During the week of 16–22 February 2026, significant regulatory updates were issued across GST, Customs, DGFT, SEBI, IBBI, RBI and related sectors, while no notifications were released under Income Tax, Central Excise, or MCA. GST updates included enhanced interest computation in GSTR-3B, Rule 14A withdrawal facility, and multiple AAR/AAAR rulings on mining royalty-linked DMF contributions, product classification (ice cream, shaving foam, tobacco leaves, digestive capsules, sterile aprons), mobilisation advances, arbitration awards, and refund principles, with the Supreme Court reiterating that refunds are payable only if tax incidence is not passed on. Customs revised tariff values for key commodities and increased duty drawback on jewellery, while a High Court upheld confiscation of areca nuts imported below minimum price. DGFT launched multiple Export Promotion Mission schemes (LIFT, FLOW, INSIGHT, TRACE, alternative trade instruments). SEBI updated broker registration forms. IBBI and Supreme Court rulings clarified insolvency, spectrum treatment, and limitation. RBI introduced FEMA, ECB, and OTC derivative reporting reforms.
Notifications & Circulars issued during week (16th– 22nd Feb 2026)
(Income Tax, GST, Central Excise, Custom Duty, DGFT, SEBI, MCA, IBBI, RBI)
(Click the Link for Notification/ Circular as issued)
A. Income Tax
No Notification/ Circular during the week.
B. GST
GSTN, Advisory on Interest Collection and related enhancements in GSTR-3B: The interest computation in GSTR-3B Table 5.1 has been revised in line with the CGST Rules, allowing deduction of the minimum cash balance available in the Electronic Cash Ledger from the due date till payment. Also, the functionality to utilise CGST or SGST ITC for payment of IGST liability, in any order of payment after complete exhaustion of IGST Credit, shall be available from tax period February 2026 onwards.
(Link: GSTN Advisory Dated 19/02/2026, Tutorial)
GSTN, Facility for Withdrawal from Rule 14A: CGST Rule 14A (effective Nov 1, 2025) provides a voluntary, simplified, and fast-track GST registration process for small taxpayers with a monthly B2B output tax liability up to Rs 2.5 lakh. Active registered taxpayers who had opted for registration under Rule 14A can apply for withdrawal (Opt-Out), subject to statutory conditions. The facility has been enabled for eligible taxpayers to apply for withdrawal by filing Form GST REG-32 on the GST Portal. Upon approval through Form GST REG-33, the taxpayer can furnish output tax liability details on supplies to registered persons exceeding Rs 2.5 lakh from the first day of the succeeding month in which the order is issued.
(Link: GSTN Advisory Dated 21/02/2026)
AAAR, Mining Royalty-Linked DMF Payments exempted from GST Prospectively: Case of Singareni Collieries Company Limited, AAR Telengana Ruling dated 2nd January 2026. Under the Mines and Minerals (Development and Regulation) Act 1957, the applicant is required to pay royalty to the State Government based on the quantity of minerals extracted. In addition, Section 9B mandates contribution of 30% of royalty to the District Mineral Foundation (DMF), and Section 9C mandates contribution of 2% of royalty to the National Mineral Exploration Trust (NMET). AAR ruled that royalty paid in respect of mining lease fell under tariff item 997337 and attracted GST at 18%. It further ruled that the same tax rate would apply to contributions made to DMF and NMET.
— The applicant contended that payments to DMF and NMET were in the nature of statutory contributions and not consideration. The appellate authority concluded that contributions to DMF and NMET formed part of the statutory payments connected with mining royalty and were not independent of the mining lease. However, CBIC Circular No. 206/18/2023-GST dated 31st October 2023 clarified that DMFTs qualify as Governmental Authorities and are eligible for the same GST exemptions as available to Governmental Authorities. The appellate authority partly allowed the appeal and ruled that GST is not applicable on contributions made to DMF with effect from the date of the order.
AAR, Paddle Wheel Aerators for Aquaculture classifiable under HSN 8479, attract 18% GST: Case of Sagar Aqua Culture Private Limited, AAR Gujarat Ruling Dated 19th February 2025. AAR ruled that Paddle Wheel Aerators (including parts) used exclusively in aquaculture are classifiable under HSN 8479 and attract GST at 18% under Serial Number 366 of Schedule III to Notification 1/2017 from 1st July 2017 to 21st Sept 2025 and under Serial Number 464 of Schedule II of Notification No. 9/2025 from 22nd Sept 2025 onward.
AAR, GST Liability on Interest Free Mobilisation Advance cannot be deferred until adjustment in Running Bills: Case of PC Snehal Construction Private Limited, AAR Gujarat Ruling Dated 19th February 2025. AAR held that since the mobilisation advance was adjusted against running account bills, it was treated as consideration for works contract services. It noted that no invoice was issued at the time of receipt of advance. Therefore, the time of supply is the date of receipt of payment, making GST payable at that stage. However, if an invoice is issued within the prescribed period under section 31, liability arises on the earlier of the date of invoice or receipt of payment.
AAR Clarifies GST on Ice Cream, Goods vs Restaurant Service & 5% Rate Applicability: Case of Mohammed Sajid Mohammed Sharif Kakuwala, AAR Gujarat Ruling Dated 19th February 2025. AAR held that Ice cream manufactured outside the retail outlet and sold over the counter would be supply of goods. If such ice cream is supplied along with food or used in preparations like falooda, milkshakes or juices, it would qualify as restaurant service. Ice cream prepared within the retail outlet and supplied to dine-in or takeaway customers would fall under restaurant services. Ice cream supplied in B2B transactions, whether manufactured outside or at the retail outlet, would be treated as supply of goods since no service element is involved. The GST rate applicable would be 5%, subject to ITC conditions applicable to restaurant services.
AAR, Digestive Capsules classified as Supari, not Pan Masala, GST at 5%: Case of Kartik Pinakin Bhatt, AAR Gujarat Ruling Dated 19th February 2025. AAR observed that the products fall into two categories, i.e. (i) products manufactured by mixing ingredients and filling into edible capsules, namely Paan Kapsul (Silver Coated), Regular, and Rose; and (ii) products that are purchased in finished form and only packed or repacked, namely ChatPata Twins, Tangy Twins, Ginger Shots, Amla Shots, and GasGo Candy. AAR held that Paan Kapsul variants are classifiable under HSN 2106 90 30 and the remaining products under HSN 2106 90 99, with GST payable at 5% on all products.
AAR, Shaving Foam not same as Shaving Cream due to Chemical and Commercial Differences: Case of McNROE Consumer Products Private Limited, AAR West Bengal Ruling Dated 13th February 2025. AAR held that “shaving foam” and “shaving cream” are two different products, Shaving cream is included in tariff item 33071010, and shaving foam is covered under tariff item 33071090. Shaving cream (HSN 33071010) is taxed at 5% as per serial number 249 of Schedule I of notification No.1/2017. However, the pre-shave, shaving or after-shave preparations are covered under tariff item 33071090 and are taxed at 18% as per serial no. 64 of Schedule II of the said notification.
AAR, Sterile Aprons and Shoe Covers falls under Chapter 39: Case of Hi Care Remedy Private Limited, AAR West Bengal Ruling Dated 13th February 2025. The applicant is involved in the business of manufacturing medical disposables and personal protective equipment. AAR has ruled on various products as regards their classification and applicable rate of GST. The GST rate of 18% is applicable for all the products.
AAR, GST on Tobacco Leaves fixed at 5% as Curing and Grading do not Change Character: Case of Om Jai Balajee Construction Private Limited, AAR West Bengal Ruling Dated 13th February 2025. AAR held that tobacco leaves, even after curing, grading, bundling or butting, continue to qualify as “tobacco leaves” so long as they are not stemmed or stripped, and therefore attract GST at 5%.
AAR, GST applicable on Arbitration Awards treated as Price Revision: Case of Karam Chand Thapar & Bros, AAR West Bengal Ruling Dated 13th February 2025. AAR held that GST is not applicable to the arbitration cost awarded to the applicant, but 18% GST must be paid on the fees paid to arbitrators separately. It also ruled that if price of goods or services is increased and this increase is based on a contract made before GST came into effect, then supplier must issue a supplementary invoice or debit note. This invoice must be treated as a supply under GST, and GST will be payable on the increased amount.
SC, Refund of GST is payable to applicant only when Incidence of Tax is not passed on to Other Person: Case of Union of India vs Torrent Power Limited, SC Judgement Dated 10th February 2026. The apex court held that Section 54 of the CGST Act constitutes a complete statutory code governing refund. Any refundable amount shall be credited to the Consumer Welfare Fund unless it falls within the exceptions enumerated in the said section. Section 54(8)(e) specifically provides that refund may be paid to the applicant only if the applicant has not passed on the incidence of tax and interest to any other person. . The court further held that, court are not allowed to invent the new modality for refund, which is not contemplated by the provision of Law nor rules. It ruled that since the tax incidence was passed to consumers, the refund must go to the Consumer Welfare Fund.
C. Central Excise
No Notification/ Circular during the week.
D. Custom Duty
Fixation of Tariff Value of Edible Oils, Brass Scrap, Areca Nut, Gold and Silver: CBDT notified the Tariff Values of Edible Oils, Brass Scrap, Areca Nut, Gold and Silver, which shall come into force w.e.f. 19th February 2026. The tariff value for crude palm oil is set at USD 1086 per metric ton, while gold and silver have tariff values of USD 1624 per 10 grams and USD 2421 per kilogram, respectively. The tariff value for areca nuts is fixed at USD 7020 per metric ton.
(Link: Customs Notification 22/2026 (NT) Dated 18/02/2026)
Duty Drawback increased for Gold Jewellery and Silver Jewellery/Articles: The notification revises the applicable drawback amounts for the specified tariff items in Chapter 71 of the Schedule. For tariff item 711301, it has been increased from Rs 524.27 to Rs 639.59 per gram. For tariff items 711302 and 711401, it has been revised from Rs 6317.22 to Rs 9089.33 per kg.
(Link: Customs Notification 21/2026 (NT) Dated 16/02/2026)
HC, Areca Nuts treated as prohibited, Confiscation justified as imported below Minimum Import Price: Case of Bhagwan Corporation vs Commissioner of Customs, HC Delhi Judgement Dated 9th February 2026. HC held that absolute confiscation as ordered is justifiable in view of import of Areca Nuts below Minimum Import Price condition.
E. Directorate General of Foreign Trade (DGFT)
Launch of Facilitating Logistics Interventions for Freight & Transport (LIFT) under Export Promotion Mission (EPM): The LIFT scheme under the Export Promotion Mission (NIRYAT DISHA), provides partial reimbursement of freight costs to offset geographical disadvantages affecting exporters from identified districts, including North-eastern states, hill regions, and select other states. Eligible MSMEs with valid IEC and Udyam registration can claim up to 30% reimbursement of freight costs (capped at 20% of FOB value), subject to an annual ceiling of Rs 20 lakh per IEC. Support applies only to notified products and shipments exceeding 200 km to ICDs, ports, or air cargo complexes, excluding deemed exports and SEZ supplies.
(Link: DGFT Trade Notice 29/2026 Dated 20/02/2026)
Launch of Facilitating Logistics, Overseas Warehousing & Fulfilment (FLOW) Under Export Promotion Mission (EPM): The FLOW scheme aims to mitigate logistics related constraints faced by MSMEs engaged in international value chains by supporting overseas warehousing, fulfilment, distribution, and market-facing infrastructure. Assistance is available to eligible Indian incorporated entities such as Export Promotion Councils, logistics service providers, industry associations, and government organisations. Financial support is capped at 30% of project cost subject to specified ceilings and is limited to lease, rental, and operational expenses for up to three years. Approved projects must ensure that, at least 20% of annual merchandise volumes benefit Indian MSMEs.
(Link: DGFT Trade Notice 28/2026 Dated 20/02/2026)
Launch of Support for Integrated Support for Trade Intelligence & Facilitation (INSIGHT) Under Export Promotion Mission (EPM): The INSIGHT scheme aims to strengthen exporter preparedness, particularly for MSMEs, by addressing information gaps, procedural challenges, and capacity constraints. It focuses on four key areas, i.e. export capacity building and skills development; district and cluster-level export facilitation; trade intelligence, analytics, and digital knowledge systems; and research, innovation, and pilot initiatives for export promotion. The initiative will operate initially on a pilot basis to enable institutional learning and refinement. Applications can be submitted online for modules, research studies, capacity-building programs, and analytics initiatives.
(Link: DGFT Trade Notice 27/2026 Dated 20/02/2026)
Launch of Trade Regulations, Accreditation & Compliance Enablement (TRACE) under Export Promotion Mission (EPM): The TRACE initiative aims to strengthen quality and technical compliance ecosystem and assist MSMEs involved in international value chains in meeting importing country regulatory requirements. The scheme provides partial reimbursement of eligible expenditure incurred towards testing, inspection, certification, audits, traceability systems, and other conformity assessment requirements necessary for market access or compliance with internationally recognised standards. It will initially operate on a pilot basis.
(Link: DGFT Trade Notice 26/2026 Dated 20/02/2026)
Launch of Support for Alternative Trade Instruments under Export Promotion Mission (EPM): The initiative aims to enhance export finance access for MSMEs involved in international value chains by providing structured support for export factoring arrangements, including recourse and non- recourse factoring in INR or freely convertible foreign currency. Eligible MSMEs with valid IEC and Udyam Registration can claim interest subvention at 2.75% on export factoring interest costs, subject to an annual cap of Rs 50 lakh per financial year and restricted to a notified positive list of 4,139 HS six-digit tariff lines. It will initially operate on a pilot basis.
(Link: DGFT Trade Notice 25/2026 Dated 20/02/2026)
F. Securities and Exchange Board of India (SEBI)
Forms for registration of stock brokers and clearing members: The circular prescribes new application forms and certificate formats for registration of stock brokers and clearing members under the SEBI (Stock Brokers) Regulations. The updated forms include Form A (stock broker registration), Form B (clearing member registration), and Form C (certificate of registration).
(Link: SEBI Circular Dated 17/02/2026)
G. Ministry of Corporate Affairs (MCA)
No Notification/ Circular during the week.
H. Insolvency and Bankruptcy Board of India (IBBI)
Discussion Paper on strengthening CoC’s oversight and procedural clarity under the CIRP Regulations: The paper intends to enhance transparency in recording CoC deliberations while approving resolution plans, rationalise approval of insolvency resolution process costs (CIRP costs), and require a structured Going Concern Assessment Report at the first CoC meeting. It clarifies that delayed claims accepted by the resolution professional must be placed before the Adjudicating Authority for condonation, with the CoC’s role limited to recommendations on treatment in the plan. It also proposes excluding related operational creditors from CoCs, constituted solely of operational creditors to avoid conflict of interest.
(Link: IBBI Discussion Paper Dated 16/02/2026)
SC, Spectrum allocated to Telecom Service Providers cannot be subjected to proceedings under IBC: Case of State Bank of India vs Union of India, SC Judgement Dated 13th February 2026. The scope and ambit of IBC is to speed up the process providing for insolvency, and achieving maximisation of value of the asset of the entity undergoing CIRP. The focus is on the company. On the other hand, Telegraph Act, Wireless Telegraphy Act and TRAI Act forms a complete and exhaustive code for all matters relating to telecom sector. This includes declaration of the nature of the rights and liabilities arising out of holding and using spectrum. The two statutes have different subjects to deal with, different purposes to subserve, different laws to abide, protect different rights and create different liabilities. The apex court held that Spectrum allocated to Telecom Service Providers (TSPs) and shown in their books of account as an “asset” cannot be subjected to proceedings under IBC.
SC, Balance Sheet Acknowledgement & Debt Restructuring extend Limitation: Case of B Prashanth Hegde vs State Bank of India, SC Judgement Dated 12th February 2026. The apex court upheld admission of CIRP under section 7 of IBC (Initiation of CIRP by Financial Creditors) against the Corporate Debtor, holding that the application was within limitation due to repeated acknowledgements of debt through restructuring agreements, consortium arrangements & balance-sheet entries.
NCLAT, Contract Termination not triggered by insolvency is not barred by Moratorium under section 14 of IBC: Case of Pradeep Upadhyay vs Bhadohi Industrial Development Authority, NCLAT Delhi Judgement Dated 7th November 2025. The appellate tribunal held that termination of a construction contract based on pre-CIRP breaches, performance deficiencies, and delay in execution is not protected by the moratorium, nor does it fall within the residuary jurisdiction of the NCLT. Where contractual remedies are exercised independent of insolvency, the IBC cannot be invoked to invalidate legitimate termination actions. The ruling restricts misuse of Section 14 to shield pre-existing contractual defaults.
I. Reserve Bank of India (RBI)
Reporting under FEMA, Returns pertaining to External Commercial Borrowing (ECB): The forms prescribed under the Master Direction Reporting under FEMA 1999, for ECB returns have been modified. Part V – Annex I and Part V – Annex II have been substituted with revised formats, namely Form ECB 1 (Revised) and Form ECB 2.
(Link: RBI Circular 223/2026 Dated 18/02/2026)
Unique Transaction Identifier for OTC Derivative Transactions: The circular mandats the generation and reporting of a Unique Transaction Identifier (UTI) for all over-the-counter (OTC) derivative transactions reported to the Trade Repository managed by Clearing Corporation of India Limited. The framework applies to rupee interest rate derivatives, forward contracts in government securities, foreign currency and interest rate derivatives, credit derivatives, and other specified instruments. UTI must be generated, which comprising up to 52 characters, including the Legal Entity Identifier of the generating entity.
(Link: RBI Circular 222/2026 Dated 18/02/2026)
Amendments to FEMA Borrowing and Lending Regulations: The amendments pertain to changes in the External Commercial Borrowing (ECB) framework. The updated Regulations consolidate provisions relating to ECB and borrowing in Indian Rupees by persons resident in India, from existing master directions. Consequently, specified paragraphs of the Master Direction on External Commercial Borrowings, Trade Credits and Structured Obligations, the Master Direction on INR borrowing between residents and non-residents, and Part I of the FAQs on ECB and Trade Credits have been deleted.
(Link: RBI Circular 221/2026 Dated 16/02/2026)
Assignment of Lead Bank Responsibility for new district in Haryana: Punjab National Bank has been designated as the Lead Bank, under the Lead Bank Scheme, for newly formed Hansi district in Haryana,.
(Link: RBI Circular 220/2026 Dated 16/02/2026)
Amendments to FEMA Borrowing and Lending Regulations: The amendments substitute Regulation 2 with an expanded definitions clause, and insert Regulation 3A restricting end-use of borrowed funds for specified activities such as chit funds, nidhi companies, real estate business (with conditions), certain agricultural activities, trading in TDRs, securities transactions (except strategic corporate actions), and repayment of restricted domestic loans. The revised Schedule I lays down a comprehensive External Commercial Borrowing (ECB) framework covering eligible borrowers and lenders, borrowing limits, maturity, cost, security, refinancing, conversion into non-debt instruments, reporting requirements, and treatment of untraceable borrowers. It permits ECB in foreign currency or INR, prescribes a minimum average maturity period, and details reporting through Forms ECB 1 and ECB 2 via designated AD Category I banks.
(Link: FEMA Amendment Regulations Dated 09/02/2026)
Draft Directions on Reporting Instructions for Authorised Dealer Category- I Banks: The draft directions requires AD Cat-I banks to report all over-the-counter (OTC) foreign exchange derivative contracts involving the Indian Rupee (INR) undertaken globally by their offshore related parties to the Trade Repository (TR) of Clearing Corporation of India Ltd. (CCIL). While OTC derivatives already reported by market-makers improved transparency, offshore INR derivative transactions remained outside reporting requirements. Reporting excludes back-to-back transactions and small-value contracts up to USD 1 million. The comments/ feedback from stakeholders is invited.
(Link: Draft Circular, Press Release Dated 16/02/2026)
Draft Directions on Foreign Exchange Dealings of Authorised Persons: RBI has been refining the regulations governing the foreign exchange market based on evolving needs and market feedback. The regulations governing the facilities for Authorised Dealers (ADs) in the foreign exchange market have been reviewed to provide the ADs with greater flexibility with respect to foreign exchange products, risk management and platforms. The comments/ feedback from stakeholders is invited.
(Link: Draft Circular, Press Release Dated 17/02/2026)
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Compiled by: CMA Yash Paul Bhola, MBA, FCMA, Former Director (Finance), National Fertilizers Limited.
Disclaimer: The contents of this article are for informational purposes only. The user may refer to the relevant notification/ circular/ decisions issued by the respective authorities for specific interpretation and compliances related to a particular subject matter)
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