The week ending 23rd March 2025 saw significant updates across various sectors, notably in Income Tax, GST, Customs, and Securities. A key development was the CBDT notification enabling the sharing of income tax data with the Delhi Government’s Department of Information & Technology. This move, aimed at identifying eligible beneficiaries for social welfare schemes, aligns with Section 138 of the Income Tax Act. Furthermore, the Income Tax Department issued clarifications on compounding offences and sought stakeholder inputs for drafting the new Income Tax Rules and Forms in light of the 2025 Income Tax Bill.
In the GST sector, various rulings were issued by the Tamil Nadu AAR. Notably, the maintenance of Micro Compost Centres by Chennai Corporation was exempt from GST. Similarly, services related to printing examination materials were also exempt, while fish processing services on a job work basis were subject to a 5% GST rate. Issues with filing GST waiver applications were addressed, with a technical advisory urging taxpayers to file waiver applications by 30th June 2025.
In Customs, significant changes included the amendment to rules on diamond variance limits, which now set precise dimensions for round and other shaped diamonds. Additionally, the export duty of 20% on onions was withdrawn, effective from 1st April 2025. There were also updates to the rules of origin under trade agreements, requiring proof of origin rather than a certificate. The Directorate General of Foreign Trade (DGFT) also initiated a review of the Standard Input Output Norms (SIONs) for automobile tyres.
In the financial sector, SEBI issued updates to the Securities Contracts Regulations, now allowing stock exchanges to verify past risk-return metrics. SEBI also streamlined processes by mandating online filing for certain reports under the SEBI Takeover Regulation. The regulator also integrated DigiLocker for better access and transfer of unclaimed assets, aiming to enhance investor protection. Additionally, amendments to regulations covering non-banking financial companies (NBFCs) and regional rural banks (RRBs) were announced, ensuring regulatory clarity on the treatment of assets.
The week also saw a notable judgment from the Supreme Court in the Muskan Enterprises vs. State of Punjab case, which clarified the interpretation of the word “may” under the Negotiable Instruments Act. The court emphasized that “may” is generally considered discretionary, while “shall” or “must” conveys a mandatory intent, depending on the context of the statute. This judgment provides guidance for interpreting statutory language more effectively, focusing on both textual and contextual meanings.
Notifications & Circulars issued during week (17th– 23rd Mar 2025)
A. Income Tax
CBDT allows Income Tax data sharing for identifying beneficiaries under social welfare schemes: The notification permit the sharing of income tax data with the Department of Information & Technology, Government of National Capital Territory (NCT) of Delhi to be used for identification of eligible beneficiaries under the social welfare schemes. The authorization is granted under Section 138(1)(a)(ii), specifies that the Additional Chief Secretary of the Government of NCT Delhi, designated to receive this information. (Income Tax Notification 20/2025 Dated 18/03/2025)
Frequently Asked Questions (FAQs) on Guidelines for Compounding of Offences: The revised guidelines for Compounding of offences) under the Income-tax Act, issued on 17th October 2024 have been simplified, by eliminating categorization of offences, removing the limit on number of occasions for filing applications, allowing fresh application upon curing of defects, allowing compounding of offences under section 275A and 276B of the Act, removing the existing time limit for filing application etc. For better awareness and understanding, the circular provide clarifications in the form of answers to FAQs. 52 FAQs have been clarified. (Income Tax Circular 04/2025 Dated 17/03/2025, and Press Release)
Seeking stakeholders’ input for drafting Income-tax Rules and related forms consequent to the Income Tax Bill: The Income Tax Bill, 2025 has been introduced in Parliament and is currently under examination by the Select Committee for detailed consideration. Stakeholders are encouraged to continue submitting their suggestions on the provisions of the Bill, which will be compiled and forwarded to the Select Committee for its review.
— Further, an effort is also underway to collect inputs and work on simplification of the associated Income Tax Rules and Forms. As part of a wider consultative process, suggestions from stakeholders are invited in the four categories i.e. Simplification of Language, Reduction of Litigation, Reduction of Compliance Burden, Identification of Redundant/Obsolete Rules and Forms. (Income Tax Press Release Dated 18/03/2025)
High-Risk e-Verification Cases: The Directorate of Income Tax (Systems) has issued instructions for handling high-risk e-Verification cases pertaining to Assessment Year 2021-22. The identified cases have been assigned to Assessing Officers for further action under the Income Tax Act. If scrutiny is not pending, the officers may utilize the information as per Section 148. Approval from the Specified Authority is required before issuing notices under Section 148. Relevant data, including documents and reports, can be accessed via the Insight Portal under the e- Verification module. (Income Tax e-Verification Instructions 1/2025 Dated 11/03/2025)
HC, Survey findings of one year cannot be applied to other years: Case of GE Grid (Switzerland) GMBH vs ACIT, HC Delhi Judgement Dated 24th February 2025. High Court held that reassessment under section 148 of the Income Tax Act entirely based on course of survey not sustainable, and liable to be quashed. Further, survey in particular year cannot be extrapolated to other years. (HC Delhi Judgement Dated 24/02/2025)
B. GST
Advisory, Issue in filing applications (SPL 01/SPL 02) under waiver scheme: Taxpayers have reported difficulties in filing GST waiver applications (SPL 01/SPL 02), including missing order numbers, non-populated order and payment details, and issues with payment adjustments. Additionally, some are unable to withdraw appeal applications. GSTN is working to resolve these technical issues. As per Rule 164(6) of the CGST Rules, 2017, waiver applications can be filed until 30th June 2025. The actual deadline for tax payment under the waiver scheme is 31st March 2025. Taxpayers should ensure payment using the “Payment Towards Demand” functionality on the GST portal. If issues arise, they can make a voluntary payment via Form DRC-03 and link it using Form DRC-03A. To avoid complications, taxpayers are urged to make payments by 31st March 2025, and submit waiver applications by 30th June 2025. (GSTN Advisory Dated 21/03/2025)
AAR, Micro Compost Centre Services for Chennai Corporation exempt from GST: Case of Nellai Motors, AAR Tamil Nadu Ruling Dated 12th February 2025. AAR ruled that The Maintenance of Micro Compost Centres by the applicant to Greater Chennai Corporation, is classifiable under Heading SAC 9994 and more specifically under group 99943 ‘Waste Treatment and Disposal Services’ as per the Annexure to Notification 11/2017 (Rate) dated 28th June 2017. The supply of service by the applicant for ” Maintaining the Micro Compost Centres and processing of wet waste” are exempted from GST vide serial No 3 of Notification 12/2017 (Rate) dated 28th June 2017 (as amended) and the corresponding Notification issued under TNGST Act. (AAR Tamil Nadu Ruling Dated 12/02/2025)
AAR, Printing Services for Examination Materials Provided to Educational Institution exempt from GST: Case of Mehra Computer Systems, AAR Tamil Nadu Ruling Dated 12th February 2025. The applicant is engaged in the business of printing and delivering high end security printing products. The applicant is providing complete end to end solutions to customers from designing to delivery in mass quantity. The paper and ink used are as per approval of customer. The products are as per requirements of a particular customer and cannot be delivered to any other person. AAR ruled that services of printing of pre-examination items like hall tickets, question paper, OMR sheets, answer booklets; post examination items like mark sheets, degree certificates, grade sheets, rank sheets, certificates after scanning of OMR sheets; and scanning and process of results of examinations are exempt in terms of serial No. 66 of Notification 12/2017 (Rate) dated 28th June 2017 (as amended). (AAR Tamil Nadu Ruling Dated 12/02/2025)
AAR, Fish Processing on Job Work Basis Attracts 5% GST: Case of Jude Foods India Private Limited, AAR Tamil Nadu Ruling Dated 12th February 2025. The applicant is engaged in the direct sale of fish and the processing of raw fish. AAR ruled that the activity of fish processing done to other registered persons on job work basis is classified under 998812 and attracts GST at the rate of 5% in terms of serial No 26 of Notification 12/2017 (Rate) dated 28th June 2017 (as amended). (AAR Tamil Nadu Ruling Dated 12/02/2025)
AAR, GST on Stipend and Supplies in Apprenticeship Programs: Case of Logskim Solutions Private Limited, AAR Tamil Nadu Ruling Dated 6th February 2025. The applicant, a third-party aggregator, facilitates training programs by engaging industry partners. AAR ruled that the amount of stipend received from the industry partner and paid to trainees without making any deduction, is chargeable to tax. The sale of uniforms and shoes and the amount of Insurance Premium sold to the industry partner is chargeable to tax under the CGST/TNGST Acts. (AAR Tamil Nadu Ruling Dated 06/02/2025)
AAR, Electricity supply exempt from GST, ITC claim on solar power denied: Case of Kanishk Steel Industries Limited, AAR Tamil Nadu Ruling Dated 6th February 2025. The company is engaged in steel manufacturing and sought clarification on whether ITC could be availed for inputs and services running the solar plant. AAR ruled that the activity of the applicant namely, generation and supply of electricity would fall under the scope of supply and as the supply of electricity attracts nil rate of tax, it falls within the definition of exempted supply. The applicant is not eligible to avail the input tax credit on any goods or services exclusively used for running or maintenance of the Solar Power Plant. (AAR Tamil Nadu Ruling Dated 06/02/2025)
AAR, GST Applies to School Transport Services given Directly to Students: Case of Batcha Noorjahan, AAR Tamil Nadu Ruling Dated 13th February 2025. The applicant, engaged in the business of transporting school students, contended that their services should qualify for GST exemption as they were essential to educational institutions. AAR ruled that the services by way of transportation of students and staff cannot be considered as services provided to school (educational institution) and not exempt. (AAR Tamil Nadu Ruling Dated 13/02/2025)
AAR, Stipend reimbursement to training firms is exempt from GST: Case of Yashaswi Skills Limited, AAR Maharashtra Ruling Dated 28th February 2025. The applicant, a skill development company, sought clarification on whether reimbursements from industry partners for stipends paid to trainees would attract GST. AAR ruled that the reimbursement by industry partners to the applicant, of the stipend paid to trainess, does not attract tax under GST laws. (AAR Maharashtra Ruling Dated 28/02/2025)
AAR, Fish finders are not parts of vessels: Case of Kunthunath Trading and Investments Private Limited, AAR Maharashtra Ruling Dated 28th February 2025. The applicant, a trader of fish finders, sought clarification on whether these devices qualify as “parts of goods” under specific HSN codes related to vessels (8901-8907), which would attract a reduced GST rate of 5%. A fish finder is a device boatman use to locate fish in the water. AAR ruled that fish finders do not merit classification as parts of the goods of headings 8901-8907 and do not fall under entry number 252 of schedule I of notification 1/2017 (Rate) dated 28th June 2017 (as amended). (AAR Maharashtra Ruling Dated 28/02/2025)
C. Central Excise
No Notification/ Circular during the week.
D. Custom Duty
Amendment to Customs Rules on Diamond Variance Limits: The notification revise the variance limits for imported diamonds. The modifications provide that permissible variance for round diamonds is ±0.05 mm in diameter, while other shaped diamonds can have a variance of ±0.07 mm in length and breadth, ±0.01 mm in height, and ±1 cent in weight. (Custom Notification 18/2025 (T) Dated 20/03/2025)
Export duty of 20% on Onions withdrawn: The notification amend previous Notification 27/2011 dated 1st March 2011 to withdraw the export duty of 20% on Onion from 1st April, 2025. (Custom Notification 19/2025 (T) Dated 22/03/2025)
Amendment to Customs Administration of Rules of Origin under Trade Agreements Rules: The notification primarily amends and replaces the term ‘certificate’ with ‘proof’ in various provisions, including Rule 2, Rule 3, and Rule 6, to redefine the documentation required for establishing the origin of goods under trade agreements. Form I has been updated, replacing Certificate of Origin (CoO) with ‘proof of origin’ in Section III, Part B. (Custom Notification 14/2025 (NT) Dated 18/03/2025)
Anti-dumping Duty on ‘Aluminium foil up to 80 micron, excluding aluminium foil below 5.5 micron for non-capacitor application’ originating in or exported from China: Anti-dumping Duty has been imposed on imports of ‘Aluminium foil up to 80 micron, excluding aluminium foil below 5.5 micron for non-capacitor application’ originating in or exported from China, and imported into India. The provisional anti-dumping duty shall be effective for a period of six months. (Custom Notification 02/2025 (ADD) Dated 17/03/2025)
Anti-dumping Duty on ‘vacuum insulated flask and other vacuum vessels, of stainless steel’ originating in or exported from China: Anti-dumping Duty has been imposed on imports of ‘vacuum insulated flask and other vacuum vessels, of stainless steel’ originating in or exported from China, and imported into India. The anti-dumping duty shall be effective for a period of five years. (Custom Notification 03/2025 (ADD) Dated 17/03/2025)
Anti-dumping Duty on Soft Ferrite Cores originating in or exported from China: Anti-dumping Duty has been imposed on imports of Soft Ferrite Cores originating in or exported from China, and imported into India. The anti-dumping duty shall be effective for a period of five years. (Custom Notification 04/2025 (ADD) Dated 18/03/2025)
Anti-dumping Duty on Poly Vinyl Chloride Resin originating in or exported from China, Korea, Malaysia, Norway, Taiwan and Thailand: Anti-dumping Duty has been imposed on imports of Poly Vinyl Chloride Resin originating in or exported from China, Korea, Malaysia, Norway, Taiwan and Thailand and imported into India. The anti-dumping duty shall be effective for a period of five years. (Custom Notification 05/2025 (ADD) Dated 21/03/2025)
E. Directorate General of Foreign Trade (DGFT)
Extension of Urea Import STE Status for Indian Potash Limited: DGFT has extended the Status of State Trading Enterprise (STE) for Indian Potash Limited (IPL) for the import of agricultural grade Urea until 31st March 2026. Under this notification, the import of Urea for agricultural purposes on the government account will continue through IPL, subject to compliance with Para 2.21 of FTP 2023. (DGFT Notification 65/2025 Dated 18/03/2025)
Extension of RoDTEP for Advance Authorizations (AAs) holders, Special Economic Zones (SEZs), and Export-Oriented Units (EOUs): The Support under the Remission of Duties and Taxes on Exported Products (RoDTEP) Scheme for exports of products manufactured from AAs, SEZs, and EOUs has been extended up to 5th Feruary 2025. However, from 6th February 2025 onwards, exports from these categories will no longer be eligible for RoDTEP support. The support under the RoDTEP Scheme for other categories (DTA) shall continue as per Notification 32/2024-25. (DGFT Notification 66/2025 Dated 20/03/2025)
Extension of the last date for filing Annual RoDTEP Return (ARR) for Financial Year 2023-24: DGFT has extended the deadline for filing the Annual Remission of Duties and Taxes on Exported Products (RoDTEP) Return for the financial year 2023-24 from 31st March 2025, to 30th June 2025. Additionally, the grace period for filing has been extended to 30th September 2025. (DGFT Public Notice 51/2025 Dated 19/03/2025)
Review the SIONs pertaining to Automobile tyres: DGFT has initiated a review of the Standard Input Output Norms (SIONs) for automobile tyres (A-1722, A-1717, A-1667, A- 1666, A-1673, A-1665, A-1664, A-1663). The stakeholders using these SIONs are advised to review their applicability and propose modifications if needed. (DGFT Trade Notice 34/2025 Dated 20/03/2025)
F. Securities and Exchange Board of India (SEBI)
Amendment to Securities Contracts (Stock Exchanges and Clearing Corporations) Regulations: The notification inserts new regulation 38B which allows recognized stock exchanges, with SEBI’s approval, to carry out the verification of past risk-return metrics. This function aligns with SEBI Credit Rating Agencies Regulations, and will be subject to prescribed conditions specified. (SEBI Notification Dated 20/03/2025)
Amendment to SEBI Intermediaries Regulations: The key change includes the insertion of Chapter IIIC, which mandates the verification of past risk and return metrics for Investment Advisers, Research Analysts, and Algorithmic Trading Providers empanelled with recognized stock exchanges. These entities can make claims regarding returns or performance only if verified by a SEBI recognized credit rating agency acting as a Past Risk and Return Verification Agency. (SEBI Notification Dated 20/03/2025)
Amendment to SEBI Credit Rating Agencies Regulations: A new Chapter IIA has been introduced for the establishment of a Past Risk and Return Verification Agency. An eligible credit rating agency may function as a verification agency with SEBI’s approval. Additionally, such an agency must engage a recognized stock exchange as a data center for verification purposes, following prescribed conditions. (SEBI Notification Dated 20/03/2025)
Framework on Social Stock Exchange (“SSE”): SEBI has reduced the minimum application size for subscribing to Zero Coupon Zero Principal Instruments from ₹10,000 to ₹1,000, based on recommendations from the SSE Advisory Committee and public feedback. (SEBI Circular Dated 19/03/2025)
Harnessing DigiLocker as a Digital Public Infrastructure for reducing unclaimed assets in the Indian Securities Market: The circular aims to enhance investor protection and streamline access to financial holdings. By integrating DigiLocker with the securities market, it ensures that investors can store and retrieve details of their demat accounts and mutual fund holdings securely. The key feature of this initiative is the nomination facility. Investors can appoint data access nominees within DigiLocker, allowing them read-only access to the account in case of the investor’s demise. It has enabled an automated notification system for nominees. Once notified, DigiLocker will automatically alert the nominated individuals, enabling them to initiate the asset transfer process with financial institutions. The KRAs will play a vital role in verifying information and ensuring a seamless transition of assets to rightful heirs. (SEBI Circular Dated 19/03/2025)
Online Filing System for reports filed under SEBI Takeover Regulation 10(7): The circular mandate online filing system for specific reports under Regulation 10(7) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations. This change affects reports related to various exemptions. Currently, these reports are submitted via email. SEBI is introducing the SEBI Intermediary Portal (SI Portal) for online submissions. A parallel filing system, allowing submissions via both email and the SI Portal, will be in place until 14th May 2025. (SEBI Circular Dated 20/03/2025)
Disclosure of holding of specified securities in dematerialized form: The circular revises the disclosure requirements for shareholding patterns of listed entities under Regulation 31 of the Listing Obligations and Disclosure Requirements (LODR) Regulations. The key modifications include updates to Table I-IV of the shareholding pattern, requiring listed entities to disclose details of Non-Disclosure Undertakings (NDUs), other encumbrances, and total pledged shares. Moreover, outstanding convertible securities now explicitly include Employee Stock Option Plans (ESOPs). A new column has been added to capture the total number of shares on a fully diluted basis, including warrants, ESOPs, and convertible securities. (SEBI Circular Dated 20/03/2025)
Alignment of interest of the Designated Employees of the Asset Management Company (AMC) with the interest of the unitholders: The amendments to SEBI (Mutual Funds) Regulations, 1996 (‘MF Regulations’) were carried out to relax the regulatory framework relating to ‘Alignment of interest of the Designated Employees of the AMCs with the interest of the unitholders’, notified in February and March 2025. These amendments shall be applicable from 1st April 2025. (SEBI Circular Dated 21/03/2025)
Extension of timeline for Industry Standards on Minimum information for review of audit committee and shareholders for approval of a related party transaction: SEBI Circular dated 14th February 2025 required listed entities to follow the Industry Standards on “Minimum information to be provided for review of the audit committee and shareholders for approval of a related party transaction” with effect from 1st April 2025. Based on the feedback from various stakeholder, it has been decided that the effective date shall be 1st July 2025. (SEBI Circular Dated 21/03/2025)
Consultation Paper on amendments to SEBI (ICDR) Regulations, and SEBI (SBEB & SE) Regulations related to requirements of a public issue: The key proposals include clarifying the minimum holding period for equity shares eligible for an Offer for Sale (OFS) and addressing the treatment of ESOPs granted to founders before filing the Draft Red Herring Prospectus (DRHP). It proposes to extend the exemption from the one-year holding requirement to equity shares obtained through the conversion of fully paid-up compulsorily convertible securities under an approved scheme. This aligns OFS eligibility with Minimum Promoters’ Contribution (MPC) rules. Additionally, SEBI proposes allowing founders classified as promoters at the time of DRHP filing to retain and exercise previously granted ESOPs, provided they were issued at least one year before the company decided to go public. The stakeholders comments/ suggestions are invited. (SEBI Consultation Paper Dated 20/03/2025)
Consultation paper on provisions pertaining to Electronic Book Provider (EBP) Platform and Request For Quote (RFQ) Platform: The EBP Platform, introduced in 2016, ensures fair price discovery for privately placed debt securities. SEBI is considering expanding its scope to all debt issuances, including municipal bonds and securitized debt instruments. The RFQ Platform, launched in 2020, facilitates electronic trading of corporate bonds. SEBI proposes modifications to improve liquidity and participation, including changes to contract note generation and regulatory requirements for foreign and domestic funds. The stakeholders comments/ suggestions are invited. (SEBI Consultation Paper Dated 20/03/2025)
Facilitation to Stock Brokers to undertake securities market related activities in GIFT-IFSC under a Separate Business Unit (SBU): SEBI registered stock brokers are required to obtain approval from SEBI in the form of NOC to float subsidiaries or to enter into joint venture to undertake securities market related activities in Gujarat International Finance Tech-city – International Financial Services Centre (GIFT-IFSC). It is proposed that stock brokers may offer these services under a SBU of the stock broking entity itself on an arms-length basis. Accordingly, the requirement for stock brokers to obtain approval (NOC) from SEBI to float subsidiary/joint venture in GIFT-IFSC may be done away with. The stakeholders comments/ suggestions are invited. (SEBI Consultation Paper Dated 21/03/2025)
Advisory to Intermediaries, uploading advertisements on Social Media Platforms (SMPs): In order to increase transparency in the securities market, curb fraudulent activities, protect the interest of investors and to further strengthen the conduct intermediaries, it has been decided in consultation with Social Media Platform Providers (SMPPs) that all SEBI registered intermediaries uploading/ publishing advertisements on SMPPs like Google/ Meta (to start with), shall be required to register on such social media platforms using their email ids and mobile numbers registered on SEBI SI Portal. These SMPPs will thereafter carry out advertiser verification of these Intermediaries after which, intermediaries will be permitted to upload/ publish advertisements on these platforms. Accordingly, all such intermediaries interested in uploading/ publishing advertisements on these platforms are advised to update their contact details in the intermediary database on the SEBI SI Portal. (SEBI Press Release Dated 21/03/2025)
G. Ministry of Corporate Affairs (MCA)
No Notification/ Circular during the week.
H. Insolvency and Bankruptcy Board of India (IBBI)
Disclosure of information relating to carry forward of losses in Information Memorandum (IM): The circular give directions that all Insolvency Professionals shall include a dedicated section in the IM explicitly detailing the carry forward of losses under the Income Tax Act, 1961. It shall prominently highlight the quantum of carry forward losses available to the corporate debtor, a breakdown of these losses under specific heads as per the Income Tax Act,196, the applicable time limits for utilizing these losses and If there are no carry forward of losses available to the Corporate debtor , the Information Memorandum should explicitly specify the fact. (IBBI Circular Dated 17/03/2025)
SC, Penalties imposed by NCDRC are regulatory & not constitute debt under IBC: Case of Saranga Anilkumar Aggarwal vs Bhavesh Dhirajlal Sheth, SC judgement Dated 4th March 2025. The apex court held that the penalties imposed by the National Consumer Disputes Redressal Commission (NCDRC) are regulatory in nature and do not constitute “debt” under the IBC. Thus, penalty imposed by NCDRC needs to be complied with. (SC Judgement Dated 04/03/2025)
SC, Quashes cheque bounce case against director in view of moratorium under IBC: Case of Vishnoo Mittal vs Shakti Trading Company, SC Judgement Dated 17th March 2025. After the company entered insolvency proceedings, a moratorium under Section 14 of IBC was imposed, preventing legal action against the corporate debtor. SC found that since the moratorium was in place before the cause of action arose (21st August 2018, when the 15-day payment period ended), Mittal, as a director, was not liable under Section 138. In this case, Mittal had no control over the company’s finances once the Interim Resolution Professional (IRP) took over. The Court ruled that continuing prosecution against him was unjustified and quashed HC Order. (SC Judgement Dated 17/03/2025)
NCLAT, Notice under Rule 7 of Insolvency Rules doesn’t amount to invoking of guarantee: Case of State Bank of India vs Deepak Kumar Singhania, NCLAT Delhi Judgement Dated 28th February 2025. The appellant tribunal held that issuance of notice under Rule 7 of the Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) Rules, doesn’t amount to invoking of guarantee. (NCLAT Judgement Dated 28/02/2025)
IBBI suspends Insolvency Professional for non-cooperation & regulatory breaches: The Disciplinary Committee (DC) finds Kairav Anil Trivedi Insolvency Professional (IP) lapses in cooperation, procedural compliance, and adherence to regulatory duties. It suspended his registration for a period of 2 years. (IBBI DC Order Dated 21/03/2025)
I. Reserve Bank of India (RBI)
Annual closing transactions of Central / State Governments, Special Measures for the Current Financial Year: All agency banks should keep all branches dealing with receipts and payments open for over the counter transactions related to Government transactions up to the normal working hours on 31st March 2025. Special clearing will be conducted for collection of Government cheques on 31st March 2025. The reporting window of 31st March 2025 transactions will be kept open till 1200 hours noon on 1st April 2025. (RBI Notification 124/2025 Dated 17/03/2025)
Asian Clearing Union (ACU) Mechanism, Indo-Maldives trade: As per existing regulations, trade transactions between ACU member countries are to be routed through the ACU mechanism or as per the directions issued by the RBI. In the wake of signing of Memorandum of Understanding (MoU) between RBI and Maldives Monetary Authority for establishing a framework to promote the use of local currencies, it has been decided that India’s bilateral trade transactions with Maldives may also be settled in INR and/or MVR in addition to the ACU mechanism, as hitherto. (RBI Notification 125/2025 Dated 17/03/2025)
Clarifications on RBI Financial Statements – Presentation and Disclosures Directions: The key clarifications include the classification of lien-marked deposits, which will remain under Schedule 3: Deposits with appropriate disclosures. Advances backed by Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) and similar schemes with explicit government guarantees must be disclosed under Schedule 9(B)(ii): Advances Covered by Bank/Government Guarantee. Additionally, disclosures on repo and reverse repo transactions should reflect both market value and face value terms. (RBI Notification 126/2025 Dated 20/03/2025)
Amortisation of additional pension liability in Regional Rural Banks (RRBs) with – Prudential Regulatory Treatment: The guidelines have been issued on amortising additional pension liability for RRBs implementing the RRB (Employee) Pension Scheme 2018 with effect from November 1, 1993. Given the financial impact, RRBs can now spread the increased liability over five years, starting from FY 2024-25, with a minimum of 20% expensed annually. The total liability must be recognised per applicable accounting standards, and banks must disclose the accounting policy in the Notes to Accounts, including unamortised expenditure and its impact on net profit. The unamortised pension expenditure will not be deducted from Tier 1 Capital. (RBI Notification 127/2025 Dated 20/03/2025)
Treatment of Right-of-Use (ROU) asset for regulatory capital calculations by NBFCs and HFCs: In terms of Indian Accounting Standard (Ind AS) 116 – Leases, most leases will be reflected on a lessee’s balance sheet as an obligation to make lease payments (a liability) and a related ROU asset (an asset). In this regard, it is clarified that regulated entities shall not be required to deduct an ROU asset (created in terms of Ind AS 116-Leases) from Owned Fund/ CET 1 capital/ Tier 1 capital (as the case may be), provided the underlying asset being taken on lease is a tangible asset. The ROU asset shall be risk-weighted at 100 per cent, consistent with the risk weight applied historically to the owned tangible assets. (RBI Notification 128/2025 Dated 21/03/2025)
RBI and Bank of Mauritius Sign Memorandum of Understanding (MoU) to Promote Use of Local Currencies for Bilateral Transactions: The MoU aims to promote the use of INR and MUR in bilateral trade. The MoU covers all current account transactions and permissible capital account transactions as agreed upon by both the countries. This framework would enable exporters and importers to invoice and pay in their respective domestic currencies, which in turn, would enable the development of a market in the INR-MUR pair. (RBI Press Release Dated 18/03/2025)
J. Miscellaneous
Revision in MSME Classification Limits: The notification increase the investment and turnover thresholds for micro, small, and medium enterprises. For micro-enterprises, the investment limit has been raised from Rs 1 crore to Rs 2.5 crore, and the turnover limit from Rs 5 crore to Rs 10 crore. For Small enterprises, investment threshold increases from Rs 10 crore to Rs 25 crore turnover limit from Rs 50 crore to Rs 100 crore. For medium enterprises, the investment limit increases from ₹50 crore to ₹125 crore, and the turnover limit from ₹250 crore to ₹500 crore. These changes are effective from 1st April 2025. (Ministry of MSME Notification Dated 21/03/2025)
SC, Interprets the word ‘May’ under Negotiable Instrument Act: Case of Muskan Enterprises vs State of Punjab, SC Judgement Dated 19th December 2024. Law is well-settled that use of the verbs ‘may’ and ‘shall’ in a statute is not a sure index for determining whether such statute is mandatory or directory in character. The legislative intent has to be gathered looking into other provisions of the enactment, which can throw light to guide one towards a proper determination. Although the legislature is often found to use ‘may’, ‘shall’ or ‘must’ interchangeably, ordinarily ‘may’, having an element of discretion, is directory whereas ‘shall’ and ‘must’ are used in the sense of a mandatory provision.
— It is also a well-accepted rule that interpretation must depend on the text and the context – the text representing the texture and the context giving it colour – and, that interpretation would be best, which makes the textual interpretation match the contextual. While wearing the glasses of the statute-maker, the enactment has to be looked at as a whole and it needs to be discovered what each section, each clause, each phrase and each word means and whether it is designed to fit into the scheme of the entire enactment. (SC Judgement Dated 24/12/2024)
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