Delhi High Court Stays GST Imposition on CCI
Delhi High Court Stays GST Imposition on CCI
In a significant relief to the Competition Commission of India (CCI), the Delhi High Court on granted a stay on the imposition of Goods and Services Tax (GST), including interest and penalties, on the Commission for the consideration received from various parties involved in disputes before it.
The bench comprising Justice Yashwant Varma and Justice Harish Vaidyanathan Shankar passed the interim order in response to a writ petition filed by the CCI.
The Commission had challenged the order issued by the Additional Commissioner of CGST (Delhi South), which sought to impose GST on fees collected by the regulatory body.
The CCI argued that the CGST order was erroneous, as it overlooked a recent ruling by the Delhi High Court in the case of the Central Electricity Regulatory Commission (CERC). In that case, the Court had held that statutory regulatory functions do not constitute ‘business’ under the CGST Act, 2017, and are therefore exempt from taxation under Schedule III of the Act.
CCI further contended that it had successfully defended similar taxation issues in prior service tax proceedings, where authorities ruled that its functions did not constitute a taxable service. Those rulings clarified that all fees collected by the CCI are statutorily mandated and not linked to any service. However, the GST Department has appealed that decision, and the matter is still pending before the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT).
Emphasizing the need for consistency in regulatory taxation matters, the CCI sought parity with other statutory bodies like the CERC and the Delhi Electricity Regulatory Commission (DERC). The Delhi High Court found merit in the argument and extended a stay on the GST imposition, preventing the taxation of regulatory fees collected by the CCI.
CCI was represented by Senior Advocate Sujit Ghosh and Advocate Manu Sanan of Sanan Law, who presented arguments in favor of exempting regulatory fees from GST.
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Mariya is the Senior Editor at JurisHour. She has 5+ years of experience on covering tax litigation stories from the Supreme Court, High Courts and various tribunals including CESTAT, ITAT, NCLAT, NCLT, etc. Mariya graduated from MLSU Law College, Udaipur (Raj.) with B.A.LL.B. and also holds an LL.M. She started as a freelance tax reporter in the leading online legal news companies like LiveLaw & Taxscan.
