₹28.56 Lakh GST Demand on Blackbuck-Zinca: What It Means
Blackbuck-Zinca Logistics has received a ₹28.56 lakh GST demand for FY 2017–18 from the authorities. The company has announced its intention to file an appeal, a move that brings attention to how GST scrutiny is tightening on logistics aggregators.
Let’s break down what this tax demand means, the appeal process, and what other businesses can learn from it.
Why Did Blackbuck-Zinca Receive a GST Demand?
As per reports, the demand pertains to FY 2017–18, which was the first full financial year under GST. During this transition period, several businesses — especially platform-based aggregators — struggled with:
- Classification of services
- Place of supply errors
- Incomplete input tax credit (ITC) reconciliation
- Non-reconciliation between GSTR-1, GSTR-3B and books
- Taxability of commission or facilitation services
Logistics aggregators, like Zinca (a group entity of Blackbuck), often operate in a model where truckers, agents, and service buyers interact via a platform. This structure raises issues like:
- Who is the supplier under GST?
- Is TDS/TCS under GST applicable?
- Who pays tax under reverse charge if unregistered truckers are involved?
A demand of this nature suggests that departmental audit or investigation under Section 61 (Scrutiny of Returns) or Section 65/66 (Audit/Special Audit) has led to recovery of tax, interest, and possibly penalty.
Can the Company File an Appeal?
Yes. Under Section 107 of the CGST Act, a taxpayer can file an appeal against the adjudication order within 3 months of the date of communication of the order.
Appeal Process Summary:
| Step | Description |
|---|---|
| 1 | Receive order under Section 73 or 74 |
| 2 | File FORM GST APL-01 within 3 months |
| 3 | Pay pre-deposit: 10% of disputed tax |
| 4 | Appeal heard by Appellate Authority |
| 5 | Further appeal to Appellate Tribunal possible |
If the ₹28.56 lakh includes only tax, the company must deposit ₹2.85 lakh (10%) upfront to pursue the appeal.
Legal Reference: CGST Act Provisions Involved
- Section 73/74: Demand and recovery (non-fraudulent vs. fraudulent cases)
- Section 107: Appeals to Appellate Authority
- Rule 108: Filing procedure for appeals
- Circular No. 129/48/2019-GST: Clarifies process of scrutiny and audit
Official CGST Act link (gst.gov.in)
Expert Insight: What Should Logistics Platforms Watch Out For?
According to indirect tax experts, logistics firms must:
- Maintain robust reconciliations between GST returns and books
- Clarify service classification in contracts with truckers and customers
- Track reverse charge obligations for unregistered vendors
- Avoid reliance on system-generated GSTR-2A as sole basis for ITC
Pro tip: Always retain proof of vendor tax payment if availing ITC, especially in aggregator models where the supply chain is multi-layered.
What Can Other Businesses Learn?
This case is a wake-up call for all startups and logistics tech firms operating on marketplace or intermediary models. Key takeaways:
- Get a preventive GST health check
- Digitally archive all tax invoices and agreements
- Be ready for notices even after 5+ years, as timelines under Section 73 (3 years) and Section 74 (5 years) still apply
- Consider using platforms like Efiletax for ongoing GST audit compliance and return review
Internal Link:
Read more: GST Demand Notices: Steps to Respond and Avoid Penalties
FAQ Section
Q1. Can a GST demand be challenged after 3 months?
Yes, with a condonation of delay request, if sufficient cause is shown, the appellate authority may allow an appeal up to 1 more month.
Q2. Does Blackbuck-Zinca need to pay the entire ₹28.56 lakh upfront?
No. Only 10% of the disputed tax needs to be deposited to file the first-level appeal under Section 107.
Q3. Can GST demand arise for FY 2017–18 in 2024–25?
Yes. The extended limitation period under Section 74 (fraud, suppression) is 5 years, and departments have been issuing show cause notices before the deadline.
Final Thoughts
The Blackbuck-Zinca case isn’t isolated. With data analytics and return matching, the GST department is tightening compliance, especially for aggregator-led models. Businesses must not wait for a notice — proactive audit and classification review can save lakhs.
Need expert help with GST scrutiny or appeal filing?
Efiletax offers end-to-end assistance — from demand notice response to appeal representation.
Summary
Blackbuck-Zinca faces ₹28.56 lakh GST demand for FY18. Learn why this happened, appeal steps under Section 107, and how logistics firms can avoid similar tax pitfalls under GST.