During the week 26 January to 1 February 2026, multiple regulatory updates were issued across Income Tax, GST, Central Excise, Customs, DGFT, SEBI, MCA, RBI, and allied laws, reflecting Budget 2026 implementation and policy fine-tuning. Key developments include fresh Income-tax notifications granting scientific research deductions and income exemptions, alongside important Supreme Court and High Court rulings on PF/ESI deductions, retention money, TDS credits, agent commission, and infrastructure deductions. On the GST front, GSTN enhanced interest computation, ITC utilisation, and liability reporting in GSTR-3B. Central Excise changes revised NCCD rates on tobacco, clarified packing machine capacity rules, and extended fuel-related exemptions. Customs saw extensive amendments covering duty exemptions, tariff value revisions, deferred duty payment expansion, new Baggage Rules 2026, automation measures, and mandatory body-worn cameras for cargo examination. DGFT introduced MIP restrictions on select antibiotics, SEBI eased demat processes and opened a special window for physical shares, MCA proposed faster IEPF refunds, RBI issued draft calamity relief norms, and courts reaffirmed strict tender compliance standards.
Notifications & Circulars issued during week (26th – 1st Feb 2026)
(Income Tax, GST, Central Excise, Custom Duty, DGFT, SEBI, MCA, IBBI, RBI)
(Click the Link for Notification/ Circular as issued)
A. Income Tax
Sikshya O Anusandhan, Bhubaneswar, Odisha notified under section 35(1)(ii) for Scientific Research: The notification notifies ‘Sikshya O Anusandhan’, Bhubaneswar, Odisha for ‘Scientific Research’ under the category of ‘University, college or other institution’ for the purposes section 35(1)(ii) of the Income-tax Act, read with rules 5C and 5E of the Income-tax Rules. This section allows for deduction equal to one and half times while computing taxes for expenses relating to scientific research.
(Link: Income Tax Notification 14/2026 Dated 27/01/2026)
Exemptions to State Legal Service Authority Union Territory, Chandigarh: State Legal Service Authority Union Territory, Chandigarh, an Authority constituted by the Administrator, Union Territory, Chandigarh under the Legal Services Authorities Act, 1987, has been notified under section 10(46) for exemption on its income arising from amount received as Grants from High Court and Central Authority, Grants from Central and State Government, Under court orders, Fees and interest on bank deposits.
(Link: Income Tax Notification 15/2026 Dated 28/01/2026)
Rajalakshmi University Trust, Chennai notified under section 35(1)(ii) for Scientific Research: The notification notifies Rajalakshmi University Trust, Chennai, for ‘Scientific Research’ under the category of ‘University, college or other institution’ for the purposes section 35(1)(ii) of the Income-tax Act, read with rules 5C and 5E of the Income-tax Rules. This section allows for deduction equal to one and half times while computing taxes for expenses relating to scientific research.
(Link: Income Tax Notification 16/2026 Dated 30/01/2026)
SC, Notice issued on late PF/ESI deposit Deduction Dispute: Case of Woodland (Aero Club) Private Limited vs ACIT, SC Judgement Dated 27th January 2026. The case relates to the tax treatment of employees contributions to Provident Fund (PF) and Employees State Insurance (ESI) that were deposited after the statutory due dates under the respective welfare laws but before the due date for filing the income tax return. The apex court is expected to provide final clarity, potentially resolving conflicting interpretations among various High Courts regarding the strict application of due dates for employees contributions.
SC Dismisses tax appeal as Developer Status under section 80IA already Settled: Case of PCIT vs Monte Carlo Limited, SC Judgement Dated 9th January 2026.. The apex court held that an entity acting as a ‘developer’ of infrastructure projects is eligible for deduction under Section 80IA(4) of the Income-tax Act. It upholds the High Court ruling that such an entity is not merely a ‘works contractor’ but a developer assuming risk and investment, thus qualifying for the tax benefit.
SC, Retention Money not income until Contract Conditions are Met: Case of PCIT vs EMC Limited, SC Judgement Dated 8th January 2026. The Assessing Officer had treated retention money of Rs 142.53 crore as income, on the ground that the amount had been credited by the principal contractors and tax was deducted at source under section 194C, which the assessee had also claimed as TDS credit. The assessee contended that under the terms of the contracts, a portion of the consideration was retained and payable only after successful completion of projects and issuance of completion or taking-over certificates. Until fulfilment of these conditions, the assessee had no enforceable right to receive the retention money, and therefore no income accrued in that year. HC had concluded that retention money, being contingent and deferred, could not be treated as income of the assessee in the year in which it was retained. The apex court upheld the HC ruling.
HC, TDS on Agent Commission, only interest recoverable if Tax Paid: Case of CIT vs Jordanian Airlines, HC Delhi Judgement Dated 22nd January 2026. HC reaffirmed that supplementary commission (incentives) paid to travel agents constitutes ‘commission’ under Section 194H, requiring deduction of tax at source. As the travel agents had already paid taxes on the commission, the court held that the demand for the principal tax amount was not maintainable. The revenue can only recover interest, not the principal tax amount from the airline.
HC, Employee entitled to TDS credit despite employer’s failure to Deposit Tax: Case of Venkatachalam Thagavelu vs ITO, HC Delhi Judgement Dated 20th January 2026. The case relates to denial of credit of Tax Deducted at Source (TDS) to an employee on the ground that the employer had failed to deposit the deducted tax with the Income Tax Department. HC ruled that employees cannot be denied TDS credit solely because their employer failed to deposit the deducted tax.
B. GST
GSTN, Advisory on Interest Collection and Related Enhancements in GSTR3B: The advisory relates to interest computation, tax liability reporting, and input tax credit utilization. The key change is the revised interest calculation in Table 5.1, where the portal now factors in the minimum balance available in the Electronic Cash Ledger (ECL) from the return due date until the date of tax payment, in line with Rule 88B(1) of the CGST Rules. The system will auto-compute and auto-populate this interest, which cannot be reduced by taxpayers but may be increased through self-assessment. Also, a new auto-populated Tax Liability Breakup Table will reflect supplies of earlier periods reported later through GSTR-1 or IFF, aligning interest liability with Section 50 of CGST Act. The portal will also enable more flexible cross-utilization of ITC after IGST credit is exhausted, allowing payment of IGST liability using CGST/ SGST credits in any sequence.
(Link: GSTN Advisory Dated 30/01/2026, Tutorial)
C. Central Excise
Central Excise NCCD effective rate as 25% on Chewing and Jarda Scented Tobacco: The Notification seeks to prescribe effective rates of National Calamity Contingent Duty (NCCD) on chewing tobacco, Jarda Scented tobacco and other Tobacco products. It provide effective NCCD rate as 25% on chewing tobacco, jarda scented tobacco, and other goods falling under tariff item 240399.
(Link: Central Excise Notification 01/2026 (T) Dated 01/02/2026)
Exempt value of Biogas in Blended CNG, and defers Additional Duty on Unblended Diesel: The Notification extend the validity of specified exemptions providing continuity in the excise framework. It defers implementation of levy of additional duty of Rs 2 per litre on unblended diesel till 31st March 2028. A new serial number 9A has been inserted to levy excise duty at 14% on Compressed Natural Gas (CNG) when blended with Biogas or Compressed Biogas (CBG). The value of biogas/CBG and the GST paid on such biogas/CBG are to be excluded while computing excise duty on the blended CNG.
(Link: Central Excise Notification 02/2026 (T) Dated 01/02/2026)
Central Excise notification No. 05/2023 rescinded: The Notification rescind Notification No. 05/2023 Central Excise dated 1st February 2023. The exemptions or concessions granted under the 2023 notification will no longer apply.
(Link: Central Excise Notification 03/2026 (T) Dated 01/02/2026)
Amendments to Excise Rules to Redefine Packing Machine Speed Calculation: The notification amends the Chewing Tobacco, Jarda Scented Tobacco and Gutkha Packing Machines (Capacity Determination and Collection of Duty) Rules 2026. It introduce a specific explanation in Rule 5 defining ‘maximum rated speed’ of packing machines through a mathematical formula based on motor RPM, overall gear ratio, and the number of funnels or cups, depending on machine type. Rule 6 is aligned to distinguish between horizontal machines using funnels and vertical machines using cups. The consequential changes have also been made to Forms CE DEC-01 and CE CCE-01, substituting references to ‘tracks’ with ‘cups’ or ‘cup or funnel’, and others.
(Link: Central Excise Notification 01/2026 (NT) Dated 31/01/2026)
Amendments to Health Security se National Security Cess Rules: The amendment clarifies the method for determining the maximum rated speed of pouch, tin, or container packing machines by prescribing a precise formula based on RPM, gear ratio, and number of cups or funnels, ensuring uniform classification for cess purposes. It explain the computation of cess abatement where machines remain sealed and non-operational for more than fifteen days, including timelines for filing claims and adjustment of abatements. A new Rule 35 is inserted to prescribe how the cess is to be credited to the Consolidated Fund of India, transferred quarterly to a dedicated cess fund, and utilised with parliamentary oversight and CAG audit.
(Link: Min of Finance HSNS Notification 02/2026 Dated 30/01/2026)
D. Custom Duty
Budget 2026, CBIC extends validity of five and amends two customs exemption notifications: The notification extends validity of five exemption notifications for a further period of two years till 31st March 2028. It also amends notification 25/2002 to expand the scope of an existing exemption by including Battery Energy Storage Systems (BESS) alongside electrically operated vehicles . Certain serial numbers under notification 36/2024 have been omitted, and a clear expiry date of 30th April 2026 has been inserted.
(Link: Customs Notification 01/2026 (T) Dated 01/02/2026)
Budget 2026, Revision in Basic Customs Duty on certain items: The notification amends earlier notification 45/2025 dated 24th October 2025, and makes extensive changes across multiple tables by omitting numerous exemption entries, extending the validity of several existing exemptions up to 31 March 2028, and inserting new entries granting nil basic customs duty on specified goods. The key additions include exemptions for monazite, rare earth compounds, sodium antimonate for solar glass, critical minerals, nuclear power equipment, aircraft and defence-related imports, renewable energy components, and inputs for solar photovoltaic manufacturing. Lists relating to life-saving drugs, rare diseases, and nuclear power projects have been expanded.
(Link: Customs Notification 02/2026 (T) Dated 01/02/2026)
Budget 2026, Revision in Social Welfare Surcharge (SWS) and Agricultural Infrastructure Development Cess (AIDC) applicable on certain items: The exemption notifications 11/2018 dated 1st February 2018 and 11/2021 dated 1st February 2021 have been amended to rationalise product coverage and duty concessions. Several tariff headings have been newly included, certain serial numbers have been omitted, and specific entries have been substituted.
(Link: Customs Notification 03/2026 (T) Dated 01/02/2026)
Up-dation of References to Baggage Rules 2026: The notification align customs provisions with the newly notified Baggage Rules 2026. The amendment is purely consequential, substituting reference to ‘Baggage Rules 2016’ with ‘Baggage Rules 2026’ at all relevant places in existing customs notification governing passenger baggage.
(Link: Customs Notification 04/2026 (T) Dated 01/02/2026)
Withdrawal of two customs notifications under New Baggage Rules 2026: The notification rescinded earlier exemption notifications 11/2004 dated 8th January 2004 and 27/2016 dated 31st March 2016 in view of new Baggage Rules 2026.
(Link: Customs Notification 05/2026 (T) Dated 01/02/2026)
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. 28th January 2026. The tariff value for crude palm oil is set at USD 1075 per metric ton, while gold and silver have tariff values of USD 1567 per 10 grams and USD 3545 per kilogram, respectively. The tariff value for areca nuts is fixed at USD 7679 per metric ton.
(Link: Customs Notification 09/2026 (NT) Dated 27/01/2026)
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. 30th January 2026. The tariff value for crude palm oil is set at USD 1075 per metric ton, while gold and silver have tariff values of USD 1709 per 10 grams and USD 3545 per kilogram, respectively. The tariff value for areca nuts is fixed at USD 7679 per metric ton.
(Link: Customs Notification 10/2026 (NT) Dated 29/01/2026)
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. 31st January 2026. The tariff value for crude palm oil is set at USD 1066 per metric ton, while gold and silver have tariff values of USD 1740 per 10 grams and USD 3830 per kilogram, respectively. The tariff value for areca nuts is fixed at USD 7679 per metric ton.
(Link: Customs Notification 11/2026 (NT) Dated 30/01/2026)
Duty Deferral Facility introduced for Eligible Manufacturer Importers: The notification amends earlier notification 135/2016 dated 2nd November 2016 to expand the scope of the deferred payment of import duty facility under the proviso to Section 47(1) of the Customs Act. A new class of importers titled ‘Eligible Manufacturer Importer’ has been inserted after the existing categories. The Eligible Manufacturer Importer means a Manufacturer Importer. They are expressly permitted to make deferred payment of import duty up to 31st March 2028, thereby extending a time-bound benefit.
(Link: Customs Notification 12/2026 (NT) Dated 01/02/2026)
Extension of Import Duty Deferral Period to 30 Days for Trusted Entities: The Deferred Payment of Import Duty Rules, have been amended to shift the timeline for payment of deferred import duty to a monthly payment framework. For goods covered by Bills of Entry from the 1st day to the last day of any month other than March, the deferred duty must now be paid by the 1st day of the immediately following month. For the month of March, duty must be paid by 31 March itself.
(Link: Customs Notification 13/2026 (NT) Dated 01/02/2026)
Notification of Baggage Rules 2026: Baggage Rules 2026 have been notified replacing the earlier rules. The new rules comprehensively govern duty-free allowances, re-import, temporary import, transfer of residence, and unaccompanied baggage for passengers arriving in India. Used personal effects for daily necessities remain fully duty-free, while a general free allowance of Rs 75,000 is provided for residents, tourists of Indian origin, and eligible foreigners arriving by air or sea, with a lower limit of Rs 25,000 for foreign tourists. One new laptop is allowed duty-free for passengers above 18 years. Special concessions are prescribed for jewellery, transfer of residence cases, crew members, and foreign professionals, subject to conditions. Certain items such as firearms, excess tobacco, liquor, gold bars, and televisions remain excluded.
(Link: Customs Notification 14/2026 (NT) Dated 01/02/2026)
Notification of Customs Baggage (Declaration and Processing) Regulations 2026: The new regulations replace multiple legacy baggage regulations. These mandate electronic declaration of accompanied and unaccompanied baggage through ICEGATE or the Atithi app, introduce standardised Customs Baggage Declaration (CBD) forms, and formalise Green and Red Channel procedures. Passengers carrying dutiable or prohibited goods must declare electronically, with provisions for advance filing, updates till arrival, and risk-based verification. The framework also covers temporary export, re-import, and duty-free temporary import of personal effects for residents and tourists, supported by export and temporary import certificates.
(Link: Customs Notification 15/2026 (NT) Dated 01/02/2026)
Clarification on the term ‘RPA (Remote Pilot Aircraft) for military use’: The circular clarifies the scope of the customs exemption for ‘RPA (Remote Pilot Aircraft) for military use’ under S. No. 59 of Table II of notification 45/2025. It confirms that the exemption from Basic Customs Duty and IGST applies only when such aircraft are imported for defence purposes by the Ministry of Defence, defence forces, defence PSUs, other PSUs, or any entity importing for the defence forces, subject to a certificate from a Joint Secretary-level officer in the Ministry of Defence. It clarifies that “RPA” is a broad term covering all remotely piloted aircraft, irrespective of nomenclature, including drones, Unmanned Aerial Vehicles (UAVs), and Unmanned Aircraft Systems (UAS).
(Link: Customs Circular 02/2026 Dated 01/02/2026)
Extension of time period under Deferred Import Duty Scheme: In view of trade recommendations, CBIC has extended the deferred payment period for import duties from 15 days to 30 days by amending Rule 4. Under the revised framework, duties for Bills of Entry returned in any month other than March are payable by the 1st day of the following month, while those returned in March must be paid by 31 March.
(Link: Customs Circular 03/2026 Dated 01/02/2026)
Guidelines for uniform implementation of Baggage Rules 2026: The circular consolidates statutory provisions with relevant instructions from numerous earlier circulars into a single master reference, without amending or expanding the law. It applies to all categories of passengers, including residents, NRIs, tourists, long-term foreign residents, crew, and diplomats, across all ports and land borders. The key clarifications cover electronic advance baggage declarations, duty-free allowances, personal effects, jewellery, temporary import/export certificates, treatment of commercial quantities, detention and re-export procedures, unaccompanied and mishandled baggage, land border restrictions, and risk-based verification.
(Link: Customs Circular 04/2026 Dated 01/02/2026)
Onboarding of CDSCO, WCCB, Textile Committee and MeitY on SWIFT 2.0 as Single Touch Point for Trade: The circular expand SWIFT 2.0 as a single-touch digital platform for EXIM clearances by onboarding additional Partner Government Agencies (PGAs). Building on the pilot integration of AQCS, PQMS, and FSSAI, CBIC has now extended SWIFT 2.0 to CDSCO and WCCB, MeitY and the Textile Committee, and integrated the system enabling digital generation, submission, and validation of licences, NOCs, test reports, and exemption certificates directly through the SWIFT dashboard.
(Link: Customs Circular 05/2026 Dated 01/02/2026)
Automation of Customs processes in import and export: The circular provides for auto goods registration on imports for AEO T2 and T3 entities, approved Eligible Manufacturer Importers, importers with longstanding supply chains, and those availing Direct Port Delivery, replacing manual or web-based registration. Auto Out of Charge (OOC) is extended to all importers where duties are paid and no compliance intervention is required, expanding the earlier AEO-only facility. For exports, an online and e-seal–based auto goods registration system is introduced to eliminate physical interaction, with a pilot at Nhava Sheva, Mumbai, to be scaled up nationwide.
(Link: Customs Circular 06/2026 Dated 01/02/2026)
Mandatory use of Body Worn Cameras (BWC) for Import Cargo Examination: The circular introduce system based e-Scheduling of cargo examination and mandatory use of Body Worn Cameras (BWCs) during physical examination of import cargo to enhance transparency, accountability, and ease of doing business. All customs officers conducting physical examination of import goods will be required to record the entire examination process using BWCs, covering seal verification, opening of packages, inspection, sampling, and interactions with importers or customs brokers. Recordings will be securely stored for two years, or longer in cases of investigation or litigation.
(Link: Customs Circular 07/2026 Dated 01/02/2026)
E. Directorate General of Foreign Trade (DGFT)
Minimum Import Price (MIP) Introduced for Penicillin, Amoxicillin and 6-APA: DGFT has amended import policy for Penicillins and its salts, Amoxicillin and its salts, and 6-APA under Chapter 29. While the import policy for these items continues to remain ‘Free’, new MIP based restrictions have been introduced. Imports of Penicillin G-potassium with CIF value below Rs 2,216 per kg, Amoxicillin Trihydrate below Rs 2,733 per kg, and 6-APA below Rs 3,405 per kg are now classified as ‘Restricted’. However, the MIP conditions do not apply to imports by 100% Export Oriented Units, units in Special Economic Zones, or imports under the Advance Authorisation Scheme, provided the imported inputs are not sold into the Domestic Tariff Area.
(Link: DGFT Notification 56/2026 Dated 29/01/2026)
F. Securities and Exchange Board of India (SEBI)
Doing away with requirement of issuance of Letter of Confirmation (LOC) and to effect direct credit of securities in dematerialisation account: SEBI has eliminated the requirement of issuing a Letter of Confirmation (LOC) and enabled direct credit of securities into investors’ demat accounts, for issue of duplicate certificates, transmission, transposition, unclaimed suspense accounts and corporate actions. Under the new framework, investors must already hold a demat account and submit a duly attested, recent Client Master List along with prescribed forms. Registrars, issuer companies and depositories are required to complete verification and credit securities directly into the demat account within 30 days.
(Link: SEBI Circular Dated 30/01/2026)
Special Window for Transfer and Dematerialisation of Physical Securities: SEBI has opened a special, time-bound window to facilitate transfer and dematerialisation of physical securities that were sold or purchased prior to 1st April 2019. The window will remain open for one year till 4th February 2027, and also covers cases where earlier transfer requests were rejected, returned, or not attended due to deficiencies. Eligible transfers must be supported by original certificates and executed transfer deeds, and the securities will be credited only in demat form with a mandatory one-year lock-in. The framework excludes disputed cases and securities already transferred to the IEPF.
(Link:SEBI Circular Dated 30/01/2026)
Master Circular for compliance with the SEBI Listing Obligations and Disclosure Requirements Regulations: The updated Master Circular related to compliance with SEBI Listing Obligations and Disclosure Requirements (LODR) Regulations by listed companies. It supersedes the earlier versions, to reflect provisions currently in force.
(Link: SEBI Master Circular Dated 30/01/2026)
G. Ministry of Corporate Affairs (MCA)
IEPFA proposes Faster Refunds to simplify Low-Value Investor Claims: The Investor Education and Protection Fund Authority (IEPFA) has proposed amendments to the IEPFA (Accounting, Audit, Transfer and Refund) Rules, with the objective of simplifying, expediting, and strengthening the investor refund process. A key proposal is a streamlined mechanism for low-value claims, defined as physical shares up to Rs 5 lakh, dematerialised shares up to Rs 15 lakh, and dividend claims up to Rs 10,000. For such claims, disposal within 30 days is proposed, based solely on the company’s verification report. The comments/ feedback from stakeholders is invited.
(Link: MCA Draft Amendment Rules Dated 29/01/2026)
H. Insolvency and Bankruptcy Board of India (IBBI)
I. Reserve Bank of India (RBI)
Draft Guidelines on Relief Measures in areas affected by Natural Calamities: The draft guidelines rationalising the extant prudential norms for implementation of resolution plans in respect of exposures affected by natural calamities, inter alia the existing regulatory instructions, including requirements, the scope, coverage and prudential harmonising the regulatory instructions applicable to different Regulated Entities (REs) has been issued. The guidelines envisage a principle-based resolution regime, providing complete discretion to the RE with respect to design and implementation of resolution plan. The exposures which have been affected by the natural calamity and which are ‘Standard’ but in default up to 30 days i.e., ‘SMA-0’ on the date of occurrence of the natural calamity, shall be eligible to be considered for relief under the guidelines. REs shall make alternate arrangements for providing banking services in the natural calamity affected areas. The comments/ feedback from stakeholders is invited.
(Link: Press Release Draft Guidelines on Relief Measures Natural Calamities)
(Link: Commercial Banks Draft Guidelines Dated 27/01/2026)
(Link: Small Finance Banks Draft Guidelines Dated 27/01/2026)
(Link: Local Area Banks Draft Guidelines Dated 27/01/2026)
(Link: Urban Cooperative Banks Draft Guidelines Dated 27/01/2026)
(Link: Regional Rural Banks Draft Guidelines Dated 27/01/2026)
(Link: Rural Cooperative Banks Draft Guidelines Dated 27/01/2026)
(Link: Non-Banking Finance Companies Draft Guidelines Dated 27/01/2026)
(Link: All India Financial Institutions Draft Guidelines Dated 27/01/2026)
J. Miscellaneous
HC, CA certificate alone not enough, upholds tender rejection for Non-Submission of LoA/WCC: Case of Bothra Shipping Services Pvt Ltd, vs Union of India, HC Delhi Judgement Dated 13th January 2026. HC dismissed a petition challenging a tender rejection, ruling that a CA certificate alone is insufficient if the Request for Proposal (RFP) mandate for supporting documents like Letters of Acceptance (LoAs) or Work Completion Certificates (WCCs) is not met.
*****
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)
Author Bio
