Taxation & GST Law

Taxation law in India governs the assessment, levy, collection and administration of direct and indirect taxes. The principal statutory framework includes the Income-tax Act, 2025 for direct taxes, and the Central Goods and Services Tax Act, 2017, the Integrated Goods and Services Tax Act, 2017 and the respective State Goods and Services Tax Acts, 2017 for goods and services tax, together with the Customs Act, 1962 for customs duties. The Income-tax Act, 1961 continues to apply to certain earlier tax years and pending or transitional matters in accordance with the applicable savings and transitional provisions. Appellate authorities and tribunals, including the Income Tax Appellate Tribunal (ITAT), the GST Appellate Tribunal (GSTAT) and the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), exercise jurisdiction over specified categories of tax disputes.

Direct taxes are levied on the income or profits of a person and are borne directly by the person on whom they are imposed; income tax under the Income-tax Act, 2025 is the principal example. Indirect taxes are levied on the supply of goods or services or on the import or export of goods, and are generally collected by an intermediary and passed on to the ultimate consumer; the goods and services tax under the CGST, IGST and State GST Acts, 2017, and customs duties under the Customs Act, 1962, are principal examples. The two categories differ in their levy, collection, incidence and the statutory framework governing them.

The goods and services tax (GST) framework in India is governed by the Central Goods and Services Tax Act, 2017, the Integrated Goods and Services Tax Act, 2017 and the respective State Goods and Services Tax Acts, 2017, together with the rules and regulations made thereunder. GST is a destination-based tax levied on the supply of goods or services or both. The framework provides for registration, returns and compliance, input tax credit, assessment, demand and recovery, refunds, and appellate remedies before the Appellate Authority and the GST Appellate Tribunal (GSTAT). The specific provisions applicable depend on the nature of the transaction, the place of supply and the applicable statutory provisions and rules.

The appellate structure under the Income-tax Act, 2025 generally provides for a first appeal before the Joint Commissioner (Appeals) or Commissioner (Appeals), as applicable, followed by an appeal before the Income Tax Appellate Tribunal (ITAT). Further remedies may include appeals before the High Court and, in appropriate cases, the Supreme Court, subject to the applicable statutory conditions, limitation and procedure. The availability, scope and procedure of each remedy depend on the nature of the order, the applicable provisions and the forum having jurisdiction. Not every order follows the same appellate route.

Assessment refers to the process by which the tax authority determines the income, turnover or tax liability of a person for a given tax period, in accordance with the applicable statutory provisions. Reassessment refers to a subsequent proceeding through which the tax authority may reopen or revise an earlier assessment, subject to the conditions, procedural requirements and limitation periods prescribed by the applicable statute. The grounds, procedure and limitation for assessment and reassessment differ under the applicable tax framework, and the validity of such proceedings may be subject to judicial review where the statutory conditions are not satisfied.

Input tax credit (ITC) under the goods and services tax framework refers to the credit that a registered person may be entitled to claim in respect of tax paid on inputs, input services or capital goods used or intended to be used in the course or furtherance of business, subject to the conditions and restrictions prescribed under the applicable provisions. The eligibility, availment, utilisation and reversal of ITC are governed by the CGST Act, 2017 and the rules made thereunder. Disputes relating to ITC eligibility, blocked credit, mismatch or denial of credit may be pursued through the available statutory remedies, subject to the applicable conditions and procedure.

The Income Tax Appellate Tribunal (ITAT) is a statutory tribunal that exercises appellate jurisdiction over specified categories of direct tax matters. The GST Appellate Tribunal (GSTAT) exercises appellate jurisdiction over specified categories of goods and services tax matters. The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) exercises appellate jurisdiction over specified customs, central excise and service tax matters. Each tribunal operates under its own statutory framework, and the remedies against their orders depend on the applicable statutory framework and may include proceedings before the High Court or the Supreme Court, where available.

The limitation period for filing a tax appeal depends on the applicable statute, the nature of the order and the forum before which the appeal is filed. The Income-tax Act, 2025, the CGST Act, 2017 and the Customs Act, 1962 prescribe specific limitation periods for different categories of appeals, subject to provisions relating to condonation of delay, where applicable. For example, the first appeal under the income-tax framework is generally subject to a prescribed limitation period, while GST and customs appeals are governed by their respective statutory periods. The computation of limitation and availability of condonation depend on the applicable statutory provisions and the facts of the matter. The specific limitation applicable to a matter should therefore be verified with reference to the applicable statute and order concerned.

A tax notice or order may, in appropriate cases, be challenged before the High Court under Article 226 of the Constitution of India, and supervisory jurisdiction under Article 227 may be relevant where applicable. The maintainability of such proceedings may depend on factors including the availability of an alternative statutory remedy, the nature of the challenge and the stage of the proceedings. Further remedy before the Supreme Court may be available under Article 136 in appropriate cases, subject to the applicable constitutional and legal framework. The specific position should be verified with reference to the applicable law and facts of the matter.

Legal representation is not uniformly mandatory in every tax matter, and the position depends on the forum and the applicable rules. Before tax authorities, an assessee may appear personally or through an authorised representative, subject to the applicable statutory provisions and circumstances requiring personal appearance. In proceedings before the Income Tax Appellate Tribunal (ITAT), the GST Appellate Tribunal (GSTAT) and the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), representation by an authorised representative may be permitted in accordance with the applicable rules. Proceedings before the High Court and the Supreme Court are ordinarily conducted through advocates, subject to the applicable procedural rules and permissions. The specific position should be verified with reference to the applicable rules and the forum concerned.