Income From Shares is Not Taxable Under GST as Supported by Circular 196, HC Quashes Demand Order

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  • Last Updated on 17 May, 2024

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GST Demand Order

Case Details: Samarth Commodities Merchants (P.) Ltd. v. Commissioner, GST & Central Excise - [2024] 162 taxmann.com 483 (Orissa)

Judiciary and Counsel Details

    • B.R. Sarangi & G. Satapathy, JJ.
    • C.R. Das, Adv. for the Petitioner.
    • A. Kedia for the Respondent.

Facts of the Case

The petitioner is a registered company and it received a demand order from the GST department. It filed writ petition to quash the demand order and contended that the income from shares is not taxable and it is beyond the purview of GST.

High Court Held

The Honorable High Court noted that the petitioner did not produce any materials before the authority at the time of assessment indicating that the income had come from shares. The Court noted that the Circular No. 196/08/2023-GST dated 17.07.2023 has been issued by the CBIC, GST Policy Wing and it was clearly mentioned that the income from shares is not taxable.

Therefore, the Court held that if the income from shares has been excluded by virtue of Circular No. 196/08/2023-GST dated 17-07-2023 then the assessment made thereof by the authority on the basis of the audit report cannot be sustained in the eye of law. The Court also directed the authority to hear the same afresh and pass appropriate order by giving opportunity of hearing to the petitioner.

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