During the week of 20–26 April 2026, multiple regulatory updates across tax, trade, and financial sectors introduced key clarifications and reforms. Courts reinforced that interest linked to business setup or project funds is capital in nature and not taxable as “income from other sources,” while share buyback does not constitute property acquisition. GST compliance saw extensions in return filing and operational improvements through offline tools, alongside rulings clarifying classification-based taxation and exclusion of human-led services from OIDAR. Customs measures focused on trade facilitation, including revised drawback rates, new import-export locations, and a 72-hour timeline for export incentive processing. DGFT, SEBI, MCA, IBBI, and Reserve Bank of India issued reforms impacting exporters, investors, corporate compliance, insolvency professionals, and digital payments. Notably, RBI tightened derivative norms and cancelled a payments bank license. Overall, the developments emphasize compliance discipline, operational efficiency, and regulatory oversight across sectors.
Notifications & Circulars issued during week (20th – 26th Apr 2026)
(Income Tax, GST, Central Excise, Custom Duty, DGFT, SEBI, MCA, IBBI, RBI)
(Click the Link for Notification/ Circular as issued)
A. Income Tax
HC, Interest on deposits linked to business setup was capital receipt and not taxable as Income From Other Sources: Case of VNG Automotive Private Limited vs ACIT, HC Delhi Judgement Dated 10th April 2026. HC held that interest earned on funds borrowed for setting up a business, and temporarily parked in deposits, is not taxable as ‘income from other sources’ but should be capitalized and set off against pre-operative expenses.
HC, Buyback not taxable as Property Acquisition due to Share Extinguishment: Case of PCIT vs Globe Capital markets Ltd, HC Delhi Judgement Dated 7th April 2026. HC held that buy-back of shares results in reduction of share capital and extinguishment of the shares. It considered that once the shares are bought back, they cease to exist and are not retained as assets. Therefore, the concept of ‘acquisition of property’ does not apply in such cases. It held that treating such transactions as generating deemed income is legally untenable.
HC, Interest not taxable due to Direct Nexus with Real Estate Project: Case of PCIT vs Brahma Center Development Pvt Ltd, HC Delhi Judgement Dated 23rd September 2025. HC held that interest earned on fixed deposits (FDRs) created from project-linked funds (foreign direct investment/loans) is a capital receipt, not taxable as ‘income from other sources’. The court found the interest had a direct, inseparable nexus to the real estate project, permitting it to be adjusted against project costs.
B. GST
Extension of due date of March GSTR-3B to 21st April 2026: The notification extends the due date for furnishing the return in FORM GSTR-3B for the month of March 2026. The registered persons required to furnish returns under section 39(1) read with rule 61(1)(i), can now file the return up to 21st April 2026. The extension applies to the relevant class of taxpayers obligated to file monthly returns under the provisions.
(Link: CGST Notification 01/2026 dated 21/04/2026)
GSTN Advisory on Introduction of IMS Offline Tool: The Invoice Management System (IMS) was introduced on the GST portal from the October 2024 tax period enabling the taxpayers to take actions on invoices uploaded by their suppliers through GSTR-1, GSTR-1A, or IFF, including accepting, rejecting, or keeping such records pending in the system. An IMS Offline Tool has now been introduced in the GST system. It is based on MS excel making it easy to use by the taxpayers and it enables them to undertake actions on both individual as well as bulk invoices in an efficient manner.
(Link: GSTN Advisory Dated 21/04/2026, Tutorial Attachment)
AAR, Biodegradable nature of bags is outside scope, GST rate depends on Classification: Case of Sunita Kohli, AAR Rajasthan Ruling Dated 27th March 2026. AAR clarified that determining if a product is ‘biodegradable’ falls outside its scope. The bags, if made from polymer or composite plastic are classified under chapter 39, and if made from paper are classified under chapter 48. This classification is independent of whether material is biodegradable or not. AAR held that if the bags are biodegradable, the benefit of entry 319 schedule I would be available and GST @ 5% will be applicable.
AAR, Online Coaching not OIDAR as Human Intervention Dominates Service: Case of Allen Career Institute Private Limited, AAR Rajasthan Ruling Dated 25th March 2026. AAR clarified that online coaching services provided by the party do not qualify as “Online Information and Database Access or Retrieval” (OIDAR) services because human intervention remains the dominant component. The sessions involve real-time faculty interaction and guidance.
C. Central Excise
No Notification/ Circular during the Week.
D. Custom Duty
Duty Drawback Rate revised for Gold jewellery & Silver Jewellery/Articles: The notification amends earlier notification 77/2023 dated 20th October 2023, revising the All Industry Rates (AIR) of duty drawback for specified gold and silver jewellery and articles. It substitutes the existing drawback rates for tariff items 711301, 711302, and 711401 under Chapter 71 with updated figures.
(Link: Customs Notification 41/2026 (NT) Dated 24/04/2026)
Hirnoda (Jaipur) notified for Import Export Handling: The notification amends earlier notification No. 12/97 dated 2nd April 1997, by adding a new customs location at Village Hirnoda, Jaipur, designated for the unloading of imported goods and loading of export goods, or specified classes. It also makes a technical correction by renumbering ‘Kishangarh’ from item (x) to (xi) in the table relating to Rajasthan.
(Link: Customs Notification 40/2026 (NT) Dated 23/04/2026)
De-notification of ICD at Coimbatore (Thudiyalur), Tamil Nadu: The notification amends earlier notification No. 12/97 dated 2nd April 1997, and removes a previously notified customs related entry point at Coimbatore (Thudiyalur), Tamil Nadu.
(Link: Customs Notification 39/2026 (NT) Dated 20/04/2026)
Instructions for time bound processing of RoDTEP and RoSCTL scrolls: The compliance audit highlighted significant lag in generating scrolls and disbursing benefits, causing hardship to exporters. The CBIC mandates strict adherence to a time bound framework, aligning with earlier Instructions, which requires duty drawback credits to be processed within three days. The directive of three-day timeline is also extended for the generation of scrolls under both RoDTEP and RoSCTL schemes.
(Link: Customs Instructions 05/2026 Dated 23/04/2026)
Addition of Five Food Import Ports under FSSAI Framework: The instruction modifies earlier instruction 31/2025 dated 3rd November 2025,, based on notifications dated 6th January 2026 and 9th April 2026 issued by the Food Safety and Standards Authority of India (FSSAI). The five additional Points of Entry for food imports have been notified, increasing the total number to 171. These include ICD Dhirpur (Haryana), Electronic SEZ Park Gandhinagar (Gujarat), ICD Naya Raipur (Chhattisgarh), ICD Dahej (Gujarat), and ICD Varnama (Gujarat).
(Link: Customs Instructions 04/2026 Dated 20/04/2026)
E. Directorate General of Foreign Trade (DGFT)
Instructions regarding Issuance/Extension of Validity of Post Export EPCG Scrips, Activation of Online Module: The Trade introduces an online module for issuance, re-issuance, and extension of validity of Post Export EPCG duty credit scrips. It addresses difficulties faced by exporters in utilizing manually issued scrips by enabling electronic generation and seamless data exchange with ICEGATE. It covers scenarios including pending authorization closure, non-transmission or expiry of generated scrips, and cases where manual scrips were issued or not generated.
(Link: DGFT Trade Notice 02/2026 Dated 21/04/2026)
Interest Subvention extended to Chapter 72 (Iron and Steel Products) Goods for MSEs: The Trade Notice extends interest subvention benefits under the Export Promotion Mission by to Chapter 72 (iron and steel products). These benefits are strictly limited to Micro and Small Enterprises (MSEs), while Medium Enterprises are expressly excluded from eligibility for these newly added tariff lines.
(Link: DGFT Trade Notice 01/2026 Dated 20/04/2026)
F. Securities and Exchange Board of India (SEBI)
Framework for net settlement of funds for transactions done by Foreign Portfolio Investors (FPIs) in Cash Market: As per existing provisions, FPIs were required to settle transactions on a gross basis due to restrictions on intra-day trading, leading to higher liquidity needs, increased funding costs, and operational inefficiencies. SEBI has now, allowed netting of funds for ‘outright transactions’, defined as either only purchase or only sale in a security within a settlement cycle. Transactions involving both buy and sell positions will continue to be settled on a gross basis. The circular clarifies that securities settlement remains gross between FPIs and custodians, and statutory levies like STT and stamp duty remain unchanged.
(Link: SEBI Circular Dated 24/04/2026)
Consultation paper on Review of variable net worth for stock brokers: The paper proposes a revision of the variable net worth framework for stock brokers to better align capital requirements with operational risks and protect investor interests. It proposes a revised calculation based on multiple parameters, including 10% of average client credit balances and additional requirements linked to number of active clients, both direct and through authorised persons. The feedback/ comments from stakeholders are invited.
(Link: SEBI Consultation Paper Dated 24/04/2026)
Consultation Paper on Handling of Client Unpaid Securities by Trading Members (TM)/ Clearing Members (CM): The existing provisions under the Master Circular mandate use of a ‘Client Unpaid Securities Pledgee Account’ (CUSPA) for pledging unpaid securities. The proposals include clarifying that the funding period may be shorter than five trading days, prescribing timelines for pledge release (same day or next day depending on payment timing), enabling partial release of pledged securities, and specifying auto-release timelines at the end of the sixth trading day. It also clarifies re-pledging procedures between TMs and CMs, permits extensions in exceptional cases. The feedback/ comments from stakeholders are invited.
(Link: SEBI Consultation Paper Dated 24/04/2026)
G. Ministry of Corporate Affairs (MCA)
Amendments to Companies Registration Offices and Fees Rules: The notification revise the fee structure for filing Form DIR-3 KYC Web under Rule 12A of the Companies (Appointment and Qualification of Directors) Rules 2014. The amendment introduces a tiered fee system: There is no fee is payable if the form is filed within the prescribed timeline, while a fee of Rs 5,000 applies for delayed filings or reactivation of Director Identification Numbers (DIN). Additionally, a fee of Rs 500 is levied for each subsequent filing made to update or change KYC details.
(Link: MCA Notification Dated 21/04/2026)
FAQs on Companies Compliance Facilitation Scheme, 2026 (CCFS-2026): MCA has issued FAQs on CCFS- 2026. The scheme enables companies to file overdue annual returns and financial statements by paying reduced additional fees. It also facilitates companies to opt for dormant status or proceed for strike off, wherever applicable.
(Link: MCA FAQs Dated 22/04/2026)
H. Insolvency and Bankruptcy Board of India (IBBI)
IBBI, Insolvency Professional (IP) Mr. Vishal Ghisulal suspension for two years due to failure to verify Wilful Defaulter Status: The Committee found that a revised resolution plan submitted after the applicant was declared a wilful defaulter, constituted a fresh plan, requiring eligibility assessment at that stage. IP failed to verify and disclose this disqualification, leading to wrongful consideration and approval of an ineligible plan, causing delays and prejudice to the insolvency process. DC suspends the registration of IP for two years.
(Link: IBBI DC Order Dated 22/04/26)
I. Reserve Bank of India (RBI)
INR Derivative deals with Related Parties restricted for Authorised Dealers: The circular restricts Authorised Dealers from undertaking foreign exchange derivative contracts involving INR with related parties, except in limited cases. The exceptions include cancellation or rollover of existing contracts and back-to-back transactions with non-related non-resident users. The term ‘related parties’ will follow definitions under Ind AS 24, IAS 24, or equivalent standards.
(Link: RBI Circular 14/2026 Dated 20/04/2026)
RBI issued Digital Payments, E-mandate Framework: The Digital Payments E-mandate Framework 2026, consolidates earlier circulars and introducing minor changes. The directions apply to all payment system providers and participants handling recurring transactions through cards, UPI, and PPIs, including domestic and cross-border payments. The framework mandates one time registration of e-mandates with additional factor authentication (AFA), along with facilities for modification or withdrawal. It requires pre-transaction notifications at least 24 hours before debit and post-transaction alerts with detailed information. Recurring transactions up to Rs 15,000 can be processed without AFA, while specific payments like insurance and mutual funds have a higher limit of Rs 1 lakh.
(Link: RBI Directions 396/2026 Dated 21/04/2026)
Draft Prepaid Payment Instruments (PPI) Master Directions issued to Strengthen Digital Payment Security Framework: The draft updated rules are applicable to all PPI issuers and system participants under the Payment and Settlement Systems Act. It introduces revised definitions, categories of PPIs (general and special purpose), and detailed operational guidelines on issuance, loading, interoperability, and customer protection. The framework prescribes stricter capital requirements, governance norms, and KYC compliance, along with limits on balances, transactions, and usage across different PPI types. It also mandates escrow account management, dispute resolution mechanisms, and reporting obligations. The feedback/ comments from stakeholders are invited.
(Link: RBI Press Release Dated 22/04/2026, Draft Master Directions)
RBI cancels the Licence of Paytm Payments Bank Limited: RBI has cancelled the banking licence of Paytm Payments Bank Limited on April 24, 2026, under Section 22(4) of the Banking Regulation Act. The bank is prohibited from carrying out banking activities and the RBI will initiate winding-up proceedings before the High Court. The action was taken on multiple grounds, including that the bank’s affairs were conducted in a manner detrimental to depositors, its management was prejudicial to public interest, and it failed to comply with licensing conditions. Separately, One 97 Communications Limited clarified that it has no financial exposure or operational dependency on the bank, and its services continue unaffected.
(Link: RBI Press Release Dated 24/04/2026)
J. Miscellaneous
SC, GDCL not authorised to sell asset of JUL without ownership rights, directs payment of dues of workers: Case of Bhartiya Mazdoor Sangh vs State of UP, SC Judgement Dated 15th April 2026. The apex court affirmed that once a winding-up recommendation was made, the operating agency (GDCL) was merely a caretaker, not an owner, and had no authority to sell company assets without explicit court approval. The court set aside unauthorized transactions and directed verification and settlement of dues of the workers.
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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)
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