The tax and regulatory updates for the week of 10th-16th March 2025 include key changes in income tax, GST, customs, SEBI regulations, and foreign trade policies. The government notified Power Finance Corporation’s Zero Coupon Bond under Section 2(48) of the Income Tax Act and issued a clarification on the Principal Purpose Test under DTAAs. The Delhi HC ruled that SEZ enterprises do not require government approval for Section 80IC deductions. GST updates include jurisdictional revisions in Rajasthan and Tamil Nadu, biometric-based Aadhaar authentication for registration in Uttar Pradesh, and multiple rulings by AAAR Gujarat on high seas sales, PVC floor mats, healthcare plans, and canteen charges. Custom updates include revised tariff values for edible oils, gold, silver, and other commodities. DGFT extended the free import policy for Urad and Yellow Peas and modified the certificate of inspection requirement for rice exports. SEBI introduced amendments to insider trading regulations and capital issuance norms. The NCLAT upheld a CoC decision rejecting a resolution plan, and the Delhi HC ruled that electricity supply cannot be disconnected during the IBC moratorium period. No circulars were issued for central excise or corporate affairs.
Notifications & Circulars issued during week (10th– 16th Mar 2025)
A. Income Tax
Power Finance Corp (PFC) Zero Coupon Bond notified under section 2(48): Central Government specifies the Ten Year Zero Coupon Bond of Power Finance Corporation Ltd as zero coupon bond under section 2(48) Income Tax Act. The duration of the bond is ten years one month, to be issued on or before the 31st day of March, 2027, the amount to be paid on maturity or redemption of the bond is Rs.1,00,000/- for each bond, the discount is Rs. 49,546/- per bond, i.e. issue price is Rs. 50,454/- per bond, the number of bonds to be issued is ten lakhs.
— A Zero Coupon Bond (ZCB) is a financial instrument that does not pay periodic interest (coupon) during its tenure. Instead, it is issued at a discount and redeemed at its face value upon maturity. The difference between the issue price and face value represents the return for investors. If held beyond 12 months, the long term capital gains will attract a 12.5% tax rate. If sold before 12 months, the short term capital gains will be taxed as per the bondholder’s income tax slab. (Income Tax Notification 19/2025 Dated 11/03/2025)
CBDT issues clarification on Circular 01/2025 Guidance on application of the Principal Purpose Test (PPT) provision under DTAAs: The Circular seeks to provide guidance on the application of the PPT provision under India’s DTAAs, wherein such a provision exists. Therefore, this Circular shall apply to the PPT provision in only those Indian DTAAs wherein such a provision exists. It is not intended to interfere or interact with any other provision of the Indian DTAAs. It is not intended to interfere or interact with anti-abuse rules under the domestic law, such as General Anti-Abuse Rule (GAAR) and Specific Anti-Abuse Rules (SAAR), and Judicial Anti-Abuse Rules (JAAR) reflected in or resulting from judicial interpretations. It does not introduce any new legal interpretation. (CBDT Press Release Dated 15/03/2025)
HC, No government approval needed for SEZ enterprises for section 80IC deductions: Case of Legacy Foods Pvt Ltd vs DCIT, HC Delhi Judgement Dated 7th February 2025. HC held that enterprises claiming deductions under Section 80IC were not required to obtain government approval if they operate in notified special zones. Section 80IC did not mandate an agreement or approval from state or local authorities. (HC Delhi Judgement dated 07/02/2025)
B. GST
Territorial Jurisdiction Updates: The notification redefine the jurisdiction of several regions. It include revised district coverage for Alwar, Jaipur, Jodhpur, Udaipur in Rajasthan, and Chennai Outer, Madurai, Tiruchirappalli in Tamil Nadu. Notable changes encompass additional districts, exclusions, and specific territorial waters for Tamil Nadu and the Union Territory of Puducherry. (CGST Notification 10/2025 Dated 13/03/2025)
Advisory on Biometric-based Aadhaar authentication and document verification for GST registration applicants of Uttar Pradesh: 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 Uttar Pradesh effective from 18th March 2025. (GSTN Advisory Dated 16/03/2025)
AAAR, High Seas Sales (HSS) transactions fall under Schedule III & are neither supplies of goods nor services: Case of Tecnimont Private Limited, AAAR Gujarat Ruling dated 28/02/2025. Tecnimont, a subsidiary of Tecnimont S.P.A. Milan, Italy is an EPC company. It has entered into turnkey contract with IOCL for executing EPC work of Acrylic Acid and Butyl Acrylate units in Vadodara. The contract identifies two separate set of supplies i.e. works contract for EPC work and supply of imported materials. During the course of importation, before the goods reach the custom frontier in India, Tecnimont enter into HSS agreement with IOCL, transferring the ownership at the agreed price. The appellant raises custom invoice, IOCL filles Bill of Entry as the importer of said goods and discharge custom duty for home consumption.
— AAR held that the transaction of sale of goods on HSS basis, is covered under entry 8(b) of Schedule III of CGST Act, and therefore it is neither a supply of goods nor supply of services. However, the value of such HSS supply would form part of the transaction value under section 15, for computing the value of work contract service for charging GST. AAAR upheld the ruling and rejected the appeal. (AAAR Gujarat Ruling Dated 28/02/2025)
AAAR, PVC Car Floor Mats Classified Under CTH 8708, GST Rate 28%: Case of Manishaben Vipulbhai Sarathiya, AAAR Gujarat Ruling dated 28/02/2025. The appellant is engaged in the manufacture and supply of floor mats for four wheel motor vehicles (cars), which are essentially made of PVC material. AAR held that the impunged goods i.e. PVC floor mats is classifiable under CTH 8708 and applicable rate of GST would be 28%. AAAR upheld the ruling and rejected the appeal. (AAAR Gujarat Ruling Dated 28/02/2025)
AAAR, GST on Healthcare Services Under Diamond Plan: Case of Divyajivan Healthcare Pvt Ltd, AAAR Gujarat Ruling dated 28/02/2025. The appellant has devised a plan namely ‘Health Care Service (Diamond Plan)’ wherein the appellant shall provide the health care services for next 20 years for which a lump sum amount, say Rs. 10 lakhs will be charged. Under the plan the services will be provided to the family i.e. Member, Spouse & up to 2 children (age below 21 years). It will also tie-up with other hospitals pan India from where the members can avail health care services. It includes hospitalization benefits, annual preventive health check-ups, advanced health check-up services, special healthcare treatments, and privilege card benefits. AAR ruled that in absence of documents it is not possible to figure out as to whether the services are covered under Health care Services or otherwise, the application is not maintainable. AAAR upheld the ruling and rejected the appeal. (AAAR Gujarat Ruling Dated 28/02/2025)
AAAR, Treated Water’ obtained from CETP not eligible for GST exemption: Case of Palsana Enviro Protection Limited, AAAR Gujarat Ruling dated 28/02/2025. The appellant who has been promoted by a cluster of processing industries has set up a Common Effluent Treatment Plant (CETP). It recycles and thereafter supplies treated water to its member units for use in their activities. This treated water can used in non-portable activity. Though the CEPT treated water is made free from various impurities, however even after carrying out the said physical and biological processes the said water is not pure water and cannot be termed as purified water. AAR ruled that ‘Treated Water’ obtained from CETP is not eligible for exemption and is taxable at 18%. AAAR upheld the ruling and rejected the appeal. (AAAR Gujarat Ruling Dated 28/02/2025)
AAAR, GST and ITC on Canteen Charges: Case of Troikaa Pharmaceuticals Limited, AAAR Gujarat Ruling dated 28/02/2025. The applicant is engaged in the manufacture and sale of pharmaceutical products, provides canteen facilities as mandated under Section 46 of the Factories Act, 1948. The company subsidizes 50% of the canteen cost, recovering this from employees. While for contract workers, the canteen service provider raises bill for only 50% of the amount as the rest of the amount is being directly paid by the individual workers to the service provider. AAR ruled that GST is not leviable on the amount representing employee portion of canteen charges, whereas GST is leviable on the amount representing the contractual workers. ITC is admissible on the food supplied to employees of the company subject to condition that burden of GST have not been passed to the employees. ITC on GST paid on canteen facility is not admissible on food supplied to contractual workers. AAAR upheld the ruling and rejected the appeal. (AAAR Gujarat Ruling Dated 28/02/2025)
AAAR, GST on System Use Gas in LNG Regasification: Case of Shell Energy India Pvt Ltd, AAAR Gujarat Ruling dated 28/02/2025. The appellant, is a wholly owned subsidiary of M/s. Shell Gas B V Netherlands and it owns & operates an LNG regasification terminal at Hazira, Surat. In addition to services of regasification of LNG, they also provide certain incidental & ancillary services related to unloading, storage and delivery of LNG/ RLNG.
— NG, a highly flammable gas is condensed into liquid state at close to atmospheric pressure by cooling down the gas to very low temperature (- 160 c) for transportation, and upon receipt of LNG at the destination port it is again converted into gaseous state. The vaporization is achieved either through ORV method or through SCV method, ORV is the primary and preferred mechanism for regasification of NG. The regasification charges are computed by multiplying the actual quantity of RLNG delivered with regasification tariff. During the process of such regasification there is a loss of gas, which is termed as System Use Gas (SUG), the SUG percentage is fixed at 0.66% of the actual gas discharged quantity of LNG by an LNG carrier.
— The issue is whether SUG value invoiced by M/s. Shell on its customer is leviable to GST. AAR has ruled that value of SUG is an indispensable part of taxable value, for Re-gasification service supply by M/s Shell and liable to GST. In view of the additional information/ data, AAAR set aside the ruling and remanded back to AAR for a fresh decision. AAR will take into consideration all aspects of the matter and decide the case afresh affording adequate opportunity of hearing to the appellant. (AAAR Gujarat Ruling Dated 28/02/2025)
AAAR, GST Time Limit strict, no further extensions beyond maximum allowable period: Case of Mitsubishi Electric India Private Limited, AAAR Tamil Nadu Ruling dated 12/02/2025. AAAR dismissed the appeal on grounds of time limitation. The Appellate Tribunal is of the considered view that we are not satisfied with the reasons of delay advanced by the appellant as also we are not empowered to condone the delay beyond the statutory period in filing this appeal. (AAAR Tamil Nadu Ruling Dated 12/02/2025)
HC, Appeal involving question of taxability of service lies before Supreme Court: Case of Commissioner of Central Tax vs JMD Ltd, HC Delhi Judgement Dated 18th December 2024. High Court rejected a service tax matter observing its lack of maintainability, while advising the Revenue to approach the SC under Section 35L of the Central Excise Act, 1944 to determine the taxability of the concerned service. The Respondent entity had developed real-estate projects at Ludhiana and Gurugram, and was slapped with Show-Cause Notice from the Director General of Central Excise Intelligence raising a service tax demand contending that the services provided by the Assessee qualifies to be ‘commercial or industrial construction service’ as per Section 65 (25b) and taxable under Section 65 (105) of the Act. JMD Limited refuted the service tax demand, holding that the services rendered by them were of the nature of composite work contracts involving transfer of goods and services as opposed to the allegations of the service being ‘commercial or industrial construction’. (HC Delhi Judgement Dated 18/12/2024)
HC, Mere decision to file appeal not automatically stay GST refund: Case of Truth Fashion vs Comm of DGST Delhi, HC Delhi Judgement Dated 10th February 2025. Truth Fashion filed a writ petition in the Delhi High Court seeking enforcement of an earlier order directing the release of a GST refund of ₹18.33 lakh. The DGST argued that the refund was withheld under Section 54(11) of the CGST Act, citing the Commissioner’s decision to appeal against the order. However, the court rejected this argument, clarifying that merely deciding to file an appeal does not automatically stay the refund process unless a competent authority explicitly orders it. The court directed DGST to release the refund immediately, along with statutory interest, while allowing the department to pursue legal remedies if necessary. (HC Delhi Judgement Dated 10/02/2025)
HC, No additional tax on aircraft parts re-imported following repairs: Case of Interglobe Aviation Ltd. Versus Principal Comm Of Customs (Import), HC Delhi Judgement Dated 4th March 2025. The petitioner, challenged the levy, arguing that such taxation resulted in double taxation, as duties were already paid under the import of services at the time of sending the parts overseas. The court held that the imposition of IGST on re-imported goods was unconstitutional and ultra vires the IGST Act, 2017. The court quashed the impugned notifications and assessment orders passed by the Commissioner of Customs. It also declared the additional levy and the explanation added to the notification as invalid, granting the petitioner consequential reliefs. (HC Delhi Judgement Dated 04/03/2025)
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 March 2025. The tariff value for crude palm oil is set at USD 1169 per metric ton, while gold and silver have tariff values of USD 941 per 10 grams and USD 1067 per kilogram, respectively. The tariff value for areca nuts is fixed at USD 8140 per metric ton. (Custom Notification 13/2025 (NT) Dated 13/03/2025)
CBIC Seeks Proposals for Revising CGST Jurisdiction: Regarding revision and reorganization of the territorial jurisdictions of Central Tax Commissionerates (CGST), CBIC plans a comprehensive review for all field formations under its Central Tax Zones. Principal Chief/Chief Commissioners have been directed to assess their zones’ needs and submit detailed proposals justifying the required changes by March 31, 2025. (CBIC Office Memorandum Dated 12/03/2025)
E. Directorate General of Foreign Trade (DGFT)
Extension of ‘Free’ Import Policy of Urad: The notification extends the ‘Free’ import policy of Urad (existing policy allow free imports only up to 31st March 2025) up to 31st March 2026. (DGFT Notification 64/2025 Dated 10/03/2025)
Extension in Import Policy of Yellow Peas: This notification continues the existing “Free” import policy, removing the Minimum Import Price (MIP) condition and port restrictions. The Import policy of Yellow Peas is ‘Free’ subject to registration under online Import Monitoring System for all import consignments, where bill of lading (Shipping on Board) is issued on or before 31sy May 2025. (DGFT Notification 63/2025 Dated 10/03/2025)
Amendment in Export policy condition i.e. Certificate of Inspection for Rice: The notification modifies the requirement for a Certificate of Inspection from EIC/ EIAs for Rice (Basmati and Non- Basmati) exports. This certificate is mandatory only for Rice exports to EU member states, UK, Iceland, Liechtenstein, Norway and Switzerland. Exports to other European countries are exempt from this requirement for six months from date of this notification. (DGFT Notification 62/2025 Dated 10/03/2025)
Revised Procedure for General Authorization for Export after Repair (GAER): The Public Notice amends Paragraph 10.12(D) of the Handbook of Procedures (HBP) and introduces a streamlined procedure for the General Authorization for Export after Repair (GAER) of imported SCOMET items. The related entities and repair supply chain participants, such as authorized vendors or OEMs, can re-export repaired items using a one-time GAER. The conditions include post-reporting on a quarterly basis, submission of proof of import and repair obligations, and adherence to Internal Compliance Programmes (ICP) and Authorized Economic Operator (AEO) certifications. (DGFT Public Notice 50/2025 Dated 10/03/2025)
Seeking Inputs on Draft Amendments in Procedures for Export Authorization for “Stock and Sale” of SCOMET items: The Trade Notice invite stakeholder feedback on proposed amendments to Paragraph 10.10 of the Handbook of Procedures (HBP). It relates to authorization process for bulk export of SCOMET (Special Chemicals, Organisms, Materials, Equipment, and Technologies) items under the Stock and Sale policy. The revision aims to clarify eligibility criteria, documentation requirements, and compliance obligations for Indian exporters and their stockist entities abroad. The key changes include defining a stockist entity as a subsidiary, principal (parent) company, affiliate, or an Original Equipment Manufacturer (OEM). The application process mandates submission of corporate documentation, end-use certificates, and compliance statements. (DGFT Trade Notice 33/2025 Dated 12/03/2025)
F. Securities and Exchange Board of India (SEBI)
Amendment to SEBI Prohibition of Insider Trading Regulations: The amendments refine the definition of unpublished price-sensitive information (UPSI), incorporating new disclosure requirements such as contract awards or terminations, rating changes, fundraising activities, agreements affecting management control, and financial or regulatory actions. The key managerial personnel resignations, fraud, defaults, insolvency proceedings, forensic audits, and legal disputes impacting a company must now be disclosed. Additionally, structured digital databases must record external information within two calendar days of receipt. The revised trading window norms allow listed companies to keep trading open for UPSI not originating internally. (SEBI Notification Dated 11/03/2025)
Amendment SEBI Issue of Capital and Disclosure Requirements Regulations: The notification revise definitions such as ‘associate,’ which now aligns with the Companies Act, 2013. The term ‘Board’ in certain clauses is replaced with ‘stock exchange(s).’ The key modifications include incorporating stock appreciation rights under employee stock schemes, clarifying the price determination of securities for promoters’ contribution and allowing loan repayments as part of capital expenditure disclosures. It also relates to bonus shares issued under employee stock schemes and eligibility conditions for Rights Issues. (SEBI Notification Dated 04/03/2025)
Faster Rights Issue with a flexibility of allotment to specific investor(s): The circular introduces a revised framework, provides that the rights issues must be completed within 23 working days from board approval. The regulations specify that rights issues must remain open for subscription for a minimum of seven and a maximum of thirty days. Stock exchanges and depositories have been tasked with developing an automated system for bid validation within six months. It also introduces amendments to existing master circulars, clarifying procedures for letter of offer disclosures, application forms, bid data correction, and fee payments. For convertible debt instruments requiring shareholder approval, timelines will be adjusted accordingly. (SEBI Circular Dated 11/03/2025)
G. Ministry of Corporate Affairs (MCA)
No Notification/ Circular during the week.
H. Insolvency and Bankruptcy Board of India (IBBI)
NCLAT, Rejection of resolution plan by CoC after discussion justifiable: Case of Sanjeev Aggarwal vs Avishek Gupta, NCLAT Delhi Judgement Dated 19th February 2025. NCLAT Delhi held that rejection of resolution plan of appellant is justified as Committee of Creditors (CoC) deliberated and discussed the Resolution Plan of the Appellant. Thus, resolution plan with 97% vote share of CoC rightly approved. (NCLAT Delhi Judgement Dated 19/02/2025)
NCLAT, Electricity was essential supply, couldn’t be disconnected during moratorium period under IBC: Case of Maharashtra State Electricity Distribution Company Ltd vs Ravi Sethia RP of Morarji Textiles Ltd, NCLAT Delhi Judgement Dated 24th February 2025. Electricity being an essential supply could not be disconnected during moratorium period under section 14 of the Insolvency and Bankruptcy Code, as providers of necessary products or services were not permitted to stop or reduce their delivery during the moratorium period. Even if payment for these services or items was not made during the CIRP’s period, the corporate debtor was still entitled. (NCLAT Delhi Judgement Dated 24/02/2025)
I. Reserve Bank of India (RBI)
No Notification/ Circular during the week.
J. Miscellaneous
SC, Directors not automatically liable for company’s wrongful acts without direct involvement: Case of Sanjay Dutt vs State of Haryana, Supreme Court Judgement Dated 2nd January 2025. The apex court reaffirmed that directors cannot be automatically held liable for acts committed by a company unless specific statutory provisions impose such liability or their personal involvement is established.
— The case arose from allegations of illegal tree felling in Gurugram, Haryana, violating Section 4 of the Punjab Land Preservation Act, 1900, punishable under Section 19 of the Act. The appellants were directors and senior officers of companies allegedly responsible for the act. Despite this, the complaint failed to establish direct involvement or personal liability. SC observed that the Act does not include provisions for vicarious liability of directors for offences committed by a company. The complaint did not attribute any specific actions to the directors that could establish personal culpability. The company itself was not named as a party in the proceedings, undermining the prosecution’s case. SC set aside the High Court’s order, quashing the criminal proceedings against the appellants. (SC Judgement Dated 02/01/2025)
HC, ordered 80% reduction in Toll charges as unfair to charge Toll on poor roads: Case of Sugandha Sawhney vs Union of India, HC J&K Judgement Dated 25th February 2025.
HC held that charging tolls on bad roads was unfair and ordered an 80% reduction in toll fees at 2 key toll plazas as tolls were meant to provide good-quality roads, and if the roads were damaged, people should not be forced to pay.
— Assessee through the medium of this Public Interest Litigation sought a direction to the respondents to exempt the Toll Tax at Lakhanpur Toll Plaza, Kathua; Thandi Khui Toll Plaza and Ban Toll Plaza, Nagrota, Jammu till the National Highway commencing from Pathankot to Udhampur under the project, titled, Delhi- Amritsar-Katra Expressway gets fully operational for smooth utilization of the public. HC held that toll charges at Lakhanpur and Ban Toll Plazas should be reduced to just 20% of the original rate until the Delhi-Amritsar-Katra Expressway was fully completed. It also ordered that all toll plazas must follow the National Highways Fee Rules, especially regarding the required 60 km distance between toll plazas. (HC Jammu & Kashmir Judgement Dated 25/02/2025)
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