The Delhi High Court has granted a stay on the Goods and Services Tax (GST) demand imposed on the Competition Commission of India (CCI) by the Additional Commissioner of CGST (Delhi South). The stay was issued on Wednesday by a division bench comprising Yashwant Verma and J. Harish Vaidyanath Shankar in response to a writ petition filed by the CCI challenging the tax assessment.
The dispute arose from an Order-in-Original dated January 16, 2025, in which the CGST Commissioner determined that the CCI was liable to pay GST, along with interest and penalties, on the consideration it received from various parties involved in disputes before it.
The CCI argued that this assessment was fundamentally flawed and failed to take into account a recent Delhi High Court ruling in CERC v. Addl. Director, GST & Ors. The court had previously held in that case that the activities of the Central Electricity Regulatory Commission (CERC) were not taxable under the CGST Act, 2017, as statutory regulatory functions do not constitute a “business” and are further exempt under Schedule III of the Act.
The CCI also pointed out that it had successfully defended a similar position in an earlier service tax dispute, where it was established that all fees collected by the Commission are statutorily mandated and do not constitute a service. While the GST Department has appealed that service tax ruling before the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), that matter remains pending.
Senior Advocate Sujit Ghosh and Advocate Manu Sanan of Sanan Law represented the CCI in court. The order granting the stay is awaited and is expected to provide further clarity on the applicability of GST to regulatory bodies performing statutory functions.
