Latest news with #DirectorateGeneralofGoodsandServicesTaxIntelligence
Indian Express
23-07-2025
- Indian Express
High court slams Chandigarh DGGI for ‘psychological coercion' in 30-hour detention of businessman
The Punjab and Haryana High Court has come down heavily on the Directorate General of Goods and Services Tax Intelligence (DGGI), Chandigarh, for holding a businessman in its zonal office for more than 30 hours in what it described as a case of 'psychological coercion', and for authorising his arrest 'without application of mind'. Justice Harpreet Singh Brar, in his order on petitions filed by Bharat Lal Garg and his wife Barkha Bansal, said the DGGI's claim that Garg remained in its office overnight on June 4 'of his own volition' was an 'illusionary choice'. 'When one is summoned to the office of a state-run agency and kept under constant watch, an atmosphere suggesting stepping out is not an option is created… the illusion of voluntariness renders any consent invalid,' the court said. Garg, a businessman, had been summoned to record his statement in connection with an ongoing investigation, during which data was extracted from his laptop for forensic analysis. The court noted that a cognisable offence had not been established at the time, rendering even consideration of his arrest 'premature'. The proposal to arrest him was moved only at 5.46 pm on June 5 and approved by the Additional Director General an hour later 'mechanically, without examining the material available' and without the mandatory Document Identification Number (DIN), making the authorisation 'deemed invalid'. The judge also pointed out that CCTV cameras at the zonal office were reportedly non-functional even though all other digital systems worked, calling the explanation 'incongruous'. Observing that Barkha Bansal had to approach the court to secure her husband's release, the judge stressed that statements of persons summoned must be recorded only during office hours and in the presence of their counsel if they so choose, with CCTV surveillance available on request. The additional director general of the DGGI, Chandigarh zonal unit, has been directed to file an affidavit before the next hearing showing full compliance with the Supreme Court's directions in Paramvir Singh Saini judgment, regarding the mandatory installation and maintenance of CCTV cameras in police stations, and to explain why the court's earlier order of July 2 seeking production of records was not complied with.
Hindustan Times
26-05-2025
- Business
- Hindustan Times
Solapur-based lawyer arrested in ₹100 crore bogus GST invoice racket
The Directorate General of Goods and Services Tax Intelligence (DGGI) on Thursday apprehended a Solapur-based lawyer, Sajid Ahmed Sheikh, for allegedly orchestrating a massive fake GST invoice racket worth over ₹100 crore. Investigations by the DGGI revealed that Sheikh had set up a complex network of 30 shell companies using counterfeit and fabricated documents. He allegedly used these fake entities to generate fake invoices for non-existent transactions to fraudulently avail of Input Tax Credit (ITC), a senior GST official confirmed. The accused was placed in judicial custody for 14 days and has been lodged in Kalamba Central Jail. Following intelligence inputs, DGGI officers conducted a raid at Sheikh's office in Solapur on May 22. They seized several electronic devices, including his computer and mobile phone. A forensic examination of these devices uncovered crucial evidence, prompting the agency to expand its investigation to 12 more suspected shell companies operating in the area. Authorities believe the scam may extend to multiple stakeholders, including traders, real estate developers, and jewellers, who could be complicit in the fraudulent ITC claims. The ongoing probe aims to unearth the full extent of this elaborate tax evasion racket.
Yahoo
08-03-2025
- Business
- Yahoo
Indian court to rule on whether a doughnut shop is bakery or restaurant
A court in India is hearing a case that decides whether doughnuts should attract 5 or 18 per cent tax, in a case that could have significant implications for India's restaurant and bakery industries. At the core of the dispute is whether doughnuts should be taxed as part of restaurant services, which carry a five per cent charge under India's Goods and Services Tax (GST), or as standalone bakery products, which fall under the 18 per cent GST bracket. This comes after the Indian arm of doughnut chain Mad Over Donuts challenged a notice from India's Directorate General of Goods and Services Tax Intelligence (DGCI) that held them guilty of tax evasion for incorrectly classifying their business as a restaurant service and ordered them to pay more than Rs1bn in dues. A similar notice was also served to chains Dunkin' Donuts, Theobroma, and Krispy Kreme. The notice stated that the DGCI, during its investigation, questioned the head chef of Mad Over Donuts, who allegedly said that the doughnuts are prepared in a central kitchen and then sent to individual outlets, according to The Economic Times. At these outlets, 'garnishing, chocolate pouring, and packing' are done before an item is sold, thus the products are sold 'over the counter'. On Monday, the Bombay High Court's division bench of Justices BP Colabawalla and Firdosh P Pooniwalla heard the petition from Himesh Foods Pvt Ltd, the parent company of Mad Over Donuts. Mad Over Donuts maintained that it meets the criteria for it to be classified as a restaurant, since all its outlets have a kitchen to heat the items sold and the doughnuts go through a final preparation before sale. The Indian law enforcement agency argued that the kitchens at these outlets are 'stretching the definition of service beyond' the guidelines under the GST act, and any garnishing of the doughnuts before they are served is 'nothing but to make the said products attractive for the customers before selling them over the counter, similar to the types of sweets prepared by confectioners with various coatings and spreading different dry fruits over it'. Advocate Abhishek Rastogi, representing Mad Over Donuts, pointed to that GST notifications that categorise food sold at restaurants, eateries, messes, and canteens under the 5 per cent tax bracket, irrespective of whether they are eaten on-site or taken away. 'If for some reason, this order is not dealt pragmatically then there are high chances of disruption for the food and beverages sector,' he added. The court ruled that no coercive action can be taken against Mad Over Donuts while the case is pending, and listed it for hearing on 24 March. Over the last few years, India has seen a few other tax classification disputes. The most notable took place in September 2022, when the authorities insisted that frozen Malabar parottas (a layered flatbread cooked primarily in southern Indian states Kerala and Tamil Nadu) should be taxed at a higher rate than frozen rotis (a round flatbread) since they took longer to cook and therefore could not be classified as ready for consumption. A similar controversy erupted over popcorn last year, after Indian finance minister Nirmala Sitharaman announced that caramel popcorn would be taxed at a higher rate than regular salted popcorn, since 'anything with added sugar attracts a different tax rate'. The United Kingdom too saw a dispute of a similar nature over three decades ago – the famous legal battle over Jaffa Cakes, where the courts deliberated over whether they were biscuits, which are taxed at 20 per cent or cakes, zero-rated for Value Added Tax (VAT). McVitie's, the company that makes the Jaffa Cakes, argued that Jaffa Cakes harden when they go stale, like cakes, unlike biscuits which went soft and soggy.
The Independent
08-03-2025
- Business
- The Independent
Indian court to rule on whether a doughnut shop is bakery or restaurant
A court in India is hearing a case that decides whether doughnuts should attract 5 or 18 per cent tax, in a case that could have significant implications for India's restaurant and bakery industries. At the core of the dispute is whether doughnuts should be taxed as part of restaurant services, which carry a five per cent charge under India's Goods and Services Tax (GST), or as standalone bakery products, which fall under the 18 per cent GST bracket. This comes after the Indian arm of doughnut chain Mad Over Donuts challenged a notice from India's Directorate General of Goods and Services Tax Intelligence (DGCI) that held them guilty of tax evasion for incorrectly classifying their business as a restaurant service and ordered them to pay more than Rs1bn in dues. A similar notice was also served to chains Dunkin' Donuts, Theobroma, and Krispy Kreme. The notice stated that the DGCI, during its investigation, questioned the head chef of Mad Over Donuts, who allegedly said that the doughnuts are prepared in a central kitchen and then sent to individual outlets, according to The Economic Times. At these outlets, 'garnishing, chocolate pouring, and packing' are done before an item is sold, thus the products are sold 'over the counter'. On Monday, the Bombay High Court's division bench of Justices BP Colabawalla and Firdosh P Pooniwalla heard the petition from Himesh Foods Pvt Ltd, the parent company of Mad Over Donuts. Mad Over Donuts maintained that it meets the criteria for it to be classified as a restaurant, since all its outlets have a kitchen to heat the items sold and the doughnuts go through a final preparation before sale. The Indian law enforcement agency argued that the kitchens at these outlets are 'stretching the definition of service beyond' the guidelines under the GST act, and any garnishing of the doughnuts before they are served is 'nothing but to make the said products attractive for the customers before selling them over the counter, similar to the types of sweets prepared by confectioners with various coatings and spreading different dry fruits over it'. Advocate Abhishek Rastogi, representing Mad Over Donuts, pointed to that GST notifications that categorise food sold at restaurants, eateries, messes, and canteens under the 5 per cent tax bracket, irrespective of whether they are eaten on-site or taken away. 'If for some reason, this order is not dealt pragmatically then there are high chances of disruption for the food and beverages sector,' he added. The court ruled that no coercive action can be taken against Mad Over Donuts while the case is pending, and listed it for hearing on 24 March. Over the last few years, India has seen a few other tax classification disputes. The most notable took place in September 2022, when the authorities insisted that frozen Malabar parottas (a layered flatbread cooked primarily in southern Indian states Kerala and Tamil Nadu) should be taxed at a higher rate than frozen rotis (a round flatbread) since they took longer to cook and therefore could not be classified as ready for consumption. A similar controversy erupted over popcorn last year, after Indian finance minister Nirmala Sitharaman announced that caramel popcorn would be taxed at a higher rate than regular salted popcorn, since 'anything with added sugar attracts a different tax rate'. The United Kingdom too saw a dispute of a similar nature over three decades ago – the famous legal battle over Jaffa Cakes, where the courts deliberated over whether they were biscuits, which are taxed at 20 per cent or cakes, zero-rated for Value Added Tax (VAT). McVitie's, the company that makes the Jaffa Cakes, argued that Jaffa Cakes harden when they go stale, like cakes, unlike biscuits which went soft and soggy.
