No vested power exist with Tax Research Unit (TRU) to issue circular under the GST law

Last updated: 06 December 2023

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The Delhi High Court has ruled that the Tax Research Unit (TRU) does not have the legal authority to issue circulars clarifying the classification of goods under GST law. The court found no provision in the CGST Act that grants such power to the TRU, stating this authority rests exclusively with the Central Board of Indirect Taxes and Customs (CBIC). Consequently, a specific circular issued by the TRU regarding the classification of polypropylene bags was quashed.

Court :
Delhi High Court

Brief :
The Hon'ble Delhi High Court in the case of Association of Technical Textiles Manufacturers and Processors &Anr. V. Union of India & ors. [W.P.(C) 5933/2019 dated November 16, 2023] held that, the respondents could not draw attention to any provision of the Central Goods and Services Tax, 2017 ("the CGST Act"), in terms of which the Tax Research Unit ("TRU") could be said to have been clothed with the authority or jurisdiction to render a clarification, with respect to the classification of goods and articles. That power clearly appears to stand conferred upon the Board exclusively. We are thus of the considered opinion that no authority vested in the TRU to issue the clarification impugned before us. Thus, in the absence of a conferral of any power upon the TRU, or it being recognized as being statutorily enabled to issue any clarification or directive under Section 168 of the CGST Act, Circular No. 80/54/2018-GST dated December 31, 2018, is liable to be quashed and set aside on this ground alone and thus, the writ petition shall stand allowed.

Citation :
W.P.(C) 5933/2019 dated November 16, 2023

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