During the week of 22–28 December 2025, several significant judicial rulings, regulatory circulars, and policy updates were issued across Income Tax, GST, Customs, SEBI, IBBI, and RBI frameworks. Key Income Tax developments include Supreme Court rulings clarifying that deductions under section 36(1)(viii) are activity-specific and that non-compete fees are revenue in nature, along with High Court decisions on transfer pricing, accommodation entries, and allowability of licence and goodwill payments. In GST, important clarifications emerged on the scope of summons under section 70, illegality of negative blocking of ITC, GST exemptions for tree plantation as charitable activity, and withdrawal of staggered GST appeal filing. Customs updates saw fresh and extended anti-dumping duties and a ruling rejecting justification for undeclared gold imports. SEBI simplified demat and duplicate certificate procedures and introduced the Securities Markets Code. IBBI amendments tightened disclosure norms in resolution plans, while RBI deferred Phase 2 of continuous cheque settlement. Overall, the week focused on compliance clarity, procedural fairness, and regulatory rationalisation.
Notifications & Circulars issued during week (22nd– 28th Dec 2025)
(Income Tax, GST, Central Excise, Custom Duty, DGFT, SEBI, MCA, IBBI, RBI)
(Click the Link for Notification/ Circular as issued)
A. Income Tax
SC, Deduction under section 36(1)(viii) Limited to Profits from Long-Term Finance: Case of National Cooperative Development Corporation vs ACIT, SC Judgement Dated 10th December 2025.The apex court held that deduction under section 36(1)(viii) of the Income Tax Act is not general exemption. Such deduction is specific incentive attached strictly to the profits arising from a defined activity namely, the provision of long-term finance.
SC, Non-Compete Fee paid to protect business is Revenue Expenditure: Case of Sharp Business System vs CIT, SC Judgement Dated 19th December 2025. The apex court held that payments made as non-compete fees are typically revenue expenditures deductible under Section 37(1) of the Income Tax Act. The court held that such fees, aimed at protecting or enhancing profitability by warding off competition, facilitate the conduct of existing business more efficiently and do not create a capital asset.
HC, Low Tax effect circular cannot shield Accommodation Entry Cases: Case of PCIT vs Agroha Fincap Ltd, HC Delhi Judgement Dated 23rd December 2025. HC held that Revenue appeal was maintainable despite low tax effect, as it fell within the CBDT exception relating to accommodation entries.
HC, Transfer Pricing, Forex Fluctuation is Operating Income/Cost in Cost-Plus Transactions: Case of PCIT vs Steria India Pvt Ltd, HC Delhi Judgement Dated 12th December 2025. HC held that Forex fluctuations are operating Income or loss. Such fluctuations are cost in cost-plus transactions, if so provided in contractual arrangements.
HC, Licence Fee & Goodwill Payment allowed as Business Expense since not Prohibited by Law: Case of PCIT vs Remfry & Sagar, HC Delhi Judgement Dated 5th December 2025. The core issue is whether the license fees paid by the law firm to a related private limited company Remfry & Sagar Consultants Private Limited for using the ‘Remfry & Sagar’ name and goodwill could be claimed as a business expense, or if it violated Bar Council of India (BCI) rules against sharing professional fees with non-lawyers. The court held that the license fee paid by the firm for the use of its name and goodwill is a legitimate business expenditure deductible under Section 37 of the Income Tax Act.
B. GST
GSTAT Benches allotted to ensure Nationwide GST Appellate Functioning: The Government of India, has approved the allotment of benches to appointed members of the Goods and Services Tax Appellate Tribunal (GSTAT). The order specifies postings for three categories, i.e. Technical Members (Centre), Technical Members (State), and Judicial Members, across multiple locations nationwide, including metropolitan centres and regional benches. This administrative action formalises bench composition and postings, enabling GSTAT to function effectively and provide structured appellate adjudication under the GST regime across India.
(Link: FinMin Office Order 03/2025 Dated 26/12/2025)
Staggered GST Appeal filing withdrawn after Portal Review: GSTAT has revoked its earlier order dated 24th September 2025 that had mandated staggered filing of appeals under Section 112 of the CGST Act. The earlier arrangement required appeals arising from orders under Sections 107 and 108 to be filed in phases, based on portal capacity constraints. Upon reassessing the technical readiness and capabilities of the GSTAT appeal portal, it has been decided to discontinue the staggered filing mechanism.
(Link: GSTAT Order 315/2025 Dated 26/12/2025)
AAR, Plantation and Tree Maintenance treated as Charitable Activity under GST Law: Case of Sadbhavna Seva Foundation, AAR Gujarat Ruling dated 23rd December 2025. AAR ruled that the activities of plantation and post-plantation maintenance of trees, including incidental and ancillary works necessary for survival of trees, squarely fall within the ambit of charitable activities. GST exemption is available to the applicant under Entry No. 1 of Notification No. 12/2017 (Rate) for plantation and maintenance of trees undertaken as part of environmental preservation.
AAR, GST Exemption allowed as Tree Plantation held as Environmental Preservation: Case of Manav Seva Charitable Trust, AAR Gujarat Ruling dated 23rd December 2025. AAR ruled that serial number 1 of the notification 12/2017 (Rate) applies as the activities fall under the definition of “charitable activities” related to the preservation of the environment. The applicant is eligible for 100% exemption (Nil rate) from GST under the aforementioned entry.
AAR, ITC denied because Warehouse Treated as Civil Structure after Law Amendment: Case of Premlata Rakesh Jain, AAR Gujarat Ruling dated 23rd December 2025. AAR ruled that following the retrospective amendment by the Finance Act, 2025 (effective 1st October 2025), buildings and civil structures are excluded from ‘plant and machinery’, making ITC on their construction ineligible under Section 17(5) of CGST.
HC, Summons under section 70 of CGST Act cannot be considered as Initiation of Proceedings: Case of Md Aniqul Islam vs Directorate of GST Intelligence, HC Delhi Judgement Dated 16th December 2025. HC held that the power under Section 70 is exercised only for the purpose of inquiry, namely, to summon persons, record statements, and collect documents. Issuance of summons does not amount to initiation of proceedings under Sections 73 or 74 of the CGST Act. Proceedings commence only when a formal determination of tax liability is proposed.
HC, Challenge to GST Deadline Extension notifications deferred due to case pending in SC: Case of Neelgiri Machinery vs Commissioner GST, HC Delhi Judgement Dated 10th December 2025. The present petition also challenges the vires of the Notification 9/2023- Central Tax dated 31st March, 2023 Notification 56/2023- Central Tax dated 28th December, 2023 Notification 56/2023-State Tax dated 11th July, 2024. The issue concerning the validity of the impugned notifications is presently under consideration before the Supreme Court. The judgements/ orders of this court are subject to further orders of the Supreme Court in respect of the validity impugned notifications.
HC, Negative Blocking of ECL is held beyond scope of GST Rule 86A: Case of ISKCON Steel Traders vs Union of India, HC P&H Judgement Dated 19th November 2025. HC ruled that creating a ‘negative balance’ in a taxpayer Electronic Credit Ledger (ECL) under Rule 86A of the CGST Rules is illegal, as the rule only allows blocking of currently available Input Tax Credit (ITC) and not creating an artificial negative balance.
HC, Negative Blocking of GST Credit beyond ledger balance is Illegal under GST Rule 86A: Case of Abhishek Goyal vs Union of India, HC P&H Judgement Dated 21st November 2025. The core issue was the tax authorities action of debiting the petitioner ECL (Electronic Credit Ledger) by creating negative balances. The court ruled that such negative blocking of Input Tax Credit is illegal and contrary to the GST law.
C. Central Excise
No Notification/ Circular during the week.
D. Custom Duty
Anti- Dumping Duty on ‘1,1,1,2 – Tetrafluoroethane or R- 134a’ originating in or exported from China: Anti-dumping Duty has been imposed on imports of ‘1,1,1,2- Tetrafluoroethane or R-134a’ originating in or exported from China, and imported into India. It shall be effective for a period of five years.
(Link: Customs Notification 36/2025 (ADD) Dated 24/12/2025)
Anti- Dumping Duty on Calcium Carbonate Filler Masterbatch originating in or exported from Vietnam: Anti-dumping Duty has been imposed on imports of Calcium Carbonate Filler Masterbatch originating in or exported from Vietnam, and imported into India. It shall be effective for a period of five years.
(Link: Customs Notification 37/2025 (ADD) Dated 24/12/2025)
Anti- Dumping Duty extended as Sunset Review continues on ‘2-Ethyl Hexanol’ Import: The notification 17/2021 (ADD) dated 26th March, 2021 has been amended, to extend the applicability of the existing anti-dumping duty on imports of ‘2- Ethyl Hexanol’ pending completion of a sunset review investigation. The subject goods, classifiable under tariff item 2905 16 20, originate in or are exported from the European Union, Indonesia, Korea RP, Malaysia, Taiwan, and the United States of America. The duty shall continue to remain in force up to 26th June 2026.
(Link: Customs Notification 38/2025 (ADD) Dated 25/12/2025)
Anti- Dumping Duty on PET Resin extended pending Review: The notification 18/2021 (ADD) dated 27th March 2021, has been amended to extend the validity of the existing anti-dumping duty on imports of Polyethylene Terephthalate (PET) resin with intrinsic viscosity of 0.72 dl/g or higher, originating in or exported from China, pending completion of sunset review investigations. The duty will continue to remain in force up to 26th June 2026.
(Link: Customs Notification 39/2025 (ADD) Dated 26/12/2025)
HC, Wedding visits do not justify bringing 500 Grams of Undeclared Gold: Case of Mohit Mann vs Union of India, HC Delhi Judgement Dated 11th December 2025. The case involves a US-based Indian origin citizen, challenging the detention of his undeclared gold (around 500 grams) by Customs officials at Delhi Airport. The court held that even wedding visits do not justify bringing 500 Grams of undeclared gold.
E. Directorate General of Foreign Trade (DGFT)
No Notification/ Circular during the week.
F. Securities and Exchange Board of India (SEBI)
Standardised Affidavit and reduced documentation for Duplicate Certificates: The circular increases the threshold for simplified documentation from Rs 5 lakh to Rs 10 lakh, thereby expanding the scope of cases eligible for a streamlined process. It introduce a standardised Affidavit-cum-Indemnity format, rationalised documentation requirements for securities valued above Rs 10 lakh, and dispensed with notarisation for cases involving securities up to Rs 10,000, where only an undertaking on plain paper is required. For higher-value cases exceeding Rs 10 lakh, additional safeguards such as FIR or equivalent legal documents and newspaper publication requirements were retained.
(Link: SEBI Circular Dated 24/12/2025)
Enhancing the Facility for Basic Services Demat Account (BSDA): SEBI has introduced further reforms to enhance the Basic Services Demat Account (BSDA) framework with the objective of easing investments for investors and simplifying compliance for Depository Participants (DPs). It decided to exclude Zero Coupon Zero Principal (ZCZP) bonds and delisted securities from the valuation threshold used to determine BSDA eligibility, thereby preventing such instruments from disqualifying eligible investors. It also clarifies valuation norms for illiquid and unlisted securities and mandates that DPs reassess BSDA eligibility quarterly. The demat accounts eligible for BSDA must be opened or converted into BSDA by default unless investors provide explicit, authenticated consent to maintain a regular demat account.
(Link: SEBI Circular Dated 24/12/2025)
Securities Markets Code introduced in Lok Sabha: The Securities Markets Code 2025, proposes a comprehensive overhaul of India’s securities law framework by repealing and consolidating three legacy statutes governing securities regulation, market oversight, and depositories. The Bill seeks to modernise regulation in line with evolving market practices, technological advancements, and the growing scale of capital markets. A key reform is the decriminalisation of minor and procedural defaults, replacing criminal sanctions with proportionate civil penalties linked to unlawful gains or investor losses, while retaining strict punishment for market abuse. The Bill enhances investor protection through mandatory grievance redressal mechanisms and an Ombudsperson framework, and facilitates innovation via a regulatory sandbox.
(Link: Securities Market Code as introduced in Lok Sabha Dated 15/12/2025)
G. Ministry of Corporate Affairs (MCA)
No Notification/ Circular during the week.
H. Insolvency and Bankruptcy Board of India (IBBI)
Amendments to IBBI Insolvency Resolution Process for Corporate Persons (CIRP) Regulations: The amendment inserts a new Regulation 38 (3A), prescribing additional mandatory disclosures in every resolution plan. A resolution applicant must provide a detailed statement of beneficial ownership, disclosing all natural persons who ultimately own or control the applicant, along with the shareholding structure and jurisdiction of each intermediate entity, in a format to be specified by the Board through circulars. The resolution plan must also include an affidavit confirming whether the applicant is eligible or not eligible for the benefit of Section 32A of the Code.
(Link: IBBI Notification dared 22/12/2025)
HC, Pre-Resolution GST Liabilities set aside after final NCLT Approval Date: Case of Patanjali Foods Limited, vs AC CGST, HC Delhi Judgement Dated 11th December 2025. HC held that for the purposes of Section 31(1) of the IBC, the effective date of approval of the Resolution Plan is 4 September 2019, when the NCLT granted final approval, and not any earlier or later date reflected in website extracts or interim orders. It quashed all GST demands relating to periods prior, reiterating that a successful resolution applicant takes over the corporate debtor on a “clean slate”.
HC, GST demands for Pre-Insolvency Period barred after Resolution Plan Approval: Case of Era Infra Engineering Limited vs Joint Commissioner CGST, HC Delhi Judgement Dated 15th December 2025. HC held that the GST department cannot raise new demands for pre-insolvency (IBC) periods after a resolution plan is approved, because all statutory dues are extinguished by the approved plan, preventing further enforcement against the company. The court emphasised that once it participates in insolvency, and claims are accounted for in the resolution plan, those matters are concluded.
NCLAT, Section 66 of IBC ingredients proved, as Intention to Defraud Creditors Established: Case of Rana Sagar vs Bimal Agarwal, NCLAT Delhi Judgement Dated 11th December 2025. The appellate tribunal held that intention to defraud creditors of Corporate Debtor was based on documentary evidence, accordingly, all the ingredients under section 66 of IBC are attracted. Section 66 deals with fraudulent or wrongful trading, empowering the Adjudicating Authority (NCLT) to hold individuals personally liable for contributions to a company’s assets if they knowingly carried on business with intent to defraud creditors or failed due diligence, causing loss to creditors during CIRP or liquidation.
NCLAT, Loan without written agreement qualifies as Financial Debt due to Time Value of Money: Case of Sinki Commodities Pvt Ltd vs ABC Floors Pvt Ltd, NCLAT Delhi Judgement Dated 14th October 2025.The appellate tribunal held that the non-compliance with the RBI guidelines by an NBFC cannot defeat the classification of a loan as a financial debt under section 7 of the IBC. Even if there is no financial contract exists between the parties, court is not precluded from looking into the real nature of transaction which can be proved by the Financial Creditor from the materials brought on the record.
NCLAT, Form-B under CIRP regulations permits set-off of mutual dealing between Corporate Debtor and Creditor: Case of CNH Industries vs SREI Equipment Finance Limited, NCLAT Delhi Judgement Dated 14th October 2025.The appellate tribunal held that Form-B under CIRP Regulations, contemplates specifically permits set-off mutual credit, mutual debts, or mutual dealings between the Corporate Debtor and Creditor.
I. Reserve Bank of India (RBI)
Continuous Cheque Clearing and Settlement Phase 2 is Deferred: The circular related to changes to the rollout of Continuous Clearing and Settlement on Realisation (CCSR) in the Cheque Truncation System (CTS). While Phase 1 was implemented on 4th October 2025, Phase 2 has been postponed until further notice to provide banks additional time to streamline operational processes. It has also revised the CTS timelines by rescheduling the presentation session to 9:00 AM–3:00 PM and the confirmation session to 9:00 AM–7:00 PM.
(Link: RBI Circular 156/2025 Dated 24/12/2025)
J. Miscellaneous
SC, Execution of Specific Performance Decree restored despite delay in Deposit: Case of Dr Amit Arya vs Kamlesh Kumari, SC Judgement Dated 19th December 2025. The apex court ruled that a decree for specific performance is not rendered inexecutable merely due to the decree-holder’s delay in depositing the balance consideration after a successful appeal. Applying the doctrine of merger, it held that time limits in a Trial Court’s decree do not survive once it merges with an Appellate Court’s decree that is silent on time. The court restored the execution, noting that delay alone, without a positive refusal to perform, cannot defeat the equitable remedy of specific performance.
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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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