The petitioner challenged a show cause notice proposing levy of IGST on equity capital infused by the holding company and on External Commercial Borrowings. The factual background showed that the transactions were in the nature of capital infusion and interest-based borrowings, which were exempt under relevant GST notifications.
The Court held that the issues raised were squarely covered by earlier decisions holding that equity infusion and ECB transactions do not constitute supply under GST. The show cause notice was quashed to the extent it proposed levy contrary to settled law.