🚨 Breaking News: Tata Sons ₹1,500 Crore GST Demand Dismissed in Docomo Settlement Case 🚨 In a landmark decision, the GST department's adjudicating authority dismissed a GST demand exceeding ₹1,500 crore on Tata Sons related to a settlement deal with Japanese company Docomo.

This ruling could set a precedent for other companies engaged in arbitration. The GST department still has the option to challenge the decision in the High Court.

The case began in 2019 when the Directorate General of GST Intelligence (DGGI) imposed an 18% GST on the $1.27 billion paid by Tata Sons to Docomo in 2017.

The payment was made to settle a dispute involving Tata Teleservices. The DGGI argued that the payment should be considered a loan from Tata Sons to Tata Teleservices, thus falling under the purview of an 18% GST.

Tata Sons filed a writ petition with the Bombay High Court in November 2022, citing circulars issued by the Central Board of Indirect Taxes and Customs (CBIC) that suggested no GST could be levied on liquidated damages.

Tata Sons argued that the payment was part of an arbitration settlement, not for services provided by Docomo.

Despite Tata Sons’ arguments, the Bombay High Court allowed the GST department to issue a show-cause notice in 2023. Tata Sons then challenged the notice before the adjudicating authority, which ultimately ruled in favor of Tata Sons.

This decision could influence other similar cases and is a significant development in the realm of GST law.