjustment and linking of payments made through Form GST DRC-03 under the “Others” category with specific demand orders including:

• DRC-07
• DRC-08
• MOV-09
• MOV-11
• APL-04

The facility enables taxpayers to:

• Regularize earlier voluntary payments;
• Update the Electronic Liability Register;
• Reconcile outstanding demands; and
• Ensure closure of pending demand records.

The integration of DRC-03A with appellate compliance is likely to improve demand reconciliation and reduce litigation relating to payment mismatches.

3.    GSTAT Issues Clarification on Court Fee Payment Status for Appeal Filing:

Appeal Filing Will Not Be Affected by Delayed Court Fee Status Updates

In a welcome relief for taxpayers and professionals, the Goods and Services Tax Appellate Tribunal (GSTAT) has issued an important advisory clarifying the procedure to be followed where court fee payments have been successfully made but the payment status on the GSTAT Portal is not immediately reflected as “Success”.

The GSTAT Portal facilitates online filing of appeals, including electronic payment of prescribed court fees. Following payment through the designated online mode, the system is expected to display the payment status as “Success”, thereby enabling the taxpayer to proceed with further stages of appeal filing.

However, in certain cases, taxpayers have reported instances where the payment amount is debited from the bank account or payment gateway but the GSTAT Portal does not immediately reflect the successful transaction.

To address these situations and avoid unnecessary apprehension among taxpayers, GSTAT has issued a clarification outlining the course of action to be followed.

Waiting Period of 72 Hours Prescribed

As per the advisory, taxpayers are advised to wait for a period of up to 72 hours from the time of making the court fee payment.

The Tribunal has acknowledged that payment processing and status synchronization between banking channels, payment gateways and the GSTAT Portal may occasionally require additional time.

Accordingly, a temporary delay in the display of payment status should not be treated as a failed transaction.

Taxpayers are therefore advised not to initiate duplicate payments merely because the payment status has not been updated immediately after remittance.

Appeal Filing Will Continue Despite Non-Updated Status

One of the most significant aspects of the advisory is the assurance that appeal filing will not be blocked due to delayed status updates.

The GSTAT has specifically clarified that where the payment status does not change to “Success” even after the prescribed waiting period of 72 hours, the system shall not restrict the appellant from proceeding further with the appeal filing process.

In other words, the taxpayer will continue to have access to the appeal filing workflow and may complete all necessary formalities without interruption.

This clarification is particularly important in matters involving statutory limitation periods, where any technical impediment could otherwise create concerns regarding delayed filing of appeals.

Backend Reconciliation Mechanism Introduced

The advisory further states that court fee payments not immediately reflected on the portal shall be reconciled through backend verification mechanisms.

Accordingly, genuine payments made by taxpayers will be matched and validated by the system without requiring any disruption to the appeal filing process.

The Tribunal has thus adopted a practical approach by separating payment reconciliation from appeal submission, thereby preventing technical glitches from adversely affecting substantive appellate rights.

The move is expected to significantly reduce taxpayer grievances and support seamless implementation of the GSTAT e-filing framework.

Relief for Taxpayers Facing Technical Issues

The clarification provides substantial relief in cases involving:

• Delay in payment gateway confirmation.
• Banking network synchronization issues.
• Technical errors during payment status updates.
• Delayed communication between banking channels and the GSTAT Portal.
• Temporary system-related payment verification issues.

By ensuring that appeal filing remains operational despite such delays, GSTAT has reinforced the principle that procedural technicalities should not impede access to appellate remedies.

Practical Guidance for Taxpayers

In light of the advisory, taxpayers should consider the following best practices:

Preserve Payment Evidence

Maintain copies of:

• Payment receipts;
• Bank transaction confirmations;
• UTR numbers;
• Net banking acknowledgments; and
• Payment gateway references.

Wait for Status Synchronization

Allow up to 72 hours for the payment status to be automatically updated on the portal.

Avoid Duplicate Payments

Do not make a second payment merely because the status is pending unless specifically advised by the concerned authority.

Proceed with Appeal Filing

Where the payment status remains pending beyond 72 hours, taxpayers may continue with the appeal filing process as permitted by the GSTAT Portal.

Monitor Portal Updates

Regularly check the payment status and maintain records of all communications relating to the transaction.

4. AAAR & Important Judgements:

(i) AAAR Regarding ITC Of Fund Raising Has Allowed To Taxpayer Or Not:

(Applicant – RHI Magnesita India Limited)

The company (RHI Magnesita) raised money through a Qualified Institutional Placement (QIP)—which is a way for listed companies to raise capital by issuing shares to institutional buyers. To get this done, they hired merchant bankers, legal advisors, consultants, and credit rating agencies.

The main question was whether the company could claim Input Tax Credit (ITC) on the GST paid for these professional services. The lower authority (AAR) had completely blocked the credit. The higher authority (AAAR) changed that decision, saying you cannot block the credit entirely. Instead, it depends on exactly what the raised money was used for.

The Ruling: What is Allowed and What is Not

The AAAR broke the decision down into two parts based on how the money was spent:

• Allowed (ITC is Eligible): The company used a portion of the money to pay off its existing bank loans and debts. The AAAR agreed that reducing debt lowers interest costs, improves cash flow, and keeps the business healthy. Because this directly helps the company’s day-to-day operations, the services hired to raise this money count as being “in the course or furtherance of business.” Therefore, ITC is allowed on this portion.
• Blocked (ITC is Denied): The company used another portion of the money to buy shares in its own subsidiary company. The AAAR ruled that a parent company and its subsidiary are separate legal entities. Even though investing in a subsidiary helps that subsidiary grow, it does not have a direct link to the parent company’s own business operations. Therefore, ITC on the services used to raise this specific portion of the money is blocked.

Key Takeaway

The ruling confirms an important principle: hiring professionals to raise finance for a business is a valid business expense, and you can claim ITC on it. However, to actually get the credit, you must track the money and prove that the funds were used directly for your own business operations (like clearing debt) rather than investing in another company.

Disclaimer:

This publication contains information for general guidance only. It is not intended to address the circumstances of any particular individual or entity. Although the best of endeavour has been made to provide the provisions in a simpler and accurate form, there is no substitute to detailed research with regard to the specific situation of a particular individual or entity. We do not accept any responsibility for loss incurred by any person for acting or refraining to act as a result of any matter in this publication.