MAY 27, 2026

TRU or False

By Vijay Kumar

CIRCULAR No. 163/19/2021-GST was issued on 6th October 2021, by the

Tax Research Unit (TRU)

in the

Department of Revenue

under

Ministry of Finance

of the

Government of India

Please note that the Central Board of Indirect Taxes (CBIC) does not figure in the above hierarchical list.

Anyway, the TRU in the Department of Revenue under the Ministry of Finance of the Government of India (CBIC not figuring anywhere) in the abovementioned circular clarified certain issues on GST. The TRU Circular does not state the authority/power/duty under which TRU issued the clarifications.

It was stated:

Based on the recommendations of the GST Council in its 45th meeting held on 17th September, 2021, at Lucknow, clarification, with reference to GST levy, are being issued through this circular.

The Circular was signed by a Technical Officer in TRU.

Can TRU issue clarifications? What is TRU?

As per Section 168 of the Central Goods & Services Tax Act, 2017,

The Board may, if it considers it necessary or expedient so to do for the purpose of uniformity in the implementation of this Act, issue such orders, instructions or directions to the central tax officers as it may deem fit, and thereupon all such officers and all other persons employed in the implementation of this Act shall observe and follow such orders, instructions or directions.

So, the Board can issue orders, instructions or directions which are binding on the GST officers.

But can the TRU issue orders, instructions or directions and are they binding on the GST officers?

The Circular has been challenged in the Allahabad High Court on the grounds:

1. TRU is not an administrative authority to issue binding direction by the revenue authorities.

2. No binding circulars had been issued by the competent administrative authority i.e. CBIC.

The High Court on April 29, 2026 asked the Counsel for Union, counsel for the revenue and the Counsel for the State: WRIT TAX No. - 2333 of 2026

1. To obtain clear written instructions as to the source of the power of the TRU to issue the impugned circular;

2. Written instruction would reveal how such communications issued by the TRU may create binding force either in law or on the administrative side.

And the case was posted for 19.05.2026. On that date, relying on the written instructions received, the Counsel for TRU and CBIC asserted that the impugned Circular has been issued by the CBIC. Remember CBIC's name never figured in the Circular!

The High Court noted that though such recital is contained in the written instructions, supporting material are not on record and that prima facie, if a circular is issued by the CBIC, necessary notings evidencing file movement to establish that the matter had engaged the attention of the CBIC at any stage, resulting in issuance of such Circular would exist.

The Counsel for TRU and CBIC prayed for and was granted three weeks to file appropriate counter affidavit.

And the matter is listed for 07.07.2026.

The Delhi High Court had already solved this riddle in "Association of Technical Textiles Manufacturers and Processors" 2023-TIOL-1586-HC-DEL-GST , in 2023.

The High Court held that TRU has no power to issue such directions and circulars and so the impugned circular was quashed.

There was another petition W.P.(C) 2343/2019 - All India Buffalo & Sheep Meat Exporters Association Vs Union of India in the same Delhi High Court challenging the very same circular and the High Court noted that the impugned circular has already been set aside by a coordinate Bench of this Court in Association of Technical Textiles Manufacturers and held:

Needless to state that the Concerned Authorities shall adjudicate the question of classification if it so arises, uninfluenced by the said circular.

Now, what happens to the hundreds of circulars and directions and clarifications issued by TRU all these years? Were they all illegal?

I asked this question in Jest GST dated 22 11 2023, "And what about the future? Will TRU stop issuing directions and clarifications?"

Obviously, TRU did not stop issuing similar circulars as there was a Circular No. 245/02/2025-GST, Dated: January 28, 2025 issued by TRU.

Government has taken both the cases to the Supreme Court in Special Leave Petitions and the case is pending in the Apex Court.

What then is TRU? TRU is treated like God in the Board and so they have the final word. At the least it is the Oracle of the Board.

TRU is a part of the Board, like many other sections in the Board, but over the years, because of its proximity to the Revenue Secretary and the Finance Minister, it has outgrown the Board and all neighbourhood. Working in the TRU became a status symbol as the best officers with the highest legal acumen and capacity for hard work with hardly any rewards except of course fame and associated power, were selected. In the Board, there are several Commissioners and Joint Secretaries and the TRU Joint Secretary was a kind of super secretary.

Here's the Board's family tree - six Members, countless Joint Secretaries, and somewhere in the foliage, the TRU, pretending to be the trunk.

As per the Department of Revenue website, the Department is headed by the Revenue Secretary under whom is the Chairman, CBIC under whom there are six Members in charge of Administration and Vigilance; Customs; Compliance; GST, Central Excise and Service Tax; Tax Policy and Legal; and IT&TPS. Interestingly they are all of Secretary Rank and get the Secretary's salary. There are several Joint Secretaries and Commissioners working in the Board under each of these Members.

In Circular No. 27/90-CX.3, dated 24-5-1990, Board mentioned, Tax Research Unit when consulted in this matter, has stated that there was no intention of granting credit of duty .

Does it mean that TRU was not part of the Board?

In Circular No. 37/90-CX.8, dated 3-7-1990, the Board stated, The matter has been examined by the Board in consultation with the Tax Research Unit.

So, is the TRU outside the Board?

Circular No. 71/71/94-CX, dated 27-10-1994 [From F.No. 341/45/94-TRU] was issued by the TRU, b ut it stated that the matter has been examined in the Board.

Does it mean that TRU was communicating the decision of the Board?

In Circular No. 1025/13/2016-CX, dated 22-4-2016, Board mentioned that Shri Alok Shukla, Joint Secretary [Tax Research Unit, Central Board of Excise and Customs, Department of Revenue] will be a Member of a Committee. Board recognised that TRU is a part of the Board.

But did TRU ever recognise the Board?

After every budget, it is customary for the Joint Secretary, TRU to issue a D.O letter to the Commissioners and Chief Commissioners. In his letter D.O.F.No.334/1/2001-TRU, dated February 28, 2001, the then Joint Secretary (TRU)T.R. Rustagi wrote:

The Explanatory Notes prepared by the TRU explain the details of individual changes. Any errors or omissions that might have crept in the Finance Bill or any of the notifications may kindly be brought to my notice urgently. Doubts on any matter requiring clarification may be referred to me by E-Mail or otherwise. We shall try to respond as early as possible.

All TRU officers and I shall be looking forward to know your comments and reactions on the budgetary changes.

With warm personal regards,

No reference to the Board at all!

Twenty-five years later in his letter D.O.F. No. 334/3/2026-TRU, dated 1st February 2026, the TRU Joint Secretary Jainendra Singh Kandhari wrote,

my team and I would like to express our gratitude to you for the valuable suggestions, feedback and support and would look forward to your comments/suggestions.

Again, no reference to the Board.

Is there a TRU in CBDT? There is - it is called TPL - Tax Policy and Legislation.

We haven't even fully recovered from the long-standing battle over the DRI's power to issue show-cause notices, and now we are faced with the reality that the almighty TRU isn't authorized to issue circulars or directions. The irony is that these instructions would have been perfectly legal if they had simply been issued in the name of the Board or at least mentioned the Board's existence.

As Finance Minister Pranab Mukherjee was going to Parliament to reply to the discussion on the Finance Bill 2009, he asked the Joint Secretary TRU to suggest to him an exemption which will be very popular without losing much revenue. The JS TRU suggested that there have been persistent demands from State Governments and other stakeholders to exempt road repair from service tax as road laying was already exempted.

The Finance Minister was pleased and told the Lok Sabha:

Roads serve as a lifeline in the country. Therefore, the Government has accorded the highest priority in developing and maintaining roads across the country. On the tax front, construction or laying of the new road is excluded from the service tax. However, repairs and maintenance of the roads are chargeable to service tax. Several requests have been received to exempt the repairs and maintenance of roads from the service tax. Therefore, I propose to remove this anomaly by also exempting repairs and maintenance of roads from the service tax with immediate effect .

That is TRU!