The Gauhati High Court upheld that the bank guarantee for interim GST relief must equal the alleged short-paid tax amount but rejected the inclusion of penalties in that guarantee.
Gauhati HC: Limiting Bank Guarantee to Tax Amount in Interim Relief Cases
The Gauhati High Court ruled that furnishing a bank guarantee equal to the alleged short-paid GST amount suffices for the interim release of the consignment. The Court rejected the Directorate General of Goods and Services Tax Intelligence's (DGGI) plea to include penalty components in the bank guarantee amount, reinforcing the principle that interim relief should only secure the tax liabilities in question.
This ruling clarifies the scope of bank guarantees pertaining to GST relief, ensuring that penalties do not unduly burden taxpayers during the interim periods before final determinations are made.
Tax professionals should be aware of this judgment, as it delineates the limitations regarding bank guarantees and may influence strategies surrounding the treatment of interim relief in GST-related disputes.
Citations
- Gauhati HC (2026)
