Latest news with #AbhishekARastogi
Business Standard
07-05-2025
- Business
- Business Standard
Online gaming firms oppose retrospective 28% GST, not the levy itself
The gaming industry is not opposed to a prospective levy of 28 per cent Goods and Services Tax (GST) on the full face value of entry amounts under the current framework, but it is against the move to apply the tax retrospectively, online gaming companies told the Supreme Court on Wednesday. The GST Council in 2023 decided to impose a flat 28 per cent tax on the face value of online gaming, casinos and horse racing, and accordingly amended the GST laws (CGST Act and IGST Act). The new rule came into effect from October 1, 2023. The amendments specified that GST would be levied on entry-level bets on online gaming platforms, and not on amounts paid by players in each game from their winnings. Online gaming companies had challenged the amendment, but the apex court in 2023 refused to grant interim relief against GST demand notices issued to them. The court had then agreed to consider the legality of the government's decision to impose 28 per cent GST retrospectively on the full value of bets placed, rather than on the gross gaming revenue. Gaming firms have argued that the 28 per cent tax should be applicable only from October 1, 2023. The government, however, contended that the October 1 revision merely clarified a law already in force, and that the tax demand was not backdated. Advocate Abhishek A Rastogi, appearing for online poker platforms, told the court that the core issue is whether such a retrospective tax imposition is legally valid and constitutionally justifiable. 'The tax assessment has been erroneously computed on the total amount 'churned'—that is, the gross transaction volume passing through the platform—rather than the actual 'pooled' amount, which constitutes the real monetary consideration or stake pooled by players,' he argued. 'The distinction is critical: the churned amount may include internal platform movements or virtual transfers that do not reflect real income or revenue, thereby inflating the tax liability disproportionately,' he added. The bench is expected to continue hearing arguments through the week. On Tuesday, the Centre reiterated its position that gambling, whether based on skill or chance, remains gambling and is therefore liable to be taxed accordingly.
Time of India
07-05-2025
- Business
- Time of India
Landowners get interim court relief from GST on joint development pacts
Live Events The Bombay High Court has granted interim relief to petitioners in a key Goods and Services Tax (GST) dispute involving the treatment of development rights under revenue-sharing joint development a case that could have wider implications for the real estate landscape across India, a group of landowners had approached the court to challenge the levy of GST on development rights transferred under such court has issued notice to the authorities and granted interim relief, restraining any further action on the impugned tax dispute centers on whether the transfer of development rights by landowners, typically in exchange for a share in the developed property or revenue, is a 'supply' of services liable to GST, or a 'sale of land' which falls outside the scope of GST under the constitutional framework and the GST on behalf of the landowners, Abhishek A Rastogi, founder of Rastogi Chambers, submitted that the transfer of development rights is an intrinsic part of land ownership and cannot be treated as a distinct service for the purposes of GST.'The issue strikes at the very root of the GST architecture,' Rastogi said. 'Development rights that are part of the land cannot be artificially severed and taxed as services. The legislative intent, including the specific amendments and clarifications introduced from April 1, 2019, need to be interpreted in line with constitutional guarantees and the basic scheme of the GST law.'The division bench, after hearing initial submissions from both sides, observed that the petition raises important questions regarding the taxability, point of taxation, and the person liable to pay court has issued a Rule and granted interim relief by restraining the tax authorities from enforcing the disputed order until further hearing. The respondents have been directed to file their affidavit-in-reply within four case is likely to have wider implications for real estate taxation under the GST regime, particularly in how development rights are classified and taxed.
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Business Standard
28-04-2025
- Business
- Business Standard
Karnataka HC stays GST demand of over Rs 50 cr against Mad Over Donuts
Should a donut or any other bakery product sold by 'Mad-over-Donuts' be treated as a restaurant service and charged 5 per cent GST? Or it should be taxed 18 per cent GST by not classifying donut chains as restaurants at all? The Karnataka High Court (HC) will ponder over it and take a call in the next few days as it stayed a Goods and Services Tax (GST) demand of over ₹50 crore against the donut outlet on Friday. Food items sold outside a restaurant setting invite 18 per cent GST, while those served in restaurants are charged 5 per cent GST. Justice SR Krishna Kumar heard the case raising the question whether these products should be classified under restaurant services, attracting a concessional 5 per cent GST rate, or as bakery goods, which might attract a different tax treatment. A copy of the order was uploaded on Monday. Himesh Foods ('Mad Over Donuts'), represented by Advocate Abhishek A Rastogi, told the court that the supply of food products like donuts and cakes constitute a composite supply of services, as defined under the CGST Act. They said that the provision of food at restaurants, eateries, canteens, and messes -- whether consumed on-premises or taken away -- fall under the category of restaurant services, which are taxed at a lower GST rate of 5%. They also referred to a recent interim order of the Bombay High Court, which said that such supplies could be considered services under GST law. The Karnataka High Court said that since there was a prior undertaking by the tax authorities before the Bombay High Court, assuring that no coercive action would be taken while the classification issue was under consideration, the same should be applicable here as well. The court emphasised the importance of judicial consistency and agreed that no precipitative or coercive measures could be pursued by Karnataka's GST authorities during the pendency of the case. The next date of hearing is now on June 6. "… in the light of the undertaking given by the respondents (tax authorities) in relation to the very same petitioner ('Mad Over Donuts') before the Bombay High Court, respondents are directed not to take any precipitative/coercive steps till the next date of hearing,' the order said. Sandeep Sehgal, Partner of tax firm AKM Global, said, 'The company (Mad Over Donuts) pointed out that the Directorate General of GST Intelligence (DGGI) in Mumbai had already issued a consolidated notice covering similar tax issues across multiple states, including Karnataka. Despite this, the Karnataka State GST authorities attempted to raise a separate demand. The court's decision to grant relief to Mad Over Donuts highlights the importance of businesses monitoring overlapping tax actions and taking prompt steps when faced with duplicate proceedings.'
Time of India
22-04-2025
- Business
- Time of India
Landowners seek GST relief on joint development agreements
Several landowners have approached the courts seeking relief from the Goods and Services Tax (GST) authorities' decision to recover tax from landowners involved in joint development agreements (JDAs) in the real estate sector . While these matters are pending in the courts of Mumbai, Telangana, and all three courts of the National Capital Region, a specific petition in the Bombay High Court was filed in the first week of April. In this case, a total of 10 landowners have filed the petition. At the heart of the dispute lies the taxation of development rights transferred by landowners to developers in exchange for a portion of the constructed area or revenue sharing. The GST authorities have sought to tax landowners in a barter transaction of supply of development rights who receive construction services under the forward charge for rendering services of transfer of development rights. This is instead of reverse charge mechanism, where the recipient of the service, rather than the provider, is liable to pay GST. The matter is currently under legal scrutiny, and its outcome may affect future structuring of JDAs across the country. ET has seen the copy of GST notices issued to the landowners. The applicability of 18% GST is expected to impact real estate projects across major property markets nationwide marking a pivotal shift in the cost dynamics of joint developments and redevelopment projects. Landowners are contesting the tax demand, arguing that the transaction in question is not taxable at all, let alone under the reverse charge framework. They contend that transferring development rights in this manner does not qualify as a supply of service attracting GST and have accused the authorities of misinterpreting the tax provisions. 'This dispute essentially revolves around three core issues--taxability, the point of taxation, and the person liable to pay tax, particularly the applicability of the reverse charge mechanism,' said Abhishek A Rastogi, founder of Rastogi Chambers, who is representing the landowners in the matter before the Bombay High Court. According to him, the legislative intent, as reflected through a series of earlier notifications issued with effect from April 1, 2019, need to be carefully considered while determining the tax implications in such cases. "The nuances of when the tax liability arises, whether the transaction itself is taxable, and who should be responsible to discharge that liability are questions that go to the root of the matter,' he added. The outcome of this legal challenge is expected to set an important precedent, clarifying the tax treatment of joint development agreements under GST. Industry stakeholders including developers are closely watching the case, given its potential to reshape the structuring of real estate collaborations in the years ahead. Industry associations and real estate developers have also expressed concern over the issue, cautioning that an adverse ruling could increase costs for landowners. This may also disrupt the delicate financial structures of joint development and redevelopment projects, especially in land-scarce urban centres like Mumbai, Bengaluru, and Delhi-NCR. The applicability of 18% GST under the disputed framework threatens to significantly alter cost dynamics across major property markets.
Economic Times
21-04-2025
- Business
- Economic Times
Landowners seek GST relief on joint development pacts
Several landowners have approached the courts seeking relief from the Goods and Services Tax (GST) authorities' decision to recover tax from landowners involved in joint development agreements (JDAs) in the real estate sector. While these matters are pending in the courts of Mumbai, Telangana, and all three courts of the National Capital Region, a specific petition in the Bombay High Court was filed in the first week of April. In this case, a total of 10 landowners have filed the petition. At the heart of the dispute lies the taxation of development rights transferred by landowners to developers in exchange for a portion of the constructed area or revenue GST authorities have sought to tax landowners in a barter transaction of supply of development rights who receive construction services under the forward charge for rendering services of transfer of development rights. This is instead of reverse charge mechanism, where the recipient of the service, rather than the provider, is liable to pay matter is currently under legal scrutiny, and its outcome may affect future structuring of JDAs across the country. ET has seen the copy of GST notices issued to the landowners. The applicability of 18% GST is expected to impact real estate projects across major property markets nationwide marking a pivotal shift in the cost dynamics of joint developments and redevelopment are contesting the tax demand, arguing that the transaction in question is not taxable at all, let alone under the reverse charge framework. They contend that transferring development rights in this manner does not qualify as a supply of service attracting GST and have accused the authorities of misinterpreting the tax provisions.'This dispute essentially revolves around three core issues--taxability, the point of taxation, and the person liable to pay tax, particularly the applicability of the reverse charge mechanism,' said Abhishek A Rastogi, founder of Rastogi Chambers, who is representing the landowners in the matter before the Bombay High to him, the legislative intent, as reflected through a series of earlier notifications issued with effect from April 1, 2019, need to be carefully considered while determining the tax implications in such cases."The nuances of when the tax liability arises, whether the transaction itself is taxable, and who should be responsible to discharge that liability are questions that go to the root of the matter,' he outcome of this legal challenge is expected to set an important precedent, clarifying the tax treatment of joint development agreements under stakeholders including developers are closely watching the case, given its potential to reshape the structuring of real estate collaborations in the years associations and real estate developers have also expressed concern over the issue, cautioning that an adverse ruling could increase costs for may also disrupt the delicate financial structures of joint development and redevelopment projects, especially in land-scarce urban centres like Mumbai, Bengaluru, and Delhi-NCR. The applicability of 18% GST under the disputed framework threatens to significantly alter cost dynamics across major property markets.
