Decided 22 September 2026. The Raipur Bench of GSTAT has held that recovery of a written-off housing loan is covered by the exemption for loans and advances in Entry 27 of Notification 12/2017-Central Tax (Rate). It set aside the appellate order that ignored the lender's bank records and remanded the matter for verification of the written-off loan account.
Case at a glance
| Case | M/s Cent Bank Home Finance Ltd. v. Commissioner, State Tax, Chhattisgarh & Ors. |
| Forum | GSTAT, Raipur (Division Bench Court I) |
| Appeal No. | APL/4/RPR/2026 |
| Date of order | 22 September 2026 |
| Period | July 2017 to March 2018 |
| Demand | About ₹4.18 lakh (tax ₹1,99,220 with interest and penalty) |
| Result | Order-in-Appeal set aside; remanded to appellate authority |
Facts of the case
On scrutiny, the officer asked the appellant to substantiate exempt and non-GST supplies shown in GSTR-9. No reply was given, and a demand under section 73 was confirmed and upheld in appeal.
The appellant said the amount was recovery of a written-off housing loan: a cheque of ₹11,50,000 deposited by a borrower on 01.01.2018 into a written-off loan account, net ₹11,06,782 after charges including SARFAESI costs.
Issue before the Tribunal
Is recovery of a written-off loan exempt, and did the appellate authority err in ignoring the bank records?
What the Tribunal held
- Entry 27 of Notification 12/2017 exempts services by way of extending deposits, loans and advances. Recovery of a loan amount is covered. The question of law was answered for the appellant.
- The appellant must prove with reliable evidence that the receipt was recovery of a written-off loan during the relevant year.
- The loan account record was on file but ignored. A certified copy of a banker's book entry is admissible under section 4 of the Bankers' Books Evidence Act, 1891; the appellate authority could also have verified it with the branch.
- Using its power under Rule 112(4), the Tribunal remanded the matter: the appellant must produce a certified copy of the records, and the appellate authority must decide afresh.
Practical takeaways for taxpayers
- NBFCs and banks should map recoveries of written-off loans separately in GSTR-9 and keep certified account statements ready.
- Reply to ASMT-10 notices; non-reply led to this demand in the first place.
- Certified copies under the Bankers' Books Evidence Act are strong proof before GST authorities.
Frequently asked questions
Is recovery of a bad or written-off loan taxable under GST?
GSTAT Raipur held it falls within the exemption for loans and advances under Entry 27 of Notification 12/2017.
What evidence is needed?
Certified copies of the loan account showing write-off and recovery, under the Bankers' Books Evidence Act.
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This summary is based on the order of the GST Appellate Tribunal, Raipur (Division Bench Court I) in Appeal No. APL/4/RPR/2026. It is general information, not legal advice; the outcome of any case depends on its own facts and the full text of the order.