Madras High Court Stays Instruction Of Specified Officer Removing General Insurance Services From Default List Of Input Services For GST Exemption

Justice Anita Sumanth noted that assumption of jurisdiction by the specified officer to amend the instructions which was issued by the Government of India was suspectable.

“Prima facie and insofar as the Instruction, based on which the list of input services has been notified, is issued by the Government of India, the assumption of jurisdiction by a Specified Officer/R3 to amend the same, is itself suspect,” the court noted.

The court also noted that only the Development Commissioner was vested with the power to expand the list and the Specified Officer could not have assumed jurisdiction to curtail the list contrary to the parent instruction.

“In light of the specific stipulation in Instruction No.79 that the Development Commissioner is vested with the power only to expand the list of services, the act of curtailing the list by removal of General insurance services from the ambit of the default list services, also appears contrary to the parent Instruction, being Instruction No.79,” the court said.

The court was hearing a petition filed by Zoho Corporation to stay and set aside the instruction of the Specified Officer.

It must be noted that on November 19, 2023, the SEZ Division, Government of India, Ministry of Commerce and Industry issued Instruction 79 which contained the uniform list of services to be followed in the SEZ. This list continued in post the introduction of the GST by way of a notification issued by the authority on January 2, 2018. All authorized operations which are specified in the letter of approval issued by the Development Commissioner of SEZ are exempt under the GST.

While this instruction stood so, the Specified Officer, unilaterally removed General Insurance services from the purview of the default list of input services which was under challenge in the present petition.

The court, noting that the assumption of jurisdiction by the officer was prima facie contrary, has ordered a stay until further orders.

Counsel for the Petitioner: M/s Lakshmi Kumaran and Sridharan Attorneys

Case Title: Zoho Corporation Private Limited v Union of India and Others

Case No: WP.NO.22132 OF 2024