Delhi High Court: CBIC Not Obligated to Issue GST Clarifications

By: Admin | Date: February 10, 2025 | Category: Important Pronouncements | Reading Time: 4 Min

The Delhi High Court recently dismissed a writ petition filed by the Association of Power Producers. The petition sought clarification from the Central Board of Indirect Taxes and Customs (CBIC) on the applicability of GST to Battery Energy Storage Systems (BESS). The court ruled that CBIC has no obligation to issue clarifications on taxpayer queries. Instead, taxpayers must rely on statutory provisions to determine their GST liability.

Case Background

Petitioner: Association of Power Producers

Issue:

The petitioner wanted clarification from CBIC on whether GST applies to Battery Energy Storage Systems (BESS). They requested that the Solar Energy Corporation of India (SECI), through the Ministry of Power, decide on the matter within a fixed timeline.

Request:

The petitioner urged CBIC to clarify GST applicability on BESS based on a representation dated August 27, 2024.

Legal Issue

The core question before the court was whether CBIC must issue clarifications for individual taxpayer queries, specifically regarding GST on BESS.

Court’s Ruling

The Delhi High Court dismissed the petition, emphasizing three key points:

1. CBIC’s Role Under Section 168

The court cited Section 168 of the CGST Act, which gives CBIC the authority to issue orders, instructions, or directions for uniform implementation of the GST Act. However, the law does not mandate CBIC to provide clarifications for specific taxpayer concerns.

2. Taxpayer Responsibility

Taxpayers must determine their GST obligations based on statutory provisions. The court clarified that CBIC is not responsible for providing binding clarifications on whether services like BESS are taxable.

3. Alternative Solutions

Instead of seeking direct clarifications from CBIC, taxpayers should apply for an Advance Ruling to get a formal and legally binding decision on their GST-related concerns.

Key Takeaways

✔ CBIC is not obligated to issue clarifications: Taxpayers cannot demand direct responses from CBIC regarding GST applicability.
✔ Reliance on statutory provisions: Businesses must interpret and apply the CGST Act to determine their tax liability.
✔ Advance Ruling as an alternative: Taxpayers seeking definitive answers should use the Advance Ruling mechanism.

Relevant Legal Provisions

Section 168 of the CGST Act

• Empowers CBIC to issue directions for consistent implementation of the GST Act.
• Does not require CBIC to provide clarifications for individual taxpayer queries.

This ruling reinforces that CBIC clarifications are discretionary. Taxpayers must rely on legal provisions or seek an Advance Ruling for certainty in GST matters.