Shrikrishna Subray Hegde Vs Nagshanti Autocars LLP (GSTAT Bengaluru)
Summary: The Goods and Services Tax Appellate Tribunal (GSTAT), Bengaluru State Bench, allowed the Department to withdraw its appeal against Nagshanti Autocars LLP because the disputed amount was below the monetary threshold prescribed for departmental litigation. The application was filed under Section 112(4) of the CGST Act, 2017. The Department relied upon CBIC Circular No. 207/1/2024-GST dated 26 June 2024, which prescribes a monetary limit of ₹20 lakh for departmental appeals before GSTAT, subject to specified exceptions. The Tribunal accepted the withdrawal and dismissed the application without adjudicating the substantive GST controversy.
The underlying dispute concerned incentives and discounts received by Nagshanti Autocars LLP under its dealership arrangement with Renault India Private Limited. The earlier appellate proceedings examined whether credit notes amounting to ₹22,60,182 represented consideration for a separate taxable service under SAC 999792, described as agreeing to do an act. The disputed GST demand was ₹4,06,832, together with interest and penalty under Section 74(1). The Department had challenged the earlier appellate authority’s decision setting aside the demand. The substantive dispute therefore involved the distinction between commercial discounts and consideration for taxable services.
In the earlier appellate proceedings, the authority examined the dealership agreement and the Renault Excellence Program. It found that the incentives were linked to achievement of sales targets and were issued through post-sale commercial credit notes. The authority considered these amounts to be adjustments relating to vehicle purchases rather than consideration for an independent supply of services. Relying upon Circular No. 92/11/2019-GST dated 7 March 2019 and judicial precedents, it concluded that the disputed incentives did not constitute a separate taxable supply under Section 7. Consequently, the earlier appellate authority set aside the GST demand, interest and penalty.
When the matter came before GSTAT, the Department’s authorised representative stated at the hearing on 1 October 2026 that the application should be withdrawn because the amount involved was below the monetary limit fixed by the CBIC circular. A formal withdrawal application was electronically submitted in Form GST APL-5W under Rule 113A on the same date. The respondent’s authorised representative raised no objection.
Cases Discussed
- Southern Motors Vs State of Karnataka (2017) — cited in the earlier appellate proceedings concerning discounts and incentives.
- Sharyu Motors Vs CST — cited in the earlier appellate proceedings concerning the treatment of incentives as discounts rather than consideration for services.
FULL TEXT OF THE ORDER OF GSTAT BENGALURU
1. When the matter was taken up for hearing on 1st October 2026, the learned Authorised Representative for the Appellant Department appeared in person and the Authorised Representative for the Respondent appeared virtually.
2. The AR appearing on behalf of the Appellant submitted that they wish to withdraw the Application filed under Sub-Section (4) of Section 112 of the CGST/SGST Act 2017 for the reason that the amount involved in the application was less than the monetary limit fixed for application as per the CBIC Circular No. 207/1/2024-GST dated 26th June 2024 issued under the provisions of sub-section (1) of section 120 of the Act.
3. A formal withdrawal application in GSTAT FORM-APL5W prescribed under Rule 113 A of the CGST/SGST Rules 2017 has been submitted electronically on the GSTAT e-Filing Portal, on 1st October 2026 stating that the Appellant did not wish to proceed with the Application for the above reason.
4. The learned Authorised Representative appeared on behalf of the Respondent submitted that they did not have objection to the withdrawal of the Application filed by the Department registered as APL/6/BUR/2026.
5. In view of the formal application and the specific statement made by the Authorised representative for the Appellant Department, the prayer for withdrawal is allowed. Under Rule 42 of the GST Appellate Tribunal (Procedure) Rules, 2025, read with Section 112 of the Central Goods and Services Tax (CGST) Act, 2017, the Tribunal accepts the disposal of the litigation by way of abandonment of claims by the Appellant, without discussing the matter on merit.
6. Accordingly, the Application filed under Section 112(4) stands dismissed as withdrawn.
7. Any provisional or final acknowledgement issued under Form GST APL 02A stands disposed of under this Final Order in Form GST APL-04A.
The Registry is directed to upload this order on the GSTAT Case Information System and communicate a copy to both the Appellant and the Respondent.
Passed on October 8, 2026
