Bombay High Court Grants Interim Relief to Hindustan Coca-Cola in ₹2,500 Cr GST Dispute!
In a significant development, the Bombay High Court has granted ad-interim relief to Hindustan Coca-Cola Beverages Pvt. Ltd. against a massive ₹2,500 crore GST demand issued on grounds of alleged undervaluation due to retrospective discounts given to distributors.
Let us have a Short Overview of the case:
In this case, the Revenue alleged that Coca-Cola extended retrospective discounts through its distributors after retailers had already received the benefits, thereby undervaluing taxable supplies.
The SCN (Show Cause Notice) was also challenged as time-barred, violating the mandate of Section 74 of the CGST Act.
Most crucially, Coca-Cola questioned the constitutional validity of Section 15(3)(a) of the CGST Act – arguing that the Revenue’s interpretation renders it ultra vires of Section 15(1), which mandates taxation at transaction value.
Coca-Cola’s stand:
The discounts were transparently recorded in its Distributor Management System and followed industry practice. The Department, they argue, has misconstrued Section 15(3)(a).
HC Observation
“Prima facie, we do not find this reasoning to be correct… Strong prima facie case made out for staying the impugned order.”
Interim stay granted on the ₹2,500 Cr GST order.
Matter now listed for final hearing on April 29, 2025, with a clear indication from the Court – they may dispose of the writ petition at that stage itself.
This case could reshape the legal interpretation of discount provisions under GST, especially for companies using retrospective sales incentives and managing complex distributor-retailer models.
The copy of the order is as under:
