Analysis of Notifications and Circulars for Week ending 18th May 2025

Notifications & Circulars issued during week (12^th-18^th May 2025)

1.Income Tax

Exemptions to Telangana State Pollution Control Board: The Telangana State Pollution Control Board, a Board constituted by the State Government of Telangana under Water (Prevention and Control of Pollution) Act, 1974 has been notified under section 10(46) for exemption on its income arising from Income from consent fees, analysis fees, reimbursements from CPCB, authorisation fees, cess, grants, interest on loans and advances, tender fees, penalties and interest on bank deposits.

(Link: Income Tax Notification 47/2025 Dated 13/05/2025)

Indian Railway Finance Corporation Ltd (IRFC) Zero Coupon Bond notified under section 2(48): Central Government specifies the Ten year Zero Coupon Bond of IRFC as zero coupon bond under section 2(48) Income Tax Act. The duration of the bond is ten years, to be issued on or before the 31^st 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. 49165.10/- per bond, i.e. issue price is Rs. 50834.90/- 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.

(Link: Income Tax Notification 48/2025 Dated 14/05/2025)

2. GST

Advisory on appeal withdrawal with respect to waiver scheme:  When Withdrawal application (APL 01W) for appeal is filed before issuance of final acknowledgment (APL 02) by the appellate authority, then the system automatically withdraws the appeal application (APL 01). However, if withdrawal application is filed after issuance of final acknowledgment, then the withdrawal of such appeal is subjected to the approval of the appellate authority. Once the appellate authority approves the withdrawal application, the status of the Appeal application changes from “Appeal submitted” to “Appeal withdrawn”.

— While filing Waiver application or in the already filed waiver application, taxpayers need to upload the screenshot of the appeal case folder showing status as “Appeal withdrawn”.

(Link: GSTN Advisory Dated 14/05/2025)

Advisory on reporting values in Table 3.2 of GSTR-3B: As per the earlier advisory dated April 11, 2025, it was communicated that the auto-populated values in Table 3.2 of Form GSTR-3B would be made non-editable starting from the April 2025 tax period (i.e., for the return to be filed in May 2025). These details relate to interstate supplies made to unregistered persons, composition taxpayers and UIN holders.

— In view of representations and grievances from taxpayers, it has been decided that Table 3.2 shall remain editable for the time being. Taxpayers are advised to report or amend the auto populated entries, if required and furnish their returns accurately, ensuring the correctness of the disclosed information.

(Link: GSTN Advisory Dated 16/05/2025)

AAR, Sada Tambaku pre-mixed with Lime classifiable under HSN 24039910, taxable at 28% GST: Case of Zen Tobacco Private Limited, AAR Gujarat Dated 30^th April 2025. AAR concluded that mixing tobacco with lime paste in a mixer results in the emergence of a new product – tobacco mixed with lime – which possesses a distinct name, character (chewable), and use (direct consumption). This transformation, making it ready for end use where the original form was not, was held to constitute ‘manufacture’ under the GST law. It ruled that the goods i.e. ‘sada tambaku’ pre-mixed with lime’ is leviable to GST at the rate of 28% in terms of serial No. 15 of Schedule IV of notification No. 1/2017 dated 28^th June 2017 and applicable compensation cess. The product is classifiable under HSN 24039910.

AAR, denies GST ITC on imported parts where foreign supplier paid tax: Case of Enerzi Microwave Systems Pvt Ltd, AAR Gujarat Ruling Dated 30th April 2025. AAR ruled that the applicant is not eligible for IGST on imports of parts paid by the foreign supplier in terms of section 16 of the CGST Act. The ruling clarifies that even if imported goods are received by a registered person and used in their business, the benefit of ITC on import tax is contingent upon the registered person being the one who bore the tax burden and the value of those inputs being included in their subsequent taxable outward supplies.

AAR, No ITC admissible for construction-related supplies and services for factory building: Case of HMSU Rollers (India) Pvt Ltd, AAR Gujarat Ruling Dated 30^th April 2025. AAR held that Input Tax Credit (ITC) is not admissible on the goods and services used for constructing an integrated factory building, including a Pre- Engineered Building (PEB) structure designed to support an overhead crane. The authority classified such construction as immovable property, falling under the blocked credit provisions of the GST law. It ruled that no proportionate ITC is admissible for supply of the following goods and services:

— Steel, Cement and other consumables etc., to the extent of their actual usage in the execution of works contract service when supplied for construction of immovable property, in the form of the factory which is an Integrated Factory Building with Gantry Beam, which in turn is used for mounting across the pre-cast concrete beams, poles over which the crane would be operated;

— Installation and Erection Services of the PEB when supplied for construction of immovable property, in the form of the factory which is an Integrated Factory Building with Gantry Beam, which in turn is used for mounting across the pre-cast concrete beams, poles and over which the crane would be operated;

— Other capital goods like rails, electrification, etc. installed or erected for smooth operation of the crane.

AAR, Chaff Cutter Blades (Agricultural Machine Part) attract 18% GST: Case of Neel Kamal Gera, AAR Rajasthan Ruling Dated 23^rd April 2025. AAR ruled that the blades used as spare parts in agricultural chaff cutter machines are classifiable under HSN Heading 8208 4000, attracting a Goods and Services Tax (GST) rate of 18%.

AAR, Heating of Groundnuts with shell renders it ineligible for HSN 1202 classification: Case of Sitaram Kumhar,  AAR Rajasthan Ruling Dated 17^th April 2025. HSN code 1202 covers “Ground-nuts, not roasted or otherwise cooked, whether or not shelled or broken,” attract a 5% GST rate. AAR ruled that heating groundnuts with shell to reduce moisture for storage and transportation does indeed make them ineligible for classification under HSN 1202.

AAR, Members diverge on GST classification of Tipper Body fabrication: Case of Kamal Coachworks Pvt Ltd, AAR Rajasthan Ruling Dated 23^rd April 2025. AAR, has highlighted a difference in interpretation regarding the GST classification of fabricating and mounting tipper bodies on chassis provided by a customer. The split decision by the two-member bench means the matter will now be referred to the Appellate Authority for clarity.

SC, Section 5A of KGST and 7A of TGST is constitutionally valid: Case of CT Kouchouseph vs State of Kerala, SC Judgement Dated 9^th May2025. The apex court held that legislations do not levy the purchase tax to tax the transaction of the sale and purchase twice. It levies purchase tax only where no sales tax was payable on the sale. Accordingly, constitutional validity of section 5A of Kerala General Sales Tax Act, 1963 and section 7A of Tamil Nadu General Sales Tax Act, 1959 is upholded.

3. Central Excise

No Notifications/ Circular during the week.

4. 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. 16^th May 2025. The tariff value for crude palm oil is set at USD 987 per metric ton, while gold and silver have tariff values of USD 1028 per 10 grams and USD 1065 per kilogram, respectively. The tariff value for areca nuts is fixed at USD 6970 per metric ton.

(Link: Custom Notification 34/2025 (NT) Dated 15/05/2025) 

Anti-Dumping Duty on imports of “Titanium Dioxide” originating in or exported from China: Notification No. 12/2025 imposes Anti-Dumping Duty (ADD) on imports of “Titanium Dioxide” originating in or exported from China. It is levied only for specified end uses, and excludes from its scope Titanium Dioxide for use in products covered under its description relating to food, pharma, skin-care, textile, fibre, or nano or ultra fine titanium dioxide. To facilitate smooth clearance, a facility is being introduced in Bill of Entry to make an electronic declaration for those importers importing for use in such excluded products.

(Link: Custom Circular 16/2025 Dated 11/05/2025)

Revision of Arrest Report and Incident Report (where arrest not made): The instruction highlights that details of the DIGIT ID are now mandatory components of both the Arrest Report (revised Annexure-I) and the Incident Report (revised Annexure-II). These updated reports are required to be submitted via email to specified addresses.

(Link: Custom Instructions 10/2025 Dated 13/05/2025)

Port restriction on import of certain goods from Bangladesh to India: Refer notification dated 17^th May 2025, whereby a new Para 19 under ‘General Notes Regarding Import Policy’ has been inserted. For ready-made garments, import from Bangladesh shall not be allowed from any land port, however, it is allowed only through Nhava Sheva and Kolkata seaports. For some specific items imports from Bangladesh shall not be allowed through any LCSs/ICPs in Assam, Meghalaya, Tripura and Mizoram; and LCS Changrabandha and Fulbari, in West Bengal. These restrictions shall not apply to Import of Fish, LPG, Edible Oil, and Crushed Stone to India from Bangladesh. These restrictions shall also not apply to Bangladesh exports to Nepal/Bhutan transiting through India. Necessary action be taken to sensitize officers in this regard.

(Link: Custom Instructions 11/2025 Dated 17/05/2025)

SC, Crude Soybean Oil deemed manufactured product, eligible for customs duty exemption: Case of Noble Resources and Trading India Pvt Ltd vs Union of India, SC Judgement Dated 14^th May 2025. The primary question before the court was whether crude degummed soybean oil, derived from soybeans through a series of processes, could still be classified as an agricultural product. The Court noted that crude degummed soybean oil is not simply a processed form of soybean but a distinct marketable product with its own identity. the The apex court allowed the appeal, ruling that crude degummed soybean oil is a manufactured product and not an agricultural product. This classification makes it eligible for customs duty exemption under the relevant notification.

HC, Gold Kada worn by sikh man is personal effect, court orders release: Case of Daljeet Singh vs Commissioner of Customs, HC Delhi Judgement Dated 28^th April 2025. High Court has ruled that a gold kada worn by the petitioner was a personal effect and ordered its release. The petitioner was traveling from Dubai when a 22 carat gold kada weighing 60 grams, which he stated he always wore as a personal effect, was detained by the Customs Department at New Delhi.

5. Directorate General of Foreign Trade (DGFT)

Amendment in Export-Import norms for Di-Octyl Phthalate production: The export product description for Standard Input Output Norms SION A-1303, which was previously listed as “Di-Octyl Phthalate (DOP),” has been amended to “Di-Octyl Phthalate (DOP) (PVC Plasticizer).” Also, the import quantity of ‘2- Ethylhexanol (Octanol)’ has been reduced from the existing allowance of 0.700 kg to 0.680 kg for every 1 kg of the export product. The quantity permitted for the other import item, Phthalic Anhydride remains unchanged at 0.400 kg.

(Link: DGFT Public Notice 07/2025 Dated 16/05/2025)

6. Securities and Exchange Board of India (SEBI)

Review of provisions pertaining to Electronic Book Provider (EBP) platform for debt securities: The key changes include mandatory use of the EBP platform for private placements of debt securities, non-convertible redeemable preference shares (NCRPS), and municipal debt securities with issue sizes of Rs 20 crore or more (including cumulative tranches). Issuers such as REITs, SM REITs, and InvITs may also opt to use the platform voluntarily.

— Issuers must now submit the Placement Memorandum and term sheet at least two or three working days before the issue opens, depending on their prior use of the platform. New disclosures include details on green shoe options, anchor investor allocations (with percentage limits based on credit ratings), and pro-rata allotment methods. Timelines for obtaining in-principle approvals and completing the listing process have been standardized.

(Link: SEBI Circular Dated 16/05/2025)

Extension of timeline for disclosures for Offshore Derivative Instruments (ODIs) and Foreign Portfolio Investors (FPIs) with segregated portfolios: These provisions were originally outlined in paragraphs 2.2 to 2.7 of an earlier SEBI circular dated 17^th December 2024. The specified paragraphs were scheduled to take effect five months after issuance. However, based on representations from stakeholders, the implementation deadline has been extended to 17^th November 2025.

(Link: SEBI Circular Dated 16/05/2025)

Rating of Municipal Bonds on the Expected Loss (EL) based Rating Scale: The circular permits Credit Rating Agencies (CRAs) to use the Expected Loss (EL) based Rating Scale for rating Municipal Bonds. It noted that EL ratings, when used alongside standard or Probability of Default (PD) ratings, could provide a clearer reflection of the recovery prospects for municipal bonds. As that these bonds are frequently issued by Urban Local Bodies and Municipalities primarily to finance infrastructure development, extending the EL-based scale, previously permitted for the infrastructure sector, was considered appropriate.

(Link: SEBI Circular Dated 15/05/2025)

Composition of the Internal Audit team for Credit Rating Agencies (CRAs): Previously, the internal audit team for a CRA needed to include at least a Chartered Accountant and a professional with a Certified Information Systems Auditor (CISA) or Diploma in Information Systems Auditor (DISA) qualification. Under the revised norms, the internal audit team must now comprise at least a Chartered Accountant or a Cost Accountant (holding ACMA or FCMA qualifications from the Institute of Cost Accounts of India). Additionally, the information systems audit requirement can now be met by a professional holding CISA, DISA, or a Diploma in Information System Security Audit (DISSA) from the Institute of Cost Accounts of India.

(Link: SEBI Circular Dated 14/05/2025)

Investor Charter for Registrars to an Issue and Share Transfer Agents (RTAs):  The updated charter reflect recent market developments such as the introduction of the Online Dispute Resolution (ODR) platform and SCORES 2.0. Registered RTAs are now required to display the revised charter on their websites, offices, and via email to shareholders. The RTAs must disclose monthly complaint data on their websites. The revised charter outlines key services, expected timelines for service delivery, investors’ rights, and a clear grievance redressal mechanism.

(Link: SEBI Circular Dated 14/05/2025)

Extension of timeline for complying with the certification requirement for the key investment team of the Manager of AIF: The regulation mandates that the key investment team of an Alternative Investment Fund (AIF) Manager must include at least one member with the specified certification, i.e. ‘NISM Series-XIX-C: Alternative Investment Fund Managers Certification Examination’. In view of industry representations, SEBI now extended the compliance deadline to 31^st July 2025. 

(Link: SEBI Circular Dated 13/05/2025)

Streamlining of Request for Quote (RFQ) Platform pricing and enhancement of  Corporate Bond data:  It has been decided to simplify the yield to price computation on the RFQ platform. The cash flow dates for interest, dividend, or redemption payments will be based on the scheduled due date as per the cash flow schedule, without adjustment for day count convention. Also, to centralize information, issuers are now required to disclose the cash flow schedule, including due dates and payment dates as per day count convention, in the centralized corporate bond database upon ISIN activation and update it within one working day of any changes.

(Link: SEBI Circular Dated 13/05/2025)

Consultation Paper on proposal to facilitate relaxation in regulatory compliances for FPI applicants investing only in Indian Government Bonds: The key proposals include aligning the Know Your Customer (KYC) review cycle for these FPIs (termed IGB-FPIs) with the timelines prescribed by the Reserve Bank of India for regulated entities, which are less frequent than current FPI requirements. Also, IGB-FPIs may be exempted from providing investor group details, as the investment limits relevant to such grouping do not apply to their IGB investments under Voluntary Retention Route (VRR) and Fully Accessible Route (FAR). It also suggests permitting unrestricted contribution and control by Non-resident Indians (NRIs), Overseas Citizens of India (OCIs), and Resident Individuals (RIs) in the corpus of IGB-FPIs, noting that NRIs and OCIs can already invest in specified IGBs without limits under FAR. The comments/ suggestions from stakeholders are invited.

(Link: SEBI Consultation Paper Dated 13/05/2025)

7. Ministry of Corporate Affairs (MCA)

No Notifications/ Circular during the week.

8. Insolvency and Bankruptcy Board of India (IBBI)

SC, Non-implementation of resolution plan by JSW for about two years since its approval is not justifiable: Case of Kalyani Transco vs Bhushan Power and Steel Ltd, SC Judgement Dated 2^nd May 2025. The apex court rejects resolution plan of JSW since Successful Resolution Applicant (JSW) did not implement the Resolution Plan for about two years since its approval by the NCLAT, though there was no legal impediment in implementing the same. Such flagrant violation of the terms of the Resolution Plan, has frustrated the very object and purpose of the Code.

HC quashes Income Tax reassessment Post IBC plan, Clean Slate Policy: Case of Surya Manufacturing Private Limited vs ACIT, HC Delhi Judgement Dated 24^th April 2025. High Court has quashed the reassessment order and notice issued by the Income Tax Department against Surya Manufacturing Private Limited. The court’s decision reinforces the “Clean Slate Theory” in the context of the Insolvency and Bankruptcy Code (IBC), holding that once a resolution plan is approved, pre-existing liabilities not included in the plan are extinguished.

NCLAT, Rejection of Resolution Plan without hearing violates natural justice: Case of Essar (India) Ltd vs Prabhat Technologies, NCLAT Delhi Judgement Dated 6^th May 2025. The appellate tribunal held that rejection of approved resolution plan on account of alleged fraud without giving an opportunity to resolution applicant to explain its position is against the principle of natural justice. Accordingly, matter remanded back.

IBBI suspends Mr Viswanathan Rajagopalan IP for lapses in his duties under IBC and related regulations: The multiple lapses include delays in appointing an Authorized Representative for homebuyers, failing to include critical agendas such as the appointment of registered valuers, and issuing an Invitation for Expression of Interest without requisite approvals. The Disciplinary Committee suspended his registration for two years.

(Link: IBBI Order Dated 15/05/2025)

9. Reserve Bank of India (RBI)

Exim Bank’s Line of Credit (LOC) for USD 700 million to Govt of Mongolia for financing construction of Crude Oil Refinery Plant in Mongolia: The LoC facilitates the export of eligible Indian goods and services in alignment with the Foreign Trade Policy of India, subject to approval by Exim Bank. The disbursement period is up to 48 months following the scheduled completion date of the related contract. Exporters must declare shipments under the LoC in accordance with existing RBI procedures and are not entitled to agency commission payments from the LoC funds.

(Link: RBI Notification 37/2025 Dated 16/05/2025)

10. Miscellaneous

SC, Dispute Arbitrable even after signing discharge voucher and accepting amount: Case of Arabian Exports Pvt Ltd vs National Insurance Company Ltd, SC Judgement Dated 6^th May 2025. The issue before the court was whether a dispute raised by an insured after giving a full and final discharge voucher to the insurer can be referred to arbitration. The court had upheld the concept of economic duress and held that notwithstanding signing of the discharge voucher and accepting the amount offered, the dispute is still arbitrable. The question as to whether the appellant was compelled to sign the standardized voucher/advance receipt forwarded to it by the respondent out of economic duress and whether arbitration claim was sustainable or not were clearly within the domain of the arbitral tribunal. Thus, setting aside the impugned order of the High Court and allowing the appeal, the Bench appointed the sole arbitrator.

(Link: SC Judgement Dated 06/05/2025)SC, Compensation on mother’s death denied to married daughter due to loss of dependency: Case of Deep Shikha vs National Insurance Company Ltd, SC Judgement Dated 13^th May 2025.  The apes court held that a married daughter may be considered a legal representative, but, she will not be eligible for loss of dependency compensation unless it is proven by the daughter that she was financially dependent on the deceased. Accordingly, compensation was denied due to lack of dependency. (Link: SC Judgement Dated 13/05/2025)

HC, Registered Trademark holder can’t override prior user rights: Case of Goethe Institute EV vs Abhishek Yadav, HC Delhi Judgement Dated 6^th May 2025. High Court held that section 34 of the Trade Marks Act, recognizes the rights of a prior user and protects its rights. The rights of prior user are recognized as superior than that of the registration and that even the registered trademark holder cannot disturb/interfere with the rights of the prior user.

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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)