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Several key notifications and circulars were issued between January 6th and 12th, 2025. In the Income Tax domain, a notification exempting Tax Collection at Source (TCS) for goods sold to IFSC Units was introduced, effective January 1, 2025, with conditions for declaration by buyers. Regarding GST, the due dates for several returns including GSTR-1, GSTR-3B, GSTR-5, GSTR-6, GSTR-7, and GSTR-8 for December 2024 and Q4 of 2024 have been extended by several days, offering relief to taxpayers. A new nodal officer has been designated for IGST-related duties under section 14A(3). Additionally, an advisory on mandatory HSN code reporting for GSTR-1 and GSTR-1A was implemented, along with biometric-based Aadhaar authentication for GST registration in Rajasthan. Several court rulings impacted GST, including the Supreme Court’s decision on in-flight food and beverages supply not qualifying as outdoor catering, and the Gujarat High Court’s ruling that transfer of leasehold rights does not attract GST. Other notable rulings included those on ITC eligibility, mobilization advances in EPC contracts, and eligibility for ITC on repairs for vessels and construction services on leasehold land.

Notifications & Circulars issued during week (6th – 12th Jan 2025)

1. Income Tax

Tax Collection at Source (TCS) exemption under section 206(1H) for goods sold to IFSC Units: The notification exempts tax collection at source under Section 206C(1H) for goods sold to International Financial Services Centre (IFSC) Units, effective from January 1, 2025. This exemption is subject to the IFSC buyer submitting a declaration in Form-1 specifying the ten consecutive assessment years for which deductions are claimed. Sellers, upon receipt of this form, are exempt from collecting TCS for the specified period but must report payments in their TCS statement. The exemption applies exclusively to the specified ten years, and sellers are liable for tax collection at source for other periods. (Income Tax Notification 06/2025 Dated 06/01/2025)

2. GST

Extension of due date for GSTR-1 for December, 2024 and quarter October to December 2024: The time limit for furnishing the details of outward supplies in FORM GSTR-1 for December 2024 of has been extended till 13th January, 2025 and for the tax period October to December, 2024, has been extended till 15th January, 2025. (CGST Notification 01/2025 Dated 10/01/2025)

Extension of due date for GSTR-3B for December, 2024 and quarter October to December 2024: The time limit for furnishing the details of outward supplies in FORM GSTR-3B for December 2024 of has been extended till 22nd January, 2025 and for the tax period October to December, 2024, has been extended till 24th and 26th January, 2025 for the specified states. (CGST Notification 02/2025 Dated 10/01/2025)

Extension of due date for GSTR-5 for December, 2024: The time limit for furnishing return by non-resident taxable person in FORM GSTR-5 for December 2024 of has been extended till 15th January, 2025. (CGST Notification 03/2025 Dated 10/01/2025)

Extension of due date for GSTR-6 for December, 2024: The time limit for furnishing return by Input Service Distributor in FORM GSTR-6 for December 2024 of has been extended till 15th January, 2025. (CGST Notification 04/2025 Dated 10/01/2025)

Extension of due date for GSTR-7 for December, 2024: The time limit for furnishing return by a registered person, required to deduct tax at source as per provisions of section 51, in FORM GSTR-7 for December 2024 of has been extended till 12th January, 2025. (CGST Notification 05/2025 Dated 10/01/2025)

Extension of due date for GSTR-8 for December, 2024: The time limit for furnishing the statement, containing the details of outward supplies of goods or services or both, effected through an e-commerce operator, in FORM GSTR-8 for December 2024 of has been extended till 12th January, 2025. (CGST Notification 06/2025 Dated 10/01/2025)

Nodal Officer designation for section 14A(3) of IGST Act: The notification designate the Additional/Joint Director (Intelligence) of the Directorate General of GST Intelligence Headquarters (DGGI-Hq), as the nodal officer under section 14A(3) IGST Act. This designation is in accordance with the Information Technology Act and the Intermediaries and Digital Media Ethics Code Rules. The appointed nodal officer will oversee responsibilities as specified under these rules and ensure compliance with the IGST provisions. (Fin Min Notification Dated 06/01/2025)

Advisory on Implementation of mandatory mentioning of HSN codes in GSTR-1 & GSTR 1A: After successful implementation of Phase-I & Phase-II, now Phase-III regarding Table 12 of GSTR-1 & 1A is being implemented, from return period January 2025. In this phase manual entry of HSN has been replaced by choosing correct HSN from given Drop down. Also, Table-12 has been bifurcated into two tabs namely B2B and B2C, to report these supplies separately. Further, validation regarding values of the supplies and tax amounts involved in the same, have also been introduced for both the tabs of Table-12. However in initial period these validations have been kept in warning mode only, which means failing the validation will not be a blocker for filling of GSTR-1& 1A. (GSTN Advisory Dated 09/01/2025)

Advisory on Biometric-based Aadhaar authentication and document verification for GST registration applicants of Rajasthan: CGST rule was amended which provide for identification of applicants on biometric- based Aadhaar authentication, which includes taking the applicant’s photograph and verifying the original documents submitted with the application. The new functionality mandates that after submitting Form GST REG-01, applicants will receive an email with either a link for OTP-based Aadhaar Authentication or a link to book an appointment at a GST Suvidha Kendra (GSK). It has been rolled out in Rajasthan effective from 7th January 2025. (GSTN Advisory Dated 08/01/2025)

Advisory on Enabling filing of Application for Rectification: It has been notified vide 22/2024 dated 8th October 2024, that any registered person against whom any order confirming demand for wrong availment of ITC, on account of contravention of provisions section 16(4) had been issued, but where such ITC is now available as per the recently inserted section 16(5) or 16(6), would now be able to file an application for rectification of such demand orders. A functionality has now been made available on the Portal for taxpayers to file an application for rectification of such orders. A hyperlink has also been provided on the Portal to download the proforma in Annexure A in word format, required to be uploaded after entering the details. (GSTN Advisory Dated 08/01/2025)

SC, In-flight Food & Beverages supply to airlines not qualifies as Outdoor Catering Services: Case of Comm of CGST and CE vs Ambassador Sky Chef, SC Judgement dated 2nd January 2025. The Assessee was providing food to various airlines along with the responsibility of packing and handling of food. There was no activity of serving the food. The appeal was against the CESTAT ruling which held that the supply of food and beverages to the international as well as domestic flights is not outdoor catering services. These are rather sale of food and beverages. CESTAT had dropped the demand of service tax proposed by show cause notices. SC upheld the order. (SC Judgement Dated 02/01/2025)

HC, No GST on transfer of leasehold rights: Case of Gujarat Chamber of Commerce and Industry vs Union of India, HC Gujarat Judgement dated 3rd January 2025. The High Court has ruled that the transfer or assignment of leasehold rights does not attract GST. It has held that such a transfer constitutes the sale of immovable property, which falls outside the scope of GST as per the provisions of the GST Act. (HC Gujarat Judgement Dated 03/01/2025)

AAAR, No GST on free bus transportation facility provided to its Employees by Employer: Case of Emcure Pharmaceuticals, AAAR Gujarat Ruling Dated 30th December 2024. The AAAR reaffirmed the earlier ruling by AAR that Applicant is not liable to pay GST on free bus transportation facility provided to its employees. Further, it was ruled that the ITC on motor vehicle for transportation of person having approved seating capacity of more than 13 persons, not being blocked under Section 17(5)(b)(i) of the CGST Act, and thereby, could be availed by the Applicant. (AAAR Gujarat Ruling Dated 30/12/2024)

AAAR denies GST exemption for Suzlon’s Transformers: Case of Suzlon Energy Limited, AAAR Gujarat Ruling Dated 30th December 2024. The AAAR upheld the earlier ruling by AAR, stating that such transformers, despite performing dual functions of step-down and step-up transformation, do not constitute parts of wind turbine generators (WTGs) as per the Ministry of New and Renewable Energy’s guidelines and relevant circulars. The appellant’s reliance on common parlance or popular meaning to classify transformers as part of WTGs was deemed unsupportable without substantive evidence. Additionally, previous judicial rulings cited by Suzlon Energy, primarily pertaining to other contexts like depreciation under income tax laws, were found irrelevant to the present dispute. The authority ruled that transformers are not part of WTGs and, therefore, ineligible for tax benefits under the specified exemptions. (AAAR Gujarat Ruling Dated 30/12/2024)

AAAR, Mobilization advance for EPC contracts taxable on receipt: Case of SP Singla Constructions, AAAR Gujarat Ruling Dated 30th December 2024. The agreement specified that mobilization advances, constituting 10% of the contract value, are paid in two instalments against a bank guarantee. These advances, deemed interest-bearing, are repaid through deductions from subsequent stage payments as certified by the engineer. The appellant argued that the mobilization advance is a mere financial transaction or deposit and does not constitute taxable consideration. AAAR refuted this claim, citing contractual terms that specify its usage for project execution and repayment terms. It upheld the earlier ruling by AAR that the mobilization advance is taxable on the date of receipt. (AAAR Gujarat Ruling Dated 30/12/2024)

AAAR, ITC eligibility for vessel services: Case of Sikka Ports and Terminals Ltd, AAAR Gujarat Ruling Dated 30th December 2024. The AAAR partially allowed the Revenue’s appeal, modifying the AAR earlier decision. It ruled that ITC for repair and maintenance of vessels, including Diving Support Vessels (DSV) and Special Patrol Vehicle (SPV), is blocked under Section 17(5)(ab) since the vessels were not used for the specified purposes outlined in the law, such as transportation of goods or passengers. For the hiring of SPVs, it noted that the services were not used for making outward taxable supplies of the same category or as part of a composite or mixed supply. The hiring of SPVs did not qualify for ITC under Section 17(5)(b)(i), which blocks credit unless vessels are used for specified purposes like passenger transport or goods movement. (AAAR Gujarat Ruling Dated 30/12/2024)

AAAR, No ITC on payments made to acquire leasehold land rights: Case of GACL-NALCO Alkalies & Chemicals Pvt Ltd, AAAR Gujarat Ruling Dated 30th December 2024. The case revolved around ITC eligibility on services utilized for constructing a caustic soda plant on leasehold land. The appellant argued that the plant qualifies as “plant or machinery” and falls outside the restrictions of Section 17(5)(d) of the CGST Act, which blocks ITC for construction of immovable property. However, the AAAR relied on the Supreme Court’s ruling in the Safari Retreats Pvt. Ltd. case, emphasizing the functionality test for determining whether a building qualifies as a plant. Applying this rationale, the AAAR found that the construction was for its own account, making it ineligible for ITC. The AAAR affirmed the earlier ruling by AAR, denying ITC for construction related services. (AAAR Gujarat Ruling Dated 30/12/2024)

AAAR, Aorom Herbotech’s herbal cigarettes not medicinal products: Case of Aorom Herbbotech, AAAR Gujarat Ruling Dated 30th December 2024. The appelant argued that the product is rooted in Ayurvedic principles and cures diseases under the Ayurvedic practice of Dhoompana. However, it failed to substantiate their claims with authoritative Ayurvedic texts or relevant manufacturing licenses. The AAAR affirmed the earlier ruling by AAR that herbal cigarettes were not medicinal products. (AAAR Gujarat Ruling Dated 30/12/2024)

AAAR Leasing electric vehicles without operator: Case of True Solar Private Ltd, AAAR Odisha Ruling dated 18th December 2024. The applicant sought an advance ruling on whether leasing electric vehicles (E-Bikes) without operators would fall under the classification for “Leasing or rental services without operator” under GST Notification 11/2017. The AAR could not reach a consensus, with one member classifying the service under financial services and the other under leasing services. Consequently, the matter was referred to the AAAR. The AAAR ruled that leasing electric vehicles without an operator is classified under “Financial and related services” under Notification 11/2017, meaning the transaction involves the transfer of the right to use goods, subject to tax at the same rate as goods that involve the transfer of title. (AAAR Odisha Ruling Dated 18/12/2024)

AAAR, GST on Bakery Products and Services by Pioneer Bakers: Case of Pioneer Bakers, AAAR Odisha Ruling dated 18th December 2024. Pioneer Bakers operates outlets offering a variety of food items, including cakes, pastries, handmade chocolates, and beverages, alongside services such as air conditioned dining and customization. The AAAR ruled that such operations qualify as a “composite supply,” wherein the principal supply is food, and the accompanying services align with the definition of “restaurant service” under GST law. This classification attracts a 5% GST rate, excluding ITC.

— It also distinguished between services and the sale of bought-out goods such as birthday caps and decorative items. These items, sold without any additional processing, are treated as a supply of goods and taxed at rates applicable under Notification No. 1/2017. It clarified that certain items bundled with cakes, such as decorative goods, do not qualify as composite supply. It also clarified that the bakery is ineligible for the GST composition scheme as it manufactures ice cream, a restricted activity under the scheme. (AAAR Odisha Ruling Dated 18/12/2024)

C. Central Excise

No Notification/ Circular during the week.

D. Custom Duty

No Notification/ Circular during the week.

E. Directorate General of Foreign Trade (DGFT)

Amendment in Import Policy and Import Policy Condition of Synthetic Knitted Fabrics: The Minimum Import Price (MIP) condition of synthetic knitted fabrics is extended from 1st January 2025, to 31st March 2025. Imports of these items are classified as “Restricted” but are allowed freely if the CIF (Cost, Insurance, and Freight) value is at least 3.5 USD per kilogram. Exceptions to the MIP condition are granted for Advance Authorisation holders, Export Oriented Units (EOUs), and units in Special Economic Zones (SEZ), provided the imported materials are not sold in the Domestic Tariff Area (DTA). (DGFT Notification 49/2025 Dated 04/01/2025)

Procedure for export of certified organic products: The Public Notice provides the updated procedure for exporting certified organic products under the Foreign Trade Policy. Organic products eligible for export must be produced, processed, packed, and labeled in compliance with the “National Programme for Organic Production” (NPOP) standards, as periodically updated on the APEDA website. Exported products must be accompanied by a Transaction Certificate (TC) issued by a certification body accredited by the National Accreditation Body (NAB) under NPOP. The updated NPOP (8th edition) will become effective 180 days from the date of this notice, allowing exporters and stakeholders time to align their practices with the revised guidelines. (DGFT Public Notice 39/2025 Dated 05/01/2025)

F. Securities and Exchange Board of India (SEBI)

Renewal of Recognition for AMC Repo Clearing Limited: SEBI has renewed the recognition of AMC Repo Clearing Limited for one year, allows the Clearing Corporation to continue its role in clearing and settling transactions in repo and reverse repo agreements for debt securities traded on recognized stock exchanges. AMC Repo Clearing Limited is restricted to clearing and settlement activities related to debt securities and cannot undertake any other operations. (SEBI Notification Dated 09/01/2025)

Settlement of Account of Clients who have not traded in the last 30 days: At present, trading members were required to settle such accounts within three working days. SEBI now mandates that funds from inactive accounts be settled on the next monthly running account settlement date, as notified in annual stock exchange calendars. However, if a client resumes trading before the settlement date, the original preference given by the client for quarterly or monthly settlement applies. (SEBI Circular Dated 06/01/2025)

Revision in Timelines for Credit Rating Agencies (CRAs): The key changes include revised deadlines for press releases on rating actions, prompt reviews of delayed debt servicing reports, and consistent practices for migrating ratings to the “Issuer Not Cooperating” (INC) category. CRAs must now publish press releases within 7 working days of relevant events instead of 7 calendar days. In cases of delayed debt servicing, CRAs must issue press releases within 2 working days of receiving related statements. The changes account for challenges faced by CRAs in obtaining confirmations during non-working weekends and holidays. (SEBI Circular Dated 07/01/2025)

Guidelines for Investment Advisers (IAs): The key updates include new deposit requirements based on client numbers, provisions for part-time IAs, and dual registration for Research Analysts as IAs under specific conditions. Non-individual IAs must appoint compliance officers and meet qualification standards. Fee-related provisions allow flexibility in charging modes and revise fixed fee limits. Disclosure and segregation requirements apply to IAs using Artificial Intelligence or offering non-SEBI-regulated products. Enhanced audit, record maintenance, and website requirements aim to ensure transparency and compliance. The circular also mandates functional websites for all IAs and enforces detailed terms for agreements with clients. (SEBI Circular Dated 08/01/2025)

Guidelines for Research Analysts: The key updates include revised qualification requirements, deposit mandates based on client count, and provisions for dual registration as both investment advisers and research analysts. The compliance deadlines for existing RAs vary, with deposit requirements due by April 30, 2025, and client fee-related provisions effective by June 30, 2025. It also introduce client-level segregation for research and distribution activities, clarified guidelines for recommending model portfolios, and updated KYC record-keeping and interaction documentation standards. The guidelines also cover fee limits, refund mechanisms, grievance redressal, and mandatory disclosures, including Most Important Terms and Conditions (MITC). (SEBI Circular Dated 08/01/2025)

Procedure for seeking waiver or reduction of interest in respect of recovery proceedings initiated for failure to pay penalty: The defaulter must submit an application to the Recovery Officer along with supporting documentation to demonstrate genuine hardship, the circumstances beyond their control leading to default, and cooperation in related inquiries. The application must be made after the principal amount has been fully paid, and the decision must be made within 12 months from the receipt of a complete application. However, the waiver or reduction does not apply in cases involving interest on failure to remit fees or disgorgement orders. (SEBI Circular Dated 10/01/2025)

Revise and Revamp of Nomination Facilities in the Indian Securities Market: The circular revise the nomination norms for demat accounts and mutual fund folios to streamline asset transmission and reduce unclaimed investments. The key updates include the rule of survivorship for joint accounts, the process for simultaneous passing of joint holders, and nomination requirements for single and joint accounts. The investors can now nominate up to 10 individuals, specifying their shares. Transmission of assets will require minimal documentation, such as a death certificate and nominee KYC updates. Additionally, nominees receive assets as trustees for legal heirs, safeguarding regulated entities from liability. (SEBI Circular Dated 10/01/2025)

Consultation paper on proposal to increase the size criteria for FPI additional disclosure framework: At present, FPIs managing more than INR 25,000 crore in equity assets under management (AUM) are required to disclose granular details of all investors to prevent circumvention of Press Note 3 stipulations. With the rise in market turnover, SEBI suggests raising the threshold for these disclosures to INR 50,000 crore. However, the proposal does not alter the concentration criteria for disclosures, which aims to prevent circumvention of Minimum Public Shareholding (MPS) norms. The comments/ feedback from stakeholders is invited. (SEBI Consultation Paper dated 10/01/2025)

G. Ministry of Corporate Affairs (MCA)

No Notification/ Circular during the week.

H. Insolvency and Bankruptcy Board of India (IBBI)

Mandatory Use of eBKray Auction Platform for Liquidation Processes: IBBI through circular dated 29th October 2024, has issued directions regarding the use of the eBKray auction platform. In this regard, all IPs handling liquidation processes are directed to exclusively use the eBKray auction platform for conducting auctions for sale of assets during the liquidation process with effect from 1st April 2025. It is further directed that listing of unsold assets in all ongoing liquidation cases shall be completed by 31st March 2025. (IBBI Circular Dated 10/01/2025)

Extension of time for filing Forms to monitor liquidation and voluntary liquidation processes under IBC: The timeline to file forms relating to the liquidation and voluntary liquidation process was earlier extended till 31st December 2024 Considering the representations and difficulties faced by the liquidators, it has been decided to extend the last date of submission of the liquidation and voluntary liquidation forms till 31st March 2025. (IBBI Circular Dated 09/01/2025)

SC Sets Aside High Court Ruling on CIRP Proceedings: Case of Mohammed Enterprises (Tanzania) vs Farooq Ali Khan, SC Judgement Dated 3rd January 2025. The apex court overturned the HC decision that had quashed the resolution plan approved by the Committee of Creditors (CoC) under CIRP. The appeals were brought by the successful resolution applicant, Mohammed Enterprises Tanzania Ltd. (METL), the resolution professional, and a financial creditor, challenging HC interference in insolvency proceedings citing violation of natural justice and procedural lapses. It reiterated that High Courts must exercise restraint in cases governed by specialized legal frameworks like the IBC, underscoring the importance of expeditious resolution to maintain economic stability and creditor confidence. The interference in CIRP proceedings by the judiciary should remain minimal to ensure timely resolution, as mandated by the IBC. (SC Judgement Dated 03/01/2025)

SC, Deed of Hypothecation amounts to guarantee under section 5(8) of IBC: Case of China Development Bank vs Doha Bank, SC Judgement Dated 20th December 2024. The apex court held that Deed of Hypothecation amounts to guarantee in terms of section 5(8) of the Insolvency and Bankruptcy Code, 2016. (SC Judgement Dated 20/12/2024)

IBBI Imposes Penalty on Ms Bhavi Shreyans Shah Insolvency Professional equivalent to unadmitted EPFO Claim: The issue relates to failure to accept a claim from the Employees’ Provident Fund Organisation (EPFO) despite its submission within the stipulated timeframe during the corporate insolvency resolution process (CIRP). The claim was initially submitted in an incorrect form, which Ms. Shah deemed invalid, even after subsequent follow-ups from EPFO. The Disciplinary Committee imposed a penalty of ₹40,956, equivalent to the unadmitted claim amount, to be deposited into the Consolidated Fund of India within 45 days. (IBBI Order Dated 06/01/2025)

I. Reserve Bank of India (RBI)

RBI Master Direction on Non-resident Investment in Debt Instruments: The Master Direction regulate foreign investments in Indian debt instruments. These regulations, based on the Foreign Exchange Management Act (FEMA), provide guidelines on investments by Foreign Portfolio Investors (FPI), Non-Resident Indians (NRI), and Overseas Citizens of India (OCI). They include provisions for the Fully Accessible Route (FAR) for certain securities, the investment of Sovereign Green Bonds, and transactions in derivatives. RBI has also established reporting and settlement requirements for FPI investments in Government securities. (RBI Master Directions 126/2025 Dated 07/01/2025)

RBI Master Direction on Credit Information Reporting: The Master Direction consolidate previous guidelines issued under Section 11 of the Credit Information Companies (Regulation) Act. These directions standardize credit information reporting for regulated entities, including banks, financial institutions, and non- banking financial companies. The key provisions include mandatory membership of credit institutions with all Credit Information Companies (CICs), standardized data formats for consumer, commercial, and microfinance segments, and regular data updates. (RBI Master Directions 125/2025 Dated 06/01/2025)

J. Miscellaneous

Environment Protection (End-of-Life Vehicles) Rules, 2025: These rules effective from 1st April 2025, aim to regulate the handling, processing, and scrapping of End-of-Life Vehicles (ELVs) to ensure environmentally sound practices. These are applicable to vehicle producers, registered owners, scrapping facilities, and other entities involved in the vehicle lifecycle. The waste materials already governed by separate regulations such as batteries, plastic, and e-waste are excluded. Agricultural machinery, including tractors and harvesters, are also exempt.

— Producers are mandated to fulfill Extended Producer Responsibility (EPR) by ensuring ELVs are properly scrapped in registered facilities. They must declare and meet scrapping targets, implement schemes like buybacks or deposit refunds, and report annual compliance to the Central Board. Registered owners and bulk consumers must ensure vehicles deemed ELVs are deposited at designated centers or scrapping facilities within 180 days of reaching the end of life.

— Registered Vehicle Scrapping Facilities must perform scrapping operations, including depollution, dismantling, and recycling, in compliance with environmental standards. They are responsible for generating EPR certificates based on the steel recovered from ELVs, which producers can purchase to meet their obligations. (Min of Environment Notification Dated 06/01/2025)

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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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