Summary: The week from 7 to 13 September 2026 witnessed significant judicial, regulatory and compliance developments across Income Tax, GST, Customs, DGFT, SEBI, IBBI and RBI. Income Tax updates covered taxpayer-information sharing and SFT reporting for mutual fund and depository transactions, while the Delhi High Court ordered a Rs. 53 crore TDS refund with interest without Form 26B. GST developments included enabling appeals in NIL-demand cases, classification of Papad Khar at 18%, exclusion of blocked ITC under Rule 86A from GST appeal pre-deposit and mandatory biometric Aadhaar authentication for GST registrations. Customs addressed one-time validity of EPR registrations and the Supreme Court set aside a penalty based on fake AI-generated case laws. DGFT proposed suspension of 544 SIONs and introduced Open API integration for Certificates of Origin. SEBI revised commodity-derivative position limits, relaxed the Accredited Investor mandate timeline for Angel Funds and issued proposals concerning FPIs, derivatives settlement, MII cybersecurity and governance. IBBI issued guidance on misuse of the IBC framework, proposed safeguards for personal guarantor insolvency and reported several judicial and disciplinary developments. RBI amended FEMA, priority-sector lending and Local Area Bank directions, withdrew obsolete FEMA circulars and proposed safeguards against suspected money-mule accounts. The Supreme Court also ruled on Foreign Travel Tax penalties, arbitration clauses binding guarantors, settlement of partners’ interests in dissolved firms and adverse possession.
(Income Tax, GST, Central Excise, Custom Duty, DGFT, SEBI, MCA, IBBI, RBI)
(Click the Link for Notification/ Circular as issued)
A. Income Tax
Tax Information sharing with Andhra Pradesh Government Enabled: The notification specifies the Secretary, Information Technology, Electronics & Communications (ITE&C), Govt of Andhra Pradesh, as designated authority for sharing taxpayer information.
(Link: Income Tax Notification 118/2026 Dated 09/09/2026)
Procedure and Guidelines for submission of Statement of Financial Transactions (SFT-2518) for Mutual Fund Transactions: The notification sets the procedural guidelines for submitting SFT-2518 to pre-fill capital gains on mutual fund transactions. The compliance requirements include, Transaction-level tracking including exact cost of acquisition, FIFO (First-In, First-Out) for holding periods, Frequency twice a financial year through designated RTA portals, and syncs with individual Annual Information Statements (AIS).
(Link: Income Tax Notification 02/2026 (System) Dated 10/09/2026)
Procedure and Guidelines for submission of Statement of Financial Transactions (SFT-2517) for Depository Transactions: The notification outlines the format, procedure, and guidelines for submitting the Statement of Financial Transactions (SFT-2517) for depository transactions. The key requirements include, Standardized electronic submission formats provided by the Directorate of Income-tax (Systems), Strict adherence to reporting timelines to ensure accurate pre-filling for taxpayers, Mandatory validation using digital signatures or electronic verification codes.
(Link: Income Tax Notification 01/2026 (System) Dated 10/09/2026)
HC, TDS Refund of Rs 53 Crores with Interest ordered Without Form 26B: Case of Vodafone Idea Limited Vs ACIT, HC Delhi, Judgement Dated 18th August 2026. The court ruled that Form 26B/Rule 31A apply only to pre-assessment TDS adjustments at the CPC level, not to post-assessment or appellate refund orders. It directed the Income Tax Department to issue the tax refund along with applicable interest to the petitioner.
(Link: HC Delhi Judgement Dated 18/08/2026)
B. GST
GSTN, Enabling Filing of appeals in cases involving NIL or Zero Demand Amount: In cases where a dispute regarding liability exists but the demand amount is reflected as ‘NIL’ or ‘Zero’ in the demand order, and payment has been made by the taxpayer prior to the issuance of the demand order, the previous validation restricting the filing of an appeal against such demand orders has been removed from the GST Portal. Accordingly, taxpayers are now enabled to file an appeal in Form GST APL-01 in such cases.
(Link: GSTN Advisory Dated 07/09/2026)
AAR, Papad Khar classified under HSN 28362090 at 18% GST: Case of Jignesh Kantilal Makadia, AAR Gujarat Ruling Dated 11th September 2026. The applicant, argued that Papad Khar should attract a 5% GST rate under HSN 2501 (Common Salt) or HSN 2102 (Prepared Food Additives) since it is primarily a traditional food ingredient. AAR ruled that because the product undergoes a specific industrial manufacturing and chemical mixing process, it is disqualified from being classified as simple common salt or a basic food additive. Instead, it must be classified under inorganic chemicals (carbonates), subjecting it to the standard 18% GST rate.
(Link: AAR Gujarat Ruling Dated 11/09/2026)
HC, ITC blocked under Rule 86A cannot be treated as pre-deposit for filing GST Appeal: Case of Spherion Solutions Private Limited vs Additional Commissioner Adjudication CGST Delhi North, HC Delhi Judgement Dated 3rd September 2026. The apex court held that an Input Tax Credit (ITC) blocked under Rule 86A cannot be counted toward the mandatory pre-deposit needed to file a GST appeal under Section 107(6) of CGST Act. ITC blocked under Rule 86A is not equivalent to ITC actually utilised or appropriated.
(Link: HC Delhi Judgement Dated 03/09/2026)
HC, Mandates Biometric Aadhaar authentication for all GST registrations: Case of Neha Vs Union of India, HC Delhi, Judgement Dated 8th September 2026. The Court ordered that no new GST registration should be granted across India without biometric Aadhaar authentication. It is mandatory for all new GST registrations nationwide.
(Link: HC Delhi Judgement Dated 08/09/2026)
C. Central Excise
No Notifications/ Circulars during the week.
D. Custom Duty
EPR Registration Valid for one year for Plastic Import Clearance: The instructions direct customs authorities not to insist on renewal certificates for importer registrations under the centralized Extended Producer Responsibility (EPR) portal for plastic waste. EPR registration certificates issued to importers with an initial validity of one year must be treated as ‘one-time Registration Certificates’ that do not require periodic renewal.
(Link: Customs Instructions 15/2026 Dated 09/09/2026)
SC, Sets aside Customs Penalty due to Fake AI-Generated Case Laws: Case of Vijay Ghanshyam Gadiya Vs Union of India, SC Judgement Dated 2nd September 2026. The apex court set aside customs penalty after discovering that the adjudicating authority relied on non-existent, AI-hallucinated case laws and fake citations.
(Link: SC Judgement Dated 02/09/2026)
E. Directorate General of Foreign Trade (DGFT)
Comments invited on proposed suspension of 544 SIONs: The trade notice proposes suspension of 544 Standard Input Output Norms (SIONs) that have remained unutilized under the Advance Authorisation (AA) and Duty-Free Import Authorisation (DFIA) Schemes over the last three financial years. The comments/ views are invited.
(Link: DGFT Trade Notice 26/2026 Dated 07/09/2026)
Introduction of Open API Integration for Certificate of Origin (CoO) through Trade Connect e-Platform: The trade notice introduces an Open API (Application Programming Interface) integration for issuing and verifying Certificate of Origin (CoO) through the Trade Connect e-Platform. The functionality provides, Direct connection between company ERP/accounting systems and DGFT portals, Covers both Preferential and Non-Preferential Certificates of Origin, Includes major pacts like India-UAE CEPA, India-Australia ECTA, and India-EFTA TEPA, and Real-time transaction ledger monitoring application stages i.e., Draft, Approved, Issued.
(Link: DGFT Trade Notice 25/2026 Dated 07/09/2026)
F. Securities and Exchange Board of India (SEBI)
Review of Position Limits for Clients and related Penalty Provisions for Commodity Derivatives Segment: The circular also revises the definition of ‘Broad Commodity’, under which an agricultural commodity must not be a ‘Sensitive Commodity’ and must have average deliverable supply for the past five years of at least 10 lakh MT in quantitative terms or at least INR 5,000 crore in monetary terms. Client-level numerical position limits are revised to 2% for Broad commodities, 1% for Narrow commodities and 0.5% for Sensitive commodities. The revised penalty framework provides that where a position limit violation exceeds 2% of the prescribed limit, the penalty will be the prescribed formula amount or Rs. 2,00,000, whichever is lower, while violations up to 2% will attract the formula amount or Rs. 10,000, whichever is lower.
(Link: SEBI Circular Dated 09/09/2026)
Relaxation in timeline with respect to Accredited Investor mandate for Angel Funds: The Angel Funds registered with SEBI on or before 10th September 2025 were required to implement the Accredited Investor mandate on or before 8th September 2026. They were also prohibited from accepting contributions for investment in an investee company from non-Accredited Investors after September 08, 2026, while existing investors could continue to hold their investments according to the PPM and/or fund documents. SEBI has extended the timelines until March 31, 2027.
(Link: SEBI Circular Dated 07/09/2026)
FPIs Investing Only in Government Securities not required to Furnish Investor Group Details: The amended provisions provide that FPIs investing exclusively in Government Securities (G-Secs) are no longer required to provide investor group details to their intermediaries.
(Link: SEBI Circular Dated 07/09/2026)
Consultation Paper on Review of Closing Auction Session, Market Timings and Settlement Methodology for Derivatives Contracts: For derivatives settlement prices, SEBI proposes either immediate adoption of a Blended VWAP based on actual transactions during the last 30 minutes of the Continuous Trading Session (CTS) and 10 minutes of CAS, or an interim CTS VWAP methodology using only the last 30 minutes of CTS, with possible transition to Blended VWAP after at least one year subject to liquidity, participation, familiarity and assessment of CAS. The paper also distinguishes an Indicative Equilibrium Price (IEP), the final CAS closing price and derivatives settlement price, and proposes that the IEP-derived Indicative Index Value should not be disseminated during CAS while individual security-level IEPs continue to be available. The suggestions/ comments from stakeholders are invited.
(Link: SEBI Consultation Paper Dated 12/09/2026)
Consultation Paper on Applicability of IT & Cyber Security Framework of MIIs to their Subsidiaries: The proposal seeks to provide greater regulatory clarity where subsidiaries undertake activities that directly contribute to an MII’s domain, handle data that the MII is required to handle, or share infrastructure with the MII. The proposed framework would require such subsidiaries to comply with applicable requirements relating to cyber security, system audits, incident reporting, BCP-DR and technology governance. The proposal also contemplates proportionality-based exemptions where an MII considers that the framework should not be extended to a subsidiary solely because of shared IT infrastructure. Such an exemption proposal would need to provide details of compensatory controls and include the views of SCOT and the Board of the MII. The suggestions/ comments from stakeholders are invited.
(Link: SEBI Consultation Paper Dated 11/09/2026)
Consultation Paper on Strengthening Governance of MIIs: It reviews the eligibility restrictions for directors of stock exchanges, clearing corporations and depositories. The proposal would extend the existing carve-out to directors of companies having well-diversified shareholding and defines such shareholding by reference to a 10% threshold and public-sector shareholders. Another proposal concerns a Standard Operating Procedure prescribing qualification, experience, skill-set and certification requirements for CTO, CISO, Compliance Officer and Chief Risk Officer positions. The SOP would be approved by the MII Governing Board after considering inputs from the relevant statutory committees. It is proposes that vacancies in these critical positions be filled within three months. The suggestions/ comments from stakeholders are invited.
(Link: SEBI Consultation Paper Dated 09/09/2026)
G. Ministry of Corporate Affairs (MCA)
No Notifications/ Circulars during the week.
H. Insolvency and Bankruptcy Board of India (IBBI)
Due diligence by Insolvency Professionals regarding misuse of IBC Framework: The circular directs Insolvency Professionals (IPs) to remain vigilant regardingpotential misuse of the insolvency framework. It follows information received from law enforcement and regulatory agencies concerning cases where the IBC framework has allegedly been used for purposes other than insolvency resolution or liquidation, including mitigating tax liabilities, avoiding regulatory scrutiny, mitigating investigations, prosecution and penalties, and monetising or ring-fencing assets. The IBBI has identified several illustrative indicators requiring closer examination.
(Link: IBBI Circular Paper Dated 09/09/2026)
Discussion Paper on Strengthening safeguards in the Insolvency Resolution Process for Personal Guarantors to Corporate Debtors: The Discussion Paper identifies four areas where safeguards available to creditors in corporate insolvency resolution do not have corresponding safeguards in the personal guarantor resolution process. It proposes exclusion of related parties of the personal guarantor from voting on the repayment plan by assigning them a Nil voting share; identification and reporting of preferential, undervalued, fraudulent and extortionate credit transactions; independent valuation of the personal guarantor’s assets; and mandatory recording of creditors’ deliberations and reasons for their decision on the repayment plan. The proposals contemplate amendments to regulations 9, 11 and 15 and insertion of regulations 10A and 10B in the IRP Regulations. The suggestions/ comments from stakeholders are invited.
(Link: IBBI Discussion Paper Dated 12/09/2026)
HC, IBC Resolution Plan Bars enforcement of unfiled Pre-CIRP Customs Dues: Case of Jaiprakash Associates Limited Vs The Office of The Commissioner of Customs Air Cargo Complex Import, HC Delhi, Judgement Dated 2nd September 2026. The court ruled that pre-insolvency statutory claims not filed during the Corporate Insolvency Resolution Process (CIRP) stand permanently extinguished under the “clean slate” principle of the Insolvency and Bankruptcy Code.
(Link: HC Delhi Judgement Dated 02/09/2026)
NCLAT, Mere Internal entries are insufficient to establish Independent Financial Debt: Case of Somani Worsted Limited Vs Amit Aggarwal, NCLAT Delhi Judgement Dated 1st September 2026. The appellate tribunal ruled that an RP is fully entitled to re-verify and update the list of creditors upon deeper scrutiny, even if a claim was admitted in an initial verification round.
(Link: NCLAT Delhi Judgement Dated 01/09/2026)
NCLAT, Upholds CIRP Admission where settlement did not Extinguish Operational Debt: Case of Naresh Chand Vs Mani Mahesh Ispat Pvt Ltd, NCLAT Delhi Judgement Dated 29th August 2026. The core issue was whether a subsequent property execution/settlement agreement acts as a “novation of contract” (Section 62 of Indian Contract Act), thereby discharging the previous operational debt. The appellate tribunal held that the property transactions designed as safety fallbacks do not destroy an operational creditor rights under the IBC. It upheld the admission of the CIRP against corporate debtor.
(Link: NCLAT Delhi Judgement Dated 28/08/2026)
NCLAT, Upholds section 10 IBC (Voluntary Insolvency Petition) Rejection: Case of Panshul Agro Food LLP vs State Bank of India, NCLAT Delhi Judgement Dated 25th August 2026. The party filed a voluntary insolvency petition under Section 10 of the IBC, 2016, for a default exceeding ₹42.20 crore, shortly after SBI initiated recovery proceedings under the SARFAESI Act and approached the Debt Recovery Tribunal (DRT). The appellate tribunal upheld the dismissal of a Section 10 IBC application, ruling that it misused the insolvency process to obstruct legitimate recovery actions.
(Link: NCLAT Delhi Judgement Dated 25/08/2026)
IBBI, Insolvency Professional Sh. Anurag Jain suspended for Raising Interim Finance Without CoC Approval: The Disciplinary Committee held that he raised interim finance of Rs.1 crore from an entity in which he was a Director, without obtaining the specific prior approval of the CoC. A substantial portion of the amount drawn was utilised towards his own fees and fees of a related legal professional without the relevant CIRP costs being placed before the CoC for ratification.in dismissal of the application, It suspended his registration for a period of two years.
(Link: IBBI DC Order Dated 08/09/2026)
I. Reserve Bank of India (RBI)
Amendments to FEMA Non-Debt Instruments Rules Permit Inventory E-Commerce Exports: Under the newly inserted provision, an e-commerce entity is permitted to engage in an inventory-based model of e-commerce exclusively for exporting goods or products manufactured or produced in India. It further provides that the restrictions on Business to Consumer (B2C) transactions and the inventory-based model of e-commerce stipulated under serial numbers 15.2.1 to 15.2.4 will not apply to exports of goods or products through e-commerce as permitted under the new provision.
(Link: FinMin FEMA Notification Dated 02/09/2026)
Amendments to Priority Sector Lending Targets and Classification Directions: It follows the earlier amendment issued on 7th August 2026, under which qualifying advances against fresh FCNR(B) deposits of a minimum three-year and maximum five-year tenor, and advances against NRE term deposits of three years or more, were to be excluded from ANBC subject to specified mobilisation periods. It revises the cut-off date to 31st August 2026, for such advances to be excluded from Adjusted Net Bank Credit (ANBC) calculations.
(Link: RBI Circular 256/2026 Dated 11/09/2026)
Amendments to RBI Local Area Banks Cash Reserve Ratio and Statutory Liquidity Ratio Directions: The amendments follows the inclusion of a Local Area Bank in the Second Schedule. These insert provisions relating to Incremental CRR and minimum CRR maintenance on a daily basis for scheduled banks. They also modify provisions concerning savings bank deposits, liabilities to the banking system, ACU accounts and funds borrowed under market repo against Government securities. It also address penal interest for CRR shortfalls, including separate treatment of scheduled and non-scheduled Local Area Banks.
(Link: RBI Circular 255/2026 Dated 11/09/2026)
Review of Circulars issued under Foreign Exchange Management Act (FEMA): RBI has identified and withdrawn seven circulars that have ceased o be operative because of subsequent regulatory amendments, redundancy, overlap or supersession by newer directives. The withdrawn circulars relate principally to External Commercial Borrowings (ECB), borrowing and lending in rupees, and the Money Transfer Service Scheme.
(Link: RBI Circular 254/2026 Dated 08/09/2026)
Updates on UNSC Sanctions List Under UAPA Compliance: MEA has informed about the UNSC amendments on its Al-Qaida Sanctions List of individuals and entities, which are subject to the assets freeze, travel ban and arms embargo. Regulated Entities (REs) are advised to take note for necessary compliance in terms of Master Directions on KYC.
(Link: RBI Circular 253/2026 Dated 07/09/2026)
Updates on UNSC Sanctions List Under UAPA Compliance: MEA has informed about the UNSC amendments on its Taliban Sanctions List of individuals and entities, which are subject to the assets freeze, travel ban and arms embargo. Regulated Entities (REs) are advised to take note for necessary compliance in terms of Master Directions on KYC.
(Link: RBI Circular 252/2026 Dated 07/09/2026)
Draft Amendments to RBI (Know Your Customer) Directions for Suspected Money Mule Bank Accounts: The amendment introduce Annex III containing the SOP on Suspected Money Mule Accounts to Prevent Cyber-enabled Financial Frauds. A bank must place a temporary debit hold upon identifying a suspected money mule transaction or account and notify the account holder. The account holder is generally given 20 days to provide an explanation or justification. The bank must then examine the explanation or conduct due diligence and either remove the hold, continue it and report to the Jurisdictional Police Authority through NCRP-CFCFRMS, or comply with directions from Competent Authority. The SOP also prescribes internal policies, record keeping, continued STR filing, enhanced monitoring and a grievance redressal mechanism.
(Link: RBI Draft Amendment Directions Dated 11/09/2026, Press Release)
J. Miscellaneous
SC, Penalty not automatic for delayed Foreign Travel Tax Payment: Case of Saudi Arabian Airlines Vs Union of India, SC Judgement Dated 1st September 2026. The apex court held that a delayed deposit of Foreign Travel Tax (FTT) is not the same as a complete failure to pay tax, and quashed a penalty imposed on the airline.
(Link: SC Judgement Dated 01/09/2026)
SC, Arbitration Clause in Loan Agreement binds Guarantor through Contractual Incorporation: Case of National Skill Development Corporation vs Surya Wires Private Limited, SC Judgement Dated 8th September 2026. The apex court held that an arbitration clause in a loan agreement binds a personal guarantor even if the guarantee document does not separately contain an arbitration clause, provided both form a single composite transaction.
(Link: SC Judgement Dated 08/09/2026)
SC, Partner Right in unsold Firm Assets survives until Actual Settlement: Case of V. Sumitra Reddy vs K. Ranganadha Reddy, SC Judgement Dated 9th September 2026. The apex court held that an outgoing partner’s share in the unliquidated immovable assets of a dissolved firm must be valued based on current market conditions or the date of actual sale/final settlement, rather than being frozen at the historical value on the date of dissolution.
(Link: SC Judgement Dated 09/09/2026)
SC Long Possession without Hostile Animus does not Confer Title: Case of Bhag Singh (D) Through Mahant Kashmir Singh Vs Basant Kaur (D), SC Judgement Dated 10th September 2026. The apex court ruled that mere long and uninterrupted possession of a property does not automatically establish ownership through adverse possession. The law protects legitimate titleholders from losing their properties to long-term caretakers or occupiers unless a clear, hostile takeover can be legally proven.
(Link: SC Judgement Dated 10/09/2026)
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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)
