During the week, various regulatory bodies and courts in India issued significant notifications, circulars, and judgments. In Income Tax, new ITR forms (ITR-1, 3, 4, 5) were notified for Assessment Year 2025-26, introducing changes like conditional inclusion of Long-Term Capital Gains in ITR-1/4, bifurcation of capital gains based on a July 23, 2024 date, an increased asset and liability reporting threshold, and enhanced reporting for deductions and specific business income. GST updates included the establishment of a grievance redressal mechanism for Central GST registration issues, mandatory HSN code reporting in GSTR-1/1A (Table 12 from May 2025), the rollout of biometric Aadhaar authentication for registration in Sikkim, and a court ruling clarifying that “any person” liable under Section 122(1A) includes non-taxable individuals. Customs and DGFT saw extensive activity, including the alignment of various customs duties, tariffs, anti-dumping, and counter-veiling duties with the Finance Act 2025, updates and a 20% export levy on various categories of rice, revision of Tariff Values, and a prohibition on the import or transit of goods from Pakistan for national security reasons, also notified by DGFT. SEBI introduced amendments across multiple regulations concerning investment trusts, depositories, stock exchanges, and listing obligations, alongside circulars on margin collection timelines, extension of the T+0 settlement system deadline for certain brokers, and cybersecurity frameworks, while also releasing consultation papers on winding down KYC Registration Agencies, mandating dematerialization for more pre-IPO shareholders, streamlining REIT/InvIT regulations, and rationalizing Qualified Institutions Placement documentation. Updates from NCLAT/SC judgments addressed issues under the Insolvency and Bankruptcy Code, clarifying that arbitration awards after resolution plan approval are unsustainable, Corporate Insolvency Resolution Process applications based on defaults within the prohibited Section 10A period are not maintainable, decree holders can still be considered operational creditors, and the Committee of Creditors has the right to seek multiple modifications to resolution plans. Additionally, RBI directed banks to increase the availability of smaller denomination banknotes in ATMs, mandated the use of the PRAVAAH portal for regulatory applications, and amended FEMA regulations for Diamond Dollar Accounts, while Supreme Court judgments clarified the limited power of courts to modify arbitral awards and the government’s authority to cancel tenders to protect state financial interests.
Notifications & Circulars issued during week (28th– 4th May 2025)
A. Income Tax
SAHAJ (ITR 1) and SUGAM (ITR-4) notified for FY 2025-26: The notification amend the Income Tax Rules. FORM ITR- 1 and ITR-4 will be replaced with new forms in Appendix-II of the existing rules. It include assessees with only long-term capital gains under section 112A not exceeding Rs 1,25,000 and no brought forward or carry forward losses under that head. (Income Tax Notification 40/2025 Dated 29/04/2025)
ITR Form 3 (for Individuals and HUFs having Income from profits and gains of business or profession) notified for AY 2025-26: The notification amend the Income Tax Rules. FORM ITR- 5 will be replaced with a new form in Appendix-II of the existing rules. The key changes include a split in the Schedule- Capital Gain for gains before and after 23rd July 2024. Capital loss on share buyback is now allowed if the corresponding dividend income is reported under “Income from Other Sources” for transactions post 1st October 2024. The asset and liability reporting threshold has been increased to Rs 1 crore of total income. Additionally, Section 44BBC (specific to cruise business) has been incorporated, along with enhanced reporting requirements for deductions under Sections 80C and 10(13A), and a mandate to report the TDS section code in Schedule- TDS. (Income Tax Notification 41/2025 Dated 30/04/2025)
ITR Form 5 (for persons other than Individuals, HUF, Company and persons filing ITR-7) notified for AY 2025-26: The notification amend the Income Tax Rules. FORM ITR- 5 will be replaced with a new form in Appendix-II of the existing rules. (Income Tax Notification 42/2025 Dated 01/05/2025)
B. GST
Grievance Redressal Mechanism for processing of application for GST registration: Under the new instructions, applicants whose Application Reference Numbers (ARNs) fall under Central jurisdiction and who face grievances, such as queries raised in contravention of the set procedure or unjustified rejection, may now contact the Zonal Principal Chief Commissioner or Chief Commissioner. CGST Zone is instructed to publicize a dedicated grievance email ID. Applicants should submit grievances including their ARN, jurisdiction (Centre/State), and a brief description of the issue. The directive also requests the GST Council Secretariat to consider implementing a similar mechanism for State jurisdictions. (CGST Instructions 04/2025 Dated 02/05/2025)
Advisory, Reporting of HSN codes in Table 12 and list of documents in table 13 of GSTR-1/1A: It is mandatory for the taxpayers to report minimum 4 digits or 6 digits of HSN Code in Table-12 of GSTR-1 on the basis of Aggregate Annual Turnover (AATO) in the preceding financial year. These changes are being implemented in a phase-wise manner on GST Portal. The Phase-3 of reporting of HSN codes in Table 12 of GSTR-1 & 1A shall be implemented from May 2025 return period. Further , Table 13 of GSTR-1/1A is also being made mandatory for the taxpayers from the said tax period. (GSTN Advisory Dated 01/05/2025)
Advisory on Biometric-based Aadhaar authentication and document verification for GST registration applicants of Sikkim: CGST rule was amended which provide for identification of applicants on biometric- based Aadhaar authentication, which includes taking the applicant’s photograph and verifying the original documents submitted with the application. The new functionality mandates that after submitting Form GST REG-01, applicants will receive an email with either a link for OTP-based Aadhaar Authentication or a link to book an appointment at a GST Suvidha Kendra (GSK). It has been rolled out in Sikkim effective from 1st May 2025. (GSTN Advisory Dated 01/05/2025)
HC, Clarifies ‘Any Person’ under section 122(1A) of GST: Case of Gurudas Malik Thakur vs CCGST, HC Delhi Judgement Dated 23rd April 2025. HC clarified the scope of liability under the GST framework, particularly concerning company directors involved in fraudulent Input Tax Credit (ITC) claims and tax evasion. The court ruled that the term “any person” under Section 122(1A) of the CGST Act includes both taxable and non-taxable persons. The ruling confirms that even non-taxable persons can be held accountable if they benefit from tax evasion or facilitate GST fraud. (HC Delhi Judgement Dated 23/04/2025)
C. Central Excise
SC, Reclassification unsustainable without furnishing relied upon test reports: Case of Oswal Petrochemicals Limited vs CCE, SC Judgement Dated 28th April 2025. The apex court held that re-classifying products based on the test report, which was leading to consequential differential duty demand, was not furnished to the appellant hence the same was in clear violation of principles of natural justice. Thus, order justifying re-classification cannot be sustained. (SC Judgement Dated 28/04/2025)
D. Custom Duty
Customs notification 50/2017 amended to update bank lists: The notification revises bank names in the List 34A and List 34B in the annexure to the table of the principal notification. List 34A is for Import of Gold or Silver or both by banks. List 34B is for Import of Gold by banks. (Custom Notification 24/2025 (T) Dated 28/04/2025)
Customs tariff notifications aligned with Finance Act: The notification amends 13 existing notifications to bring them into conformity with the changes made by the Finance Act, 2025. The modifications primarily involve the substitution or insertion of specific Harmonized System (HS) codes associated with goods, reflecting updated classifications or tariff structures. (Custom Notification 25/2025 (T) Dated 30/04/2025)
Custom notification 04/2025 rescinded by government: The notification rescinds earlier notification 04/2025 dated 1st February 2025, which relates to exemptions from import duty on certain goods. The rescission will take effect on 1st May 2025. It will not affect any actions already taken or omitted before this date. (Custom Notification 26/2025 (T) Dated 30/04/2025)
Customs Duty Exemptions updated on Rice imports: The notification amends two earlier notifications 27/2011 and 22/2024. It update the classification and duty exemptions on various categories of rice, especially concerning GI-tagged and milled varieties. A revised entry substitutes the earlier listing with “Parboiled Rice, GI recognised” attracting nil duty. A new entry has been added for “Other Parboiled Rice” also at nil duty. Another entry has been updated to cover “Other Rice, GI Recognised” at nil duty, and a new entry has been introduced for “Semi milled or wholly milled rice whether or not polished or glazed” at nil duty, excluding rice already classified under previous items. (Custom Notification 28/2025 (T) Dated 30/04/2025)
Export Duty on Rice, 20% on Parboiled & Other Varieties: The notification levy an export duty of 20% on various categories of rice. Specifically, it substitutes the entry for Parboiled Rice, GI recognised, and inserts a new entry for Other Parboiled Rice, both at a 20% duty. Furthermore, it substitutes the entry for Other Rice, GI Recognised, with a 20% export duty and introduces a new entry for Semi-milled or wholly milled rice also with a 20% export duty. (Custom Notification 27/2025 (T) Dated 30/04/2025)
Adjudicating Authority appointed for SVB Provisional Assessment: CBIC has appointed a Common Adjudicating Authority to finalize the provisional assessment in the SVB case concerning M/s Murrplastik India Private Limited. (Custom Notification 31/2025 (NT) Dated 28/04/2025)
India Customs Cooperation and Mutual Administrative Assistance (CMAA) with New Zealand & Madagascar: The notification adds New Zealand and the Republic of Madagascar to the list of contracting states with whom India has such agreements or arrangements. (Custom Notification 32/2025 (NT) Dated 28/04/2025)
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 May 2025. The tariff value for crude palm oil is set at USD 1076 per metric ton, while gold and silver have tariff values of USD 1064 per 10 grams and USD 983 per kilogram, respectively. The tariff value for areca nuts is fixed at USD 6970 per metricton. (Custom Notification 33/2025 (NT) Dated 30/04/2025)
Customs ADD notifications amended to align with Finance Act: The notification amends three existing anti-dumping duty (ADD) notifications to bring them into conformity with the changes made by the Finance Act, 2025. (Custom Notification 08/2025 (ADD) Dated 30/04/2025)
Custom CVD notification 05/2024 amended to align with Finance Act: The notification amends previous counter-veiling duty (CVD) notification 05/2025 dated 11th September 2024, to bring it in conformity with the changes made by the Finance Act, 2025. (Custom Notification 02/2025 (CVD) Dated 30/04/2025)
Prohibition on import or transit of all goods originating in or exported from Pakistan: DGFT vide notification dated 2nd May 2025, has inserted a para 2.20A in Foreign Trade Policy, regarding prohibition on import from Pakistan stating that “Direct or indirect import or transit of all goods originating in or exported from Pakistan, whether or not freely importable or otherwise permitted, shall be prohibited with immediate effect, until further orders. This restriction is imposed in the interest of national security arid public policy. Any exception to this prohibition shall require prior approval of the Government of India.” Action may be taken to sensitize officers regarding the said matter. (Custom Instructions 07/2025 Dated 03/05/2025)
E. Directorate General of Foreign Trade (DGFT)
Prohibition on import or transit of all goods originating in or exported from Pakistan: The notification inserts a new para 2.20A in Foreign Trade Policy, regarding prohibition on import from Pakistan stating that “Direct or indirect import or transit of all goods originating in or exported from Pakistan, whether or not freely importable or otherwise permitted, shall be prohibited with immediate effect, until further orders. This restriction is imposed in the interest of national security arid public policy. Any exception to this prohibition shall require prior approval of the Government of India.” (DGFT Notification 06/2025 Dated 02/05/2025)
Seek comments on alignment of Schedule-II (Export Policy) with amendments introduced by Finance Act 2025: The proposed amendments include changes to Chapter Notes, HS Codes, and Product Descriptions in the First Schedule of the Customs Tariff Act. The comments/ suggestions from stakeholders are invited. (DGFT Trade Notice 04/2025 Dated 29/04/2025)
F. Securities and Exchange Board of India (SEBI)
Amendments to SEBI Infrastructure Investment Trusts Regulations: The change involves a revision to Regulation 18(4), specifically the proviso clause. The existing reference to ‘and (v)’ has been expanded and replaced with ‘, (v), (vi), (vii) and (viii)’, indicating the inclusion of additional regulatory clauses or conditions. The Regulation 18 relates to Investment conditions and dividend policy. (SEBI Notification Dated 28/04/2025)
Amendments to Securities Contract – Stock Exchange and Clearing Corporation Regulations: The amended provisions allow non- independent directors to be appointed to another recognized stock exchange, clearing corporation, or depository after a cooling-off period specified by the governing board and with prior SEBI approval. Also, a public interest director can be reappointed for another three-year term in a different recognized entity (stock exchange, clearing corporation, or depository) after a cooling-off period set by the governing board and with SEBI’s prior approval. (SEBI Notification Dated 30/04/2025)
Amendments to SEBI Depositories and Participants Regulations: The amended provisions allow non- independent director on a depository’s governing board can be appointed to a recognized stock exchange, clearing corporation, or another depository with SEBI’s prior approval, but only after a cooling-off period specified by the appointing depository’s governing board. Also a public interest director to be reappointed for a further three-year term in another depository, stock exchange, or clearing corporation after a cooling-off period determined by the appointing body, applicable specifically to appointments in competing depositories. (SEBI Notification Dated 30/04/2025)
Amendments to SEBI Listing Obligations and Disclosure Requirements (LODR) Regulations: The key amendment allows SCORES registration at the trustee level for all special purpose distinct entities they oversee in the case of securitized debt instruments. It also include new clauses 10 and 11, which mandate that special purpose distinct entities or their trustees must annually disclose to the stock exchange any outstanding litigations and material developments concerning the originator, servicer, or any other party involved in the transaction that could potentially harm investor interests. (SEBI Notification Dated 29/04/2025)
Timelines for collection of Margins other than Upfront Margins, alignment to settlement cycle: The circular relates to collection of margins by Trading Members (TMs) and Clearing Members (CMs) in the cash segment, aligning the timelines with the settlement cycle. TMs and CMs are required to collect all margins (except VaR and ELM) by the settlement day itself, in accordance with the reduced T+1 settlement cycle for cash market transactions. The circular also mandates that TMs/CMs continue to collect upfront VaR margins and ELM before the trade. (SEBI Circular Dated 28/04/2025)
Extension of timeline on optional T+0 settlement cycle for Qualified Stock Brokers (QSBs): The initial circular had mandated that QSBs meeting the active client criteria as of 31st December 2024, should establish the necessary systems and processes for the T+0 settlement by 1st May 2025. Based on feedback received from QSBs and subsequent discussions with stock exchanges, clearing corporations, and depositories, SEBI has decided to extend this deadline to 1st November 2025. (SEBI Circular Dated 29/04/2025)
Clarificatory and Procedural changes to aid and strengthen ESG Rating Providers (ERPs): The circular clarifies the withdrawal process for ESG ratings. For subscriber-pays ERPs, ratings can be withdrawn if no subscribers exist, except for bundled ratings (e.g., indices like Nifty 50), and may also be withdrawn if the issuer lacks a BRSR. For issuer-pays ERPs, ratings of securities may be withdrawn after three years or half the tenure of the security (whichever is higher), with NOC from 75% of bondholders, issuer/entity ratings may be withdrawn after three years. (SEBI Circular Dated 29/04/2025)
Clarifications to Cybersecurity and Cyber Resilience Framework (CSCRF) for Regulated Entities (REs): The circular details specific criteria and thresholds for each category of RE, such as the number of registered clients and trading volume for stockbrokers, and assets under management (AUM) for portfolio managers and AIFs/VCFs. The circular also mandates the use of a dedicated Hardware Security Module (HSM) for Market Infrastructure Institutions (MIIs) and Qualified REs, while allowing other REs to implement alternatives based on a board-approved risk assessment. (SEBI Circular Dated 30/04/2025)
Facilitation to SEBI registered Stock Brokers to undertake securities market related activities in GIFT- IFSC under SBU: The circular simplify the process for undertaking securities market activities within the Gujarat International Finance Tech-city – International Financial Services Centre (GIFT-IFSC). The key change is the removal of the requirement for SEBI-registered stock brokers to obtain specific approval to operate in GIFT-IFSC. Instead, brokers can now establish a Separate Business Unit (SBU) within their existing entity to conduct these activities, or the branch itself can qualify as an SBU. To ensure segregation and ring-fencing of activities, stock brokers must maintain an arm’s- length relationship between their Indian market operations and the SBU in GIFT- IFSC, keep separate accounts, and maintain distinct net worth. (SEBI Circular Dated 02/05/2025)
Draft Circular on Framework for Orderly Winding Down of Critical Operations and Services of a KYC (Know Your Client) Registration Agency (KRA): It outline a framework for the orderly winding down of critical operations and services of KYC Registration Agencies (KRAs). The proposed guidelines address scenarios like insolvency, voluntary or involuntary cessation, and regulatory revocation, ensuring service continuity and seamless transfer of activities to a successor entity. KRAs will need to establish a structured mechanism, including identifying potential winding down scenarios, defining critical operations, and creating a standard operating procedure for the process. This SOP should cover record transfer, data security, and communication with stakeholders. The comments/ suggestions from stakeholders are invited. (SEBI Consultation Paper Dated 29/04/2025)
Consultation paper on amendment to SEBI ICDR Regulations, proposes demat for IPO shareholders: It aim to mandate the dematerialization of existing securities for a broader range of shareholders prior to an Initial Public Offering (IPO). The existing regulations require only promoters to hold their shares in demat form before an IPO. The proposed changes would expand this requirement to include promoter groups, selling shareholders, directors, key managerial personnel, senior management, qualified institutional buyers, domestic current employees, shareholders with special rights, registered stock brokers, and non-systemically important Non-Banking Financial Companies (NBFCs). The comments/ suggestions from stakeholders are invited. (SEBI Consultation Paper Dated 30/04/2025)
Consultation Paper on regulatory amendments for Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs): It provide clarification of the definition of “public” for minimum public unitholding, allowing adjustment of negative cash flows at the holding company level with distributions from Special Purpose Vehicles (SPVs) in Net Distributable Cash Flow (NDCF) calculation, and aligning timelines for various report submissions (quarterly reports to stock exchanges and trustees, and valuation reports) with the timelines for submitting quarterly and annual financial results. It also introduces the concept of an Investor Charter for REITs and InvITs. The comments/ suggestions from stakeholders are invited. (SEBI Consultation Paper Dated 02/05/2025)
Consultation Paper on Rationalize the Placement Document used in Qualified Institutions Placement (QIP): The QIP is a key mechanism for listed companies to raise capital from institutional investors. It highlights that current QIP documentation, requires comprehensive disclosures, including financials, risk factors, and corporate details. However, since listed entities are already obligated to provide regular updates under SEBI LODR Regulations, much of this information is already publicly accessible. It suggests that duplication could be reduced by streamlining the required disclosures in the placement document. The comments/ suggestions from stakeholders are invited. (SEBI Consultation Paper Dated 02/05/2025)
G. Ministry of Corporate Affairs (MCA)
No Notifications/ Circular during the week.
H. Insolvency and Bankruptcy Board of India (IBBI)
SC, Arbitration award pronounced after approval of resolution plan cannot be sustained: Case of Electrosteel Steel Limited vs Ispat Carrier Private Limited, SC Judgement Dated 21st April 2025. The apex court held that arbitration proceeding culminating into award post approval of resolution plan by NCLT is not tenable in law since it loses its jurisdiction to proceed and pronounce arbitral award in view of approved resolution plan. (SC Judgement Dated 21/04/2025)
NCLAT, CIRP based on default falling within prohibited period under section 10A of IBC not maintainable: Case of Royal Construction vs Gannon Dunkerley Limited, NCLAT Delhi Judgement Dated 01/04/2025. The appellate tribunal held that no default falling within the prohibited period of Section 10A of the IBC can form basis for initiating CIRP. Accordingly, section 9 application rightly rejected. (NCLAT Delhi Judgement dated 01/04/2025)
NCLAT, IBC Section 9 application valid despite decree holder not being an operational creditor: Case of Venus Buildtech India Pvt Ltd vs Senbo Engineering Ltd, NCLAT Delhi Judgement dated 12th March 2025. The Adjudicating Authority (AA) had dismissed the application solely on the ground that, having obtained a decree from a civil court for the outstanding operational debt, it could no longer be considered an operational creditor under the IBC. NCLAT emphasised that IBC does not intend to create a separate class of ‘decree holders’ that would exclude them from being either financial or operational creditors based on the origin of the debt. It set aside the AA order, and revived the application. (NCLAT Delhi Judgement dated 12/03/2025)
NCLAT, CoC can seek multiple modifications to Resolution Plans: Case of Sagar Stone Industries vs Sajjan Kumar Dakania, NCLAT Delhi Judgement dated 28th March 2025. The appellate tribunal clarified that Regulation 39(1A) of the CIRP Regulations, which restricts the Resolution Professional from permitting plan modifications more than once, does not bind the CoC. The CoC retains the unrestricted right to request revisions or negotiate with resolution applicants multiple times. It stated that the ‘challenge mechanism’ is an optional tool for the CoC to maximize value and its absence cannot be a valid ground to question the approval of a resolution plan. . (NCLAT Delhi Judgement dated 28/03/2025)
I. Reserve Bank of India (RBI)
Dispensation of Rs 100 and Rs 200 denomination banknotes through ATMs: RBI has issued a directive to all banks and White Label ATM Operators (WLAOs) to increase the availability of Rs. 100 and Rs.200 denomination banknotes through ATMs. The milestones require that 75% of all ATMs must dispense either Rs.100 or Rs.200 notes from at least one cassette by 30th September 2025 and 90% of all ATMs by 31st March 2026. (RBI Notification 33/2025 Dated 28/04/2025)
Processing of Regulatory Authorisations/ Licenses/ Approvals through PRAVAAH: RBI directs all regulated entities, including banks, financial institutions, NBFCs, payment system operators, credit information companies, and primary dealers, to use the PRAVAAH portal for submitting applications for regulatory authorizations, licenses, and approvals. (RBI Notification 34/2025 Dated 28/04/2025)
Amendments to FEMA Foreign Currency Accounts Regulations: The Schedule II of the principal regulations is amended in the Annex titled ‘Application For Opening Diamond Dollar Account/s’. The amendment replaces the words and figures ‘2 Years’ with ‘Three Years’ in the first paragraph of the application. (RBI Notification Dated 29/04/2025)
J. Miscellaneous
SC, Power of court to modify Arbitral award: Case of Gayatri Balasamy vs ISG Novasoft Technologies Limited, SC Judgement Dated 30th April 2025. The apex court held that Indian courts have a “limited power” to modify arbitral awards. The Court delineated specific circumstances under which such modifications are permissible:
1.Severability: To sever the valid portion of an award from its invalid part.
2. Corrections: To rectify clerical, computational, or typographical errors.
3. Post-Award Interest: To adjust post-award interest in certain situations.
4. Plenary powers of the Court under Article 142: To exercise the Supreme Court’s plenary powers under Article 142 of the Constitution to ensure complete justice.
— The majority emphasized that while courts can intervene in these limited scenarios, they cannot re-evaluate the merits of the case or act as appellate bodies over arbitral tribunals. (SC Judgement Dated 30/04/2025)
SC, Government can cancel tender to protect state’s financial interests: Case of Principal Chief Conservator of Forest vs Suresh Mathew, SC Judgement Dated 25th April 2025. The apex court held that Government is the protector of financial resources of the state and has every right to cancel/call for fresh tender if it is in the nature of protecting the financial interests of the State. (SC Judgement Dated 25/04/2025)
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Compiled by CMA Yash Paul Bhola, MBA, ICWAI, 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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