Bombay High Court stays ₹170 crore GST recovery against Gateway Terminals | Company News
Bombay High Court It has stayed collection proceedings against Gateway Terminals India Pvt Ltd in the ₹170-crore Goods and Services Tax (GST) dispute after tax authorities denied company input tax credit (ITC) on license fees paid to Jawaharlal Nehru Port Trust (JNPT).
Under the GST regime, input tax credit allows businesses to adjust the tax they pay on purchases against their tax liability on their external supplies. Denial of ITC could significantly increase costs for companies operating under long-term infrastructure and concession agreements.
A division bench comprising Justices GS Kulkarni and Aarti Sathe, in an interim order dated February 4, directed the tax department not to take any remedial steps against the company until the next hearing on March 4, 2026.
Gateway Terminals, a joint venture between JNPT and Container Corporation of India, operates a container terminal at JNPT under a 30-year license agreement. Under this agreement, it pays license fees for the right to use the port infrastructure and collects indirect taxes (first service tax and later GST) on such payments.
The dispute arose after tax authorities rejected the company’s ITC claim on the grounds that the underlying transaction did not qualify as a “service” eligible for credit under the GST law. The Ministry also refused to refund the tax already paid for the same transaction.
Speaking on behalf of Gateway Terminals, Rastogi Chambers founder Abhishek A Rastogi argued that the department’s stance was self-contradictory. He stated that the authorities denied ITC claiming that the transaction was not a service and also refused to refund the tax collected from this transaction.
“The main issue before the court is whether the ministry can, on the one hand, reject the ITC, claiming that the transaction is not a service, and on the other hand, refuse the refund of the tax collected on this very transaction,” Rastogi said, adding that such an attitude is contrary to the principle of revenue neutrality.
After considering the reasons recorded in the impugned order denying both ITC and refund, the court held that no compelling compensation should be filed against the petitioner till the adjournment date. The court issued notice to the respondents and directed the government to file its responsive affidavit within three weeks.
