Indian tax tribunals issue rulings on GST classification and credit declarations

Two Indian tax tribunals have issued significant rulings regarding Goods and Services Tax (GST) and service classifications.

In Chennai, the CESTAT set aside adjudication orders involving A. P. Constructions India Pvt. Ltd. The tribunal ruled that a joint development label alone is insufficient to establish a taxable construction service. It emphasized that the true character of a joint development arrangement must be determined by the actual rights and obligations established in the agreements, rather than mere descriptions. The tribunal noted that the absence of monetary payment does not preclude consideration if land or development rights are exchanged for constructed flats.

Separately, the Kolkata Bench of the Goods and Services Tax Appellate Tribunal (GSTAT) ruled in favor of Micro Labs Limited regarding transitional credit. The tribunal held that an incorrect transitional credit declaration in Form TRAN-1 does not automatically justify invoking Section 74 of the CGST Act. To invoke this section, authorities must provide evidence of deliberate suppression or willful misstatement intended to evade tax, rather than relying solely on discrepancies in credit declarations.