Category: CA Chandrasekhar Kutty. B.Com, F.C.A.

CASE LAW UPDATE VIRES OF SECTION 16(2)(c) CGST ACT – UPHELD Gujarat High Court (Division Bench) M/s Maruti Enterprise v. Union of India & Ors. R/Special Civil Application No. 18080 of 2023 (with batch of 50+ connected matters) Coram: Hon'ble Mr. Justice A.S. Supehia & Hon'ble Mr. Justice Pranav Trivedi Pronounced on: 01 May 2026 (Reserved on: 21 April 2026) 1.  ISSUE FOR CONSIDERATION Whether Section 16(2)(c) of the CGST Act, 2017 – which denies Input Tax Credit (“ITC”) to a recipient where the supplier has failed to deposit the tax with the Government – is ultra vires Articles 14, 19(1)(g), 265 and 300A of the Constitution; alternatively, whether the provision is liable to be read down so as to exclude bona fide purchasers from its rigour. 2.  CONCLUSION OF…

CONSOLIDATED SHOW CAUSE NOTICES UNDER GST – PERMISSIBLE Karnataka High Court (Division Bench) – W.A. No. 1751 of 2024 c/w batch The Commissioner of Central Tax, Bengaluru NW Division v. M/s Chimney Hills Education Society & Ors. Coram: Hon'ble Mr. Justice S.G. Pandit & Hon'ble Mr. Justice K.V. Aravind Date of Judgment: 23 April 2026 1.  ISSUE FOR CONSIDERATION Whether it is permissible to issue a consolidated/common Show Cause Notice under Sections 73 and 74 of the CGST Act, 2017 covering multiple financial years or multiple tax periods? 2.  CONCLUSION OF THE COURT Answered in the affirmative – in favour of the Revenue. The Division Bench held that proceedings under Sections 73/74 of the CGST Act are default-specific, not tax-period or financial-year specific. There is no statutory bar to issuance…

Advisory Circular CBIC Instruction No. 06/2026-Customs dated 27th April, 2026 Drawback under Section 74 on Re-export of Duty-Paid Goods Cleared from SEZ to DTA Background The Comptroller and Auditor General of India, in Audit Para 5.8 of Audit Report No. 33 of 2025, observed that field formations were following divergent practices while processing duty drawback claims filed by Domestic Tariff Area (DTA) units under Section 74 of the Customs Act, 1962. Certain formations had taken the view that clearance of goods from a Special Economic Zone (SEZ) into the DTA does not constitute an “import”, and on that basis declined to sanction drawback when such duty-paid goods were subsequently re-exported. Statutory Framework Examined by the Board On examination, the Board has revisited the relevant statutory provisions, particularly under the SEZ…

MOHAN & CHANDRASEKHAR Chartered Accountants ADVISORY INVOICE MANAGEMENT SYSTEM (IMS) – OFFLINE TOOL NOW LIVE ON THE GST PORTAL 1. Background The Invoice Management System (IMS) was rolled out on the GST Common Portal with effect from the October 2024 tax period. The system enables a recipient taxpayer to take action on each inward invoice uploaded by his supplier through GSTR-1 / GSTR-1A / IFF, by marking the record as Accepted, Rejected, Pending or No Action, before the corresponding input tax credit flows into GSTR-2B and GSTR-3B. In a further step towards ease of compliance, the Goods and Services Tax Network (GSTN) has, vide advisories dated 21st April 2026 and 23rd April 2026, introduced an Excel-based IMS Offline Tool on the GST Portal. The utility allows taxpayers to take action…

Mohan & Chandrasekhar, Chartered Accountants Chartered Accountants Hosur | Bengaluru | Chennai ADVISORY CIRCULAR GSTN Advisory: System Glitch in Interest Auto-Computation for February 2026 — Taxpayers Must Re-Compute Before Filing March 2026 GSTR-3B Based on GSTN Advisory dated 6th March 2026 on Re-Computation of Interest under Table 5.1 of GSTR-3B BACKGROUND The GST Network (GSTN) has issued an important advisory dated 6th March 2026 alerting taxpayers to a technical glitch that has resulted in incorrect auto-computation of interest for the February 2026 tax period, as reflected in Table 5.1 of the March 2026 GSTR-3B. Taxpayers affected by this glitch are required to take immediate corrective action before filing their GSTR-3B for March 2026. HOW THE SYSTEM COMPUTES INTEREST — A BRIEF OVERVIEW As a facilitation measure, the GST Portal auto-calculates…

MOHAN & CHANDRASEKHAR Chartered Accountants Hosur  |  Bengaluru  |  Chennai GSTN ADVISORY - GST Portal Update: Pre-Deposit Field in APL-01 Now Made Editable GSTN Advisory dated 10th April 2026  —  Critical Relief for Appellants April 2026 1.  Background Under Section 107(6) of the CGST Act, 2017, every appellant filing an appeal before the First Appellate Authority is required to pre-deposit: The full admitted amount of tax, interest, fine, fee and penalty arising from the impugned order; and 10% of the remaining disputed tax (subject to a maximum of ₹25 crores each under CGST and SGST/UTGST). This pre-deposit is a jurisdictional pre-condition for admission of the appeal — non-compliance renders the appeal liable to rejection at the threshold itself. 2.  The Problem — Portal Rigidity Causing Hardship Until recently, when an…

MOHAN & CHANDRASEKHAR Chartered Accountants Hosur | Bengaluru | Chennai GST Case Law Update April 2026 “NOTICE WITHOUT BASIS IS NO NOTICE AT ALL” Punjab & Haryana High Court Strikes Down CAG-Based GST Show Cause Notice Abbott Healthcare Pvt. Ltd. vs. Excise and Taxation Commissioner, Punjab  |  CWP-4495-2024 (O&M)  |  Date of Decision: 02.04.2026 The Background The Punjab & Haryana High Court, in a Division Bench judgment delivered by Hon’ble Mr. Justice Deepak Sibal and Hon’ble Ms. Justice Lapita Banerji, has set aside a Show Cause Notice issued under Section 73(1) of the CGST/PGST/IGST Acts, 2017, holding it to be factually incorrect, vague, and violative of the principles of natural justice. The SCN dated 31.01.2024 was issued to Abbott Healthcare Private Limited (GSTIN: 03AAACK3935D1Z2) for FY 2018-19, raising demands aggregating…

Mohan & Chandrasekhar, Chartered Accountants Hosur  |  Bengaluru  |  Chennai GSTN Advisory Ref: GSTN | April 3, 2026 Difficulty in Filing Appeals Where Demand Order Reflects “NIL” Amount 1.  Background GSTN has, vide its advisory dated April 3, 2026, brought to the notice of taxpayers a technical difficulty being faced on the GST portal while filing appeals (Form GST APL-01) in cases where the adjudication order reflects the demand amount as “NIL.” This situation commonly arises when a taxpayer makes payment of tax, interest, or penalty at the Show Cause Notice (SCN) stage — without admitting the underlying liability — and the adjudicating authority thereafter issues a demand order treating such payment as full discharge of the demand, without explicitly determining and recording the tax liability. 2.  How the Issue…

Customs Duty Concession for SEZ Units on DTA Clearances — Notification No. 11/2026-Customs The Central Government has issued Notification No. 11/2026-Customs dated 31st March 2026, granting concessional customs duty rates on goods manufactured by Special Economic Zone (SEZ) units and cleared into the Domestic Tariff Area (DTA). The notification is effective from 1st April 2026 and will remain in force until 31st March 2027. Key Highlights: The notification provides partial exemption from Basic Customs Duty (BCD) — and in select cases, from Agriculture Infrastructure and Development Cess (AIDC) — on a wide range of manufactured goods cleared from SEZ to DTA. The concessional BCD rates range from 4% to 15% depending on the tariff classification, as specified in two detailed tables annexed to the notification. Eligibility Conditions: The exemption is…

MOHAN & CHANDRASEKHAR, Chartered Accountants  Hosur • Bengaluru • Chennai Gauhati HC Sets Aside Section 73 Order — Upholds Right to Correct GSTR-1 Errors & Affirms Retrospective Applicability of Section 16(5) M/s ITI Ltd v. Union of India | WP(C)/150/2024 | Gauhati HC (Kohima Bench) | 20.03.2026 Background: The Assistant Commissioner, CGST, Dimapur passed an order under Section 73 for FY 2018–19 on two grounds: (a) mismatch between GSTR-1 and GSTR-3B, where four invoices were erroneously reported at 18% in GSTR-1 instead of 12% (the actual rate), along with a wrongly reflected Credit Note; and (b) denial of ITC under Section 16(4) since GSTR-3B for March 2019 was filed on 13.03.2021, beyond the due date of 20.10.2019. The correct figures were consistently reflected in GSTR-3B and GSTR-9. On GSTR-1 vs…

MOHAN & CHANDRASEKHAR Chartered Accountants Hosur | Bengaluru | Chennai Date: 26th March 2026 Subject: Extension of Due Date for Issuance of TDS Certificates under Section 203 of the Income-tax Act, 1961 for Q3 FY 2025-26 (Quarter ending 31st December 2025) Reference: CBDT Circular No. 2/2026 dated 25th March 2026 [F. No. 275/10/2026-IT (B)] We bring to your kind attention CBDT Circular No. 2/2026 dated 25th March 2026 issued under the powers conferred by Section 119 of the Income-tax Act, 1961 (“the Act”), whereby the Central Board of Direct Taxes (“CBDT”) has extended the due date for issuance of TDS certificates under Section 203 of the Act, read with Rule 31 of the Income-tax Rules, 1962, for the quarter ending 31st December 2025. 1.      Background Section 203 of the Act…

MOHAN & CHANDRASEKHAR CHARTERED ACCOUNTANTS Hosur  |  Bengaluru  |  Chennai ⚠️  URGENT ACTION REQUIRED  ⚠️ GSTR-3B FILING CHANGED! New Mandatory Step Before You Can File Effective from February 2026 Tax Period Onwards Advisory Circular No. MC/GST/2026-03        Date: 16th March 2026 WHAT HAS CHANGED? The GST Network (GSTN) has introduced a new mandatory step in the GSTR-3B filing process. Pursuant to Section 50 of the CGST Act, 2017, interest is leviable where tax liability of a previous tax period is discharged in a subsequent period. To operationalise this provision accurately, GSTN has enabled auto-population of the "Tax Liability Breakup, As Applicable" tab in Form GSTR-3B, effective from the February 2026 return period. This tab captures tax liability pertaining to prior tax periods reported in the current month's GSTR-1/GSTR-1A/IFF but discharged through…

ADVISORY CIRCULAR Link DRC-03 Payment with DRC-03A for Recognition in Appeal Pre-Deposit Calculation — GSTN Advisory   Based on GSTN Portal Advisory | March 2026 Circular Ref.MC / GST / CIR / 2026-03SubjectPre-deposit via Form GST DRC-03 — Filing Form GST DRC-03A is Mandatory Before AppealIssued byMohan & Chandrasekhar, Chartered AccountantsDateMarch 2026ApplicabilityAll GST-registered taxpayers who have paid amounts via Form GST DRC-03 against demand orders and intend to file appeals before the First Appellate Authority 1.  Background — The Problem Taxpayers are Facing A recurring practical difficulty has been flagged by the GSTN (Goods and Services Tax Network) which affects taxpayers who have made payments through Form GST DRC-03 during the course of investigation, scrutiny, or audit proceedings — and who subsequently wish to file an appeal against the demand…

GST on Residential Welfare Associations — Karnataka AAR Settles Key Issues A Consolidated Analysis of Four Advance Rulings dated 11.02.2026 Introduction The Karnataka Authority for Advance Ruling (KAAR) delivered four significant rulings on 11th February 2026 concerning the GST treatment of collections made by Resident Welfare Associations (RWAs) / Apartment Owners' Associations. The four applicants — M/s Liberty Square Apartment Owners Association (KAR.ADRG/08/2026), M/s Apartment Owners Association of Raj Lake View (KAR.ADRG/11/2026), M/s Sandeep Vihar Owners Association (KAR.ADRG/12/2026), and M/s Godrej United Owner's Association (KAR.ADRG/13/2026) — raised questions covering corpus fund taxation, water and electricity charge recovery, and the scope of the ₹7,500 exemption. The rulings, pronounced by Shri Kalyanam Rajesh Rama Rao (Member, Central) and Shri Sivakumar S Itagi (Member, State), provide authoritative clarity on several long-contested issues. Issue…

DGCF Alert: Automatic Extension of Export Obligation Period Date: March 10, 2026 Source: Public Notice No. 51/2025-26 dated 06.03.2026   In light of current geopolitical developments impacting global trade and shipping routes, the Directorate General of Foreign Trade (DGFT) has provided significant relief to exporters by amending the Handbook of Procedures, 2023.   Key Highlights of the Extension • Eligibility: The extension applies to all Advance Authorisations (including Annual and Special categories) and EPCG Authorisations.   • Qualifying Period: Authorisations where the Export Obligation (EO) period or Block-wise EO period is expiring between 01.03.2026 and 31.05.2026.   • New Deadline: The EO period for eligible licenses is now automatically extended up to 31.08.2026.   • No Costs/Formalities: This extension is automatic. There is no requirement for a separate application, payment of composition fees, or physical…

Date: March 2026  Gauhati High Court Holds — Summary of SCN in DRC-01 Cannot Substitute a Proper Show Cause Notice under Section 73; Absence of Digital Authentication and Denial of Personal Hearing Vitiate Demand Proceedings  Case: Md Shoriful Islam v. State of Assam Citation: [2026] 183 taxmann.com 669 (Gauhati) Decided on: 06 February 2026 Bench: Hon'ble Justice Soumitra Saikia Writ Petition (C) No. 471 of 2026  Background  The petitioner, a GST-registered taxpayer in Assam, was issued a Summary of Show Cause Notice in Form GST DRC-01 dated 02.05.2024 under Section 73 of the CGST/AGST Act, 2017. The DRC-01 stated that a Show Cause Notice was attached. However, the only attachment was a "determination of tax" — no separately drafted Show Cause Notice specifying reasons and circumstances for invoking Section 73 was ever served.  The petitioner did not file a reply, precisely because no proper SCN was…

CLIENT ADVISORY Deferred Payment of Customs Duty – New Scheme for Eligible Manufacturer Importers (EMI) Circular ReferenceCircular No. 08/2026-Customs dated 28th February, 2026Issued ByCBIC, Department of Revenue, Ministry of FinanceEffective DateApplications from 01.03.2026 | Facility from 01.04.2026ValidityTill 31st March, 2028 1. Background & Purpose CBIC has vide Notification No. 12/2026-Customs (N.T.) dated 01.02.2026 extended the facility of Deferred Payment of Customs Import Duty (available hitherto only to AEO-accredited entities) to a new class of importers called 'Eligible Manufacturer Importers' (EMI). This is governed by the Deferred Payment of Import Duty Rules, 2016, as amended. The key objective is to expedite Customs clearance of imported goods at Ports/Airports/ICDs, thereby reducing transaction costs and improving ease of doing business for the manufacturing sector. 2. Who Can Apply – Eligibility Criteria To qualify…

Maharashtra Waives E-Way Bill for Motor Vehicle Road Testing The Commissioner of State Tax, Maharashtra, has issued Notification No. SGST/e-way bill/02/2025-26 dated February 20, 2026. This notification provides significant relief to automobile manufacturers by waiving the mandatory e-way bill requirement for motor vehicles being transported specifically for road testing purposes.   This relaxation follows a representation by M/s. Tata Motors Limited, acknowledging the practical difficulties in generating e-way bills for movements that do not constitute a "supply".   Scope of the Exemption The waiver applies exclusively to the movement of motor vehicles for road tests across India where the transport is for reasons other than by way of supply. It is issued under the powers conferred by Sub-rule (5) of Rule 138A of the MGST Rules, 2017.   Key Conditions and Procedures To…

Companies Compliance Facilitation Scheme, 2026 (CCFS-2026) One-time Opportunity for Condonation of Delay in Statutory Filings   1. Introduction The Ministry of Corporate Affairs (MCA), vide General Circular No. 01/2026 dated 24th February 2026, has introduced the "Companies Compliance Facilitation Scheme, 2026" (CCFS-2026). This scheme aims to provide a one-time window for companies to regularize their pending annual filings and financial statements with significantly reduced additional fees.   2. Validity Period • Effective Date: 15th April 2026.   • Closing Date: 15th July 2026.   3. Key Benefits and Fee Structure The scheme provides a substantial reduction in the financial burden for defaulting companies:   • Annual Filings (MGT-7/AOC-4, etc.): Companies can complete pending filings by paying only 10% of the total additional fees normally payable for the delay.   • Dormancy (e-form MSC-1): Inactive companies can…

Gujarat HC: ITC on GIDC Leasehold Transfers Not Blocked Under Section 17(5)(d) The Gujarat High Court, in the case of Niket Bipinbhai Patel vs. Assistant Commissioner (A.E.) CGST, ruled that Input Tax Credit (ITC) cannot be denied for activities involving the transfer of leasehold rights when no construction is involved. Key Highlights of the Judgment Nature of Business: The petitioner, an NRI, acquired leasehold rights for GIDC plots, performed sub-plotting, and transferred those rights to purchasers. ITC Eligibility: The Court held that ITC availed on GIDC invoices for charges like sub-divisional fees and transfer fees is not barred by Section 17(5)(d) of the CGST Act Legislative Intent: The Court clarified that the restriction under Section 17(5)(d) applies exclusively to construction-related expenditure for immovable property. Absence of Construction: Since the Revenue…

AAR Gujarat: Classification of Ice Cream Supply as 'Restaurant Service' vs. 'Supply of Goods' The Gujarat Authority for Advance Ruling (AAR), comprising Shri Vishal Malani and Smt. Sushma Vora, issued a ruling on February 19, 2026, clarifying the GST classification for ice cream sold in various service contexts. The ruling distinguishes between "restaurant services" and the "supply of goods" based on the manufacturing location and the nature of the transaction. 1. Nature of the Applicant's Business The applicant, Mohammed Sajid Mohammed Sharif Kakuwala, proposed to operate multi-product retail outlets in Ahmedabad. Key features of the business include: Diverse Menu: Preparation and sale of Bhajiya, Khaman, Sandwiches, Pizza, Juices, Falooda, Milkshakes, and Ice cream. Facilities: Outlets offer both dine-in and takeaway options. Manufacturing: Ice cream is either prepared at the retail…

Facility for Withdrawal from Rule 14A (Small tax payers simplified Registration Scheme) Feb 21st, 2026 GSTN has enabled a new online facility for eligible taxpayers to apply for withdrawal from the option availed under Rule 14A of the CGST Rules by filing Form GST REG-32 on the GST Portal. 1. Who can apply Active Taxpayers who are registered under Rule 14A, may apply for OPT OUT in accordance with the provisions of the law. 2. How to apply on the GST Portal After login, navigate to:Services -> Registration -> Application for Withdrawal from Rule 14AThe link will be visible only if the taxpayer is registered under Rule 14A and is active. The field “Option for registration under Rule 14A” will be selected as “No” by default. Enter “Reason for withdrawal…

Attention : Update on Advisory on Interest Collection and Related Enhancements in GSTR-3B Feb 19th, 2026 In continuation to the advisory posted on the GST Portal on 30th January, 2026 on the above subject, it is hereby informed that the functionality to utilise CGST or SGST ITC for payment of IGST liability, in any order of payment after complete exhaustion of IGST Credit (ref point no 3 of the advisory), shall be available from February-2026 period. Find below the detailed advisory posted earlier. Advisory on Interest Collection and Related Enhancements in GSTR-3B It is hereby informed that from January-2026 period onwards, the following enhancement have been made in filing of GSTR-3B: Update in Interest Computation for GSTR-3B From January-2026 tax period onwards, the interest calculation in table 5.1 of GSTR-3B…

GST Update: Taxability of Employee Canteen Facilities & Recoveries Reference: Maharashtra Authority for Advance Ruling (AAR) in the matter of KSB Limited [TS-1069-AAR (MAH)-2025-GST] Executive Summary The Maharashtra AAR recently issued a significant ruling regarding the GST implications for employers providing canteen facilities to their employees through third-party vendors. The core takeaways for businesses are: Free Canteen Services: If an employer provides canteen facilities completely free of charge to employees, it is treated as a non-taxable perquisite and attracts no GST. Subsidized / Paid Canteen Services: If an employer recovers any amount (partially or fully) from employees for canteen meals, the amount actually recovered is treated as taxable consideration, and GST is applicable on that recovered amount. The portion of the cost borne by the employer remains a non-taxable perquisite.…

GST Ruling on Residential Construction & Land Deduction Case Name: In the matter of M/s. Jaypee Enterprises Authority: Authority for Advance Ruling (AAR), Tamil Nadu Order Date: January 8, 2026   Executive Summary The Tamil Nadu AAR has clarified the taxability of residential projects where a promoter sells land and provides construction services. The ruling establishes that even if a developer has a separate sale deed for the land, they must follow the statutory one-third (1/3^{rd}) land value deduction for GST purposes rather than deducting the actual land value.   Key Ruling Highlights 1. Tax Rates for Residential Projects The AAR confirmed that for projects commencing after April 1, 2019, promoters are liable to pay GST at the following concessional rates (without Input Tax Credit): • Affordable Residential Apartments: 1.5% GST (0.75%…

White House Issues Fact Sheet: A New Era of Reciprocal Trade Between the United States and India On February 9, 2026, the White House released an official fact sheet outlining a historic trade agreement between President Donald J. Trump and Prime Minister Narendra Modi. This deal is designed to open India’s market of over 1.4 billion people to American products while addressing long-standing systemic trade imbalances.   Major Breakthroughs & Tariff Adjustments The agreement follows a high-level call between the two leaders, resulting in immediate fiscal shifts:   • Removal of Oil-Related Tariffs: President Trump signed an Executive Order to remove an additional 25% tariff on Indian imports, recognizing India's commitment to stop purchasing Russian oil.   • Lowered Reciprocal Tariffs: The United States will further lower the Reciprocal Tariff on India from…

Legal Update: Allahabad HC Clarifies Rules on Composite GST Notices, Section 6(2)(b) Bar, and Mandatory Limitation Periods In a significant judgment for the GST landscape, the High Court of Judicature at Allahabad has delivered a balanced ruling in the batch of petitions led by M/s SA Aromatics Pvt Ltd vs. Union of India [WTAX No. 7515 of 2025]. The Court addressed critical questions regarding the validity of composite Show Cause Notices (SCNs) spanning multiple years and the "hard" nature of statutory limitation periods.   Key Judicial Findings 1. Validity of Composite SCNs (Decided against Assessee) The Court ruled that it is permissible for Revenue authorities to issue a single, composite SCN for multiple tax periods or Financial Years (FYs) under Sections 73 and 74. • Adjudication vs. Assessment: The Court distinguished…

New Era in US-India Trade: Key Highlights of the 2026 Interim Agreement Framework February 7, 2026 The United States and India have officially announced a framework for an Interim Agreement regarding reciprocal and mutually beneficial trade. This development, announced today, serves as a significant stepping stone toward a broader Bilateral Trade Agreement (BTA) and aims to fortify supply chains while enhancing market access for both nations. Here is a breakdown of the critical components of the framework: 1. Tariff Reductions and Market Access The agreement outlines major tariff adjustments intended to balance trade interests: US Market Access for India: The United States will remove tariffs on Indian steel, aluminum, and copper that were previously imposed under national security proclamations. Additionally, India will receive a preferential tariff rate quota for automotive…

A recent ruling by the Odisha Appellate Authority for Advance Ruling (AAAR) in the case of Thermo Fisher Scientific India Pvt. Ltd. provides significant relief and clarity for businesses operating across state lines through service engineers without a physical office.The AAAR has overturned a previous ruling, confirming that deploying Field Service Engineers (FSEs) to a state does not automatically mandate a separate GST registration in that state.The Core ConflictThe lower authority (AAR) originally held that because the company had engineers residing in Odisha who stored minor spare parts and tools locally, they had a "Fixed Establishment" and a "Place of Business," requiring GST registration. The AAAR has now set aside this decision.Key Takeaways from the AAAR RulingThe AAAR’s decision was based on several critical factors that define what does—and does…

mportant Update: GST Portal Simplifies Notice Checks Great news for ease of compliance! As of Feb 5, 2026, the GST Network has finally merged the "Additional Notices and Orders" tab into the main "Notices and Orders" tab. What this means for you: One Stop: No more toggling between two different tabs to find Department letters. Less Risk: All Show Cause Notices (SCNs), Orders, and Registration alerts are now in a single list. Where to look: simply go to Services > User Services > View Notices and Orders. This small change makes tracking compliance much safer and easier!

Important Update: Enhancements to GSTR-3B Interest Calculation & Filing (Effective January 2026)The Goods and Services Tax Network (GSTN) has announced significant enhancements to GSTR-3B filing, effective from the January 2026 tax period. These changes are designed to align with the CGST Rules and provide a fairer method for calculating interest on delayed payments. 1. New Interest Computation FormulaThe system now provides the benefit of the minimum cash balance available in your Electronic Cash Ledger (ECL) from the return due date until the date of payment. This ensures you are only charged interest on the actual "cash" liability not covered by your existing balance. Crucial Constraints for Table 5.1:• Non-Editable Downwards: You cannot decrease the auto-populated interest value. • Minimum Liability: The system calculates the minimum interest required. • Manual Upward Revision: If your records…

Highlights of the Direct Tax Proposals (Budget 2026)1. Structural Reforms & Compliance• The New Income Tax Act, 2025: Set to take effect from April 1, 2026. New rules and forms will be notified shortly. • Revised Return Timelines: The deadline for revising income tax returns is extended from December 31 to March 31 (subject to a nominal fee). • Updated Returns: Taxpayers are now permitted to update their Return of Income (ROI) even after reassessment proceedings have been initiated.• Integration of Proceedings: Assessment and penalty proceedings will be integrated into a common order to streamline the process.• Accountant Definition: The definition of 'accountants' is being rationalized for better clarity under the Act.2. Reduced Tax Collected at Source (TCS)• Overseas Travel: TCS on overseas tour packages is reduced to 2% with no upper…

Budget Alert 2026: Major Ease of Doing Business in GST ValuationThe Finance Bill, 2026 has proposed a landmark shift in how Post-Supply Discounts are treated under GST. This change simplifies one of the most litigative areas of the CGST Act, aligning tax laws with modern commercial realities.The Big Change: Section 15(3)(b) & Section 34Previously, for a post-sale discount to reduce your GST liability, you had to prove it was established via a pre-existing agreement and linked to specific invoices. The 2026 amendment removes these rigid hurdles.What is Changing?• Removal of the "Agreement" Mandate: You no longer need to prove that the discount was "agreed at or before the time of supply."• No Invoice-by-Invoice Linking: The requirement to specifically link every discount to a particular original invoice is being done away…

Budget Alert 2026: Interim Mechanism for GST Advance RulingsThe Finance Bill, 2026 has introduced a strategic amendment to the CGST Act, 2017, aimed at resolving the long-standing delay in the operationalization of the National Appellate Authority for Advance Ruling (NAAAR).Key Proposed Amendment: Section 101ATo ensure that taxpayers aren't left in limbo due to conflicting State-level rulings, the Bill proposes the following:• New Sub-section (1A): This empowers the Government to notify an "existing authority" (which specifically includes a Tribunal) to act as the National Appellate Authority.• Interim Power: Until the NAAAR is formally constituted, this notified authority will hear appeals under Section 101B regarding conflicting advance rulings from different States or Union Territories.• Legal Standing: All references to the "National Appellate Authority" in the Act will be treated as references to…

Budget Alert 2026: Extension for Revised Tax ReturnsThe Finance Bill, 2026 has introduced a welcome move for taxpayers, offering more breathing room to correct errors in their filings. Here is a breakdown of the proposed changes to the timeline for filing Revised Income-Tax Returns.Key Proposed AmendmentsThe Bill seeks to align the timelines across both the current and legacy tax frameworks:• Extended Deadline: The time limit for filing a revised return is proposed to increase from 9 months to 12 months from the end of the relevant tax year.• Section 263(5) [2025 Act]: This new provision will reflect the 12-month window for those governed by the updated Income-tax Act.• Section 139(5) [1961 Act]: To maintain consistency, the Bill proposes a corresponding amendment to the legacy 1961 Act, ensuring all taxpayers benefit…

Budget Alert 2026: Major GST Refund Reforms for Businesses 🚀The Finance Bill, 2026 has introduced pivotal changes to the CGST Act refund framework, aiming to unlock working capital and simplify compliance for both exporters and domestic manufacturers.📝 Key Amendments at a Glance• Provisional Refunds for Inverted Duty Structure (IDS):The scope of Section 54(6) is being expanded. Previously, the 90% provisional refund was primarily for zero-rated supplies (exports). Now, businesses facing an Inverted Duty Structure (where tax on inputs is higher than tax on outputs) can also claim a 90% provisional refund upfront, significantly improving cash flow.• Removal of the ₹1,000 Threshold for Exports:In a major boost for small exporters, Section 54(14) is being amended. The existing restriction—which barred refund claims below ₹1,000—will no longer apply to goods exported out of…

Budget 2026 Alert: Major GST Relief for Intermediary Services 🚀In line with the recommendations of the 56th GST Council Meeting, the Finance Bill 2026 has proposed a critical amendment to the IGST Act, 2017, specifically for Intermediary Services (brokers, commission agents, etc.).The Key ChangeThe Bill proposes to omit Section 13(8)(b).Before: The "Place of Supply" was fixed at the supplier's location (India). You had to charge 18% GST even for foreign clients.Now: The "Place of Supply" shifts to the recipient's location (u/s 13(2)).Top 3 Benefits1. Export Status: Services to foreign clients will now qualify as Zero-Rated Exports, making you 18% more competitive globally.2. Refund Eligibility: You can now provide services under LUT and claim a refund of Input Tax Credit (ITC) on your business expenses.3. End of Litigation: This resolves years…

Orissa High Court Grants Interest on Refunded IGST for 'Ocean Freight' The Verdict In a significant ruling for taxpayers, the Orissa High Court has held that the government must pay interest on the refund of Integrated Goods and Services Tax (IGST) paid on "ocean freight," calculated from the original date of deposit. The court awarded simple interest at 6% per annum from the date of payment until the actual refund date.   The Case Background The petitioner, Paradeep Phosphates Limited, had paid IGST under protest on ocean freight in CIF (Cost, Insurance, and Freight) contracts. This payment was made pursuant to government notifications that were later declared unconstitutional by the Supreme Court in the landmark Mohit Minerals case. While the tax authorities eventually sanctioned the refund of the principal amount, they…

GSTAT Eases Appeal Scrutiny for Initial 6 MonthsThe Update: To smooth the transition to the new GSTAT Portal, the President has directed Registries to take a lenient view on appeal filings for the next 06 months . What You Need to Know:Focus on Merit: Objections will only be raised for defects of 'substance' (merits of the case), not defects of 'form' .Digital Documents: GSTN-generated documents do not require certification .Physical Documents: Scanned copies of physical documents must be signed . Dated: 20th January, 2026

Madras HC Quashes GST Assessment Order for Lack of Statutory Backing on "Best Judgment" under Section 74 Case Reference: M/s. Amritha Marketing & Ors. vs. The Joint Commissioner of CGST & Central Excise Court: Madurai Bench of Madras High Court Order Date: November 26, 2025 Judge: Hon'ble Mr. Justice G.R. Swaminathan 1. Executive Summary The Madras High Court has allowed a batch of writ petitions filed by wholesale dealers, quashing the GST assessment orders passed by the Joint Commissioner. The Court ruled that the tax authorities cannot resort to "Best Judgment Assessment" (extrapolating data) while demanding tax under Section 74 of the CGST Act, 2017, as the section does not explicitly confer such powers. 2. Background & Facts The Allegation: The petitioners (wholesale dealers in groceries and FMCG) were accused…

Bombay HC Mandates 3-Month Gap Between Notice and Order We wish to bring to your attention a significant judgment pronounced by the Bombay High Court on January 17, 2026, which reinforces taxpayer rights regarding adjudication timelines under the CGST Act. Key Takeaway The High Court has ruled that a minimum gap of three months is mandatory between the issuance of a Show Cause Notice (SCN) under Section 73(2) and the passing of the final order under Section 73(10). Case Details Case Name: A. M. Marketplaces Pvt. Ltd vs The Union of India & ors  Court: High Court of Bombay  Date of Order: January 17, 2026  The Dispute In this case, the Revenue department issued a notice on November 18, 2024, and passed the final order on January 31, 2025. The time gap between the notice and the order was approximately 2 months and…

Important GST Judgment on Transfer of Leasehold Rights Bombay High Court Rules No GST Applicable on Assignment of Leasehold Rights in MIDC Land. 1. Executive Summary In a significant relief to industries operating on leasehold plots (such as MIDC/GIDC), the Hon’ble Bombay High Court (Nagpur Bench) has ruled that the assignment or transfer of leasehold rights in a plot of land to a third party does not attract GST. The Court quashed a demand of Rs. 27 Lakhs raised against the assessee, holding that such a transaction amounts to the transfer of immovable property benefits and not a supply of service. 2. Case Details Case Name: Aerocom Cushions Private Limited Vs Assistant Commissioner (Anti-Evasion). Court: Bombay High Court. Date of Order: January 9, 2026. 3. Facts of the Case The…

Service of Notice via "Additional Notices/Orders" Tab & Unreasoned Rejection of Rectification Case Name: Jindal Steel Limited v. Commissioner, Commercial Taxes & GST, Odisha & Anr. Citation: [TS-12-HC(ORI)-2026-GST] Court: High Court of Orissa Date of Judgment: January 08, 2026 1. Executive Summary The Orissa High Court ruled in favor of the taxpayer, holding that uploading Show Cause Notices (SCN) or Orders solely under the "Additional Notices/Orders" tab on the GST Portal does not constitute valid service. The Court found this practice to be a flagrant violation of the principles of natural justice as the tab is not prominent or easily accessible. Furthermore, the Court deprecated the practice of rejecting rectification applications (Section 161) without providing specific reasons. +2 2. Brief Facts The Dispute: The GST department raised a demand against…

Bombay HC Quashes Consolidated SCN Under Section 74 — Clubbing of Multiple FYs Not Permissible The Bombay High Court (Nagpur Bench) in M/s Paras Stone Industries v. Union of India (WP 7718/2025, dated 09.01.2026) has quashed a consolidated Show Cause Notice (SCN) issued by the DGGI covering FY 2017-18, 2018-19 and 2019-20 in a single notice under Section 74 of the CGST Act. Key Findings of the Court 1. Clubbing of Multiple Financial Years in a Single SCN Is Impermissible The Court relied on two recent Division Bench rulings of the Bombay HC: Milroc Good Earth Developers (Goa Bench) (09.10.2025) Rite Water Solutions (Nagpur Bench) (28.11.2025) Both judgments categorically held that: GST law recognizes each financial year as a separate tax period. Section 74 SCNs must be issued year-wise, not…

Madras HC Affirms Department's Power to Issue Multiple SCNs for the Same Tax Period on Distinct Issues Case Reference: Radiant Cash Management Services Ltd. Vs. The Commercial Tax Officer (Madras High Court) Synopsis The Madras High Court has ruled that the GST Department is not barred from issuing multiple Show Cause Notices (SCNs) for the same financial year, provided the notices pertain to distinct discrepancies or subject matters. The Court clarified that the principles of res judicata or estoppel do not strictly apply to GST proceedings where the issues raised are factually different. Key Facts Background: The taxpayer received a Show Cause Notice (Form GST DRC-01) for the tax period 2021-22. The taxpayer challenged this notice, arguing that an earlier intimation/notice for the same tax period had already been issued…

Andhra Pradesh HC Rules State Liable for Theft of Seized Goods; Rejects 'Sovereign Immunity' Defense Case: GRM Jewellers Vs. The Assistant Commissioner of State Tax & Ors. The High Court of Andhra Pradesh has delivered a significant judgment holding the State government constitutionally liable to compensate a taxpayer for goods lost or stolen while in official custody. The Court ruled that the doctrine of "Sovereign Immunity" cannot shield the State from the negligence of its officials. Key Highlights Background: The petitioner, a bullion merchant, had 105 kg of silver and ₹2.05 lakhs in cash seized by authorities during transit. The petitioner subsequently paid the applicable tax, penalty, and fine (approx. ₹39.20 lakhs) to redeem the goods, and a release order was issued. The Incident: When the petitioner attempted to collect…

Input Tax Credit Cannot Be Denied for Supplier Default: Tripura High Court Judgment on Section 16(2)(c) of the CGST Act – Relief to Bona Fide Purchasers BackgroundSection 16(2)(c) of the Central Goods and Services Tax Act, 2017 provides that Input Tax Credit (ITC) can be availed only if the tax charged by the supplier has actually been paid to the Government. This provision has been widely invoked by the department to deny ITC to recipients where the supplier defaults in payment of GST, even though the recipient has paid the tax to the supplier and complied with all statutory requirements. Key JudgmentThe Tripura High Court, in its judgment dated 06 January 2026 in Sahil Enterprises vs Union of India & Ors. (WP(C) No. 688 of 2022), has examined the constitutional…

Important High Court Judgment – Relief from General Penalty on Belated GSTR-9 Filing & Extension of Amnesty Scheme Benefits Case Name: Kandan Hardware Mart vs. The Assistant Commissioner (ST) (FAC) [TS-01-HC(MAD)-2026-GST] Court: Madras High Court Key Issue The Department had been levying a "General Penalty" under Section 125 of the GST Act (up to Rs. 25,000) in addition to the "Late Fee" under Section 47 for the delayed filing of Annual Returns (GSTR-9). The core questions were: Can a General Penalty be imposed when a Late Fee is already being charged? Are taxpayers who filed their belated returns before the Amnesty Scheme (Notification No. 7/2023-CT) eligible for the reduced late fee benefits? Judgment Highlights 1. "Late Fee" is effectively a Penalty; No Double Jeopardy The High Court ruled that the…

GST Advisory on Online Filing of Opt-In Declaration for “Specified Premises” for Hotel Accommodation Services (Effective FY 2026-27) The Goods and Services Tax Network (GSTN) has issued an important advisory regarding online filing of Opt-In Declarations for declaring hotel accommodation premises as “Specified Premises” on the GST Portal. This facility, earlier available only through manual filing, is now enabled electronically and will be applicable from FY 2026-27 onwards. Below is a detailed summary for the benefit of taxpayers engaged in hotel accommodation services: 1. Background of the Advisory Declarations prescribed under Notification No. 05/2025 – Central Tax (Rate) dated 16 January 2025 have now been made available online on the GST Portal. Eligible taxpayers can electronically declare their hotel premises as “Specified Premises”, which has a direct bearing on the…

📢 Major Tax Changes for Tobacco & Pan Masala Sector – Effective from 1 February 2026 Background Pursuant to the GST rate realignment for tobacco and pan masala products notified in September–December 2025, the Government has undertaken a comprehensive restructuring of indirect taxes on tobacco products. This includes: Rationalisation of GST rates, Withdrawal of GST Compensation Cess, Re-introduction of Central Excise Duty, and Introduction of a new Health & National Security Cess. All these changes come into force from 1 February 2026. 🔹 1. GST Rate Realignment (Notification No. 19/2025 – Central Tax (Rate)) Biris brought under 9% + 9% GST (18%) Pan masala, unmanufactured tobacco, cigarettes, smoking tobacco, vaping products, etc. shifted to 20% + 20% GST (40%) Schedule VII (14%) omitted 📌 This marks a clear classification of…