The article provides a comprehensive weekly roundup of major notifications, circulars, rulings, and judicial developments issued between 11th and 17th May 2026 across Income Tax, GST, Customs, DGFT, SEBI, RBI, IBBI, and other regulatory authorities. Key developments include the Supreme Court ruling allowing depreciation on leased assets without actual physical use by the assessee, GSTAT’s constitution of benches and extension of relaxed appeal filing procedures, and several AAR/AAAR rulings on GST classification, ITC eligibility, healthcare exemptions, and taxability of business models. The update also covers significant customs and DGFT amendments relating to gold, silver, sugar exports, and hazardous cargo clearance, along with SEBI consultation papers on derivatives, municipal debt securities, mutual fund borrowings, and AIF processing reforms. Further highlights include RBI’s revised outward remittance framework, IBBI governance amendments, and High Court rulings reaffirming separate corporate legal identity and limiting guarantor liability to sanctioned loan amounts.
Notifications & Circulars issued during week (11th – 17th May 2026)
(Income Tax, GST, Central Excise, Custom Duty, DGFT, SEBI, MCA, IBBI, RBI)
(Click the Link for Notification/ Circular as issued)
A. Income Tax
Shree Hari Arogyam Foundation, Gandhinagar gets Income Tax approval for scientific research: The Principal Chief Commissioner of Income Tax (Exemptions), has approved Shree Hari Arogyam Foundation, Gandhinagar, Gujarat for ‘Scientific Research’ under section 35(1)(iia) read with rule 5F of Income Tax, for a period of five years, starting from the AY 2026-27. It will enable the Institute to receive certain benefits, related to its scientific research activities.
(Link: Income Tax PCCI (Exemptions) Notification 06/2025 Dated 12/05/2026)
Monetary Limits revised for jurisdiction of Wards & Circles in JAO charges in Delhi: As per the revised arrangements, corporate returns up to Rs. 70 lakhs will fall under ITO jurisdiction, while cases above Rs. 70 lakhs will be handled by D/ACIT. Non-corporate returns, excluding salary income, up to Rs. 40 lakhs and salary income cases up to Rs. 30 lakhs will remain with ITOs. The revised limits apply immediately and govern both income and loss returns.
(Link: PCCIT Delhi Office Order Dated 15/05/2026)
SC allows Depreciation on Leased Assets as Actual Physical Use not Mandatory: Case of CIT vs Tata Motors Ltd, SC Judgement Dated 10th May 2026. The principal issue was whether depreciation could be allowed where leased assets were used by lessees but ownership remained with the assessee. The apex court had clarified that where the business of the assessee consists of leasing or hiring assets, income from such leasing constitutes business income and the leased assets are regarded as used for the purposes of business. It emphasized that actual physical use by the assessee is not mandatory.
(Link: SC Judgement Dated 10/04/2026)
B. GST
GSTAT Order on Constitution of Benches and Categorises of Cases for GST Appeals: GSTAT has constituted benches across various States and Union Territories and categorizing matters into three groups for hearing and case management. It has been clarified that matters involving tax liability below Rs 50 lakh and not involving any question of law may be listed before a Single Bench after scrutiny and approval. The cases are classified into Category I, II, and III based on disputes relating to classification, ITC, registration, refunds, assessments, recovery, penalties, seizure, confiscation, and provisional attachment. The order also specifies bench compositions, jurisdictions, hearing schedules, and provisions for virtual, hybrid, and circuit hearings.
(Link: GSTAT Office Order Dated 14/05/2026)
GSTAT extended Relaxed Appeal Filing and Scrutiny Framework: GSTAT has extended earlier procedural relaxations for filing appeals on the portal till 31st December 2026 due to difficulties faced by appellants during the initial implementation phase. It directed scrutiny officers not to raise defects where appellants upload soft copies of essential documents such as show cause notices, orders-in-original, orders-in- appeal, statements of facts, grounds of appeal, proof of pre-deposit, and court fee documents, including cases where exemptions have been granted by higher courts. The instructions also clarified that scanned certified copies of orders may be accepted if properly endorsed by issuing authorities.
(Link: GSTAT Instructions Dated 14/05/2026)
AAAR, Flipkart Delivery Model denied GTA Status as Buyer Terms did not Identify Transporter: Case of Flipkart India Private Limited, AAR West Bengal Ruling Dated 6th May 2026. AAAR has rejected Flipkart proposed delivery model as a Goods Transport Agency (GTA) service under GST law. The proposed “GT Charges” structure for delivery of goods to retail consumers would not qualify for GST exemption. It has held that applicable rate of GST (18%) is payable by Flipkart, for transport services.
(Link: AAAR West Bengal Ruling Dated 06/05/2026)
AAAR, 18% GST on Corporate Meal Supply as Supplier was not Mere Aggregator: Case of Frutta Services Limited, AAAR Tamil Nadu Ruling Dated 8th May 2026. The agreements executed with corporate clients and kitchens demonstrated extensive involvement of the appellant in menu planning, coordination with partner kitchens, quality assurance, hygiene monitoring, logistics management, timely delivery, and deployment of service personnel for serving food at client locations. AAAR has upheld AAR ruling and held that the appellant’s activities constituted a composite supply of service classifiable under SAC 996337 as ‘contract food service’ liable to GST at 18%.
(Link: AAAR West Tamil Nadu Ruling Dated 08/05/2026)
AAR, AAC Bricks not classifiable as Ceramic Products due to Low Firing Temperature: Case of Eco Green AAC Products Pvt Ltd, AAR Gujarat Ruling Dated 8th May 2026. AAR held that Autoclaved Aerated Concrete (AAC) bricks and blocks manufactured by the applicant fall under HSN 6810 (Cement Concrete Building Products) and attract a 12% GST rate, rather than being classified as ceramic products.
(Link: AAR Gujarat Ruling Dated 08/05/2026)
AAR, Allows ITC on Construction of Concrete Tower Supporting VCV Lines for EHV Cable Manufacturing: Case of Polycab India Ltd, AAR Gujarat Ruling Dated 8th May 2026. AAR held that the applicant is eligible to claim Input Tax Credit (ITC) on the goods and services used to construct specialized Vertical Continuous Vulcanization (VCV) towers. The authority determined the towers function as ‘plant and machinery’ integral to manufacturing high-voltage cables rather than as civil structures.
(Link: AAR Gujarat Ruling Dated 08/05/2026)
AAR, Black Mineral Water taxable at 5% in absence of Sugar & Flavouring: Case of Oxyhydra Beverages Pvt Ltd, AAR Gujarat Ruling Dated 8th May 2026. AAR held that ‘ALVA’ Black Mineral Water should be classified as mineral water under HSN 22011010. This product comes under Entry 146 of Schedule I of Notification 09/2025 (Rate), dated 17th September 2025. Thus it would be taxed at 5% GST.
AAR, Allows ITC on Inputs & Services used for setting up CCV Tower for Cable Manufacturing: Case of Apar Industries Ltd, AAR Gujarat Ruling Dated 8th May 2026. AAR held that Input Tax Credit (ITC) is available on the construction of specialized CCV Towers used in cable manufacturing, treating such structures as ‘plant and machinery’ under the GST law. It ruled that the restriction under Section 17(5)(d) of the CGST Act would not apply where structure itself forms an integral part of manufacturing process.
AAR, GST Exemption on Inpatient Ayurvedic Services: Case of Ayushya Ayurvedic and Panchakarma Centre, AAR Kerala Ruling Dated 28th April 2026. AAR ruled that medicines, consumables, dietary food, room rent up to the prescribed threshold, nursing care, and ancillary services provided to inpatients form part of an exempt composite supply of healthcare services. However, medicines supplied to outpatients are taxable separately, and room rent exceeding Rs. 5,000 per day per patient does not qualify for exemption.
AAR, GST on Used Gunny Bags at 5% because Reusable Bags not Treated as Scrap: Case of Kerala Cooperative Milk Marketing Federation Ltd, AAR Kerala Ruling Dated 28th April 2026. AAR ruled that the used gunny bags (jute sacks without plastic coating) arising during the course of manufacturing and sold by the applicant are not classifiable as scrap, but as reusable packing bags under Heading 6305 of the Customs Tariff Act. Accordingly, the applicable GST rate is 5% where the sale value does not exceed Rs. 2500 per piece, and 18% where the sale value exceeds Rs. 2500 per piece. in terms of Notification 09/2025 (Rate), dated 17th September 2025. It is clarified that where such bags are worn out, torn, or reduced to cuttings or waste, rendering them unfit for reuse as packing material, the classification may differ.
AAR, No GST under RCM on Honorarium paid to Temple Board Members as they are not Directors: Case of Travancore Devaswom Board, AAR Kerala Ruling Dated 4th March 2026. AAR held that the members were statutory functionaries and not ‘directors’ within the meaning of notification 13/2017 (Rate). Therefore, GST under reverse charge mechanism (RCM) was not payable on such payments.
HC, Marketing & Recruitment Support to Foreign Universities not Taxable (GST) as Intermediary Services: Case of Fateh Education Consulting Pvt Ltd vs Asstt. Commissioner, HC Delhi Judgement Dated 8th May 2026. HC held that Marketing and Recruitment Support to Foreign Universities is not taxable as Intermediary Services. It does not cover under GST Intermediary classification because consultant had no authority to bind Foreign Universities. HC quashed GST Refund rejection because Educational Consultancy Qualified as Export of Services.
HC, Recipient Unit Authorities cannot Question ISD Credit Distribution Accepted by Jurisdictional ISD Authorities: Case of Abbot Healthcare Pvt Ltd vs Union of India, HC Himachal Judgement Dated 24th April 2026. HC held that recipient-state tax authorities cannot arbitrarily invalidate, question, or deny Input Tax Credit (ITC) distributed by an Input Service Distributor (ISD) once it has been accepted by the ISD’s jurisdictional authorities.
HC orders GST reimbursement since Frozen Meat Supply was Taxable: Case of Gitwako Farms India Pvt Ltd vs Union of India, HC Delhi Judgement Dated 10th April 2026. The assessee sought reimbursement of GST paid on frozen meat supplied to the Indian Army, after the Army refused payment citing clarifications treating the supply as GST exempt under Notification 02/2017. HC held that advance rulings had already determined the goods were supplied in unit containers, taxable at 5%, and not exempt. The petition was allowed and reimbursement directed within three months.
C. Central Excise
SAED revised on Export of ATF to Rs 16 per Litre: The notification amends earlier notification 08/2026 dated 26th March 2026, to revise the Special Additional Excise Duty (SAED) applicable on export of Aviation Turbine Fuel (ATF). The SAED rate has been substituted with Rs 16 per litre (Pre-revised Rs 33 per litre), effective from 16 May 2026.
(Link: Central Excise Notification 23/2026 (T) Dated 15/05.2026)
SAED revised on Export of Petrol to Rs 3 per Litre and on Diesel to Rs 16.50 per Litre: The notification amends earlier notification 06/2026 dated 26th March 2026, to revise the Special Additional Excise Duty (SAED) applicable on export of Petrol to Rs 3 per litre (Pre-revised NIL per litre), and Diesel to Rs 16.50 per litre (Pre-revised Rs 23 per litre), effective from 16 May 2026.
(Link: Central Excise Notification 22/2026 (T) Dated 15/05.2026)
D. Custom Duty
Revision in Preferential Customs Rates Under India-UAE CEPA: The Notification revises the concessional customs duty rates under the India–United Arab Emirates Comprehensive Economic Partnership Agreement (India-UAE CEPA). In Table III, against Serial No. 12, it has substituted the entry “10” in column (5) and the entry “4” in column (6), thus revising the preferential customs duty rates or tariff quota parameters applicable under the CEPA framework. The amendment aligns concessional rates under the agreement with the broader revisions recently introduced in relation to precious metals and related imports through multiple customs notifications.
(Link: Customs Notification 18/2026 (T) Dated 12/05/2026)
Concessional Customs Duty on Gold, Silver & Platinum Imports raised to 10%: The Notification amends earlier notification 57/2000 dated 8th May 2000, which grants concessional customs duty rates on import of gold, silver, and platinum under specified import schemes. It substitutes the existing rate of 4.35% with a significantly higher rate of 10% wherever it occurred in column (4) of the Table. It effectively increases the concessional duty burden on imports of precious metals under the designated schemes.
(Link: Customs Notification 17/2026 (T) Dated 12/05/2026)
Revision in SWS and AIDC Rates on Gold & Silver: The notification revises the Social Welfare Surcharge (SWS) and Agriculture Infrastructure and Development Cess (AIDC) applicable on specified precious metal imports and related goods. It expand the coverage of tariff headings under Notification 11/2018 by including tariff headings 7107, 7109, 7111, and 7112 along with heading 7108. It also amends Notification 11/2021, for entries relating to gold, silver, platinum, spent catalyst or ash containing precious metals, jewellery findings. It revise the applicable AIDC rates to 4.35%, 5%, or 5.4% depending upon the nature of goods.
(Link: Customs Notification 16/2026 (T) Dated 12/05/2026)
Revision in Customs Duty on Gold and Silver, Increased to 10%: The notification revise customs duty rates on various precious metal imports, primarily increasing the concessional customs duty from 5% to 10% on several categories of gold, silver, and related products. The revised rates apply to gold dore bars containing up to 95% gold, silver dore bars containing up to 95% silver, gold bars and gold coins imported by eligible passengers, gold ornaments and tola bars, silver imports including ornaments, gold and silver findings used in jewellery, and other specified precious metal goods. It also inserted a new entry, serial number 200A, prescribing a 10% customs duty on spent catalyst or ash containing precious metals.
(Link: Customs Notification 15/2026 (T) Dated 12/05/2026)
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. 16th May 2026. The tariff value for crude palm oil is set at USD 1205 per metric ton, while gold and silver have tariff values of USD 1508 per 10 grams and USD 2810 per kilogram, respectively. The tariff value for areca nuts is fixed at USD 9155 per metric ton.
(Link: Customs Notification 46/2026 (NT) Dated 15/05/2026)
Village Namli in Ratlam (MP) notified as Customs Point: The notification amends earlier Notification 12/1997 dated 2nd April 1997 and inserts Village Namli in Ratlam (MP) in the notified customs locations list. It has been authorized for the unloading of imported goods and the loading of export goods or specified classes of such goods.
(Link: Customs Notification 44/2026 (NT) Dated 11/05/2026)
Customs Relief Measures extended amid Strait of Hormuz Maritime Disruptions: The circular extends the validity of earlier customs circulars issued in response to disruptions in maritime routes caused by the closure of the Strait of Hormuz. The CBIC decided that the facilities granted under Circular 09/2026 dated 8th March 2026, 10/2026 dated 10th arch 2026, 12/2026 dated 17th March 2026, 15/2026 dated 27th March 2026, 19/2026 dated 10th April 2026, and 21/2026 dated 15th April 2026 would continue to remain in force up to 30th June 2026.
(Link: Customs Circular 25/2026 Dated 14/05/2026)
Introduction of System-Based Identification & Fast-Track Customs Clearance for Hazardous Import Cargo: The circular introduces a system-based mechanism for identification and expeditious clearance of hazardous cargo imported into India. Following consultations with stakeholders, a list of specified hazardous cargo items has been prepared, detailed in Annexure-A, covering chemicals and hazardous substances classified under various Customs Tariff Headings. It mandates importers to declare hazardous cargo at the item level in Bills of Entry whenever goods fall within the listed chapters. The Customs system will automatically flag such consignments during assessment, examination, and out-of-charge stages, enabling officers to identify and process them expeditiously.
(Link: Customs Circular 24/2026 Dated 14/05/2026)
SC, Quicklime with less than 98% Purity falls under CTH 2522: Case of Commissioner of Customs vs ITC Limited, SC Judgement Dated 4th May 2026. The apex court held that imported quicklime with a calcium oxide purity of less than 98% must be classified under Customs Tariff Heading (CTH) 2522 as an industrial mineral, rather than under CTH 2825 as a chemically pure compound.
E. Directorate General of Foreign Trade (DGFT)
Amendment in Import Policy of Silver: The notification has amended the import policy of silver bars covered under ITC Codes 71069221 and 71069229 of ITC. The import policy of these items stands revised from ‘Free’ to ‘Restricted’, subject to Policy Conditions. Consequently, importers of silver bars falling under the said tariff lines shall now be required to comply with the prescribed restricted import framework.
(Link: DGFT Notification 17/2026 Dated 16/05/2026)
Amendment in Export Policy of Sugar: The notification amends the export policy of sugar under ITC Codes 1701 14 90 and 1701 99 90 from ‘Restricted’ to ‘Prohibited’ until 30th September 2026. The prohibition applies to exports of raw sugar, white sugar, and refined sugar. However, certain categories remain exempt, including exports to the EU and USA under CXL and TRQ quotas, exports under the Advance Authorization Scheme, government to government exports for food security purposes, and consignments already in the export pipeline meeting specified conditions.
(Link: DGFT Notification 16/2026 Dated 13/05/2026)
Advance Authorisation (AA) for Gold Imports restricted to 100 Kg Cap: The public notice inserts five new notes under Standard Input Output Norms (SIONs) M-1 to M-8 relating to the Gems and Jewellery Product Group under the Foreign Trade Policy. It caps gold imports under AA at 100 kilograms and mandates physical inspection of manufacturing facilities for first-time applicants by the concerned Regional Authority. It also provides that subsequent AA will be granted only after fulfilment of at least 50% of export obligations under previous authorisations.
(Link: DGFT Public Notice 11/2026 Dated 14/05/2026)
Authorised Agencies notified for issuance of India-UK CETA Certificates of Origin: The public notice amends Appendix 2B of the Foreign Trade Policy, to include authorised agencies permitted to issue Preferential Certificates of Origin (CoO) under India-UK CETA. DGFT notified a list of agencies authorised to issue CoO for specified products. The Directorate General of Foreign Trade and its regional offices, Export Inspection Council and Export Inspection Agencies were authorised for all products.
(Link: DGFT Public Notice 10/2026 Dated 11/05/2026)
Self-Declaration permitted for India-UK CETA Certificates of Origin: The public notice inserted the India-United Kingdom Comprehensive Economic and Trade Agreement (India-UK CETA) into the list of Free Trade Agreements under Para 2.88(a) of Handbook of Procedures (HBP). It also amended Para 2.91(e) to provide that, in the case of India-EFTA TEPA and India-UK CETA, Certificates of Origin (CoO) may be obtained through self-declaration by exporters in addition to the existing mechanism by authorised agencies.
(Link: DGFT Public Notice 09/2026 Dated 11/05/2026)
Clarifications on Interest Subvention Support for Pre and Post Shipment Export Credit under the Export Promotion Mission: The industry highlighted operational and technical difficulties in generating Unique Identification Numbers (UINs) during the transition from the earlier UDIN-based Equalisation Intervention Scheme. DGFT clarified that for FY 2025-26, UINs generated on or before 31st May 2026 would remain eligible for interest subvention from the date of disbursal. From FY 2026-27 onwards, UINs generated within 15 days from disbursal would qualify for support.
(Link: DGFT Trade Notice 03/2026 Dated 13/05/2026)
F. Securities and Exchange Board of India (SEBI)
Master Circular on Surveillance of Securities Market: The updated Master Circular on Surveillance of Securities Market on consolidate and revise earlier surveillance related circulars to provide stakeholders with a single reference framework. It applies to stock exchanges, depositories, listed companies, intermediaries, and fiduciaries governed under the SEBI (Prohibition of Insider Trading) Regulations. It incorporates key updates relating to financial disincentives for surveillance lapses at Market Infrastructure Institutions, subscription to non-convertible securities during trading window closure periods, and extension of automated trading window closure mechanisms to immediate relatives of designated persons during financial result declarations.
(Link: SEBI Master Circular Dated 15/05/2026)
InvIT Borrowings allowed above 49% for Capital Expansion & Debt Refinancing: The circular clarifies regarding permitted use of fresh borrowings by Infrastructure Investment Trusts (InvITs) when net borrowings exceed 49% of the value of InvIT assets. SEBI has specified that such borrowings may be used for capital expenditure aimed at enhancing asset performance or increasing capacity, major maintenance expenses for road projects, and refinancing of debt subject to conditions. For road projects, major maintenance must be non-routine and aligned with concession agreement obligations.
(Link: SEBI Circular Dated 15/05/2026)
Status of SPVs post conclusion or termination of Concession Agreement: The circular clarifies the status of Special Purpose Vehicles (SPVs) held by Infrastructure Investment Trusts (InvITs) after the conclusion or termination of concession agreements. It will continue to retain its SPV status even after the concession agreement ends, subject to specified conditions. The circular requires the Investment Manager to either exit the SPV through sale, liquidation, winding-up or merger, or acquire a new infrastructure project in the SPV within one year from completion or termination of the concession agreement, conclusion of pending litigations or tax assessments, or completion of the defect liability period, whichever is later.
(Link: SEBI Circular Dated 15/05/2026)
Consultation Paper on Exchange Traded Derivatives (including Commodity Derivatives): The proposals include removal of the Close to the Money (CTM) option series for Options in Goods, rationalization of Product Advisory Committee composition and meeting frequency, simplification of procedures for changing contract expiry dates during sudden market closures, and clarification regarding monitoring of position limits by exchanges or clearing corporations through formal agreements. It also proposes discontinuing obsolete norms relating to regional exchanges, certification requirements already covered under existing regulations, and newspaper publication of derivatives transactions in favour of website disclosures. The feedback/comments from stakeholders are invited.
(Link: SEBI Consultation Paper Dated 14/05/2026)
Consultation paper on Review of the SEBI Issue and Listing of Municipal Debt Securities Regulations: The proposals include mandatory disclosures where municipal debt securities are issued for refinancing existing loans, including details of lenders, interest rates and repayment schedules. It also proposes restricting use of issue proceeds for working capital to 25% of the issue size and requiring project specific disclosures. It suggests a detailed framework for pooled finance vehicles formed by multiple municipalities, including escrow mechanisms, credit enhancements and additional disclosure requirements. The proposals also include specifying face value and trading lot norms, permitting incentives such as additional interest or discounts for certain investor categories, introducing ESG municipal debt securities, and defining “working day” under the regulations. The feedback/comments from stakeholders are invited.
(Link: SEBI Consultation Paper Dated 13/05/2026)
Consultation Paper on utilization of intraday borrowing lines by Mutual Funds: The existing framework under the Mutual Funds Regulations already permits limited intraday borrowings with safeguards such as board approved policies, ring-fencing of assets, and AMC borne borrowing costs. The new proposal allow intraday borrowings for broader operational purposes, permitting borrowings beyond guaranteed receivables, and allowing borrowing amounts to exceed receivables provided overnight borrowing limits remain within regulatory caps. It emphasized that all intraday borrowings must be extinguished by the end of the day or converted into permissible overnight borrowings under statutory limits. The feedback/comments from stakeholders are invited.
(Link: SEBI Consultation Paper Dated 13/05/2026)
Consultation paper on review of position limits for clients and penalty provision for Commodity Derivatives Segment: Under existing framework, agricultural commodities are classified as “Broad”, “Narrow”, or “Sensitive” commodities based on deliverable supply, monetary value, and susceptibility to government intervention or price manipulation. Present client level open position limits are fixed at 1% of deliverable supply for broad commodities, 0.5% for narrow commodities, and 0.25% for sensitive commodities. The proposed revised limits are 2% for broad commodities, 1% for narrow commodities, and 0.5% for sensitive commodities. SEBI also proposed changing the definition of “Broad Commodity” by replacing the word “and” with “or”, so that a commodity may qualify as broad if it satisfies either the quantitative deliverable supply criterion of at least 10 lakh metric tons or the monetary threshold of Rs 5,000 crore. The feedback/comments from stakeholders are invited.
(Link: SEBI Consultation Paper Dated 12/05/2026)
Consultation Paper on Introduction of Physical Settlement in Select Agricultural Commodity Derivatives Contracts: The proposal allows exchanges to launch or revive delivery based agricultural commodity contracts that initially trade as financially settled contracts and later mandatorily transition to physical settlement upon crossing predefined thresholds such as Average Daily Traded Volume (ADTV), open interest levels, or completion of two years. It clarified that physical settlement would remain the eventual and mandatory outcome, with temporary financial settlement functioning only as a transitional arrangement. The feedback/comments from stakeholders are invited.
(Link: SEBI Consultation Paper Dated 12/05/2026)
Consultation Paper on Review of utilization of interest or income from IPF Corpus of Depositories: The proposal is to permit depositories to utilize up to 5% of the interest or income earned from investments of their Investor Protection Fund (IPF) corpus for meeting expenses related to IPF Trust administration. It seeks to align the framework applicable to depositories with the existing rules for stock exchanges, which already allow limited use of IPF income for administrative and statutory expenses. The feedback/comments from stakeholders are invited.
(Link: SEBI Consultation Paper Dated 11/05/2026)
Consultation paper on GARUDA Mechanism for Processing of Placement Memorandum of AIFs: The “Green-Channel: AIF Rollout Upon Document Acknowledgement” (GARUDA) mechanism has been proposed to accelerate the launch of Alternative Investment Fund (AIF) schemes by reducing regulatory timelines and simplifying filing requirements. As per the proposal, regular AIF schemes may be launched within 10 working days of filing placement memorandums with SEBI instead of the existing 30-day period. For Accredited Investor-only schemes and Angel Funds, it has been proposed allowing direct filing of placement memorandums without merchant bankers and replacing merchant banker due diligence certificates with undertakings from the CEO and Compliance Officer of the AIF manager. The proposal also permits immediate launch of such schemes upon filing with SEBI. The feedback/comments from stakeholders are invited.
(Link: SEBI Consultation Paper Dated 11/05/2026)
G. Ministry of Corporate Affairs (MCA)
No notification/ Circular during the week.
H. Insolvency and Bankruptcy Board of India (IBBI)
Amendments to IBBI Model Bye-Laws and Governing Board of Insolvency Professional Agencies Regulations: The amendments introduce the concept of a nominee director to be appointed by the Board. It also tighten eligibility criteria for independent directors by disqualifying persons associated with sponsoring regulators or serving as independent directors in other IPAs. The reappointment for a second term of independent directors will now require satisfactory performance review by the Governing Board and prior approval of the IBBI.
(Link: IBBI Notification Dated 13/05/2026)
SC Dismisses Byju Raveendran appeal, allows IRP Enquiry to Proceed Expeditiously: Case of Byju Raveendran vs Aditya Birla Finance Ltd, SC Judgement Dated 4th May 2026. The apex court upheld the order of the National Company Law Appellate Tribunal (NCLAT), as it found no merit in the challenge against the order. It directed that the enquiry against the Insolvency Resolution Professional (IRP) proceed expeditiously in accordance with law. The original Committee of Creditors was reinstated.
I. Reserve Bank of India (RBI)
Facilitating Outward Remittance services by non-bank entities through Authorized Dealer (Category I) Banks: RBI issued a revised operating framework for facilitating outward remittance services by non-bank entities through Authorised Dealer (AD) Category-I banks, removing the earlier requirement for RBI approval of such arrangements. The circular directs ADs to ensure full compliance with FEMA provisions, KYC norms, customer protection standards, transparency in foreign exchange rates and charges, grievance redressal mechanisms, cybersecurity safeguards, and data privacy obligations. The framework mandates clear disclosure of exchange rates, transaction costs, settlement timelines, refund policies, and customer support details.
(Link: RBI Circular 81/2026 Dated 13/05/2026)
J. Miscellaneous
SC holds Guarantor Liable for Original Loan, not subsequent unauthorized Overdrawals: Case of Bhagyalaxmi Cooperative Bank Ltd Vs Babaldas Amtharam Patel (D) through Legal Representatives, SC Judgement Dated 27th February 2026. The apex court has held that permitting a borrower to withdraw amounts beyond the sanctioned loan limit without the consent of the surety results in only a partial discharge of the guarantor. The court held that the guarantors are liable only to the extent of the amount originally sanctioned along with applicable interest. They are not liable for the excess amounts withdrawn beyond the sanctioned limit.
HC Directs Xiaomi Entities to furnish Rs 272 crore security because Royalty Free SEP Use cannot Continue: Case of Malikie Innovations Ltd vs Xiaomi Corporation, HC Delhi Judgement Dated 30th April 2026. HC directed Xiaomi to deposit Rs 272 crore as pro tem security in a patent infringement suit, over the use of cellular Standard Essential Practices (SEPs). The court observed that Xiaomi decision to pursue a FRAND (Fair, Reasonable, and Non-Discriminatory) rate setting adjudication in a Chinese court served as a prima facie admission of the standard essentiality of the patents in question. SEPs cover technologies necessary to meet industry standards like 4G/5G, and must be licensed on FRAND terms to ensure fair competition. Given Xiaomi failure to disclose an alternative technology for 4G and 5G connectivity and the ‘precarious’ financial standing of its Indian subsidiary, HC determined that the deposit was necessary to safeguard the plaintiffs’ interests during the pendency of the litigation.
HC, 100% Shareholding does not make you Owner of Company Property: Case of CIT vs Pradeep Wig, HC Delhi Judgement Dated 24th April 2026. HC held that merely because Indian residents held 100% shares in a foreign company, the rental income and capital gains earned by that company abroad cannot be taxed in the hands of the shareholders. It dismissed the revenue attempt to invoke the doctrine of “substance over form” and clarified that a company remains a separate legal entity.
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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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