JSA Newsletter - Indirect Tax

Recent Rulings by Courts and Authorities

High Court

Goods and Services Tax ("GST") paid on notice pay recovered from employees allowed to be refunded giving retrospective effect to the Board circular

In the case of Manappuram Finance Ltd. vs. Assistant Commissioner, Central Tax and Excise, Thrissur Joint Commissioner (Appeals), Kochi¹, the Petitioner, a non-banking finance company, adopted a legal position that Goods and Services Tax ("GST") is applicable on notice pay recovered from outgoing employees. In light of Circular No.178/10/2022-GST dated August 3, 2022 ("Circular") issued by the Central Board of Indirect Taxes and Customs ("CBIC") with respect to non-applicability of GST on notice pay recovery, the Petitioner filed for refund of tax paid on the notice pay recovered from the former employees. However, the refund claim was rejected by the adjudicating/ appellate authorities. The Petitioner challenged the orders of the adjudicating/ appellate