Sendoz Commercials Private Limited Vs Union of India (Supreme Court of India)
SC Issues Notice on Plea Seeking Transition of Accumulated GST Compensation Cess ITC On Stock As on Date of Compensation Cess Abolition
The Supreme Court of India was pleased to issue notice to the Union of India in Sendoz Commercials Private Limited v. Union of India [Writ Petition (Civil) No. 1219 of 2025], wherein the Petitioner had filed a writ petition under Article 32 praying for allowing the transition and adjustment of the accumulated Input Tax Credit of Goods and Services Tax Compensation Cess in respect of stock held as on the date of abolition of the Compensation Cess, towards the Goods and Services Tax payable thereon.
The factual matrix which led to filing of the Writ Petition was as follows:
GST Compensation Cess on coal stood abolished effective 22.09.2025 vide Notification No. 2/2025-Compensation Cess Rate dated 17.09.2025, consequent to the 56th GST Council decision merging Cess rates into GST (as clarified in Ministry of Finance FAQs dated 09.09.2025). This abolition, coupled with simultaneous rate in increase of GST to 18% under Notification No. 9/2025-Central Tax Rate, rendered accumulated Cess ITC inutilizable, since the proviso to Section 11(1) of the Goods and Services Tax Compensation to States Act, 2017 restricts such credit solely to
output Cess liability, which ceased to exist.
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