The Delhi High Court recently issued a stay order on the levy of Goods and Services Tax (GST) demand imposed on the Competition Commission of India (CCI) by the Additional Commissioner of Central GST (Delhi South) in relation to considerations received by the CCI for the purposes of adjudicating matters.
The dispute arose from an Order-in-Original dated January 16, 2025, in which the CGST Commissioner determined that the fees collected by the CCI were subject to GST, along with interest and penalties. CCI challenged this ruling, arguing that the Commission’s statutory regulatory functions do not qualify as ‘business’ under the Central Goods and Services Tax (CGST) Act, 2017, and are thus exempt under Schedule III of the Act.
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This led to the institution of the present case before the Delhi High Court, titled, Competition Commission Of India Vs. The Additional Commissioner Of CGST, Delhi South (W.P.(C) No.3402/2025).
Senior Advocate Sujit Ghosh and Manu Sanan representing CCI contended that the CGST Commissioner’s order was flawed, as it disregarded a previous ruling of the Delhi High Court in the case of Central Electricity Regulatory Commission (CERC) vs. Addl. Director, GST & Ors. (2025 TAXSCAN (HC) 207) where it was held that regulatory functions carried out by CERC were not taxable since they did not amount to ‘business’ under the CGST Act.
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CCI maintained that the ratio in CERC be followed to exempt them from having to pay GST on the consideration received in the form of fees. Additionally, it was averred that CCI had previously defended a similar position in a service tax matter wherein it was held that the functions rendered by CCI were not ‘service’ and thus not of taxable nature. However, the GST Department had appealed that decision, and the matter remains pending before the Customs, Excise and Service Tax Appellate Tribunal (CESTAT).
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A Division Bench comprising Justice Yashwant Verma and Justice Harish Vaidyanathan Shankar found merit in CCI’s argument, observing that the taxability of regulatory functions must be determined consistently across statutory bodies. Accordingly, the Court issued an interim stay on the GST demand, preventing the authorities from enforcing any tax liability on the CCI’s collected fees until further review.
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