The week of July 28 to August 3, 2025, saw regulatory updates from various Indian authorities. The CBDT amended Income Tax Rule 21AK to include over-the-counter derivatives and Foreign Portfolio Investors in IFSCs, while also extending the processing deadline for certain electronic returns. Supreme Court rulings affirmed that Hyatt International has a taxable Permanent Establishment in India and that a separate demand notice is not required before SEBI-mandated recovery. The GST and Customs departments issued several rulings and notifications, including new tariff values for commodities and clarification on what constitutes a “place of business” under GST. SEBI introduced a mandatory digital accessibility policy for its regulated entities, extended timelines for several circulars, and proposed amendments to IPO and Strategic Investor norms. The RBI issued new investment directions for regulated entities in AIFs and presented a draft framework for co-operative banks. Other updates include an MCA press release on a mandatory filing template and NCLAT judgments on insolvency and property rights.
A. Income Tax
CBDT amends Income Tax Rule 21AK expanding the scope of financial instruments and entities: The sub-rule 21AK(1)(b) now includes ‘over-the-counter derivatives’ along with ‘offshore derivative instruments, and extends applicability to Foreign Portfolio Investors (FPIs) operating as units within International Financial Services Centres (IFSCs). Sub-rule 21AK(2) has also been updated to recognize FPIs in addition to offshore banking units.
(Link: Income Tax Notification 126/2025 Dated 28/07/2025)
Exemptions to Haryana State Pollution Control Board: Haryana State Pollution Control Board, a Board constituted by the State Government of Haryana under the Water (Prevention and Control of Pollution) Act, 1974, has been notified under section 10(46) for exemption on its income arising from Grants received from government, Consent fees, Analysis or survey fees, Authorisation fees, Cess, interest on bank deposits and other specified incomes.
(Link: Income Tax Notification 127/2025 Dated 01/08/2025)
Exemptions to All India Council for Technical Education, New Delhi: All India Council for Technical Education, New Delhi, a Council established by the Central Government, has been notified under section 10(46) for exemption on its income arising from Grants received from government, Regulatory charges, RTI and Examination fees, CMAT/GPAT fees, interest on bank deposits and miscellaneous receipts.
(Link: Income Tax Notification 128/2025 Dated 01/08/2025)
Exemptions to West Bengal Municipal Development Fund Trust: West Bengal Municipal Development Fund Trust, a Trust constituted by the State Government of West Bengal, has been notified under section 10(46) for exemption on its income arising from interest on bank deposits and interest on term loans to Urban Local Bodies.
(Link:Income Tax Notification 129/2025 Dated 01/08/2025)
Relaxation of time limit for processing of returns of income filed electronically which were incorrectly invalidated by CPC: CBDT has granted a time relaxation for processing electronically filed income tax returns (ITRs) that were erroneously marked invalid by the Centralized Processing Centre (CPC), Bengaluru. These errors occurred due to technical issues and affected returns from various assessment years, including AY 2023–24, which were due for processing by 31st December 2024. These returns will now be validated and processed under Section 143(1), and the intimation will be issued to taxpayers by March 2026. Additionally, all relevant consequences under the Income-tax Act, including the issuance of refunds with applicable interest, will follow.
(Link: Income Tax Circular 10/2025 Dated 28/07/2025)
SC, Hyatt international has PE in India hence income attributable is taxable in India: Case of Hyatt International Southwest Asia Ltd vs Addl Director of Income tax, SC Judgement dated 24th July 2025. The apex court has held that Hyatt International has a fixed place Permanent Establishment in India within the meaning of Article 5(1) of the DTAA, and hence income received under Strategic Oversight Services Agreement (SOSA) attributable to such PE and is taxable in India.
B. GST
AAR, Temporary storage of spare parts qualifies as Place of Business under GST: Case of Thermo Fisher Scientific India Pvt Ltd, AAR Odisha Ruling Dated 11th July 2025. AAR ruled that the repair and maintenance services provided by the Head Office in Maharashtra through Field Service Engineers for Maintenance Contracts with customers in Odisha constitute a place of business in Odisha. The temporary storage of spare parts and tool kit at applicant’s location constitutes a place of business. The applicant’s location would constitute “fixed establishment”.
AAR, OSMCL not eligible for GST exemption on services: Case of Odisha State Medical Corporation Limited, AAR Odisha Ruling Dated 10th July 2025. AAR has determined that the Odisha State Medical Corporation Limited (OSMCL) is not eligible for a GST exemption on its services to the state government. It states that while OSMCL qualifies as a ‘Government Entity’ in terms of explanation in Para 2(zfa) of Notification 12/2017 (Rate) dated 28th June 2017, the services it provides are not ‘pure services’, and therefore, do not meet the criteria for exemption under Notification 12/2017 (Rate).
AAR, No GST on Bauxite loading and transport services provided to SEZ unit: Case of Advait Mining and Constructions LLP, AAR Odisha Ruling Dated 10th July 2025. The supply of services of loading of bauxite at mines, transporting it from mines to railway siding, stacking at railway siding , Rack loading and other miscellaneous services provided to SEZ unit by the applicant will be treated as Zero Rated Supply as per as per Section 16(1) (b) of IGST Act. The supplies of such services shall be inter-state supply.
AAR, No GST exemption for pre-packaged branded Rice and Wheat Flour over 25 Kg: Case of Eastern Zone Industries Pvt Ltd, AAR Odisha Ruling Dated 24th June 2025. AAR ruled that GST is applicable on the commodity (Rice, Wheat flour (atta) ‘prepackaged and labelled’ more than 25 kg (say 26 kg, 30 kg & 50kg pack) bearing a registered Brand Name, as per tax rate notification 01/2017 (Rate) dated 28th June 2017 as amended.
SC, Refund based on modified formula of Inverted Duty Structure Refund upheld: Case of Union of India vs Tirth Agro Technology Pvt Ltd, SC Judgement Dated 18th July 2025. The apex court upheld the Gujarat High Court decision to grant a refund based on the retrospectively applied amended formula of Rule 89(5) of the CGST Rules. The defendant had sought a refund of differential Input Tax Credit (ITC) under inverted duty structure.
SC, GST Exemption on license fees collected by Electricity Regulatory Commission upheld: Case of Addl Director DGGI vs CERC, SC Judgement Dated 21st July 2025. The apex court held that GST is not leviable on license fees collected by Electricity Regulatory Commissions: Supreme Court of India. The Delhi High Court had previously ruled in favour of the Commissions, stating that granting a license is a statutory obligation, not an activity in the course of business. The court also held that these Commissions perform quasi-judicial functions with the characteristics of a tribunal, and as such, their services are excluded from the definition of “supply” under Schedule-III of the CGST Act. SC found no reason to interfere with this decision, agreeing that the regulatory functions do not fall within the ambit of business and the license fees do not constitute consideration.
SC, Service tax exemption available to stem cell banking services: Case of Stemcyte India Therapeutics Pvt Ltd vs Commissioner of CE & ST, SC Judgement Dated 14th July 2025. The apex court held that stem cell banking services constitutes a healthcare services as defined under the exemption notification dated 20th June 2012 and hence exempted from payment of service tax. Accordingly, appeal allowed and order set aside.
HC, Secondment of expatriate employees not taxable as manpower supply: Case of Alstom Transport India Ltd vs Comm of Commercial taxes, South Zone, HC Karnataka Judgement Dated 15th July 2025. It has been held that the secondment of expats does not constitute import of manpower supply service. The services rendered by employees to their employer are not liable to GST under Entry 1 of Schedule III of the CGST Act. The reimbursements are not consideration, and in the absence of invoice and with full ITC, no tax is payable under the CBIC Circular.
HC, Retired Partner liable for Fir’s GST dues in absence of intimation to Commissioner: Case of Harvinder Singh vs State of Punjab, HC P&H Judgement Dated 18th July 2025. It has been held that Section 90 of CGST Act provides that the liability of a retired partner continues unless intimation of retirement is given to the Commissioner within one month of the date of retirement. The petitioner failed to provide such intimation in a timely manner, and belated communication cannot nullify the liability that arose earlier. The petitioner’s claim that he lacked access to the GST portal or that responsibility lay with existing partners is not a valid defence. The Department was justified in treating him as liable for dues of the Firm.
HC, GST Department cannot search Advocate unless directly involved: Case of Puneet Batra vs Union of India, HC Delhi Judgement Dated 28th July 2025. GST Department cannot harass Advocate with search, unless personally involved in client’s illegality. It has been held that any search and seizure conducted at an advocate’s office must be justified by prima facie material showing the advocate’s involvement in alleged illegality, and attorney-client privilege must be respected. The Court held the GST Department not to open or access the seized CPU without the Petitioner or his representative present.
C. Central Excise
No Notifications/ Circular during the week.
D. Custom Duty
Fixation of Tariff Value of Edible Oils, Brass Scrap, Areca Nut, Gold and Silver: CBDT notified the Tariff Values of Edible Oils, Brass Scrap, Areca Nut, Gold and Silver, which shall come into force w.e.f. 1st August 2025. The tariff value for crude palm oil is set at USD 1012 per metric ton, while gold and silver have tariff values of USD 1063 per 10 grams and USD 1224 per kilogram, respectively. The tariff value for areca nuts is fixed at USD 6970 per metric ton.
(Link: Custom Notification 49/2025 (NT) Dated 31/07/2025)
CBIC Appoints Common Authority for Customs Notices: The Principal Commissioner / Commissioner of Customs, Import, ICD, Tughlakabad, has been designated as a common adjudicating authority for multiple show cause notices issued to M/s. Angus Dundee India Private Ltd. It aims to streamline the adjudication process for various notices concerning the Delhi based company.
(Link: Custom Notification 48/2025 (NT) Dated 29/07/2025)
Customs Settlement Commission Chairman, Vice Chairman and Members cease to hold office: The notification specifies the date as 1st August 2025, on which the Chairman, Vice- Chairman, or Member of the Commission will cease to hold office. It formalizes the end of tenure for these officials, in alignment with the third proviso of rule 7 of the Customs and Central Excise Settlement Commission (Recruitment and Conditions of Service of Chairman, Vice- Chairmen and Members) Rules, 2015.
(Link: Custom Notification 02/2025 Dated 01/08/2025)
Customs and Central Excise Settlement Commission Rules: The notification amends Customs and Central Excise Settlement Commission (Recruitment and Conditions of Service of Chairman, Vice-Chairmen and Members) Rules, 2015, It stipulates that any individual holding the position of Chairman, Vice- Chairman, or Member of the commission immediately before a date to be specified by the Central Government will be removed from their office on that date. These individuals will be eligible to receive compensation for the premature termination of their term, with the amount not to exceed three months’ pay and allowances.
(Link:Custom Notification Dated 31/07/2025)
E. Directorate General of Foreign Trade (DGFT)
Clarification regarding Transaction Certificate from NAB for Export of Organic Textiles: It clarifies that a Transaction Certificate (TC) from a National Accreditation Board (NAB), an accredited body is no longer mandatory at the time of export for organic textile products. Stakeholders including AEPC and TEXPROCIL confirmed that global certifications like GOTS and Textile Exchange issue TCs only after the export process is complete, based on post-shipment documents such as the Shipping Bill and Bill of Lading. Consequently, the DGFT has deleted Para 4 of the earlier circular, thereby removing the requirement for submitting the TC at the point of export.
(Link: DGFT Circular 03/2025 Dated 31/07/2025)
Fixation of new SIONs for Chemical Exports: The public notice establishes three new Standard Input Output Norms (SIONs) i.e. A-3690, A-3691, and A-3692 under the ‘Chemical and Allied Product’ category (Product Code ‘A’). SION A-3690 sets norms for Betamethasone Valerate EP/BP/USP, allowing 0.915 kg of Betamethasone per 1 kg of the export product. SION A-3691 details norms for Ferrous Fumarate USP/BP/FCC/IP, permitting 0.725 kg of Fumaric Acid 99% per 1 kg of the export product. Lastly, SION A-3692, also for Ferrous Fumarate USP/BP/FCC/IP, allows 0.65 kg of Maleic Anhydride per 1 kg of the export product.
(Link: DGFT Public Notice 16/2025 Dated 29/07/2025)
Amendment to HBP to expand export authorisation for Chemicals: The public notice, amend Para 10.16 of the Handbook of Procedures (HBP) 2023. It expands the scope of the General Authorisation for Export of Chemicals & Related Equipment (GAEC) policy, now allows exporters to apply for GAEC for SCOMET items and chemicals listed in Appendix 10(N) to a wider range of countries. To support their application, Indian exporters may also submit their Authorised Economic Operator (AEO) or Status Holder Certificate.
(Link: DGFT Public Notice 17/2025 Dated 30/07/2025)
Allocation of quantity 5,841 MT of Sugar by EU for export from India under TRQ: The quantity of 5,841 MT Sugar to be exported to European Union (EU) from India under Tarif Rate Quota (TRQ) for the year 2025-26 (Oct 2025 to Sep 2026) has been notified.
(Link: DGFT Public Notice 18/2025 Dated 01/08/2025)
F. Securities and Exchange Board of India (SEBI)
Mandatory Digital Accessibility for persons with disabilities: The circular mandates that all its regulated entities (REs), including stock exchanges, depositories, and various intermediaries, ensure their digital platforms are accessible to persons with disabilities. This directive, which comes in response to a Supreme Court judgment, aims to uphold the rights of people with disabilities to access the securities market. To ensure compliance, REs must submit a list of their digital platforms, appoint an IAAP certified accessibility professional as an auditor within 45 days, and conduct a full accessibility audit within three months. Any identified issues must be remediated within six months.
(Link: SEBI Circular Dated 31/07/2025)
Extension of timeline for implementation of Phase II & III of Nomination Circular: The implementation timelines of its Nomination Circular has been amended and the new deadlines are 8th August 2025 for Phase II and 15th December 2025 for Phase III. The extensions were granted in response to representations from depositories (CDSL, NSDL), depository participants, and industry bodies like ANMI and CPAI, who cited operational difficulties and the need for additional time to complete necessary changes.
(Link: SEBI Circular Dated 30/07/2025)
Extension of timeline for implementation of Algo Trading Rule: The implementation timeline for its earlier circular on ‘Safer participation of retail investors in Algorithmic trading’ has been extended. In view of representations from stock brokers and other market participants, it has decided to postpone the effective date to 1st October 2025 to ensure a smooth implementation process without causing disruption to market players and investors.
(Link: SEBI Circular Dated 29/07/2025)
Operational Efficiency in Monitoring of Non-Resident Indians (NRI) Position Limits in Exchange Traded Derivatives Contracts: NRIs, at present, were required to inform exchanges about their clearing members, and exchanges would assign a unique Custodial Participant (CP) Code for monitoring. Now, exchanges and clearing corporations will monitor NRI position limits, without a CP code in the same way they monitor client-level position limits, which remain consistent with specified limits. Stock exchanges and clearing corporations must update their rules and operational procedures within 30 days and allow existing NRI clients to exit the CP code system via email request within 90 days.
(Link: SEBI Circular Dated 29/07/2025)
Monitoring of Minimum Investment Threshold under Specialized Investment Funds (SIF): It prescribe the steps for Asset Management Companies (AMCs) to handle active breaches, defined as an investor’s total investment falling below INR 10 lakh due to investor initiated transactions. If an active breach occurs, all units of the affected investor across SIF investment strategies will be frozen for debit. A 30 calendar day notice will be issued to the investor to rebalance their investments. Should the investor comply within this period, the units will be unfrozen. However, if the investor fails to rebalance, the frozen units will be automatically redeemed by the AMC at the Net Asset Value (NAV) of the next business day following the 30 day notice period.
(Link: SEBI Circular Dated 29/07/2025)
Consultation Paper on amendment to the definition of a Strategic Investor for REITs and InvITs: It is proposed to amend the definition of a Strategic Investor for Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs). Strategic Investors are required to invest a minimum of 5% of the total offer size, and their units are subject to a 180 day lock-in period. This commitment helps build confidence among other investors in the public issue. The proposed amendment would expand the definition to include entities classified as Qualified Institutional Buyers (QIBs) under SEBI’s ICDR Regulations, which have a broader scope. The proposal also suggests that Foreign Portfolio Investors (FPIs) who are individuals, corporate bodies, or family offices should not be considered as Strategic Investors. The comments/ suggestions from stakeholders are invited.
(Link: SEBI Consultation Paper Dated 01/08/2025)
Consultation Paper, Draft Circular on Revised Norms for appointment of an independent third-party reviewer/certifier for green debt security: The proposed norms align the requirements for for appointment of an independent third-party reviewer/certifier green debt securities with those recently established for other ESG (Environmental, Social, and Governance) debt securities, such as social and sustainability bonds. The proposed changes would require the reviewer to be independent of the issuer and its management, be compensated in a way that prevents conflicts of interest, and possess expertise in assessing ESG debt securities. The comments/ suggestions from stakeholders are invited.
(Link: SEBI Consultation Paper Dated 01/08/2025)
Consultation Paper, Draft Circular on Modification in the conditions specified for reduction in debt securities denomination: The draft proposes to modify the conditions for issuing debt securities and non-convertible redeemable preference shares. The current regulation, permits these securities to be issued at a reduced face value of Rs. 10,000, but only if they are interest or dividend-bearing. It is proposed to allow zero-coupon instruments to be eligible for the reduced face value. This change would enable issuers to offer a wider range of investment products, as zero-coupon securities, which are issued at a discount and redeemed at par, are considered attractive to certain non-institutional investors. The comments/ suggestions from stakeholders are invited.
(Link: SEBI Consultation Paper Dated 01/08/2025)
Consultation Paper on easing Initial Public Offerings (IPO) under ICDR Regulations: It is proposed to revise the rules for anchor investor allocation, suggesting an increase in the number of permitted investors for larger IPOs to accommodate multiple funds from a single Foreign Portfolio Investor (FPI). Further, it is proposed to include life insurance companies and pension funds in the reserved anchor portion, increasing the total reserved allocation for these long-term institutional investors from 33% to 40%, with a specific 7% reservation for insurance and pension funds. Also, for large IPOs exceeding ₹5,000 crore, it suggests adjusting the retail investor portion from 35% down to 25% and increasing the Qualified Institutional Buyer (QIB) share to a maximum of 60%. Additionally, the reservation for mutual funds within non-anchor QIB category would increase from 5% to 15%. The comments/ suggestions from stakeholders are invited.
(Link: SEBI Consultation Paper Dated 31/07/2025)
SC, SEBI provisions does not mandate issuance of separate demand notice before recovery: Case of Jaykishor Chaturvedi vs SEBI, SC Judgement Dated 15th July 2025. The apex court held that the provisions of the SEBI Act or its rules do not mandate the issuance of a separate demand notice before recovery. Thus, adjudication officer’s order which specified payment within 45 days, effectively operates as a notice of demand, rendering any separate demand notice redundant.
G. Ministry of Corporate Affairs (MCA)
Mandatory Filing of Form IEPF-1A with Prescribed Excel Template: The filing of Form IEPF-1A with a prescribed Excel template under Rule 5 (4A) of the IEPF (Accounting, Audit, Transfer and Refund) Rules, has been made mandatory for certain companies, with a final compliance deadline of 30th August 2025. It applies to companies that transferred funds to the IEPF or Central Government, but either failed to submit the required statements or did so in non-compliant formats (not the Excel template), causing difficulties in identifying investor dues and leading to complaints. The companies now have 30 days from the notice date to comply with the requirements.
(Link: MCA Press Release Dated 31/07/2025)
H. Insolvency and Bankruptcy Board of India (IBBI)
NCLAT, Possession of property not admissible based on unregistered sale agreement: Case of Atul Paper Pvt Ltd vs Rakesh Kumar Jain, NCLAT Delhi Judgement Dated 17th July 2025. The appellant tribunal held that possession of unit by virtue of section 53A of the Transfer of Property Act is not admissible in case the agreement to sell is unregistered. Accordingly, sale consideration paid is directed to be refunded.
NCLAT, Intervention application under IBC filed beyond three years is time barred: Case of Nextgen Procon Pvt Ltd vs MRA Associates Pvt Ltd, NCLAT Delhi Judgement Dated 16th July 2025. The appellant tribunal held that application for intervention filed under section 59(7) of the Insolvency and Bankruptcy Code, beyond the period of limitation of three years is time barred.
I. Reserve Bank of India (RBI)
RBI Investment in AIF Directions, 2025: The directions apply to various regulated entities (REs), including commercial banks, cooperative banks, All-India Financial Institutions, and Non-Banking Financial Companies. These updated guidelines supersede previous circulars. A key aspect of the new rules is the imposition of limits on AIF investments, i.e. no single RE can contribute more than 10% of an AIF Scheme’s corpus, and the collective contribution from all REs to any AIF Scheme is capped at 20%. Furthermore, if an RE’s contribution exceeds 5% of an AIF Scheme’s corpus, and that AIF has made a downstream investment (excluding equity instruments) in a company that is also a debtor to the RE, the RE must make a 100% provision for its proportionate investment in that debtor company.
(Link: RBI Notification 138/2025 Dated 29/07/2025)
RBI draft Master Direction on Business Authorization for Co-operative Banks: This new framework replaces the previous “Financially Sound and Well Managed” norms with a set of harmonized Eligibility Criteria for Business Authorization (ECBA). To be considered compliant with the ECBA, a bank must meet conditions such as having regulatory minimum capital, a net NPA of no more than 3%, and a net profit for the past two financial years. The directions categorize Urban Co-operative Banks (UCBs) into a four-tiered system based on their deposit size and outline specific rules for business activities like expanding their area of operation, opening new branches, and offering doorstep banking. For instance, a UCB that meets the ECBA can expand its operations to its entire district of registration or up to three additional districts without prior RBI approval. The comments/ suggestions from stakeholders are invited.
(RBI Press Release, Draft Dated 28/07/2025)
RBI Digital Payments Index for March 2025: RBI has been publishing a composite Digital Payments Index (RBI-DPI) since 2021 with March 2018 as base to capture the extent of digitisation of payments across the country. The index for March 2025 stands at 493.22 as against 465.33 for September 2024. The increase in RBI-DPI index was driven by significant growth in parameters viz. Payment Infrastructure, Supply-side factors and Payment Performance across the country over the period.
(RBI Press Release Dated 28/07/2025)
Withdrawal of Rs 2000 Denomination Banknotes Status: The Reserve Bank of India (RBI) had announced the withdrawal of Rs 2000 denomination banknotes from circulation vide Press Release dated 19th May 2023. These notes can be exchanged/ deposited/ send through India Post from any post office in the country, to any of the 19 RBI Issue Offices for credit to their bank accounts in India. The ₹2000 banknotes continue to be legal tender. The total value of Rs 2000 banknotes in circulation, which amounted to Rs 3.56 lakh crore, has declined to Rs 6017 crore as at the close of business on December 31, 2023. Thus, 98.31% of the banknotes has since been returned.
(RBI Press Release Dated 01/08/2025)
J. Miscellaneous
SC, Partners can be prosecuted under section 138 of NI Act without firm being arraigned as accused: Case of Dhanasingh Prabhu vs Chandrasekar, SC Judgement Dated 14th July 2025. The apex Court held that partners of the partnership firm can be prosecuted individually under section 138 of the Negotiable Instruments Act, 1881 (NI Act) without the partnership firm being arraigned as an accused. Accordingly, order of high court set aside.
SC, Arrest notices must be served in-person not by WhatsApp: Case of Satender Kumar Antil vs CBI, SC Judgement Dated 21st January 2025. The apex court has dismissed an application by the State of Haryana seeking to allow the service of notices under Section 35 of the Bharatiya Nagarik Suraksha Sanhita (BNSS), through electronic means such as WhatsApp. The court’s decision upholds its earlier directive, which mandated that all notices to an accused must be served in person, as prescribed by law, and that electronic communication is not a valid substitute.
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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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