GST WEEKLY UPDATE : 07/2025-26 (18.05.2025) By CA Vipul Khandhar

By CA Vipul Khandhar

1. Advisory on reporting values in Table 3.2 of GSTR-3B:

This is to inform taxpayers of the following developments concerning Table 3.2 of Form GSTR-3B:

1. As per the earlier advisory dated April 11, 2025, it was communicated that the auto-populated values in Table 3.2 of Form GSTR-3Bwould be made non-editable starting from the April 2025 tax period (i.e., for the return to be filed in May 2025).

2. However, GSTN has received several representations and grievances from taxpayers regarding this change. These concerns are currently being examined and will be suitably addressed in due course.

3. In the interest of taxpayer convenience and to facilitate smooth filing, it has been decided that Table 3.2 shall remain editable for the time being. Taxpayers are advised to report or amend the auto populated entries, if required and furnish their returns accurately, ensuring the correctness of the disclosed information.

4. Taxpayers will be duly informed through a separate communication once the proposed changes are implemented on the GST Portal.

2. Advisory on Appeal withdrawal with respect to Waiver scheme:

In the GST system, when Withdrawal application (APL 01W) for appeal is filed before issuance of final acknowledgment (APL 02) by the Appellate authority, then the system automatically withdraws the Appeal application (APL 01). In such cases, the status of the appeal application will automatically change from “Appeal submitted” to “Appeal withdrawn”.

However, if withdrawal application is filed after issuance of final acknowledgment, then the withdrawal of such appeal is subjected to the approval of the Appellate authority. Once the Appellate authority approves the withdrawal application, the status of the Appeal application changes from “Appeal submitted” to “Appeal withdrawn”.

Waiver scheme under Section 128A mandates that any appeal against the requisite demand order should not remain pending with Appellate authority. In both the above-mentioned cases, the status of the Appeal application is changed to “Appeal Withdrawn” which essentially fulfilled the requirement.

While filing waiver application or in the already filed waiver application, taxpayers need to upload the screenshot of the appeal case folder showing status as “Appeal withdrawn”.

4. Important AAR & Judgements:

(i) AAR On even a supplier who falls victim to a fraudulent order is liable to pay GST on the goods supplied regardless of whether they receive any payment:

(Applicant – Acube lingitech Company)

In the case of Acube lingitech Company Gujarat AAR : held that even a supplier who falls victim to a fraudulent order is liable to pay GST on the goods supplied regardless of whether they receive any payment. Experts suggest that this decision leaves businesses in such circumstances without legal recourse, potentially setting a new precedent that aligns with tax principles applicable to illegal income under Income Tax and Customs laws.

GAAR clarified its stance, stating, “The goods supplied by the applicant will be considered as supply of goods in terms of Section 20 of the IGST Act, 2017, read with Section 12 and 7 of the CGST Act, 2017.” These sections of the GST law define the concept and timing of a supply.

Applicant had approached GAAR seeking a ruling on whether the goods they supplied due to the fraudulent order, and for which they received no payment, constituted a supply under Section 2I of the IGST Act.

(ii) Hon’ble Jharkhand High Court Assessee was continuing business in name of his father’s proprietary concern after his father’s death in spite of the Assessee obtaining a fresh registration in his own name:

(Applicant – Rishi Shangari )

set aside the order stating that in absence of any material referred to by department as to on what basis it was held that the Assessee was continuing business in name of his father’s proprietary concern after his father’s death in spite of the Assessee obtaining a fresh registration in his own name.

Legal heir not liable for deceased gst dues in absence of business continuity, an Order dated November 28, 2022 (“the Impugned Order”), was passed the proprietary concern of the Petitioner’s deceased father quoting Section 93(1)(a) of the CGST Act, holding that if the business is carried on by a person’s legal representative after his death, the legal representative would be liable to pay tax, interest or penalty. The Impugned Order did not provide details of any material evidence to show as to how the Petitioner was said to be continuing business of the father’s proprietary concern having himself obtained a fresh registration on March 24, 2018. The Impugned Order also stated that Petitioner is liable to pay entire GST along with applicable interest and penalty of his late father’s firm.

(iii) Gujarat HC stays coercive-action in order confirming GST demand on Corporate-Guarantee by JV-partner:

(Applicant – ITD Cementation India Limited)

The Gujarat High Court issued a notice and stayed coercive action against an assessee who challenged the levy of GST on a corporate guarantee (CG) provided by a company (JV partner) to banks/financial institutions for raising funds for an unincorporated JV.

The assessee contested an order confirming a demand of Rs. 17 crore along with interest and penalty, and sought to strike down Rule 28(2) of the CGST Rules, inserted by Notification No. 52/2023-Central Tax and amended by Notification No. 12/2024, as arbitrary and unconstitutional, violating Articles 14 and 19(1)(g) of the Constitution.

The assessee argued that Rule 28(2), which prescribes the valuation mechanism for corporate guarantees between related parties, is unconstitutional.

Additionally, the assessee challenged the validity of Circular No. 204/16/2023-GST and Circular No. 225/19/2024-GST, contending that a JV partner providing corporate guarantees to lenders without consideration does not constitute a ‘supply’ under GST.

Considering the assessee’s plea that the issue of GST levy on corporate guarantees is already pending before the Court, the High Court tagged the matter with connected cases and listed it for further hearing on June 12.

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.

(The author is a well known Chartered Accountant practising at Ahmedabad on Direct and Indirect Taxes.)