SC: Argument of promissory estoppel not valid in limiting erstwhile Area based exemption upto 58% under GST

Last updated: 29 October 2022

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The Supreme Court has ruled that the argument of promissory estoppel cannot be used to claim a full 100% tax exemption under the GST regime, based on a pre-GST era memorandum. Hero Motocorp Ltd. sought to continue a 100% excise duty exemption granted in 2003, but the court found that the change in law with GST meant the government was not bound to honour the previous promise. While dismissing the appeal, the court allowed the appellant to make representations to the GST Council and state governments regarding the matter.

Court :
Supreme Court of India

Brief :
The Hon'ble Supreme Court of India in M/S Hero Motocorp ltd. v. Union of India & ors. [Civil Appeal No. 7405 of 2022] held that the assessee established its units in North Eastern and the Himalayan States based on the Office Memorandum of 2003 and it was not any kind of promise that was done by the Central government during the pre-GST regime. Therefore, a 100% exemption cannot be granted to the assessee based on this memorandum. Moreover, the Apex Court also suggested that the assessee can approach the respective state government and GST council for representing this matter.

Citation :
Civil Appeal No. 7405 of 2022

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