The Bombay High Court has quashed a proposed ₹1,524 crore (approximately $183 million USD) Goods and Services Tax (GST) demand against Tata Sons Pvt Ltd, determining that payments made to Japanese telecom company NTT Docomo as part of an arbitration award do not constitute a 'supply of service' under the GST framework. The ruling was delivered by a Division Bench comprising Justice G. S. Kulkarni and Justice Aarti Sathe, who set aside a show cause notice issued by the Directorate General of GST Intelligence (DGGI).

The dispute originated from a 2009 shareholders' agreement between Tata Teleservices and NTT Docomo, which led to arbitration after certain performance targets were not met. In 2016, the London Court of International Arbitration awarded Docomo over $1.17 billion in damages. Following enforcement actions in multiple jurisdictions, including India, Tata deposited approximately ₹8,450 crore (about $1.02 billion USD) as part of the settlement.

The revenue department's argument for imposing GST was based on the premise that the consent terms constituted a taxable service. However, the court found that the settlement of the arbitral award was a matter strictly between the parties involved and did not involve any independent consideration that would trigger GST liability. This ruling is significant as it clarifies the legal treatment of arbitration damages in relation to GST.