Delhi HC Stays ₹10.35 Cr GST Demand on CCI Over Taxability of Non-Business Activities [Read Order]

In a recent development, the Delhi High Court stayed a Goods and Services Tax (GST) demand of Rs. 10.35 crore raised against the Competition Commission of India (CCI), observing that no coercive steps shall be taken against the statutory regulator at this stage. The demand was raised through an order dated 16.01.2025 by the Commissioner of CGST, Delhi South Commissionerate.

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The CCI filed a writ petition challenging the GST demand, arguing that as a statutory authority established under the Competition Act, 2002, it does not carry out any commercial or business activities and therefore should not be liable to pay GST. The commission emphasized that its regulatory functions are non-commercial in nature and fall outside the scope of taxable supply under the GST regime.

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In support of its claim, the CCI relied on the Delhi High Court’s earlier judgment in the case of Central Electricity Regulatory Commission v. Directorate General of GST Intelligence & Anr. where the court had quashed similar GST demands against another regulator. In that decision, the court held that show cause notices issued to regulators performing statutory duties without any business component were unsustainable under GST law.

Appearing for the CGST department, Senior Standing Counsel Mr. R. Ramachandran accepted notice on behalf of the respondents. The department is expected to file its formal reply in the coming weeks.

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A division bench comprising Justice Prathiba M. Singh and Justice Rajneesh Kumar Gupta took note of the legal position established in the CERC judgment and directed that no coercive action be taken against CCI in connection with the impugned tax demand.

The court granted six weeks to the CGST department to file a reply, with four additional weeks for CCI to file a rejoinder. The matter has been listed before the Joint Registrar on 29.07.2025 and is scheduled for further hearing on 08.09.2025.

To Read the full text of the Order CLICK HERE

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