The notifications and circulars issued between December 9-15, 2024, covered key updates across Income Tax, GST, Customs, DGFT, SEBI, and IBBI domains. Income Tax notifications designated special courts in Tamil Nadu under tax laws, amended exemptions under Section 10(23FE), and clarified judgments on TDS applicability and invalid proceedings against deceased individuals. GST updates included extended filing deadlines, appointment of adjudicating authorities, ITC reporting clarifications, Aadhaar-based authentication for GST registrations, and SC observations on GST Tribunal delays. Customs notifications fixed tariff values for several commodities and clarified non-liability for customs duty on personal jewelry or subsequent car purchasers. DGFT introduced an import management system for IT hardware and revised EPCG rules. SEBI amendments covered ESG Debt Securities, LODR compliance, and operational frameworks for retail algo trading, MIIs, and settlement cycles. Other SEBI highlights included measures to reduce unclaimed assets and guidelines for unlisted securities. No new MCA notifications were issued, while IBBI judgments reinforced procedural limits on resolution plans and clarified non-classification of share application money as financial debt.
Notifications & Circulars issued during week (9th– 15th Dec 2024)
A. Income Tax
Tamil Nadu courts designated for Income Tax and Black Money Act: The notification designates special courts in Tamil Nadu under Section 280A of the Income- tax Act, and Section 84 of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015. It supersedes earlier notifications. The designated courts include the Court of I and II Additional Chief Metropolitan Magistrate E.O. in Chennai for northern and central Tamil Nadu districts, the Court of Additional Chief Judicial Magistrate in Madurai for southern districts, the Court of Chief Judicial Magistrate in Coimbatore for western districts, and the Court of Chief Judicial Magistrate in Puducherry for Karaikal and Puducherry districts. (Income tax Notification 126/2024 Dated 10/12/2024)
Amendment to Notification 44/2020 Dated 6th July 2020: The amendment replaces the reference “F. No. 13/3/2017-INF dated 13th August 2018” with “F. No. 13/1/2017-INF dated 11th October, 2022” in the opening paragraph of the principal notification. This notification pertains to tax exemptions under section 10(23FE), which facilitates certain specified investments. (Income tax Notification 127/2024 Dated 11/12/2024)
SC, Notice issued in name of dead person wouldn’t be valid by subsequent participation of legal representatives: Case of Ganshyam Anil Dhanani vs ITO, SC Judgement Dated 28th November 2024. It was considered that solely because the appellant as a legal representative subsequently responded to the notices would not imply that the proceeding initiated was valid. The subsequent participation of the legal representatives in the proceedings before the Assessing Office would not have cured the initial defect. SC held that proceedings initiated based on notice issued in name of dead person wouldn’t be valid by subsequent participation of legal representatives. Accordingly, order set aside. (SC Judgement Dated 28/11/2024)
HC, TDS under section 194C not deductible on capital grant subsidy extended by NHAI: Case of CIT vs NHAI, HC Delhi Judgement Dated 12th November 2024. It was held that the capital grant subsidy was essentially aid and support that the NHAI extended to the concessionaire as opposed to payment that it would have ordinarily made to a contractor and would be directly connected with or constitute recompense for physical work that was performed. The word „work‟ in the context of Section 194C is liable to be understood as relating to labour that is expended, the undertaking of a task or operation which produces a result. The infusion of equity capital as a measure of financial support, while surely a contractual obligation, cannot consequently be understood to mean the payment for a work undertaken. HC held that TDS under section 194C of the Income Tax Act not deductible on capital grant subsidy extended by NHAI to the concessionaire since it cannot be construed as payment made for a work undertaken by the contractor. (HC Delhi Judgement Dated 12/11/2024)
B. GST
Extension of GSTR-3B Filing Deadline for Murshidabad, West Bengal: The notification extends the due date for filing GSTR-3B returns for October 2024 till the 11th day of December 2024, for registered persons whose principal place of business is in the district of Murshidabad, West Bengal. (CGST Notification 30/2024 Dated 10/12/2024)
GST adjudicating authorities appointed for SCNs: The notification appoints adjudicating authorities under section 5 of CGST Act, and section 3 of IGST Act for handling GST-related cases. It outlines specific officers designated for issuing orders or decisions on show cause notices issued by the Directorate General of Goods and Services Tax Intelligence (DGGI). The notification applies to noted entities across multiple states, including Gujarat, Haryana, Uttarakhand, and Punjab. (CGST Notification 31/2024 Dated 13/12/2024)
Advisory on difference in value of Table 8A and 8C of Annual Returns FY 2023-24: GSTN has cautioned about a likely emergence of discrepancy in tables 8A and 8C of Form GSTR-9 concerning financial year 2023-24. As per notifications 12/2024 and 20 2024, the information relating to ISD in table 8A is fed directly from the GSTR-2B statement but in table 8C for claims made in the following year, the active field is open for edits. The transition from GSTR-2A to GSTR-2B has resulted in reported instances of difference in figures in the two tables owing to the timing and reporting issues. For example, the invoices that will be filed in GSTR-1 after 2024 March will not be posted to Table 8A, but will be placed in Table 8C and Table 13. In the same vein, for the reversal of ITC necessitated by late payment and the reversing claim made in the FY 2024-2025, such positions in the current year’s Table 8C should not be taken into account, but next year’s Table 6H may be used. It is that where goods were not delivered or received during the financial year 2023-24 then inverse ITC where it has been applied should be recovered, and reported in tables: 8C and 13 of that financial year. However, the ITC claimed, reversed, and reclaimed within the same year must be reported in a single table without duplication. (GSTN Advisory Dated 09/12/2024)
Advisory for Biometric-Based Aadhaar Authentication and Document Verification for GST Registration Applicants of Chhattisgarh, Goa and Mizoram: CGST rule was amended which provide for identification of applicants through 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 Chhattisgarh, Goa and Mizoram effective from 15th December 2024. (GSTN Advisory Dated 15/12/2024)
SC, Delay in Formation of GST Tribunal, Notice issued to Union of India: Case of Team Computers Pvt Ltd vs Union of India, SC Judgement Dated 13th December 2024. The petitioner approached the High Court to challenge a departmental order demanding repayment of a previously refunded amount. However, the High Court dismissed the writ petition, citing an alternative appellate remedy under Section 112 of CGST Act. The petitioner contended that the appellate tribunal, a crucial mechanism under the CGST Act, is yet to become operational, thereby rendering the prescribed remedy ineffective. SC acknowledged the petitioner’s predicament and questioned the government on the delay in operationalizing the GSTAT. The Court directed the submission of a detailed report within three weeks explaining the reasons for the tribunal’s non-functionality. The Court also stayed the department’s recovery order against the petitioner. (SC Judgement Dated 13/12/2024)
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. 14th December 2024. The tariff value for crude palm oil is set at USD 1158 per metric ton, while gold and silver have tariff values of USD 864 per 10 grams and USD 1036 per kilogram, respectively. The tariff value for areca nuts is fixed at USD 6448 per metric ton. (Custom Notification 85/2024 (NT) Dated 13/12/2024)
SC, Differential duty demand on subsequent car purchaser unjustified if importer retains ownership: Case of Nalin Choksey vs Comm of Customs, SC Judgement Dated 27th November 2024. Sri Jalaludheen Thayil had imported the vehicle in question being a Porsche Carrera Car in June 2002. The said car was later sold to Sri Shailesh Kumar in the year 2003. Subsequently, the appellant herein is stated to have purchased the said car in the month of October, 2004. In the year 2006, the appellant was served with the Show Cause Notice demanding short-levied customs duty to the tune of Rs.17,92,847/- stating that it was a case of deliberate misdeclaration of model and the year of manufacture, along with tampering with the chassis number of the imported car for the purpose of under invoicing and under valuation of the vehicle and evading the payment of the differential duty of customs. The said demand was confirmed.
— It was considered that there is no ownership in law which can be recognized in so far as the appellant herein is concerned, as his name has not been entered in the registration certificate concerning the vehicle in terms of provisions of Motor Vehicles Act. SC held that demanding differential duty of customs from subsequent purchaser of car not justified in as much as the ownership of the vehicle is still with the importer and possessor of the car can be made liable only when the owner of the goods is not known. Accordingly, appeal allowed. (SC Judgement Dated 27/11/2024)
HC, Customs duty not leviable on personal jewellery having a used personal effect: Case of Saba Simran vs Union of India, HC Delhi Judgement Dated 27th November 2024. The expression ‘jewellery’ as it appears in Rule 2(vi) would have to be construed as inclusive of articles newly acquired as opposed to used personal articles of jewellery which may have been borne on the person while exiting the country or carried in its baggage. HC held that personal jewellery which is not found to have been acquired on an overseas trip and was always a used personal effect of the passenger would not be subject to the monetary prescriptions incorporated in Rules 3 and 4 of Baggage Rules. (HC Delhi Judgement Dated 27/11/2024)
E. Directorate General of Foreign Trade (DGFT)
Procedure for Import Management System for import of restricted IT Hardware: The restricted items include laptops, tablets, all-in-one personal computers, ultra-small form factor computers, and servers.. The application portal for obtaining import authorizations will be open on the DGFT website from 13th December 2024, to 15th December 2025. The authorization validity extends until 31st December 2025. Importers may submit multiple applications throughout the year and requests for amendments during the authorization’s validity can also be made online. (DGFT Circular 09/2024 Dated 11/12/2024)
EPCG Scheme, Applicability of amendment to Para 5.10(c) of Hand Book of Procedures: The Ahmedabad High Court judgment has set aside the previous Policy Circular No. 22/2015-20, dated 29th March 2019. The amendment, which addresses third-party exports under Export Promotion Capital Goods (EPCG) scheme, is now deemed prospective and applies only to third-party exports made against EPCG Authorizations issued on or after December 5, 2017. The amendment mandates that export documents for third-party exports must include the authorization holder’s name and related details, and the export obligation must be fulfilled based on the payment received from the third-party exporter. (DGFT Circular 10/2024 Dated 13/12/2024)
DGFT Corrigendum on Jewellery Export: The corrigendum to Public Notice No. 30/2024 dated 1st November 1, 2024 pertains to an amendment in paragraph 4.59 of the Handbook of Procedures and modifications in Standard Input Output Norms (SION) M-1 to M-8 related to jewellery exports. The revised text clarifies that “The export of mechanized plain and studded jewellery also includes some manual process,” replacing the previously stated “The export or mechanized plain and studded jewellery.” (DGFT Public Notice 30/2024 Corrigendum Dated 13/12/2024)
F. Securities and Exchange Board of India (SEBI)
Amendment to SEBI Issue and Listing of Non-Convertible Securities Regulations: The key updates include the introduction of Environment, Social, and Governance (ESG) Debt Securities, defined as bonds adhering to international frameworks adapted for Indian requirements. Issuers intending to list ESG Debt Securities must comply with conditions specified by SEBI. It include revised disclosure requirements for debenture trustees, replacing direct document inclusion with a web link or QR code in the issue document. (SEBI Notification Dated 11/12/2024)
Amendment to SEBI Listing Obligations and Disclosure Requirements (LODR) Regulations: The key updates include new clauses on the acceptance of deposits by banks and retail purchases by directors and employees. The amendment revises definitions and adds provisions regarding superior voting rights of certain equity shares. It also provide for changes in compliance officer roles, reporting requirements, and investor grievance redressal mechanisms. It streamline procedures for integrated filing and introduce stricter timelines for compliance with governance provisions, especially following insolvency proceedings. (SEBI Notification Dated 12/12/2024)
Draft Circular on Harnessing DigiLocker as a Digital Public Infrastructure for reducing Unclaimed Assets in the Indian Securities Market: The draft outlines steps for the integration of demat and mutual fund (MF) holding statements into DigiLocker, providing investors the ability to store and access their financial holdings digitally. Additionally, the circular proposes a nomination system for DigiLocker users, where, upon the user’s demise, a nominee can be notified and gain access to the deceased’s financial information. The status of the user’s death will be updated using data from the Registrar General of India (RGI) or KYC Registration Agencies (KRAs). AMCs, Depositories, and KRAs are directed to register with DigiLocker and share relevant investor data, with the goal of preventing assets from becoming unclaimed. The comments/suggestions from stakeholders are invited. (SEBI Draft Circular Dated 10/12/2024)
Draft Circular on Operational Efficiency in Monitoring of Non- Resident Indians (NRIs) Position Limits in Exchange Traded Derivatives Contracts: Currently, NRIs are required to obtain a Custodial Participant (CP) Code for trading in derivatives, which involves coordination with Clearing Members (CMs) and can create operational inefficiencies. SEBI has proposed that NRIs should be given a Permanent Account Number (PAN) as a unique identifier for monitoring position limits as well as for client-level positions. There will not be necessity for NRIs to inform Clearing Members or get a CP Code. The comments/suggestions from stakeholders are invited. (SEBI Draft Circular Dated 10/12/2024)
Draft Circular on Participation of retail investors in algorithmic trading: The draft outlines responsibilities for stakeholders, including investors, stock brokers, and algo providers. The key measures include the tagging of algo orders with unique identifiers, the requirement for brokers to supervise algo trading, and guidelines for the use of APIs for retail investors to access algo trading. Additionally, SEBI emphasizes the need for enhanced surveillance and risk management. Exchanges will be tasked with ensuring proper supervision and establishing operational procedures for algo trading. The circular also defines two types of algo strategies: “White box” (disclosed logic) and “Black box” (undisclosed logic), with distinct requirements for each. The comments/suggestions from stakeholders are invited. (SEBI Draft Circular Dated 13/12/2024)
Revised Guidelines for Capacity Planning and Real Time Performance Monitoring framework of Market Infrastructure Institutions(MIIs): The guidelines focus on proactive and future-ready capacity planning, ensuring that MIIs maintain sufficient system capacity to handle increasing transaction volumes and avoid disruptions. Key points include setting capacity thresholds, conducting regular stress testing, and implementing automated performance monitoring systems. (SEBI Circular Dated 10/12/2024)
Enhancement in the scope of optional T+0 rolling settlement cycle in addition to the existing T+1 settlement cycle in Equity Cash Markets: The T+0 cycle will be expanded to include the top 500 scrips based on market capitalization, starting with the bottom 100 companies and gradually increasing. This will allow all stock brokers to participate, with differential brokerage for T+0 and T+1 cycles. Additionally, Qualified Stock Brokers (QSBs) must set up necessary systems for smooth participation, and custodians will facilitate institutional participation. SEBI has also introduced a Block Deal window for the T+0 cycle from 8:45 am to 9:00 am, in addition to the existing windows. (SEBI Circular Dated 10/12/2024)
Relaxation in restriction limit for issuers for listing grandfathered ISINs: Regulation 62A of LODR Regulations mandates listed entities to list all non-convertible debt securities issued after 1st January 2024, and provides an option for listing outstanding unlisted ISINs issued before this date. Chapter VIII of SEBI’s Master Circular on non- convertible securities specifies ISIN limits for debt securities issued through private placements, aiming to reduce market fragmentation. However, SEBI now excludes such grandfathered ISINs from the maximum limit of ISINs maturing in a financial year if converted to listed ISINs. (SEBI Circular Dated 13/12/2024)
Classification of Corporate Debt Market Development Fund (CDMDF) as Category I Alternative Investment Fund (AIF): The circular classifies the CDMDF as a Category I AIF under AIF Regulations. It was established under AIF Regulations as a backstop facility to purchase investment-grade corporate debt securities during periods of market stress. (SEBI Circular Dated 13/12/2024)
Pro-rata and pari-passu rights of investors of AIFs: Pro-rata rights require that investors’ rights in investments and distributions correspond to their commitments, with exceptions for exclusions, defaults, or shared profits. Pari- passu rights ensure equal treatment of investors, but differential rights can be offered under specific conditions, such as transparency in disclosure and adherence to implementation standards set by the Standard Setting Forum for AIFs (SFA). Existing AIFs using priority distribution models are restricted from accepting new commitments or investments unless exempt. The circular mandates the reporting and rectification of differential rights that impact other investors, with special provisions for Large Value Funds (LVFs) to opt for exemptions, subject to investor consent. (SEBI Circular Dated 13/12/2024)
Transaction in securities of unlisted public limited companies on Electronic Platforms: It has come to the notice that certain electronic platforms and/or websites are facilitating transaction in unlisted securities of public limited companies. Such activities are in violation of the laws designed to regulate and protect the interest of investors in securities market. Investors are advised not to conduct any transactions on such electronic platforms or share any sensitive personal details on the same as these platforms are neither authorized nor recognized by SEBI. (SEBI Press Release Dated 09/12/2024)
G. Ministry of Corporate Affairs (MCA)
No Notification/ Circular during the week.
H. Insolvency and Bankruptcy Board of India (IBBI)
NCLAT, No modification possible in Information Memorandum prepared based on Resolution Plan approved by CoC: Case of Supriya Singh vs Ansal Urban Condominiums, NCLAT Delhi Judgement Dated 25th November 2024. Information Memorandum prepared by the Resolution Professional based on which the Resolution Plan approved by the CoC, could not be modified as it was well settled position of law that the Resolution Plan, duly approved by the COC as per their commercial wisdom had a very limited scope of judicial review and which was circumscribed by the provisions contained in Section 31 of the Code. (NCLAT Delhi Judgement Dated 25/11/2024)
NCLAT, Application for staying auction process not tenable since rejection of resolution plan not objected: Case of Mapletree Leather Goods Pvt Ltd vs Savan Gadiawala, NCLAT Chennai Judgement Dated 20th November 2024. The Appellant had prayed for staying the auction process of the Corporate Debtor’s immovable assets, for directing the Liquidator to consider his proposal to sell the Corporate Debtor as a going concern and accordingly to provide him with the sale notice for the same in the interest of maximization of the value of the assets. NCLAT held that application for staying auction process of Corporate Debtor not tenable since order rejecting resolution plan submitted by the appellant not objected. Accordingly, appeal dismissed. (NCLAT Chennai Judgement Dated 20/11/2024)
NCLAT, Share application money didn’t constitute financial debt under section 5(8) of IBC: Case of Murlidhar Vincom Pvt Ltd vs Skoda India Pvt Ltd, NCLAT Delhi Judgement Dated 26th November 2024. There is no evidence of any valid concluded agreement between the two parties with respect to allotment of shares. Hence, the amount which was advanced by the Appellant cannot be treated to be amount in response to the private placement offer. NCLAT held that the amount given as share application money did not constitute a financial debt under Section 5(8) of the IBC. Thus, CIRP application rightly rejected. (NCLAT Delhi Judgement Dated 26/11/2024)
IBBI suspends Liquidator Mr Ramasamy Shanmuggam for contravention of IBC regulations: DC finds that the liquidator has conducted the above auctions in a hasty and improper manner causing significant loss to the stakeholders. No fresh auction notice was issued after the cancelled auction. The same set of bidders for cancelled auction were the participants in the rescheduled auction. On the basis of the forfeited EMD, the bidder was allowed to participate and bid. The financial creditor was not informed about the rescheduled auction. The value of the assets got reduced by an amount of Rs.45,00,000 within a span of two days. The auction conducted in non- transparent manner was set aside by the AA. IBBI suspended his registration for two years. (IBBI Order Dated 11/12/2024)
I. Reserve Bank of India (RBI)
Shri Sanjay Malhotra takes over as RBI Governor: Shri Sanjay Malhotra, an IAS Officer of 1990 Batch Rajasthan Cadre, took over charge as the 26th Governor of the RBI for a period of three years effective December 11, 2024. Immediately prior to this appointment, he was Secretary, Department of Revenue (DOR) in the Ministry of Finance, before which he held the post of Secretary in Department of Financial Services in the Ministry of Finance. He was also CMD of Rural Electrification Corporation Limited. He is a graduate in Computer Science and Engineering from the Indian Institute of Technology, Kanpur and a Master in Public Policy from the Princeton University, USA. (RBI Press Release Dated 11/12/2024)
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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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