Bombay HC Flags GST Confusion: Govt Takes Tax, Blocks Credit for Infra Firms

• Bombay High Court extends protection to Gateway Terminals India Pvt. Ltd. in a GST input tax credit (ITC) dispute, highlighting tax uncertainty for infrastructure and logistics sectors.
• The core issue is the government taxing transactions as services while denying ITC, arguing they don't qualify as a 'supply' under GST law.
• This approach contradicts GST's principle of tax neutrality, potentially undermining project viability for capital-intensive sectors like ports and highways.
• The Court's interim order prevents coercive recovery and signals a broader examination of classification and credit eligibility in concession-based arrangements.
• The outcome of the upcoming hearing in April 2026 could significantly impact the infrastructure sector, either reinforcing GST principles or increasing tax costs.