Executive Summary

Income Tax

• CBDT extends specified date for filing of various reports of audit for the assessment year 2025-26
• Section 220, read with section 119 of the Income-tax Act, 1961 – waiver of interest payable under section 220(2) due to late payment of demand

Goods And Service Tax (GST)

• Circular No. 251/08/2025 – GST [F. No CBIC – 0001/3/2025 – GS – GST]: Clarification on various doubts related to treatment of secondary or post-sale discounts under GST, dated 12-09-2025
• Notification No. 13/2025-Central Tax, dated 17-09-2025, makes amendments to CGST Rules 2025 (rules 31A, 39, 91, 110, 111, 113), inserts Rule 110A, updates Forms GSTR-9 & 9C, adds Forms GST APL-02A & 04A, and substitutes Forms GST APL-05, 06 & 07
• Notification S.O. 4220(E), dated 17-09-2025, extends the time to file GST Tribunal appeals till 30-06-2026 for orders communicated before 01-04-2026, and sets a 3-month limit for orders communicated after 01-04-2026
• Press release, dated 24-09-2025: Union minister of finance and corporate affairs Smt. Nirmala Sitharaman launches goods and services tax appellate tribunal in New Delhi

Companies Act 2013/ Other Laws

• Fast-track mergers: Expansion of scope
• Companies (Incorporation) Second Amendment Rules, 2025
• MCA extends last date for filing DIR-3 KYC and DIR-3-KYC-WEB
• Ease of Doing Investment – Smooth Transmission of Securities from Nominee to Legal Heir
• Investor Protection and Education Fund (IPEF) Regulations, 2025
• Share Based Employee Benefits (SBEB) Regulations
• Compliance Guidelines for Digital Accessibility Circular ‘Rights of Persons with Act, 2016 and rules made thereunder

A. CBDT EXTENDS SPECIFIED DATE FOR FILING OF VARIOUS REPORTS OF AUDIT FOR THE ASSESSMENT YEAR 2025-26 [25-09-2025]

• The ‘specified date’ of furnishing of the report of audit under any provision of the Income-tax Act, 1961, for the Previous Year 2024-25 (Assessment Year 2025-26), in the case of assessee referred to in clause (a) of Explanation 2 to sub-section (1) of section 139 of the Act, is 30th September 2025. However, keeping in view representations by Tax practitioners and submissions before Hon’ble Courts, the ‘specified date’ is extended to 31st October, 2025.

B. SECTION 220, READ WITH SECTION 119 OF THE INCOME-TAX ACT, 1961 – WAIVER OF INTEREST PAYBLE UNDER SECTION 220(2) DUE TO LATE PAYMENT OF DEMAND [19-09-2025]

• The provisions of section 115BAC(1A) of the Income-tax Act, 1961 are subject to other provisions of Chapter XII. Incomes chargeable to tax at special rates under Chapter XII are excluded while determining tax liability under section 115BAC(1A). Clause (b) proviso to section 87A applies to incomes chargeable under section 115BAC(1A).
• In certain cases, returns were processed allowing rebate under section 87A erroneously on incomes taxed at special rates; rectifications to disallow rebate will cause demands to be raised. Payment delays will attract interest under section 220(2).
• The Board, under section 119, directs waiver of interest under section 220(2) if payment of demands raised by rectification orders is made on or before 31.12.2025. Failure to pay will attract interest from next day after expiry of this period.

A. CIRCULAR NO. 251/08/2025 – GST [F. NO CBIC – 0001/3/2025 – GS – GST]: CLARIFICATION ON VARIOUS DOUBTS RELATED TO TREATMENT OF SECONDARY OR POST-SALE DISCOUNTS UNDER GST, DATED 12-09-2025

Clarifications on Secondary / Post-Sale Discounts (u/s 168 of CGST Act, 2017)

ITC on Financial/Commercial Credit Notes

Recipients eligible for full ITC even if supplier issues financial/commercial credit notes

Suppliers cannot reduce tax liability; recipient need not reverse ITC

Post-Sale Discounts – Treatment as Consideration

Normally, discount is not considered for dealer’s sale to end customer (principal-to-principal basis)

If manufacturer has agreement with end customer (dealer passing discount), discount is a reward and part of consideration

Post-Sale Discounts vs. Promotional Services

Discount reduces sale price; not treated as payment for promotional services

GST applies only if dealer provides specific promotional services with separate consideration

Action Points

Trade notices to be issued for uniformity

Difficulties, if any, to be reported to Board

B. NOTIFICATION NO. 13/2025-CENTRAL TAX, DATED 17-09-2025

C. NOTIFICATION S.O. 4220(E), DATED 17-09-2025

• Extends the time to file GST Tribunal appeals till 30-06-2026 for orders communicated before 01-04-2026
• Sets a 3-month limit for orders communicated after 01-04-2026

D. PRESS RELEASE, DATED 24-09-2025: UNION MINISTER OF FINANCE AND CORPORATE AFFAIRS SMT. NIRMALA SITHARAMAN LAUNCHES GOODS AND SERVICES TAX APPELLATE TRIBUNAL IN NEW DELHI

• Independent forum for GST dispute resolution ensuring fair, fast, and transparent justice
• Tribunal structure: 31 State Benches + Principal Bench in New Delhi; Bench composition: 2 Judicial + 1 Centre Technical + 1 State Technical Member
• Digital features: GSTAT e-Courts portal for online filings, case tracking, virtual hearings; filing window extended to 30th June 2026
• Benefits: Swift resolution, reduced delays, consistent rulings, and strengthened trust between taxpayers and government

A. FAST-TRACK MERGERS: EXPANSION OF SCOPE

Through MCA notification G.S.R. 603(E) dated 4th September 2025, the scope of fast-track mergers under Section 233 was expanded through the Companies (Compromises, Arrangements and Amalgamations) Amendment Rules, 2025. The amendment allows a wider range of companies to adopt the fast-track route, reducing burden on NCLTs and shifting simpler cases to Regional Directors. Inclusions include mergers between holding and subsidiary companies (not wholly owned, if transferor not listed), mergers between unrelated unlisted companies as per borrowing/compliance thresholds, and mergers between fellow subsidiaries under common control. This facilitates quicker restructuring and ease of doing business.

B. COMPANIES (INCORPORATION) SECOND AMENDMENT RULES, 2025

MCA notified Companies (Incorporation) Second Amendment Rules, 2025 effective 15th September 2025, substituting the existing Form RD-1 with a revised format, streamlining filings with Regional Director. These reflect efforts to simplify corporate procedures and enhance governance under Companies Act, 2013.

C. MCA EXTENDS LAST DATE FOR FILING DIR-3 KYC AND DIR-3-KYC-WEB

MCA issued General Circular No. 04/2025 dated 29 September 2025, extending due date for e-Form DIR-3 KYC and DIR-3 KYC-WEB without late fee from 30 September 2025 to 15 October 2025, responding to stakeholder requests for more compliance time.

A. EASE OF DOING INVESTMENT – SMOOTH TRANSMISSION OF SECURITIES FROM NOMINEE TO LEGAL HEIR

• In India, securities holders nominating persons leads securities to pass first to nominee, who must transmit to legal heirs.
• Transmission from nominee to legal heir sometimes treated as capital gain transfer, causing tax complications and delays, though section 47 clause (iii) excludes this transmission from transfer definition.
• SEBI circular SEBI/HO/MIRSD/MIRSD-PoD/P/CIR/2025/130 (dated 19 September 2025) clarifies and simplifies this process.

B. INVESTOR PROTECTION AND EDUCATION FUND (IPEF) REGULATIONS, 2025

On 2 September 2025, SEBI amended IPEF Regulations, revising categories for Fund credit (Reg 4) and streamlining utilization framework (Reg 5) for investor education, awareness, and protection. The amendments reflect SEBI’s focus on retail investor confidence and market safeguarding.

C. SHARE BASED EMPLOYEE BENEFITS (SBEB) REGULATIONS

SEBI notified amendments on 8 September 2025, refining governance, transparency, and disclosure for employee stock options and benefit schemes, tightening compliance and clarifying disclosures to protect employees and shareholders.

D. COMPLIANCE GUIDELINES FOR DIGITAL ACCESSIBILITY CIRCULAR ‘RIGHTS OF PERSONS WITH ACT, 2016 AND RULES MADE THEREUNDER

SEBI circular dated 31 July 2025 mandated digital accessibility for Regulated Entities’ digital platforms per the Rights of Persons with Disabilities Act, 2016. The 25 September 2025 circular (No. 131) provides compliance guidelines including clarifications, roadmap, reporting, and responsibilities to remove barriers for investors with disabilities.

Disclaimer:
Information in this note is intended to provide only a general update of the subjects covered. It is not intended to be a substitute for detailed research or the exercise of professional judgment. KNM accepts no responsibility for loss arising from any action taken or not taken by anyone using this publication. Updates for the period 30.09.2025

Executive Summary

Income Tax

• Section 143- Processing of Return filed under section 139 beyond the prescribed time limit.
• Section 143- Guidelines for compulsory selection of returns for complete scrutiny during FY 2025-26.

Goods And Service Tax (GST)

• Generation and quoting of document identification number (DIN) on any communication issued by the officers of the central board of indirect taxes and customs to taxpayers and other concerned persons, Circular no. 249/06/2025-gst [F No. GST/INV/UTILITY/2022-23], dated 9-6-2025
• Guidelines for mandatory conduct of personal hearings through virtual mode in all proceedings under the Delhi GST Act, 2017 and the Rules framed there under, Circular No. F.3 (640)/GST/ P & R/2025/348-55, dated 13-06-2025
• Corrigendum G.S.R. 389 (E) [F.No. A-50050/264/2024-GSTAT-DOR], dated 18-6-2025, Goods and services tax appellate tribunal (procedure) rules, 2025
• Circular No. 250/07/2025-GST dated 24-06-25, Reviewing authority, Revisional Authority and Appellate Authority in respect of orders passed by Common Adjudicating Authority (CAA) for show cause notices issued by DGGI

Companies Act 2013/ Other Laws

• MCA revamps corporate reporting with new disclosure norms effective July 14, 2025
• Companies (audit and auditors) amendment rules, 2025 – amendment in rule 13; substitution of forms ADT-1, ADT-2, ADT-3 and ADT-4
• Companies (registration offices and fees) amendment rules, 2025 – substitution of form GNL-1
• Companies (filing of documents and forms in extensible business reporting language) amendment rules, 2025 – amendment in rule 3; substitution of E-form AOC-4 XBRL
• Limited relaxation from compliance with certain provisions of the SEBI (listing obligations and disclosure requirements) regulations, 2015
• Modifications Under The International Financial Services Centres Authority (Anti Money Laundering, Counter-Terrorist Financing And Know Your Customer) Guidelines, 2022

A. Section 143, Read with sections 119 and 139 of the Income Tax Act, 1961- Assessment- Processing of Return filed under Section 139 beyond prescribed time limit, Dated 09-06-2025

• Central Board of Direct Taxes, in exercise of its powers under section 119(2)(a) of the Income-tax Act,1961, hereby relaxes the time-frame prescribed in second proviso to sub-section (1) of section 143 of the Act and directs that electronically filed valid returns of income filed u/s 139 of the Act for Assessment Years (AY) 2023-24, for which date of sending intimation under sub-section (1) of section 143 of the Act has lapsed, shall be processed now and intimation under sub-section (1) of section 143 of the Act shall be sent to the assessee concerned by 31-11-2025.

 The relaxation accorded above shall not be applicable to the following returns:

1. returns selected in scrutiny;
2. returns remain unprocessed for any reason attributable to the assessee.

B. Section 143 of the Income Tax Act, 1961 – Scrutiny Assessment- Guidelines for compulsory selection of returns for complete scrutiny during FY 2025-26, Dated 13-06-2025

• It is clarified that where return has been furnished in response to notice u/s 142(1) of the Act and such notice u/s 142(1) of the Act was issued due to the information contained in NMS Cycle/ AIS/ Statement of Financial Transactions (SFT)/ CPC-TDS information/ information received from Directorate of I&CI, such return will not be taken up for compulsory scrutiny. Selection of such cases for scrutiny will be done through the CASS cycle.

Jurisdictional Assessing Officers (JAOs) shall upload the underlying documents for access by NaFAC in the following cases which are to be completed by NaFAC on or before 31-03-2026 and Notice u/s 143(2)/142(l) of the Act calling for information shall be served on the assessee through NaFAC in these cases’.

1. Cases (other than search & seizure/survey) in which notices u/s 148 of the Act have been issued where return is either furnished or not furnished in response to notice u/s 148 of the Act.
2. Cases in which notices u/s 142(1) of the Act calling for return, have been issued & no returns have been furnished.

Cases, where notices u/s 148 of the Act have been issued pursuant to search & seizure/survey actions conducted on or after the 1-04-2021 but before 1-09-2024, if lying outside Central Charges,

1. where return is furnished, the Jurisdictional Assessing Officer (JAO) concerned shall serve the Notice u/s 143(2) of the Act and Pr.CIT/Pr.DIT/CIT/DIT concerned shall ensure that such cases are transferred to central charges u/s 127 of the Act.
2. Where return is not furnished, these cases shall be transferred to central charges for further necessary action.

A.Generation and quoting of document identification number (DIN) on any communication issued by the officers of the central board of indirect taxes and customs to taxpayers and other concerned persons, Circular no. 249/06/2025-gst [F No. GST/INV/UTILITY/2022-23], dated 9-6-2025

CBIC had earlier made quoting of Document Identification Number (DIN) mandatory through Circulars 122/41/2019-GST and 128/47/2019-GST to ensure transparency. However, since GST portal-generated documents already contain a verifiable Reference Number (RFN) providing full details and are considered valid under Section 169(1)(d) of the CGST Act, 2017, and as per Instruction No. 4/2023-GST, it is now clarified that quoting DIN is not required for such communications. The presence of both DIN and RFN creates duplication, which is unnecessary.

B.Guidelines for mandatory conduct of personal hearings through virtual mode in all proceedings under the Delhi GST Act, 2017, and the Rules framed thereunder, Circular No. F.3 (640)/GST/ P & R/2025/348-55, dated 13-06-2025

• All personal hearings to be conducted only through virtual mode (e.g., Webex, Google Meet).
• Link, date & time shared in advance via email/mobile.
• Taxpayers must share ID proof, vakalatnama, and ensure technical readiness.
• Maintain proper decorum; hearings are legally valid under the GST & IT Act.
• Hearing records sent via email, adjournments via BO portal.
• Emails allowed for additional documents; physical copies if specifically needed.

In-person hearings are only in rare cases, with the Zonal In-Charge’s approval

C. Corrigendum G.S.R. 389 (E) [F.No. A-50050/264/2024-GSTAT-DOR], dated 18-6-2025, Goods and services tax appellate tribunal (procedure) rules, 2025

• Background: CAA (Joint/Addl. Commissioner) adjudicates SCNs issued by DGGI (as per Notification 02/2017 & Circular 239/33/2024-GST). Earlier circulars didn’t clarify review, revision, and appeal procedure for such orders.
• Clarifications Issued:
• Reviewing Authority (Section 107, CGST Act): Principal/Commissioner of Central Tax under whom the CAA is posted.
• Revisional Authority (Section 108, CGST Act): Same Principal/Commissioner of Central Tax under whom the CAA is posted.
• Appellate Authority (Section 107, CGST Act): Commissioner (Appeals) with territorial jurisdiction of the CAA’s reporting Commissionerate (as per Table III of Notification 02/2017).
• Department Representation in Appeals:
• Concerned, the Principal/Commissioner shall represent the department.
• May nominate a subordinate officer for filing appeals

DGGI comments on the Orders-in-Original (O-I-O) can be sought before review/revision.

D. Circular No. 250/07/2025-GST dated 24-06-25, Reviewing authority, Revisional Authority and Appellate Authority in respect of orders passed by Common Adjudicating Authority (CAA) for show cause notices issued by DGGI

• Joint/Addl. Commissioners act as Common Adjudicating Authorities (CAA) for DGGI SCNs (as per Notification 02/2017 & Circular 239/33/2024-GST).
• Principal/Commissioner under whom CAA is posted will be: Reviewing Authority (Sec. 107) and Revisional Authority (Sec. 108)
• Appeals to be filed before the Commissioner (Appeals) of CAA’s jurisdiction.
• Same Principal/Commissioner to represent the department and can authorize subordinates.
• DGGI comments on the order may be taken before review/revision.
• Trade notices to be issued; implementation issues to be reported to the Board.

A. MCA REVAMPS CORPORATE REPORTING WITH NEW DISCLOSURE NORMS EFFECTIVE JULY 14, 2025

The Ministry of Corporate Affairs (MCA) has notified the Companies (Accounts) Second Amendment Rules, 2025, effective from July 14, 2025, introducing significant changes to corporate disclosures and filings. Key updates include mandatory detailed disclosures in the Board’s Report on sexual harassment complaints and a statement of compliance under the Maternity Benefit Act, 1961. Companies must also submit new e-Forms capturing extracts of the Board’s Report and Auditor’s Reports in a machine-readable format alongside the full financial statements. The rules formalize the shift to electronic filing by replacing all references from “Form” to “e-Form.” These amendments aim to enhance corporate governance, ensure accountability, and enable better data analysis by regulators. Companies must promptly align their internal processes and ensure compliance, with strict penalties for false filings under Sections 448 and 449 of the Companies Act, 2013.

B. COMPANIES (AUDIT AND AUDITORS) AMENDMENT RULES, 2025 -AMENDMENT IN RULE 13; SUBSTITUTION OF FORMS ADT-1, ADT-2, ADT-3 AND ADT-4

The Companies (Audit and Auditors) Amendment Rules, 2025, notified on May 30, 2025, and effective from July 14, 2025, introduce key updates to Rule 13 of the Companies (Audit and Auditors) Rules, 2014. The amendment mandates electronic filing of the auditor’s report in Form ADT-4 by substituting clause (d) and omits clauses (e) and (f) of Rule 13(2). Additionally, Forms ADT-1, ADT-2, ADT-3, and ADT-4 have been completely revised and replaced with updated versions in the Annexure. These changes align with the government’s push for digital compliance and streamlined reporting under the Companies Act, 2013.

C.COMPANIES (REGISTRATION OFFICES AND FEES) AMENDMENT RULES, 2025 – SUBSTITUTION OF FORM GNL-1

The Companies (Registration Offices and Fees) Amendment Rules, 2025, notified via G.S.R. 360(E) on May 30, 2025, and effective from July 14, 2025, introduce a key change to the Companies (Registration Offices and Fees) Rules, 2014. The amendment substitutes the existing Form GNL-1 with a revised version in the Annexure. This change is part of the government’s continued efforts to modernize and streamline company filings under the Companies Act, 2013.

D. COMPANIES (FILING OF DOCUMENTS AND FORMS IN EXTENSIBLE BUSINESS REPORTING LANGUAGE) AMENDMENT RULES, 2025 – AMENDMENT IN RULE 3; SUBSTITUTION OF EFORM AOC-4 XBRL

The Companies (Filing of Documents and Forms in Extensible Business Reporting Language) Amendment Rules, 2025, notified on June 6, 2025, and effective from July 14, 2025, introduce key changes to XBRL filings. Companies filing financial statements in eForm AOC-4 XBRL must now also attach a signed PDF copy of the complete financial statements, including the Board’s Report, Auditor’s Report, and other documents as per Section 134 of the Companies Act, 2013. Additionally, the format of eForm AOC-4 XBRL in Annexure-I has been substituted with a revised version. These changes aim to enhance the authenticity and completeness of digital filings.

A. MODIFICATIONS UNDER THE INTERNATIONAL FINANCIAL SERVICES CENTRES AUTHORITY (ANTI MONEY LAUNDERING, COUNTER-TERRORIST FINANCING AND KNOW YOUR CUSTOMER) GUIDELINES, 2022

IFSCA’s circular dated June 5, 2025, updates its AML/CFT and KYC Guidelines to align with amended PML Rules. Key updates include:

• Removal of “city council tax receipts” as address proof.
• Customers using alternate address documents must submit updated OVDs within 3 months.
• Regulated Entities must use KYC Identifiers from CKYCR and avoid duplicate KYC unless necessary.
• Any KYC updates must be shared with CKYCR within 7 days; CKYCR will inform other linked entities.
• Applies to banks, insurers, brokers, fund managers, and other financial entities.
• Indian nationals’ KYC must be uploaded to CKYCR; for foreign nationals, specified documents are acceptable.

A. LIMITED RELAXATION FROM COMPLIANCE WITH CERTAIN PROVISIONS OF THE SEBI (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2015

SEBI, via Circular No. SEBI/HO/DDHS/DDHS-PoD-1/P/CIR/2025/83 dated June 5, 2025, has extended relaxation from compliance with Regulation 58(1)(b) of the SEBI LODR Regulations for listed entities with non-convertible securities. This regulation mandates sending hard copies of salient financial document summaries to security holders without registered email IDs.

In line with MCA’s General Circular No. 9/2024, SEBI has:

• Exempted penal action for non-sending of hard copies during the period October 1, 2024 to June 5, 2025, provided MCA conditions are met.
• Extended similar relaxation from June 6 to September 30, 2025, on the condition that web-links to the financial summaries are provided in advertisements as per Regulation 52(8).

This circular is effective immediately and aims to reduce compliance burden while ensuring digital accessibility of financial information.

Disclaimer: Information in this note is intended to provide only a general update of the subjects covered. It is not intended to be a substitute for detailed research or the exercise of professional judgment. KNM accepts no responsibility for loss arising from any action taken or not taken by anyone using this publication. Updates for the period 31.05.2025

Executive Summary

Income Tax

• Section 37(1)- Enforcement of Section 152 And 153.
• Section 139- Extension of Due Date to file Return of Income to 15^th September, 2025.
• Income Tax Amendments Rules- Substitution of ITR Forms.

Goods And Services Tax (GST)

• Grievance redressal mechanism for processing of application for GST registration, Instruction no. 4/2025 – GST [F.No. CBIC – 20016/24/2025 – GST], dated 02-05-2025
• Timely production of records/information for audit Instruction no. 5/2025 – GST [F. No. Ccb-20015/2/2025 – GST], dated 02-05-2025

Companies Act 2013/ Other Laws

• MCA issued Companies (Indian Accounting Standards) Amendment Rules, 2025
• MCA issued Companies (Cost Records and Audit) Amendment Rules, 2025
• Ministry of Corporate Affairs amends Annual Filing Forms MGT-7, MGT-7A, and MGT-15
• Insolvency and Bankruptcy Board of India amends The Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016
• Reporting on Firms Portal – Issuance of Partly Paid Units by Investment Vehicles
• Process for appointment, Re-appointment, termination, or acceptance of resignation of specific Key Management
• Personnel (KMPs) of a Market Infrastructure Institution (MII) – Cooling-Off Period for KMPs of an MII joining a Competing MII – Provision relating to re-appointment of Public Interest Directors (PIDs)

A. Section 37(1) of the Income Tax Act, 1961- Enforcement of Section 152 and 153, Dated 06-05-2025

In exercise of the powers conferred by section 151 of the Finance Act, 2017 (7 of 2017), the Central Government hereby appoints the 9th day of May, 2025 as the date on which sections 152 and 153 of the said Act, relating to amendments in the Payment and Settlement Systems Act, 2007 (51 of 2007), shall come into force.

B. Section 139 of the Income Tax Act, 1961 – Extension of Due Date for furnishing Return of Income for A.Y. 2026-27, Dated 27-05-2025

The Central Board of Direct Taxes (CBDT), in exercise of its powers under Section 119 of the Income-tax Act, 1961 (‘the Act\ extends the due date of furnishing of Return of Income under sub-section (1) of section 139 of the Act for the Assessment Year 2025-26 in the case of assessees referred in clause (c) of Explanation 2 to sub-section (1) of section 139 of the Act, which is 31st July, 2025 to 15th September, 2025.

C. Income Tax Amendment Rules, 2025 – Substitution of ITR Forms

In exercise of the powers conferred by section 139, read with section 295 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962, namely:

• Income-Tax Twelfth Amendment Rules, 2025- Substitution of Forms- ITR 1 and ITR 4
• Income-Tax Thirteenth Amendment Rules, 2025- Substitution of Forms- ITR 3
• Income-Tax Fourteenth Amendment Rules, 2025- Substitution of Forms- ITR 5
• Income-Tax Fifteenth Amendment Rules, 2025- Substitution of Forms- ITR 2
• Income-Tax Sixteenth Amendment Rules, 2025- Substitution of Forms- ITR 6
• Income-Tax Seventeenth Amendment Rules, 2025- Substitution of Forms- ITR V
• Income-Tax Eighteenth Amendment Rules, 2025- Substitution of Forms- ITR 7
• Income-Tax Nineteenth Amendment Rules, 2025- Substitution of Forms- ITR U

A. Grievance redressal mechanism for processing of application for GST registration, Instruction no. 4/2025 – GST [F.No. CBIC – 20016/24/2025 – GST], dated 02-05-2025

Grievance Redressal for GST Registration – Central Jurisdiction

As per CBIC Instruction No. 3/2025 dated 17.04.2025:

1. Applicants under Central Jurisdiction facing issues with queries or rejection of GST registration can contact the Zonal Principal Chief Commissioner/Chief Commissioner.
2. For faster grievance redressal:

• Zones must share a dedicated email ID for grievance submission.
• Applicants should email ARN, jurisdiction (Centre/State), and the issue briefly.
• If it concerns State jurisdiction, it will be forwarded to the State authority and the GST Council Secretariat.

3. Chief Commissioners must:

• Ensure timely resolution and inform applicants.
• Advise applicants if queries are valid.
• Send a monthly report to DGGST for Board review.

4. Any implementation issues should be reported to the Board.

B. Timely production of records/information for audit Instruction no. 5/2025 – GST [F. No. CCB-20015/2/2025 – GST], dated 02-05-2025

Submission of Records to the Comptroller and Auditor General of India, Audit Teams

1. Report 7 of 2024 flagged non/partial sharing of records with audit teams.
2. As per Article 149, the Comptroller and Auditor General of India has the authority to audit the government. accounts and entities.
3. Field officers must provide all required records/information to the Comptroller and Auditor General of India’s audit teams without delay.
4. If records are with the taxpayer, send them a request letter and follow up to ensure timely submission. These issues are with the approval of the Chairman, CBIC.

A. MCA Issued Companies (Indian Accounting Standards) Amendment Rules, 2025

The Ministry of Corporate Affairs (MCA) issued a notification on May 7, 2025, enacting the Companies (Indian Accounting Standards) Amendment Rules, 2025. These rules amend the Companies (Indian Accounting Standards) Rules, 2015, primarily focusing on Indian Accounting Standard (Ind AS) 21, which deals with the effects of changes in foreign exchange rates. The amendments introduce detailed guidance on assessing whether a currency is exchangeable into another currency, estimating the spot exchange rate when a currency is not exchangeable, and the required disclosures in such circumstances. Definitions and application guidance are added to clarify terms and processes related to exchangeability for different purposes, such as reporting foreign currency transactions or translating foreign operations. Corresponding amendments are also made to Ind AS 101 regarding first-time adoption of Ind AS in the context of severe hyperinflation and non-exchangeable currencies. These amendments are applicable for annual reporting periods beginning on or after April 1, 2025, with specific transitional provisions outlined.

Effective April 1, 2025, companies delaying payments to Micro and Small Enterprises (MSEs) beyond 45 days will face.

B. MCA issued Companies (Cost Records and Audit) Amendment Rules, 2025.

The Ministry of Corporate Affairs (MCA) has issued a new notification, G.S.R. 361(E), bringing important changes to how companies manage and report their cost audits. These changes are part of the Companies (Cost Records and Audit) Amendment Rules, 2025, and will come into effect from July 14, 2025. The focus of this amendment is to replace and modernize two key forms used by companies: Form CRA-2 and Form CRA-4. These forms are used to appoint cost auditors and to file cost audit reports with the Central Government.

C. Ministry of Corporate Affairs amends Annual Filing Forms MGT-7, MGT-7A, And MGT-15

The Ministry of Corporate Affairs (MCA) has recently released an official notification dated 30th May, 2025, regarding some rules further added to amend the Companies (Management and Administration) Rules, 2014, by the Central Government of India, in exercise of its powers granted under sub-sections (1) and (2) of section 469 of the Companies Act, 2013 (18 of 2013), specifically:

• These amended rules may now be called the Companies (Management and Administration) Amendment Rules, 2025.
• These amendments will be made effective from the 14th day of July, 2025.
• In the Companies (Management and Administration) Rules, 2014, the forms MGT-7, MGT-7A, and MGT-15 are being replaced with new e-forms.

1. Insolvency and Bankruptcy Board of India amends The Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016

The Insolvency and Bankruptcy Board of India (IBBI/Board) has notified the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) (Fourth Amendment) Regulations, 2025 (Amendment Regulations) on 26th May, 2025. The amendments, which come into immediate effect, aim to further streamline and strengthen the corporate insolvency resolution process.

Key highlights of the Amendment Regulations are as follows:—

FEMA

1. Reporting on Firms Portal – Issuance of Partly Paid Units by Investment Vehicles

Investment vehicles issuing partly paid units to non-residents must report these transactions on the FIRMS (Foreign Investment Reporting and Management System) portal using Form InVI. A special one-time window allows for reporting within 180 days from the date of the circular for issuances before May 23, 2025, without late submission fees. Issuances made on or after May 23, 2025, must be reported within 30 days, as per existing regulations.

A. Process for appointment, Re-appointment, termination, or acceptance of resignation of specific Key Management Personnel (KMPs) of a Market Infrastructure Institution (MII) – Cooling-Off Period For KMPs of an MII joining a Competing MII – Provision relating to re-appointment of Public Interest Directors (PIDs)

Market Infrastructure Institutions (MIIs) such as stock exchanges, clearing corporations, and depositories. Here’s an overview of the key provisions concerning the appointment, reappointment, termination, and cooling-off periods for Key Management Personnel (KMPs) and Public Interest Directors (PIDs

1. Appointment, Reappointment, and Termination of Specific KMPs

SEBI has mandated that the appointment, reappointment, or termination of specific KMPs—including the Compliance Officer (CO), Chief Risk Officer (CRO), Chief Technology Officer (CTO), and Chief Information Security Officer (CISO)—must receive approval from the Governing Board of the MII. Previously, these decisions were within the purview of the Nomination and Remuneration Committee (NRC) of the MII.

2. Cooling-Off Period for KMPs and Directors Joining Competing MIIs

The Governing Board of an MII may prescribe a minimum cooling-off period for its KMPs and Directors—including the Managing Director (MD) and PIDs—before they can join a competing MII. However, SEBI will no longer prescribe a mandatory cooling-off period for PIDs transitioning from one MII to another.

3. Reappointment of Public Interest Directors (PIDs)

The existing process for the appointment of PIDs, which requires prior approval from SEBI but does not mandate shareholder approval, will continue. If the Governing Board of an MII decides not to reappoint an existing PID after their first term, it must record the rationale for this decision and communicate it to SEBI.

Disclaimer Information in this note is intended to provide only a general update of the subjects covered. It is not intended to be a substitute for detailed research or the exercise of professional judgment. KNM accepts no responsibility for loss arising from any action taken or not taken by anyone using this publication. Updates for the period 31.05.2025

Executive Summary

Income Tax

• Section 37(1)- No deduction or allowance in respect of expenses incurred to settle proceedings in relation to contraventions or defaults.
• Section 89(1)(L), Last date to file declaration of tax arrears with the Designated Authority.
• Section 54EC, No capital gains tax if the amount is invested in specified bonds.
• Ninth Amendment Rules, 2025
• Tenth Amendments Rules, 2025
• Eleventh Amendment Rules, 2025
• Section 206C– TCS under section 206C(1F) shall be liable on notified goods exceeding specified value

Goods And Services Tax (GST)

• Notification no. 11/2025 – Central Goods and Services Tax (Second Amendment) Rules, 2025 – Amendment in Rule 164, dated 27-03-2025
• Circular no. 248/05/2025 – GST, various issues related to availment of benefit of Section 128A of the CGST Act, 2017, dated 27-03-2025
• Frequently Asked Questions on ‘Restaurant Service’ Supplied At ‘Specified Premises’, dated 28-03-2025
• Instruction no. 3/2025 – GST, instructions for processing applications for gst registration, dated 17-04-2025
• Press release, the government is not considering levying Goods and Services Tax (GST) on UPI transactions over INR 2,000, dated 18-04-2025
• S.R. 256(E) – GST Appellate Tribunal Rules, 2025, dated 24-05-2025

Companies Act 2013/ Other Laws

• Stricter Compliance for Delayed Payments to MSMEs
• Second Amendment to CIRP Regulations
• Focus on the Real Estate Sector in CIRP
• Capping of Penalties for FEMA Violations
• Enhanced Disclosures by Foreign Portfolio Investors (FPIs)

A. SECTION 37(1) OF THE INCOME-TAX ACT, 1961 – BUSINESS EXPENDITURE – ALLOWABILITY OF – NO DEDUCTION OF ALLOWANCE IN RESPECT OF EXPENSES INCURRED TO SETTLE PROCEEDINGS UNDER NOTIFIED LAWS, DATED 23-04-2025

In exercise of the powers conferred by clause (iv) of Explanation 3 of sub-section (1) of section 37 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby notifies that any expenditure incurred to settle proceedings initiated about contravention or defaults under the following laws shall not be deemed to have been incurred for business or profession and no deduction or allowance shall be made in respect of such expenditure, namely: —

(a)  The Securities and Exchange Board of India Act, 1992 (15 of 1992);

(b)  The Securities Contracts (Regulation) Act, 1956 (42 of 1956);

(c)  The Depositories Act, 1996 (22 of 1996);

(d)  The Competition Act, 2002 (12 of 2003).

This notification shall come into force on the date of its publication in the Official Gazette.

B. SECTION 89(1)(L) OF THE FINANCE (NO.2) ACT, 2024 – LAST DATE FOR FILING DECLARATION IN RESPECT OF TAX ARREAR TO DESIGNATED AUTHORITY, DATED 08-04-2025

In exercise of the powers conferred by clause (l) of sub-section (1) of section 89 of the Finance (No. 2) Act, 2024 (15 of 2024), the Central Government hereby notifies under the Direct Tax Vivad se Vishwas Scheme, 2024, the 30th day of April, 2025 as the last date, on or before which a declaration in respect of tax arrears shall be filed by the declarant to the designated authority, per the provisions of section 90 of the said Act.

C. SECTION 54EC OF THE INCOME-TAX ACT, 1961 – CAPITAL GAINS NOT TO BE CHARGED ON INVESTMENT IN CERTAIN BONDS – NOTIFIED BONDS, DATED 07-04-2025

1. In exercise of the powers conferred by clause (ba) of Explanation to section 54EC of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby notifies that bonds redeemable after five years and issued on or after 1st day of April, 2025, by the Housing and Urban Development Corporation Limited (HUDCO) (a public financial institution notified by the Central Government under section 2(72) of the Companies Act, 2013), as ‘long-term specified asset’ for the said section.
2. HUDCO shall utilize the proceeds from such bonds only for those infrastructure projects that can service the debt out of the project revenues without being dependent on the State Governments for the service of debts.

D. INCOME-TAX (NINTH AMENDMENT) RULES, 2025 – AMENDMENT IN RULE 114, DATED 03-04-2025

In exercise of the powers conferred by sub-section (2A) of section 139AA, read with section 295 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962, namely:—

1. (1) These rules may be called the Income-tax (Ninth Amendment) Rules, 2025.

(2) They shall come into force with effect from the date of their publication in the Official Gazette.

2. In the Income-tax Rules, 1962, in rule 114, after sub-rule (5A), the following shall be inserted, namely:—

“(5AA) Every person who has been allotted permanent account number on the basis of Enrolment ID of Aadhaar application form filed prior to the 1st day of October, 2024, shall intimate his Aadhaar number to the Principal Director General of Income-tax (Systems) or Director General of Income-tax (Systems) or the person authorized by the said authorities.”

Such intimation shall be made on or before the 31st day of December, 2025 or such date as may be specified by the Central Board of Direct Taxes in this behalf.

E. INCOME-TAX (TENTH AMENDMENT) RULES, 2025 – INSERTION OF RULE 12AE AND FORM ITR-B, DATED 07-04-2025

In exercise of the powers conferred by section 158BC, read with section 295 of the Income-tax Act, 1961, the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962, namely:—

1. (1) These rules may be called the Income-tax (Tenth Amendment) Rules, 2025.

(2) They shall be deemed to have come into force on the 1st day of September 2024.

2. In the Income-tax Rules, 1962, after rule 12AD, the following rule shall be inserted, namely: ––

“12AE. Return of income under section 158BC.—

(1) The return of income required to be furnished by any person under clause (a) of sub-section (1) of section 158BC, relating to any search initiated under section 132 or requisition made under section 132A on or after the 1st day of September, 2024 shall be in the Form ITR-B and be verified in the manner indicated therein.

(2) The return of income referred to in sub-rule (1) shall be furnished by a person, mentioned in column (2) of the Table below in the manner specified in column (3) thereof: ––

(3) The Principal Director-General of Income-tax (Systems) or Director-General of Income-tax (Systems) shall specify the procedures, formats and standards for ensuring secure capture and transmission of data and shall also be responsible for evolving and implementing appropriate security, archival and retrieval policies in relation to furnishing the return in the manners specified in column (3) of the Table.

(4) In a case where the claim of credit of the tax payments is made against undisclosed income of the block period other than by way of self-assessment tax for the block period, claim of such credits and the allowability thereof shall be subject to the verification by and satisfaction of, the Assessing Officer.”

F. INCOME-TAX (ELEVENTH AMENDMENT) RULES, 2025 – AMENDMENT IN FORM NO. 27EQ, DATED 21-04-2025

In exercise of the powers conferred by section 295, read with section 206C of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962, namely: —

1. (1) These rules may be called the Income-tax (Eleventh Amendment) Rules, 2025.

(2) They shall come into force on the date of their publication in the Official Gazette.

2. In the Income-tax Rules, 1962, in Form No. 27EQ, in the Annexure, in the Notes thereto, in Note 11, in the table, after the row relating to “Collection at source on sale of motor vehicle”, the following shall be inserted, namely:—

G. SECTION 206C OF THE INCOME TAX ACT, 1961 – TCS- NOTIFIED GOODS EXCEEDING SPECIFIED VALUE IN RESPECT OF WHICH COLLECTION OF TAX SHALL BE MADE UNDER SUB-SECTION (1F) OF SAID SECTION, DATED 22-04-2025

In exercise of the powers conferred by clause (ii) of sub-section (1F) of section 206C of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby notifies the following goods of the value exceeding ten lakh rupees for collection of tax at source as specified therein —

This notification shall come into force on the date of its publication in the Official Gazette.

A. NOTIFICATION NO. 11/2025- CENTRAL GOODS AND SERVICES TAX (SECOND AMENDMENT) RULES, 2025 – AMENDMENT IN RULE 164, DATED 27-03-2025

Central Goods and Services Tax (Second Amendment) Rules, 2025 – Key Changes:

1. Amendments to Rule 164:
   1. Changes in Sub-rule (4):

• No Refund: No refund will be granted for any tax, interest, or penalty already paid for periods before the 2025 amendment.
• Partial Withdrawal of Appeal: If an appeal involves both eligible (1st July 2017 – 31st March 2020) and non-eligible periods, the applicant can choose to opt out only for the eligible period.
  1. Changes in Sub-rule (7):
• No Need to Fully Withdraw Appeal: The applicant does not have to withdraw the entire appeal; they only need to inform the authority about opting out for the eligible period.
• Deemed Withdrawal: The appeal will be considered withdrawn only to the extent of the eligible period (1st July 2017 to 31st March 2020).

1. CIRCULAR NO. 248/05/2025 – GST, VARIOUS ISSUES RELATED TO AVAILMENT OF BENEFIT OF SECTION 128A OF THE CGST ACT, 2017, DATED 27-03-2025

1. FREQUENTLY ASKED QUESTIONS ON “RESTAURANT SERVICE” SUPLLIED AT “ SPECIFIED PREMISES”, DATED 28-03-2025

3. INSTRUCTION NO. 3.2025 – GST, INSTRUCTIONS FOR PROCESSING APPLICATIONS FOR GST REGISTRATION, , DATED 17-04-2025

1. PRESS RELEASE, GOVERNMENT IS NOT CONSIDERING LEVYING GOODS AND SERVICES TAX (GST) ON UPI TRANSACTIONS OVER INR 2000, DATED 18-04-2025

• No GST is being proposed on UPI transactions above INR 2,000; claims are false and baseless.
• GST is charged only on payment service charges like MDR (Merchant Discount Rate), not on UPI transactions.
• Since January 2020, MDR has been removed for Person-to-Merchant (P2M) UPI transactions by CBDT.
• As no MDR is charged on UPI P2M payments, no GST applies on such transactions.
• Government promotes UPI growth through an Incentive Scheme supporting low-value P2M transactions:
• FY 2021-22: INR 1,389 crore
• FY 2022-23: INR 2,210 crore
• FY 2023-24: INR 3,631 crore
• India leads in digital payments: 49% of global real-time transactions (as per ACI Worldwide Report 2024).
• UPI transaction value has grown massively:
• From INR 21.3 lakh crore (FY 2019-20) ➔ to INR 260.56 lakh crore (FY 2024-25).
• P2M transactions alone reached INR 59.3 lakh crore.

1. S.R. 256(E)- GST APPELLATE TRIBUNAL RULES, 2025, DATED 24-05-2025

1. STRICTER COMPLIANCE FOR DELAYED PAYMENTS TO MSMEEffective April 1, 2025, companies delaying payments to Micro and Small Enterprises (MSEs) beyond 45 days will face.

• Mandatory MCA Filings: Companies must file a half-yearly return (Form MSME-1) detailing outstanding dues exceeding 45 days.
• Interest Penalties: Compound interest at three times the RBI bank rate (approximately 18%) will be levied on delayed payments.

• Tax Disallowance: Interest paid on delayed payments will not be allowed as a business expense under Section 43B(h) of the Income Tax Act.

Applicability:

• Applies to companies procuring goods or services from MSEs registered under Udyam Registration.

• Does not apply to medium enterprises.

A. SECOND AMENDMENT TO CIRP REGULATIONS

On April 3, 2025, the IBBI introduced the Second Amendment to the Insolvency Resolution Process for Corporate Persons (CIRP) Regulations, 2016. The key change involves the revision of Form H (Compliance Certificate), requiring resolution professionals to provide more detailed disclosures. This includes information on the successful resolution applicant, plan implementation strategies, and income tax loss details, aiming to enhance transparency in the resolution process.

B. FOCUS ON REAL ESTATE IN CIRP

In amendments effective from February 3, 2025, the IBBI addressed challenges in real estate insolvency cases. Notable provisions include:

• Allowing resolution professionals to hand over possession of properties to homebuyers during the resolution process.
• Permitting land authorities to participate in the Committee of Creditors (CoC) meetings.
• Mandating resolution professionals to prepare a report on real estate development rights within 60 days to aid informed decision-making.

FEMA

A. CAPPING OF PENALTIES FOR FEMA VIOLATIONS

The RBI has amended its compounding framework under FEMA, introducing a cap of ₹2 lakh per contravention for specific regulatory violations. This move aims to simplify compliance and encourage voluntary disclosures.

Key Highlights:

• Applicable Violations: Includes delays in repatriation of export proceeds, non-repatriation of Liberalised Remittance Scheme (LRS) proceeds within 180 days, and issuance of high-value shares as gifts without RBI approval.
• Discretionary Powers: Compounding authorities have the discretion to impose reduced penalties based on the nature of the contravention and public interest considerations.
• Legal Framework: Guided by Section 15 of FEMA, 1999, allowing the RBI to compound contraventions upon application by the violator.

A. ENHANCED DISCLOSURES BY FOREIGN PORTFOLIO INVESTORS (FPIs)

On April 9, 2025, SEBI amended its circular mandating additional disclosures by FPIs that meet certain objective criteria. This amendment aims to bolster transparency and regulatory oversight of foreign investments in Indian markets.

Disclaimer: Information in this note is intended to provide only a general update of the subjects covered. It is not intended to be a substitute for detailed research or the exercise of professional judgment. KNM accepts no responsibility for loss arising from any action taken or not taken by anyone using this publication. Updates for the period 30.04.2025.

Executive Summary

Income Tax

• Revised Income Tax Slab under Section 115BAC rates effective from April 1^st, 2025.
• Changes in provisions of Tax Deducted at Source.
• Key changes in Tax Collected at Source (TCS) provisions effective April 1^st, 2025.
• New Limits for Partnership Firms under Section 40b.
• Other Changes made in the Income Tax Act, 1961, effective from April 1^st, 2025.

Goods And Service Tax (GST)

• Section 3, read with section 5 of the Central Goods and Services Tax Act, 2017, and section 3 of the Integrated Goods and Services Tax Act, 2017 – officers under this act – powers of officers – appointment of officers – amendment in notification no. 2/2017-central tax, dated 19-6-2017
• Notification No. 16/2024-Central Tax, dated August 6, 2024, which makes ISD provisions mandatory from April 1, 2025.

Companies Act 2013/ Other Laws

• directs all companies to submit a half-yearly MCA return for delayed MSE payments exceeding 45 days
• Revises investment and turnover criteria for classifying enterprises as MSMEs
• IBBI Mandates Detailed Disclosure of Carry Forward Losses in Information Memorandum
• SEBI Amends LODR Regulations, 2015; Increases HVDLE Threshold to ₹1,000 Crore
• SEBI Amends PIT Regulations, Expands Scope of Unpublished Price Sensitive Information (UPSI)

INCOME TAX CHANGES EFFECTIVE FROM APRIL 1^ST, 2025:

The Budget 2025 introduced some major changes to the Income Tax Act 1961 to simplify the tax structure in India. These changes will come into effect on 1st April 2025 and will be relevant from FY 2025-26 onwards.

A. REVISED INCOME TAX SLAB RATES

The Budget 2025 proposed new tax slab rates under section 115BAC, i.e., the New Tax Regime or the Default Tax Regime. This was to ensure that individuals save more and increase their spending capacity. These revised tax slab rates will be applicable for income earned in FY 2025-26 onwards.

• Rebate under Section 87A has been increased to ₹60,000 (previously ₹25,000). The threshold has been increased from Rs. 7,00,000 to 12,00,000

B. CHANGES IN TDS THRESHOLDS

Significant changes in the provisions of Tax Deducted at Source (TDS) will take effect from April 2025. One of the key proposals includes an increase in the threshold limits for various TDS sections, benefiting both individuals and businesses. The revised TDS thresholds for different sections are as follows:

Omission of Sections 206AB & 206CCA – Higher TDS Provisions Removed

Sections 206AB and 206CCA, which mandated a higher TDS/TCS rate for non-filers of income tax returns, have been removed. Previously, taxpayers who had not filed their income tax returns for the last two years faced higher deduction rates. With the removal of these sections, businesses and individuals will no longer be subject to higher TDS/TCS rates for non-compliance.

C. TCS AMENDMENTS

Key changes in Tax Collected at Source (TCS) provisions effective from April  1^st 2025, are as below:

D. NEW LIMITS FOR PARTNER REMUNERATION

Revised remuneration limits for partners in firms:

E. OTHER CHANGES:

• Startups – Tax Holiday Extension (Section 80-IAC):

The government has extended the tax holiday for eligible startups under Section 80-IAC until March 31, 2030. Startups that qualify under this section will continue to enjoy a 100% deduction on profits for three consecutive assessment years out of their first ten years of incorporation, provided they meet the prescribed conditions.

• IFSC Benefits – Extended Tax Concessions:

To promote financial activities in the International Financial Services Centre (IFSC), the government has extended tax concessions until March 31, 2030. This includes exemptions and tax benefits for units operating in the IFSC, making it an attractive destination for global financial businesses.

• Unit Linked Insurance Plans (ULIPs) – Taxation on Proceeds:

Proceeds from Unit Linked Insurance Plans (ULIPs) will now be taxed as capital gains if:

• The annual premium paid exceeds 10% of the sum assured or
• The total premium across policies exceeds ₹2.5 lakh per year

This change aims to curb the misuse of high-premium ULIPs as a tax-free investment avenue while maintaining their original purpose as an insurance product.

A. SECTION 3, READ WITH SECTION 5 OF THE CENTRAL GOODS AND SERVICES TAX ACT, 2017 AND SECTION 3 OF THE INTEGRATED GOODS AND SERVICES TAX ACT,2017- OFFICERS UNDER THIS ACT- POWERS OF OFFICERS- APPOINTMENT OF OFFICERS- AMENDMENT IN NOTIFICATION NO. 2/2017- CENTRAL TAX, DATED 19-6-2017

Key Amendments to Notification No. 02/2017-Central Tax:

The Central Government hereby amends Notification No. 02/2017-Central Tax, published in the Gazette of India (G.S.R. 609(E)) dated 19th June 2017.

B.NOTIFICATION NO. 16/2024- CENTRAL TAX, DATED AUGUST 6,2024, WHICH MAKES ISD PROVISIONS MANDATORY FROM APRIL 1^ST,2015

From April 1, 2025, businesses receiving input service invoices for multiple branches must register as an Input Service Distributor (ISD) and distribute ITC accordingly. This applies to shared services like audit fees, legal consultation, and software subscriptions.

Previously optional, ISD registration is now mandatory under Notification No. 16/2024-Central Tax, dated August 6, 2024. Non-compliance may lead to ITC disallowances or penalties.

Input Service Distributor

• Purpose: Distributes ITC on input services (not goods or capital goods) to branches with different GSTINs under the same PAN.
• Distribution Rule: ITC is allocated in proportion to branch turnover.
• Tax Types: ITC is distributed as CGST, SGST, or IGST based on the recipient’s location.

Compliance:

• Requires a separate GST registration.
• Must file a GSTR-6 by the 13th of the following month; recipients view ITC in GSTR-6A and claim it in GSTR-3B.
• GSTR-9 annual return is not required for ISD.
• RCM invoices should be addressed to normal registration and not ISD registration.
• The time limit to avail of ITC is based on the date of the original invoice. For example, ITC related to FY 2024-25 must be availed by November 2025.
• Businesses must align SOPs, automate ITC tracking, and train staff for seamless compliance.

Documents required: Certificate of Incorporation, PAN of applicant, Identity/Address proof of Directors, Address proof of Business, Bank details, details of all GST registrations.

A. GOVERNMENT DIRECTS ALL COMPANIES TO SUBMIT HALF-YEARLY MCA RETURN FOR DELAYED MSE OAYMENTS EXCEEDING 45 DAYS (PROSPECTUS AND ALLOTMENTS OF SECURITIES) AMENDMENT RULES, 2025

The Central Govt. has directed all Companies receiving goods or services from micro and small enterprises to submit a half-yearly return to the MCA if payments exceed 45 days from the acceptance or deemed acceptance date. The return must include (a) the outstanding payment amounts and (b) the reasons for the delay.

B. GOVERNMENT REVISES INVESTMENT AND TURNOVER CRITERIA FOR CLASSIFYING ENTERPRISES AS MSMEs

The Central Government, under the Micro, Small and Medium Enterprises Development Act, 2006, has amended the notification S.O. 2119 (E) dated 26th June 2020, following the recommendations of the Advisory Committee. The amendments revise the investment and turnover limits for classifying enterprises as Micro, Small, and Medium Enterprises (MSMEs). Key changes include:

• Micro Enterprises: The Investment limit increased from ₹1 crore to ₹2.5 crore, and the turnover limit from ₹5 crore to ₹10 crore.
• Small Enterprises: The Investment limit was raised from ₹10 crore to ₹25 crore, and the turnover limit from ₹50 crore to ₹100 crore.
• Medium Enterprises: The Investment limit was revised from ₹50 crore to ₹125 crore and the turnover limit from ₹250 crore to ₹500 crore.

These changes will come into effect from April 1, 2025.

1. IBBI MANDATES DETAILED DISCLOSURE OF CARRY FORWARD LOSSES IN INFORMATION MEMORANDUM

The Insolvency and Bankruptcy Board of India (IBBI) has instructed Insolvency Professionals to incorporate a dedicated section in the Information Memorandum (IM), explicitly outlining carry forward losses under the Income Tax Act, 1961. The disclosure must include the quantum of losses, a breakdown by specific heads, and the applicable time limits. This directive has been issued under Section 196 of the Insolvency and Bankruptcy Code (IBC), 2016.

A. SEBI AMENDS LODR REGULATIONS, 2015; INCREASES HVDLE THRESHOLD TO RS. 1,000 CRORE

The Securities and Exchange Board of India (SEBI) has revised the LODR Regulations, 2015, strengthening compliance requirements for High-Value Debt Listed Entities (HVDLEs). The threshold for HVDLE classification has been raised from ₹500 crore to ₹1,000 crore, with entities exceeding this limit required to comply within six months. Other key amendments cover the Board of Directors (BoD), Audit Committee, Nomination and Remuneration Committee, Related Party Transactions (RPTs), Secretarial Audit, and Secretarial Compliance Reports.

B. SEBI AMENDS PIT REGULATIONS, EXPANDS THE SCOPE OF UNPUBLISHED PRICE SENSITIVE INFORMATION (UPSI)

The Securities and Exchange Board of India (SEBI) has amended the Prohibition of Insider Trading (PIT) Regulations, 2015, broadening the definition of Unpublished Price Sensitive Information (UPSI). Key amendments include:

• Addition of new UPSI events such as award or termination of contracts, rating changes, fundraising plans, forensic audits, and litigation outcomes.
• Strengthened disclosure requirements related to fraud, defaults, insolvency proceedings, and regulatory actions.
• Introduction of a 2-day deadline for recording non-internal information in structured digital databases.
• Clarification that the trading window need not be closed for UPSI not originating within the listed company.

These regulations will come into effect 90 days from their publication in the Official Gazette.

Disclaimer Information in this note is intended to provide only a general update of the subjects covered. It is not intended to be a substitute for detailed research or the exercise of professional judgment. KNM accepts no responsibility for loss arising from any action taken or not taken by anyone using this publication. Updates for the period 28.03.2025

Executive Summary

Income Tax

• Section 192 of the Income-Tax Act, 1961 – Deduction at source – Salary- Clarification on Income-Tax Deduction from Salaries during FY 2024-25.
• Executive Summary on the comprehensive simplification of the Income-Tax Act, 1961.
• New slabs in the proposed new regime introduced by Finance Bill, 2025

Goods And Service Tax (GST)

• Circular no. 246/03/2025 – GST – Clarification on applicability of late fee for delay in furnishing of Form GSTR-9C, dated 30-01-2025
• Circular F. no. 190341/12/2025, dated 31-01-2025- The Ministry of Civil Aviation (MOCA) has shared details about Gazette Notification No. 08/2024 – IGST (Rate), dated 08-10-2024, issued by the Department of Revenue.
• Instruction no. 2/2025 – GST, dated 07-02-2025 – Section 128, along with Section 73 of the CGST Act, 2017, deals with waiving interest or penalties for certain tax demands and the procedure for department appeals related only to interest or penalties under Section 128A.
• Circular no. 247/04/2025 – GST, dated 14-02-2025 – Section 9 of the CGST Act, 2017, Clarification covers GST levy and collection on GST rates and the classification (Goods) based on the GST Council’s 55th meeting on 21-12-2024.

Companies Act 2013/ Other Laws

• Companies (Prospectus and Allotment of Securities) Amendment Rules, 2025
• IBBI (Voluntary Liquidation Process) (Amendment) Regulations, 2025
• IBBI Amends CIRP Regulations 2025
• SEBI (Mutual Funds) (Amendment) Regulations, 2025
• Relaxation in the timeline for reporting of differential rights issued by AIFs

A. SECTION 192 OF THE INCOME-TAX ACT, 1961 – DEDUCTION AT SOURCE – SALARY – CLARIFICATION ON INCOME-TAX DEDUCTION FROM SALARIES DURING FINANCIAL YEAR 2024-25 UNDER SECTION 192

Amendments made vide the Finance (No. 2) Act of 2024, Finance (No. 1) Act of 2024 and Finance Act of 2023 in respect of rates of deduction of income-tax from the payment of income under the head “Salaries” under section 102 of the Income-tax Act, 1961, during the financial year 2024-25

1. The term “Salary” has been defined in section 15 of the Act. As per the amendment in section 17(1) of the Act vide the finance Act, 2023. “salary”, inter alia, includes the following:

“The contribution made by the Central Government in the previous year, to the Agniveer Corpus Fund account of an individual enrolled in the Agnipath Scheme referred to in section 80CCH.”

2. As per the amendment vide the Finance Act, 2023 in section 17(2) of the Act, “perquisite”, inter alia, includes the following:

“(i)  The value of rent-free accommodation provided to the employee by his employer

 (ii) The value of any accommodation provided to the assessee by his employer at a concessional rate.”

B. Executive summary on the Comprehensive Simplifiaction of the Income-Tax Act,1961
The Income-tax Bill, 2025 has been tabled in Parliament on 13th February 2025, marking a significant step toward simplifying the language and structure of the Income-tax Act, 1961.The simplification exercise was guided by three core principles:

1. Textual and structural simplification for improved clarity and coherence.
2. No major tax policy changes to ensure continuity and certainty.
3. No modifications of tax rates, preserving predictability for taxpayers.

Quantitative Impact

The review has substantially reduced the Act’s volume, making it more streamlined and navigable. Key reductions are summarized below:

C. New slabs in the proposed new regime introduced by Finance Bill, 2025

The new tax regime applies to a person, being an individual or Hindu undivided family or association of persons [other than a co-operative society], or body of individuals, whether incorporated or not, or an artificial juridical person referred to in sub-clause (vii) of clause (31) of section.

Any individual earlier was required to pay a tax of Rs 80,000 (in the new regime) for an income of Rs. 12 lacs. Now he will be required to pay nil tax on such income.

A. Circular no. 246/03/2025 – GST – Clarification on applicability of late fee for delay in furnishing of Form GSTR-9C, dated 30-01-2025

Clarification has been issued regarding late fees for the delay in filing GSTR-9C:

• Key Point: If a taxpayer is required to file both GSTR-9 (Annual Return) and GSTR-9C, the annual return is considered complete only when both forms are submitted.
• Late Fee Applicability: If GSTR-9C is not submitted along with GSTR-9, the late fee under Section 47(2) of CGST Act applies from the due date until both forms are filed.
• Waiver of Late Fee: A special waiver has been granted through Notification No. 08/2025, allowing taxpayers to submit pending GSTR-9C for FY 2022-23 and earlier by March 31, 2025, without additional late fees beyond what was due for GSTR-9.
• No Refund: Any late fee already paid for delayed GSTR-9C submission will not be refunded.
• Trade notices are to be issued for public awareness, and any difficulties should be reported to the Board.

B. Circular F. no. 190341/12/2025, dated 31-01-2025- The Ministry of Civil Aviation (MOCA) has shared details about Gazette Notification No. 08/2024 – IGST (Rate), dated 08-10-2024, issued by the Department of Revenue

Clarification on GST Exemption for Foreign Airlines’ Import of Services:

• GST Exemption: As per the 54th GST Council meeting (09-09-2024), foreign airline establishments in India importing services from related persons abroad without consideration are exempt from GST, subject to these conditions:
• GST is paid on passenger & goods transport services in India.
• MoCA certifies that the establishment is a designated airline under a bilateral air service agreement.
• MoCA certifies that Indian airlines receive reciprocal tax exemption in the foreign country
• MoCA’s Role:
• Provided a list of designated foreign airlines operating in India for Winter 2024-25 (Annexure I).
• Consulted Air India, IndiGo, and Akasa Air on reciprocal tax exemptions (Annexure II).
• Action: The MoCA’s Office Memorandum (O.M.) and annexures are available on the CBIC website for reference.

C. Instruction no. 2/2025 – GST, dated 07-02-2025 – Section 128, along with Section 73 of the CGST Act, 2017, deals with waiving interest or penalties for certain tax demands and the procedure for department appeals related only to interest or penalties under Section 128A

Clarification on Section 128A – Waiver of Interest & Penalty:

• Provision: Section 128A of CGST Act (with Rule 164) allows waiver of interest/penalty for demands under Section 73 for FY 2017-18 to 2019-20, subject to conditions.
• Clarification Sought: Whether benefits apply if:
  • Tax is fully paid, but the department appealed due to incorrect interest calculation.
  • Penalty is not imposed or is below the threshold.
• Decision:
  • If full tax is paid and only interest/penalty is disputed, taxpayers are eligible for Section 128A benefits.
  • Appeals should be withdrawn or not filed if the only dispute is interest/penalty miscalculation.
• Action: Proper officers should withdraw appeals or accept the order if under review.

D. Circular no. 247/04/2025 – GST, dated 14-02-2025 – Section 9 of the CGST Act, 2017, Clarification covers GST levy and collection on GST rates and the classification (Goods) based on the GST Council’s 55th meeting on 21-12-2024.

Key Clarifications from the 55^th GST Council Meeting:

• GST on Pepper (Genus Piper)
  • HS Code: 0904
  • Rate: 5% GST (S. No. 38, Notification 1/2017-CT)
  • Exemption: Agriculturists supplying dried pepper are not liable for GST under Section 23(1).
• GST on Raisins by Agriculturists
  • Exemption: Raisins supplied by agriculturists are not liable for GST under Section 23(1).
• GST on Ready-to-Eat Popcorn
  • Salt & Spices: 5% GST (if loose), 12% GST (if packaged & labeled).
  • Caramel/Sugar Coated: 18% GST (HS 1704 90 90).
  • Past Period up to 14-2-2025: Issue regularized on an “as-is where-is”
• Implementation Issues: Report difficulties to the Board.

Companies (Prospectus and Allotment of Securities) Amendment Rules, 2025

The Ministry of Corporate Affairs (MCA) has issued the Companies (Prospectus and Allotment of Securities) Amendment Rules, 2025, under the Companies Act, 2013. This amendment modifies Rule 9B of the Companies (Prospectus and Allotment of Securities) Rules, 2014, granting a compliance extension for certain private companies.

Private companies (excluding Producer companies) that were not classified as small companies as of March 31, 2023, now have until June 30, 2025, to comply with the relevant sub-rule.

• IBBI (Voluntary Liquidation Process) (Amendment) Regulations, 2025

The Insolvency and Bankruptcy Board of India (IBBI) has issued the Voluntary Liquidation Process (Amendment) Regulations, 2025, effective January 28, 2025.

Key amendments include:

• The Board is now mandated to maintain a Corporate Voluntary Liquidation Account with a scheduled bank.
• New Regulation Introduces mandatory electronic filing of forms for different stages of liquidation, with specified timelines. Liquidators must ensure accurate and timely submissions, failing which a penalty of ₹500 per form per month will be imposed.
• Liquidators are now mandated to file the final report, including Form H, with the Adjudicating Authority when a scheme of compromise or arrangement under Section 230 of the Companies Act, 2013, is approved.

These amendments aim to enhance transparency, accountability, and compliance within the Voluntary Liquidation Process.

• IBBI Amends CIRP Regulations 2025

The Insolvency and Bankruptcy Board of India (IBBI) has introduced amendments to the Insolvency Resolution Process for Corporate Persons (CIRP) Regulations, effective February 3, 2025. These changes aim to streamline insolvency proceedings, particularly in the real estate sector.

Key Amendments:

• Resolution professionals (RPs) can now transfer property possession to homebuyers during the resolution process.
• Land authorities are now permitted to participate in Committee of Creditors (CoC) meetings.
• RPs must submit a report on real estate development rights within 60 days to aid decision-making.
• A monitoring committee may be formed to oversee resolution plan execution and submit quarterly progress reports to the Adjudicating Authority.
• MSME Status Disclosure: Corporate debtors must now disclose their MSME registration status to facilitate participation from eligible resolution applicants.

These amendments aim to enhance efficiency, transparency, and stakeholder confidence in the insolvency resolution process.

• SEBI (Mutual Funds) (Amendment) Regulations, 2025

The Securities and Exchange Board of India (SEBI) has introduced the Mutual Funds (Amendment) Regulations, 2025, bringing key changes to the Mutual Funds Regulations, 1996, effective April 1, 2025. The amendments require Asset Management Companies (AMCs) to invest a portion of their employees’ remuneration in mutual fund schemes based on their roles, as specified by SEBI. Additionally, AMCs must conduct stress tests on specific schemes and disclose the results in a prescribed format. The regulations also mandate that funds raised through New Fund Offers (NFOs) be deployed within a specified timeframe. Furthermore, AMCs must ensure that charges, commissions, or fees related to mutual fund distribution are paid in accordance with SEBI’s guidelines. These changes aim to enhance transparency, risk management, and accountability in the mutual fund industry.

• Relaxation in the timeline for reporting of differential rights issued by AIFs

The Securities and Exchange Board of India (SEBI) has extended the deadline for Alternative Investment Funds (AIFs) to report differential rights issues to March 31, 2025. This extension, from the original February 28, 2025 deadline, comes after requests from the AIF industry for additional time to comply with the reporting requirements.

The extension aims to provide AIFs with additional time to ensure compliance with these regulatory guidelines, thereby promoting fair and equal treatment of investors.

Disclaimer Information in this note is intended to provide only a general update of the subjects covered. It is not intended to be a substitute for detailed research or the exercise of professional judgment. KNM accepts no responsibility for loss arising from any action taken or not taken by anyone using this publication. Updates are for the period 28.02.2025

Executive Summary

Income Tax

• Income-Tax (First Amendment) Rules, 2025 – Insertion of New Rule 6GB
• Income-Tax (Second Amendment) Rules, 2025 – Amendment in Rule 21AIA – Insertion of Rules 2DAA and 21ACA
• Guidance for Application of the Principal Purpose Test under India’s Double Taxation Avoidance Agreement.
• CBDT notifies Amendments in Income- Tax Rules,1962 to prescribe conditions for applicability of Presumptive Taxation regime for Non- Resident Cruise Ship Operators.
• Section 197A, read with Section 194A of the Income-Tax Act,1961- No Deduction in certain cases.

Goods And Service Tax (GST)

• Circular No. 240/34/2024 clarifies the availability of Input Tax Credit for electronic commerce operators when services specified under Section 9(5) of the CGST Act, 2017
• Circular No. 241/35/2024 clarifies the availability of Input Tax Credit for goods delivered by the supplier at his place of business under an ex-works contract as per Section 16(2)(b) of the CGST Act, 2017.
• Clarification on place of supply of online services supplied by the suppliers of services to unregistered recipients, Circular No. 242/36/2024 – GST [F. No. CBIC-20001/14/2024 – GST], dated 31-12-2024
• Clarification on various issues pertaining to GST treatment of vouchers, Circular No. 243/37/2024 – GST [F. No. CBIC-20001/14/2024 – GST], dated 31-12-2024
• Section 69, read with section 132 of the Central Goods and Services Tax Act, 2017 – power to arrest – guidelines for arrest and bail in relation to offences punishable amendment in instruction no. 2/2022-23 [GST- investigation], dated 17-08-2022
• Section 9 of the Central Goods and Services Tax Act, 2017 – levy and collection of tax – CGST rate schedule for goods – amendment in notification no. 1/2017 – Central Tax (rate), dated 28-06-2017
• Section 11 of the Central Goods and Services Tax Act, 2017 – power to grant exemption from tax – list of CGST exempt goods (nil rated goods) – amendment in notification no. 2/2017- Central Tax (rate), dated 28-06-2017
• Section 9, read with sections 11, 15, and 16 of the CGST Act, 2017 – Amendment in CGST rate schedule for services in Notification No. 5/2025 – Central Tax, dated 16-01-2025.
• The amendment to Notification No. 12/2017-Central Tax (Rate) revises certain exemptions for CGST exempt services, including changes to specific service categories and definitions.
• The amendment to Notification No. 8/2018-Central Tax (Rate) exempts central tax on intra-state supplies of goods in excess of the specified margin of the supplier as per the updated schedule.
• The amendment to Notification No. 11/2017-Central Tax (Rate) updates the CGST rate schedule for services, including changes to specified premises and new annexures for declarations.
• The amendment to Notification No. 12/2017-Central Tax (Rate) revises certain exemptions for CGST exempt services, including changes to specific service categories and definitions.
• Section 9 of the Central Goods and Services Tax Act, 2017 – The amendment to Notification No. 13/2017-Central Tax (Rate) updates the reverse charge mechanism on certain specified supplies of services under Section 9 of the CGST Act.
• The amendment to Notification No. 17/2017-Central Tax (Rate) specifies that tax on intra-state supplies under notified categories of services shall be paid by the electronic commerce operator under Section 9 of the CGST Act.
• Notification No. 1/2025-Central Excise (N.T.) appoints officers in notified jurisdictions to pass orders on excise and service tax appeals under Section 174 of the CGST Act, 2017.
• Central Goods and Services Tax (amendment) rules, 2025 – amendment in rule 19 and 87, insertion of new rule 16a and substitution of Form reg-12, Notification No. 7/2025 – Central Tax, dated 23-01-2025
• Notification No. 08/2025-Central Tax waives penalty for failure to file Form GSTR-9C along with Form GSTR-9 for financial years, if submitted by 31st March 2025.
• CBIC cautions against fraudsters issuing fake and fraudulent summons for GST violations press release, dated 24-01-2025
• Circular No. 244/01/2025 regularizes GST payment on co-insurance premium apportioned by lead insurers and on ceding/re-insurance commission deducted by insurers from reinsurance premiums.
• Circular no. 245/02/2025 F. No. CBIC – 190354/2/2025 – to (tru-ii) – CBEC, clarifications regarding applicability of GST on certain services

Companies Act 2013/ Other Laws

• Companies (Accounts) Second Amendments Rules,2024
• IBBI amends guidelines for technical standards on core and other services under Information Utilities Regulations
• Companies with turnover above Rs 250 crore must get onboard on ‘Trade Receivables Discounting Platforms by 31.03.2025
• Prior Approval for Change in Control, transfer of Shareholdings among Immediate Relatives and Transmission of Shareholdings and their effect on Change in Control
• SEBI updates Debenture Trustee’s due diligence certificate format for unsecured debt securities

• Income – tax (First Amendment) Rules, 2025 – Insertion of New Rule 6GB

In exercise of the powers conferred by section 295, read with sub-section (1) of section 44BBC of the Income-tax Act, 1961, the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962, namely:

2025. (1) These rules may be called the Income-tax (First Amendment) Rules, 2025.

(2) They shall come into force on the date of their publication in the Official Gazette.

1. In the Income-tax Rules, 1962, after rule 2DA, the following shall be inserted namely:-

       “CCCB-Special provisions for computing profits and gains of business of operation of cruise ships in case of non-residents.”

Rule 6GB

Conditions for non-resident, engaged in the business of operation of cruise ships for section 44BBC–

For the purposes of section 44BBC, an assessee, being a non-resident, engaged in the business of operation of cruise ships shall, –

(i)      operate a passenger ship having a carrying capacity of more than two hundred passengers or length of seventy-five meters or more, for leisure and recreational purposes and having appropriate dining and cabin facilities for passengers.

(ii)   operate such ship on scheduled voyage or shore excursion touching at least two sea ports

of India or same seaports of India twice.

(iii)    operate such ship primarily for carrying passengers and not for carrying cargo; and

(iv)  operate such ship as per the procedure and guidelines if any, issued by the Ministry of     Tourism or Ministry of Shipping.

• Income – tax (Second Amendment) Rules, 2025 – Amendment in Rule 21AIA: Insertion of Rules 2DAA and 21ACA

In exercise of the powers conferred by section 295 of the Income-tax Act, 1961, the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962, namely:—

2025. (1) These rules may be called the Income-tax (Second Amendment) Rules, 2025.

(2) They shall come into force on the date of their publication in the Official Gazette.

1. In the Income-tax Rules, 1962,

• After rule 2DA, the following shall be inserted namely:-

“Conditions for the Venture Capital Fund for the clause (23FB) of section 10.–2DAA”

• After rule 21AC, the following shall be inserted namely:-

“Conditions and activities for the Finance Company located in any International Financial Services Centre for section 94B.– 21ACA”

• Guidance For Application of the Principal Purpose Test under India’s Double Taxation Avoidance Agreement

The Multilateral Convention to Implement Tax Treaty Related Provisions to Prevent Base Erosion and Profit Shifting (“MLI”) entered into force for India on 1st October, 2019. The MLI modifies some of India’s Double Taxation Avoidance Agreements (DTAAs). A key provision of the MLI is the Principal Purpose Test (PPT), which seeks to curb revenue leakage by preventing treaty abuse. While the PPT is included in most of India’s DTAAs through the MLI, it is part of some other DTAAs through bilateral processes.

1. The PPT envisages denial of benefits under a DTAA where it is reasonable to conclude, having considered all the relevant facts and circumstances that one of the principal purposes of an arrangement or transaction was to obtain a benefit, directly or indirectly, under a DTAA.
2. For DTAAs where the PPT has been incorporated through the MLI-from the date of entry into effect of the provisions of the MLI with respect to the DTAA specified in Article 35 of the MLI, as under:
3. With respect to taxes withheld at source on amounts paid or credited to non-residents, where the event giving rise to such taxes occurs on or after the first day of the previous year that begins on or after the latest of the dates on which the MLI enters into force for the Contracting Jurisdictions to the DTAA:
4. With respect to all other taxes levied by India for previous years beginning on or after the expiration of a period of six calendar months from the latest of the dates on which the MLI enters into force for the Contracting jurisdictions to the DTAA.

• India has made certain treaty-specific bilateral commitments in the form of grandfathering provisions under the following DTAAs, as on date:
  1. India-Cyprus DTAA.
  2. India-Mauritius DTAA; and
  3. India-Singapore DTAA
• CBDT notifies Amendments in Income – Tax Rules,1962 to prescribe conditions for applicability of Presumptive Taxation Regime for Non – Resident Cruise Ship Operators

As a measure to promote investment and employment, Finance (No. 2) Act, 2024 inter-alia provided a presumptive taxation regime for non-residents, engaged in the business of operation of cruise ships. Further, exemption has been provided for any income of a foreign company from lease rentals of cruise ships, received from a related company which operates such ship or ships in India. The applicability of this presumptive taxation regime is subject to the conditions, as prescribed.

The conditions which have been prescribed for non-resident, engaged in the business of operation of cruise ships provide that such non-resident shall: —

1. Operate  a passenger ship having a carrying capacity of more than 200 passengers or length of 75 meters or more, for leisure and recreational purposes and having appropriate dining and cabin facilities for passengers.
2. Operate such ship on scheduled voyage or shore excursion touching at least two sea ports of India or same sea ports of India twice;

• Operate such ship primarily for carrying passengers and not for carrying cargo; and

1. Operate such ship as per the procedure and guidelines if any, issued by the Ministry of Tourism or Ministry of Shipping.

• Section 197A, read with Section 194Q of the Income – Tax Act,1961- No Deduction in certain cases

In exercise of the powers conferred by sub-section (1F)  of Section 197A of the Income-tax Act, 1961, the Central Government hereby specifies that no deduction of tax shall be made under the provisions of section 194Q of the said Act by a person, being a buyer, in respect of purchase of goods from a Unit of International Financial Services Centre, being a seller, subject to the following conditions, namely:—

1. The seller shall-
   1. Furnish a statement -cum-declaration in the format provided to the buyer giving details of previous years relevant to the ten consecutive assessment years for which the seller opts for claiming deduction under subsections (1A) and (2) of section 80LA of the said Act; and
   2. Such statement-cum-declaration so furnished shall be verified in the manner specified in the said Form, for each previous year relevant to the ten consecutive assessment years for which the seller opts for claiming deduction under sub-sections (1A) and (2) of section 80LA of the said Act;
2. The buyer shall-
3. Not deduct tax on payment made or credited to the seller after the date of receipt of copy of the statement- cum-declaration in the said Form from the seller; and
4. Furnish the particulars of all the payments made to the seller on which tax has not been deducted in pursuance of this notification in the statement of deduction of tax referred to in sub-section (3) of section 200 of the said Act read with rule 31A of the Income-tax Rules, 1962.
5. This notification shall come into force on 1^st day of January, 2025.

• Circular no. 240/34/2024 – GST [F. No. CBIC-20001/14/2024 – GST], dated 31-12-2024, clarifies the availability of Input Tax Credit for electronic commerce operators

The clarification confirms that electronic commerce operators (ECOs) do not need to reverse ITC for services under Section 9(5) (except for tax payments under this section, which must be in cash). ITC can still be used for the ECO’s own tax liabilities, ensuring uniform application of ITC rules.

• Circular No. 241/35/2024 – GST clarification on availability of Input Tax Credit as per clause (b) of sub-section (2) of section 16 of the Central Goods and Services Tax Act, 2017

The clarification confirms that ITC is available for goods under Ex-Works (EXW) contracts when handed over to a transporter on the buyer’s behalf, as this qualifies as “receipt” under Section 16(2)(b) of the CGST Act. The same principle applies to all EXW contracts, provided goods are used for business purposes.

• Clarification on place of supply of online services supplied by the suppliers of services to unregistered recipients, Circular No. 242/36/2024 – GST, dated 31-12-2024

Suppliers of online services must mention the unregistered recipient’s State on invoices to ensure correct place of supply under GST. Failure to do so may lead to revenue misallocation and penalties. Compliance measures, including system updates and enforcement, are required for uniform implementation.

• Clarification on various issues pertaining to GST treatment of vouchers, Circular No. 243/37/2024 – GST [F. No. CBIC-20001/14/2024 – GST], dated 31-12-2024
• Vouchers are not taxable under GST if recognized by RBI as “money” or classified as “actionable claims” (excluding betting, gambling, etc.). Trading vouchers in a P2P model is not taxable, but commission-based distribution is taxable.
• Additional services related to vouchers are taxable, while unredeemed vouchers (breakage) do not attract GST.
• Section 69, read with section 132 of the Central Goods and Services Tax Act, 2017 – power to arrest – guidelines for arrest and bail in relation to offences punishable under-said act – amendment in instruction no. 2/2022-23

Regarding this the Delhi High Court ruled that the grounds for arrest must be communicated in writing to the arrested person, to mandate written explanation and acknowledgment at the time of the Arrest Memo.

• Section 9 of the Central Goods and Services Tax Act, 2017 – levy and collection of tax – CGST rate schedule for goods – amendment in notification no. 1/2017 – Central Tax (rate), dated 28-06-2017

The Central Government has amended the CGST Act (2017) to include Fortified Rice Kernel (FRK) under specific tax schedules and revised the definition of “pre-packaged and labelled” for retail sale up to 25 kg/liters, effective immediately.

• Section 11 of the Central Goods and Services Tax Act, 2017 – power to grant exemption from tax – list of CGST exempt goods (nil rated goods) – amendment in notification no. 2/2017- Central Tax (rate), dated 28-06-2017

The CGST Act (2017) is amended to include Gene Therapy and update the definition of “pre-packaged and labelled” goods, effective immediately.

• Section 9 of the Central Goods and Services Tax Act, 2017 -Notification No. 3/2025 – Central Tax (rate) [G.S.R. 56(e)F. No. 190354/2/2025 – tru, dated 16-01-2025

The CGST Act (2017) is amended to include “food inputs” under government programs for weaker sections, with a 2.5% tax rate, effective immediately.

• Section 11, read with section 9 of the Central Goods and Services Tax Act, 2017 – power to grant exemption from tax – exemption of central tax on intra-state supplies of goods from so much tax as specified in schedule iv of notification no.1/2017 – dated 16-01-2025

The CGST Act (2017) is amended to increase the tax rate under S. No. 4 of Notification No. 8/2018 from 6% to 9%, effective immediately.

• Section 9, read with sections 11, 15, and 16 of the CGST Act, 2017 – Amendment in CGST rate schedule for services in Notification No. 5/2025 – Central Tax, dated 16-01-2025.

The CGST Act (2017) is amended to update the definition of “specified premises” for hotel accommodation services, with new annexures for opt-in and opt-out declarations, effective from 1st April 2025.

• Section 11 of the CGST Act, 2017 – Amendment in Notification No. 12/2017, Central Tax (rate), regarding CGST exempt services, in Notification No. 6/2025, dated 16-01-2025.

The CGST Act (2017) is amended to update exemptions for certain services, including transmission and distribution, motor vehicle accident fund services, and training partners approved by the National Skill Development Corporation, effective from 1st April 2025.

• Notification No. 7/2025 – Central Tax (rate) dated 16-01-2025, Section 9 of the Central Goods and Services Tax Act, 2017 – levy and collection of tax – reverse charge on certain specified supplies of services – amendment in notification no. 13/2017 – Central Tax (rate), dated 28-06-2017Notification No. 7/2025 – Central Tax (rate) dated 16-01-2025
• Section 9 of the Central Goods and Services Tax Act, 2017 – levy and collection of tax – notified categories of services, tax on intra-state supplies shall be paid by electronic commerce operator

The Central Government has amended Notification No. 17/2017-Central Tax (Rate) to substitute the definition of “specified premises” to align with clause (xxxvi) of paragraph 4 of Notification No. 11/2017-Central Tax (Rate). This amendment takes effect from April 1, 2025.

• Notification No. 1/2025-Central Excise (N.T.) appoints officers in notified jurisdictions to pass orders on excise and service tax appeals under Section 174 of the CGST Act, 2017-The Central Board of Indirect Taxes and Customs has appointed Central Excise Officers with jurisdiction to pass orders on appeals filed after July 1, 2017, under the Central Excise Act and the Finance Act.
• Central Goods and Services Tax rules, 2025 – Notification No. 7/2025 – Central Tax [F. No. CBIC-20001/15/2024 – GST], dated 23-01-2025

The CGST Rules, 2017, are amended to introduce temporary identification numbers for non-registered persons making payments, allow composition taxpayers to use FORM GST CMP-02 for intimation, and update the common portal and FORM GST REG-12 accordingly.

• Section 128, read with sections 44 and 47 of the Central Goods and Services Tax Act, 2017 – A late fee waiver is granted for delayed FORM GSTR-9 filings for FY 2017-18 to 2022-23, provided FORM GSTR-9C is filed by March 31, 2025, but no refund is given for late fees already paid.
• CBIC cautions against fraudsters issuing fake and fraudulent summons for GST violations press release, dated 24-01-2025-Taxpayers can verify the authenticity of CBIC communications, including summons, using the ‘VERIFY CBIC-DIN’ tool, and report fake summons for law enforcement action.
• Circular no. 244/01/2025 – GST F. No. CBIC – 190354/2/2025- The 53rd GST Council meeting recommended including certain insurance-related activities in Schedule III of the CGST Act, with GST payments regularized for the period 07.2017 to 31.10.2024, effective from 01.11.2024.
• Circular no. 245/02/2025 F. No. CBIC – 190354/2/2025 – to (tru-ii) – CBEC, clarifications regarding applicability of GST on certain services-The 55th GST Council meeting clarified various GST matters, including exemptions and regularizations for penal charges, payment aggregators, R&D services, skilling services, facility management, and electricity utilities, ensuring better compliance with GST laws.

• Companies (Accounts) Second Amendment Rules, 2024

The amendments to the Rules extend the deadline for filing the Corporate Social Responsibility (“CSR”) report under Form CSR-2 for the financial year 2023-2024. Initially, the deadline for filing Form No. CSR-2 for the financial year 2023-2024 under the Rules was set for December 31, 2024. However, the amendment now extends the deadline and allows companies to submit their CSR reports under Form No. CSR-2 on or before March 31, 2025, after filing of Form No. AOC-4 or AOC-4 NBFC (Ind-AS) or AOC-4 XBRL, as the case may be.

• IBBI amends guidelines for technical standards on core and other services under the Information Utilities Regulations

IBBI has notified amendments to the guidelines for technical standards for the performance of core services and other services under the IBBI (information utilities) regulations, 2017. The amendments include the use ofa  Permanent Account Number (PAN) or other OVDs for user identity verification during registration. Additionally, IUs are required to use UIDAI’s demographic authentication facility for verifying user identities.

• Companies with turnover above Rs. 250 crore must get onboarded on ‘Trade Receivables Discounting Platforms’ by 31.03.2025

In line with section 9 of the MSME Development Act, 2006, the Central Government has mandated that all companies registered under the Companies Act, 2013, with a turnover of more than Rs. 250 crores and all Central Public Sector Enterprises (CPSEs) be onboarded on the Trade Receivables Discounting System (TReDS) platforms as notified by the RBI. The onboarding process for these entities must be completed by March 31, 2025.

• Prior Approval for Change in Control, Transfer of Shareholdings among Immediate Relatives, and Transmission of Shareholdings and their effect on Change in Control

The Securities and Exchange Board of India has issued a circular on prior approval for change in control, transfer of shareholdings among immediate relatives, and transmission of shareholdings and their effect on change in control which includes the following:

1. Transfer /transmission of shareholding in case of unlisted body corporate intermediary
2. Transfer /transmission of shareholding in case of a proprietary firm-type intermediary
3. Transfer /transmission of ownership interest in case of partnership firm-type intermediary
4. The provisions of this circular shall be applicable with immediate effect.(27.12.2024)

• SEBI updates Debenture Trustee’s due diligence certificate format for unsecured debt securities

SEBI has revised the due diligence certificate format for Debenture Trustees (DTs) in unsecured debt securities under Non-Convertible Securities Regulations. Issuers must submit a due diligence certificate obtained from the Debenture Trustee during draft offer document filing and listing application, in the revised format. This circular shall be applicable with immediate effect.(29.01.2025)

Disclaimer: Information in this note is intended to provide only a general update of the subjects covered. It is not intended to be a substitute for detailed research or the exercise of professional judgment. KNM accepts no responsibility for loss arising from any action taken or not taken by anyone using this publication. Updates are for    the period 31.01.2025.

Executive Summary

Income Tax

• Section 194N of Income Tax Act,1961- Payment of Certain amounts in cash- Approved Foreign Representations to whom provision of said section shall not apply.
• Income Tax (Tenth Amendments) Rules, 2024- Insertion of Rules 10TI, 10TIA, 10TIB & 10TIC and Insertion of Form no. 3CEFC.
• CBDT Launches Electronic Campaign to address Income and transaction mismatches for FY 2023-24 and FY 2021-22.

Goods And Service Tax (GST)

• Notification No. 27/2024 – Central Tax [ (G.S.R. 729(E)) F. NO. CBIC-20016/2/2022-GST], Dated 25-11-2024, Officers under this act- Powers of officers – appointment of officers- Amendment in notification no. 2/2017 – Central Tax, Dated 19-6-2017
• Notification No. S.O. 5063(E) [F. NO. A-50050/99/2024-GSTAT-DOR], Dated 26-11-2024[As amended by notification no. S.O. 5128(E) [F.NO. A-50050/99/2024-GSTAT-DOR], Dated 29-11-2024], appellate tribunal and benches thereof- constitution of-constitution of principal and state benches of Goods and Services Tax appellate services Tax appellate tribunal
• Notification No. 28/2024- Central Tax [S.O. 5091(E)/F. NO. CBIC-20010/22/2024-GST], Dated 27-11-2024, Read with section 3 of the integrated Goods and Services Tax Act, 2017- Officers- Powers of- Appointment of officers to pass decision or orders in respect of notices issued to specified notices by officers of Directorate General Intelligence
• Notification No. 29/2024 – Central Tax [G.S.R.735(E)/F. NO. CBIC-20001/9/2024-GST], Dated 27-11-2024, furnishing of returns – extension of due date to furnish return in Form GSTR-3B for month of October, 2024, for registered persons having Principal place of business in specified state
• Notification No. S.O. 5128(E) [F. NO. A-50050/99/2024-GSTAT-DOR], Dated 29-11-2024, Appellate tribunal and benches thereof- Constitution of – Constitution of Principal and State benches of Goods and Services Tax Appellate Tribunal- Corrigendum to notification no. S.O. 5063(E), Dated 26-11-2024
• Circular No. 239/33/2024 – GST [F. NO. CBIC-20016/2/2022-GST], Dated 4-12-2024, officers under this Act- notified proper officer under Sections 73 and 74 – Amendment in circular No. 31/05/2018-GST, Dated 9-2-2018
• Notification No. 30/2024 – Central Tax [F. NO. CBIC-20001/10/2024-GST], Dated 10-12-2024, section 39 of the Central Goods and Services Tax Act, 2017 – Furnishing of returns – Extension of due date to furnish Form GSTR-3B for month of October, 2024, for registered persons having principal place of business at notified place
• Notification No. 31/2024 – Central Tax [S.O. 5392(E)/F. NO. CBIC-20010/27/2024-GST], Dated 13-12-2024, officers – Powers of – appointment of officers to pass decision or orders in respect of notices issued to specified notices by officers of Directorate General of GST Intelligence

Companies Act 2013/ Other Laws

• Caution to Public
• Extension of Time for Filing Forms to Monitor Liquidation and Voluntary Liquidation Processes under the Insolvency and Bankruptcy Code, 2016, and the Regulations made thereunder
• Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015
• Companies with turnover above Rs 250 crore must get onboard on ‘Trade Receivables Discounting Platforms’ by 31.03.2025

Section 194N of Income Tax Act, 1961-Payment of certain amounts in Cash- Approved Foreign Representatives to whom Provision of said section shall not apply

• ·In exercise of the powers conferred by the fifth proviso to section 194N of the Income-tax Act, 1961, the Central Government after consultation with the Reserve Bank of India, hereby specifies that the provisions of section 194N of the said Act shall not apply to Foreign Representations duly approved by the Ministry of External Affairs of the Government of India including Diplomatic Missions, agencies of the United Nations, International Organisations, Consulates and Offices of Honorary Consuls which are exempt from paying taxes in India as per the Diplomatic Relations (Vienna Convention) Act 1972 (43 of 1972) and the United Nations (Privileges and Immunities) Act 1947 (46 of 1947).

   

  2024. This notification shall come into effect from 1^st day of December 2024.
  • Income-Tax (Tenth Amendment) Rules,2024- Insertion of Rules 10TI, 10TIA, 10TIB & 10TIC and  Insertion of Form no. 3CEFC

  In exercise of the powers conferred by section 295, read with sub-section (2) of section 92CB of the Income-tax Act, 1961, the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962, namely: —

  1. Safe Harbour-10TIA
  2. The income-tax authorities shall accept the option for safe harbour exercised by an eligible assessee in any relevant previous year under rule 10TIB, where the income declared by such assessee from an eligible business is in accordance with the circumstances as specified in sub-rule (2), unless such safe harbour is declared invalid under the provisions of sub-rule (3) of rule 10TIB.
  3. The circumstances referred to in sub-rule (1) in respect of the eligible business mentioned in column (1) of the Table below shall be as specified in column (2) thereof, namely:-

  Eligible Business	Circumstances
  Selling of raw diamonds referred to in clause (b) of rule 10TI	The profits and gains of the eligible business chargeable to tax under the head “Profits and gains of business or profession” shall be 4 per cent. or more of the gross receipts from such business.

   

  1. Where the eligible assessee has expired the option for safe harbour under rule 10TIB in respect of the eligible business in any relevant previous year and such option is not declared invalid under the said rule, —
  2. Any deduction allowable under the provisions of sections 30 to 38 shall be deemed to have been already given full effect to and no further deduction under those sections shall be allowed;
  3. the written down value of any asset of such business shall be deemed to have been calculated as if the eligible assessee had claimed and had been actually allowed the deduction in respect of the depreciation for such previous year;
  • no set off of unabsorbed depreciation under sub-section (2) of section 32 or carried forward loss under sub-section (1) of section 72 shall be allowed to such assessee; and
  1. no set off loss from other business under sub-section (1) of section 70 or other head under subsection (1) or sub-section (2) of section 71 shall be allowed to such assessee for income chargeable to tax under the head “Profits and gains of business or profession” in respect of such business.
  2. For the purposes of exercising option for safe harbour, the assessee shall furnish Form No. 3CEFC, complete in all respects, to the Assessing Officer before furnishing the return of income under section 139 for the relevant previous year.
  3. The Assessing Officer may declare the option for safe harbour as invalid by an order in writing , where the assessee has-
  4. Availed the safe harbour by furnishing incorrect facts; or
  5. Concealed facts related to his business.
  • CBDT Launches Electronic Campaign to address Income and Transaction Mismatches for FY 2023-24 and FY 2021-22
  22. The Central Board of Direct Taxes (CBDT) has launched an electronic campaign to assist taxpayers in resolving mismatches between the income and transactions reported in the Annual Information Statement (AIS) and those disclosed in Income Tax Returns (ITRs) for the financial years 2023-24 and 2021-22. This campaign also targets individuals who have taxable income or significant high-value transactions reported in their AIS but have not filed ITRs for the respective years. The initiative is part of the implementation of the e-Verification Scheme, 2021.
  23. As part of this campaign, informational messages have been sent via SMS and e-mail to taxpayers and non-filers where mismatches have been identified between transactions reported in AIS and the ITRs filed. The purpose of these messages is to remind and guide individuals who may not have fully disclosed their income in their ITRs to take this opportunity to file revised or belated ITRs for FY 2023-24. The last date to file these revised or belated ITRs is December 31, 2024.
  24. For cases pertaining to FY 2021-22, taxpayers can file updated ITRs by the limitation date of March 31, 2025.
  25. Taxpayers can also provide their feedback, including disagreeing with the information reported in the AIS, through the AIS portal accessible via the e-filing website (https://www.incometax.gov.in/iec/foportal/).
  26. This initiative reflects the Income Tax Department’s commitment to leveraging technology to simplify compliance and ensure transparency. By utilizing third-party data, the department aims to create a more efficient, taxpayer-friendly system that aligns with the vision of Viksit Bharat.
  27. The CBDT encourages all eligible taxpayers to take advantage of this opportunity to fulfil their tax responsibilities and contribute to the nation’s economic development. This effort not only supports the government’s vision for a developed India but also promotes a culture of transparency, accountability, and voluntary compliance.

  

• Notification No. 27/2024 – Central Tax [ (G.S.R. 729(E)) F. NO. CBIC-20016/2/2022-GST], Dated 25-11-2024, Officers under this act – Powers of officers – appointment of officers – Amendment in notification no. 2/2017 – Central Tax, Dated 19-6-2017

The Central Government has amended Notification No. 02/2017-Central Tax, dated 19th June 2017, under the powers of Sections 3 and 5 of the CGST Act, 2017, and Section 3 of the IGST Act, 2017.

Key Updates:

• Revised Table V:

The updated table specifies the powers of Additional Commissioners or Joint Commissioners of Central Tax to pass orders or decisions on notices issued by officers of the Directorate General of Goods and Services Tax Intelligence (DGGI) under sections 67, 73, 74, 76, 122, 125, 127, 129, and 130 of the CGST Act, 2017.

• Jurisdiction:

The table lists 23 Commissioners and Principal Commissioners from various locations across India, including Ahmedabad South, Bengaluru East, Delhi North, Chennai South, Kolkata North, and others, who can exercise these powers.

• Effective Date:

This notification comes into effect on 1st December 2024.

• Notification No. S.O. 5063(E) [F. NO. A-50050/99/2024-GSTAT-DOR], Dated 26-11-2024[As amended by notification no. S.O. 5128(E) [F.NO. A-50050/99/2024-GSTAT-DOR], Dated 29-11-2024], appellate tribunal and benches thereof- constitution of-constitution of principal and state benches of Goods and Services Tax appellate services Tax appellate tribunal

The Central Government, under the powers granted by sub-sections (1), (3), and (4) of section 109 of the Central Goods and Services Tax Act, 2017 (12 of 2017), and based on the recommendation of the GST Council, makes the following amendments to its notification dated 31st July 2024 (S.O. 3048(E)):

• in clause (iii), in the Table of the said notification: –

• For Serial Number 25: In Column (4), replace “Varanasi” with “Prayagraj. “In Column (5), replace “Prayagraj” with “Varanasi.”
• For Serial Number 19: In Column (4), replace “Jalandhar” with “Chandigarh. “In Column (5), replace “Chandigarh” with “Jalandhar.”
  • Addition of New Clause:

A new clause (iv) is added to specify the districts under the jurisdiction of the State Benches of the GST Appellate Tribunal. The locations of the benches (Column 3), their jurisdictions (Column 4), and their sittings or circuits (Column 6) will take effect from the date of publication of this notification in the Gazette of India.

       High Court Jurisdictions in India

• Notification No. 28/2024- Central Tax [S.O. 5091(E)/F. NO. CBIC-20010/22/2024-GST], Dated 27-11-2024, Read with section 3 of the integrated Goods and Services Tax Act, 2017- Officers- Powers of- Appointment of officers to pass decision or orders in respect of notices issued to specified notices by officers of Directorate General Intelligence

Under the powers granted by Section 5 of the Central Goods and Services Tax Act, 2017, and Section 3 of the Integrated Goods and Services Tax Act, 2017, the Central Board of Indirect Taxes and Customs designates the officers Joint Commissioner or Additional Commissioner, CGST and Central Excise Thane Commissionerate. These officers are authorized to pass orders or decisions on notices issued to the individuals or entities by the Directorate General of Goods and Services Tax Intelligence under Sections 73, 74, 122, 125, and 127 of the Central Goods and Services Tax Act, 2017.

• Notification No. 29/2024 – Central Tax [G.S.R.735(E)/F. NO. CBIC-20001/9/2024-GST], Dated 27-11-2024, furnishing of returns – extension of due date to furnish return in Form GSTR-3B for month of October, 2024, for registered persons having Principal place of business in specified state
• The Commissioner, based on the recommendations of the GST Council, has extended the deadline for filing the GSTR-3B return for October 2024.
• New Deadline: November 30, 2024.
• Who is affected: Registered taxpayers whose primary business location is in Manipur and are required to file returns under Section 39(1) of the CGST Act, 2017, and Rule 61(1)(i) of the CGST Rules, 2017.
• This notification is effective retrospectively from November 20, 2024.
• Notification No. S.O. 5128(E) [F. NO. A-50050/99/2024-GSTAT-DOR], Dated 29-11-2024, Appellate tribunal and benches thereof- Constitution of – Constitution of Principal and State benches of Goods and Services Tax Appellate Tribunal- Corrigendum to notification no. S.O. 5063(E), Dated 26-11-2024

The Ministry of Finance (Department of Revenue) has issued a correction to its notification published in the Gazette of India on November 26, 2024 (S.O. 5063(E)):

• In Serial No. 21, Column (1), for the Jaipur Bench (Column 3), under Sr. 1, Column (4), the word “Alwar” is replaced with “Ajmer.”
• Circular No. 239/33/2024 – GST [F. NO. CBIC-20016/2/2022-GST], Dated 4-12-2024, officers under this Act- notified proper officer under Sections 73 and 74 – Amendment in circular No. 31/05/2018-GST, Dated 9-2-2018
• Empowerment of Additional/Joint Commissioners:
• Notification No. 2/2022-Central Tax (11th March 2022) added para 3A to empower Additional/Joint Commissioners in certain Central Tax Commissionerate’s with All India jurisdiction to adjudicate show-cause notices from the Directorate General of Goods and Services Tax Intelligence (DGGI).
• Further, Notification No. 27/2024-Central Tax (25th November 2024) expanded this empowerment to more Additional/Joint Commissioners, effective from 1st December 2024.
• Update to Circular No. 31/05/2018-GST:

7. Para 7.1 of the circular is amended for adjudication of DGGI show-cause notices when:

• Notices are issued to multiple entities (same or different PANs), or
• Multiple notices are issued to entities with the same PAN.

1. If these entities are under different Central Tax jurisdictions, adjudication can be done by any empowered Additional/Joint Commissioner with All India jurisdiction.
2. Adjudication is based on the highest demand of tax in the notice. If the principal place of business with the highest demand is in a specific jurisdiction, the case will be handled by the corresponding Additional/Joint Commissioner.

• Notification No. 30/2024 – Central Tax [F. NO. CBIC-20001/10/2024-GST], Dated 10-12-2024, section 39 of the Central Goods and Services Tax Act, 2017 – Furnishing of returns – Extension of due date to furnish Form GSTR-3B for month of October, 2024, for registered persons having principal place of business at notified place
• The due date for filing the GSTR-3B return for October 2024 is extended to 11th December 2024 for registered persons whose principal place of business is in Murshidabad, West Bengal. This applies to those required to file under section 39(1) of the Central GST Act.
• This extension is effective from 20th November 2024.
• Notification No. 31/2024 – Central Tax [S.O. 5392(E)/F. NO. CBIC-20010/27/2024-GST], Dated 13-12-2024, officers – Powers of – appointment of officers to pass decision or orders in respect of notices issued to specified notices by officers of Directorate General of GST Intelligence

The Central Board of Indirect Taxes and Customs has appointed officers like Additional/Joint Commissioner, CGST, Chandigarh to make decisions or pass orders regarding notices by Joint Director, DGGI, Hqrs issued to the notices listed by the Directorate General of Goods and Services Tax Intelligence under sections 73, 74, 122, 125, and 127 of the Central Goods and Services Tax Act, 2017.

• Caution To Public

The Securities and Exchange Board of India (SEBI) has issued a caution to the public regarding unregistered online platforms offering unlisted debt securities. These platforms lack regulatory oversight and basic investor protection. SEBI warns that these activities violate the Companies Act, 2013, SEBI Act, 1992, Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market Regulations, 2003, and SEBI (Issue and Listing of Non-Convertible Securities) Regulations, 2021. The public is advised to exercise caution when undertaking transactions on such platforms. SEBI has issued an interim order against some entities operating such platforms. Investors are advised to use online bond platforms operated by SEBI-registered stock brokers authorized by the Bombay Stock Exchange and/or the National Stock Exchange.

Extension of Time for Filing Forms to Monitor Liquidation and Voluntary Liquidation Processes under the Insolvency and Bankruptcy Code, 2016, and the Regulations made thereunder

The Insolvency and Bankruptcy Board of India has issued circular on Extension of time for filing forms to monitor liquidation and voluntary liquidation processes under the Insolvency and Bankruptcy Code, 2016, and the Regulations made thereunder. Last date of submission of the forms relating to the liquidation process is latest by December 30, 2024.

• Companies with turnover above Rs. 250 crore must get onboarded on ‘Trade Receivables Discounting Platforms’ by 31.03.2025

In line with section 9 of the MSME Development Act, 2006, the Central Government has mandated that all companies registered under the Companies Act, 2013, with a turnover of more than Rs. 250 crores and all Central Public Sector Enterprises (CPSEs) be onboarded on the Trade Receivables Discounting System (TReDS) platforms as notified by the RBI. The onboarding process for these entities must be completed by March 31, 2025.

• Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015

The Securities and Exchange Board of India has notified amendment under Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015 wherein:

1. Regulation 2, sub-regulation (1), in clause (d), sub-clause (i) shall be read as follows:

• any person who is or has been, during the six months prior to the concerned act, associated with a company, in any capacity, directly or indirectly, including by reason of frequent communication with its officers or by being in any contractual, fiduciary or employment relationship or by being a director, officer or an employee of the company or holds any position including a professional or business relationship, whether temporary or permanent, with the company, that allows such a person, directly or indirectly, access to unpublished price sensitive information or is reasonably expected to allow such access, etc.

2. They shall come into force on the date of their publication in the Official Gazette.

Disclaimer: Information in this note is intended to provide only a general update of the subjects covered. It is not intended to be a substitute for detailed research or the exercise of professional judgment. KNM accepts no responsibility for loss arising from any action taken or not taken by anyone using this publication. Updates are for    the period 30.11.2024.

Executive Summary

Income Tax

• Specifying Forms prescribed in Appendix-II of The Income Tax Rules, 1962 to be furnished electronically under Sub-Rule (1) and Sub-Rule (2) of Rule 131 of the Income Tax Rules,1962.
• Specifying Forms prescribed in Appendix-II of The Income Tax Rules, 1962 to be furnished electronically under Sub-Rule (1) and Sub-Rule (2) of Rule 133 of the Income Tax Rules,1962.
• Section 119, Read with Section 220 of The Income Tax Act, 1961- CBDT- fixing monetary limit of Income Tax Authorities in respect of reduction or waiver of interest paid or payable u/s 220(2)
• Section 119 of The Income Tax Act, 1961- CBDT- Condonation of delay u/s 119(2)(b) in filing of Form no. 10-IC and Form no. 10-ID for A.Y. 2020-21, 2021-22 and 2022-23.

Goods And Service Tax (GST)

• Circular No. 237/31/2024-GST [F.NO. CBIC-20001/6/2024-GST] Clarifying the issues regarding implementation of provisions of Sub- Section (5) and Sub-Section (6) in section 16 OF CGST ACT, 2017
• Circular No. 238/32/2024-GST [F. NO. CBIC-20001/6/2024-GST] Clarification of various doubts related to Section 128A OF THE CGST ACT, 2017
• Notification No. G.S.R. 644(E) [NO. 109 (F. NO. A-50050/2/20… Goods and Services Tax Council Secretariat, Group ‘A’ Executive posts recruitment (Amendment) Rules, 2024 – Amendment in Rule 7 and Schedule
• Corrigendum G.S.R. 652(E) [F. NO. 190354/149/2024-TO (TRU-II)-PART-I CBEC], Dated 22-10-2024, Section 9 of the Central Goods and Services Tax Act, 2017
• Corrigendum to Circular No. 237/31/2024-GST [F.NO. CBIC-20001/6/2024- GST, dated 25-10-2024, Clarifying the issues regarding implementation of provisions of Sub- Section (5) and Sub-Section (6) in section 16 of CGST ACT, 2017
• Notification No. 26/2024–CENTRAL TAX [G.S.R. 713(E)/F. NO CBIC-20001/8/2024-GST], Dated 18-11-2024, Section 39 of the Central Goods and Services Tax Act, 2017-Furnishing of Returns- Extension of due date to furnish form GSTR-3B for month of October 2024, for registered person having specified principal place of business.

Companies Act 2013/ Other Laws

• Filing of Financial Statements of Producer Companies within 60 days of Annual General Meeting
• Reporting of Foreign Exchange Transactions to Trade Repository
• Operational Framework for Reclassification of Foreign Portfolio Investment to Foreign Direct Investment (FDI)
• Onboarding Process on the Trade Receivables Discounting System
• SEBI (Bankers to an Issue) (Amendment) Regulations, 2024.

• · Specifying Forms Prescribed In Appendix-Ii Of The Income Tax Rules, 1962, To Be Furnished Electronically Under Sub Rule (1) And Sub- Rule (2) Of Rule 131 Of The Income Tax Rules, 1962

  a)      In exercise of the powers conferred under sub-rule (1) and sub-rule (2) of Rule 131 of the Income-tax Rules, 1962 (‘the Rules’), the Director General of Income Tax (Systems), Bengaluru with the approval of the Board, hereby specifies that the following Forms shall be furnished electronically and shall be verified in the manner prescribed under sub-rule (1) of Rule 131:

  Form	Description
  Form 3CEDA	Application for the rollback of an Advance Pricing Agreement
  Form 3  CO	Application form for approval under sub-section (1) of section 35CCC of the Income Tax Act, 1961

   

  2024. This notification shall come into effect from 31^st October 2024.
  • Specifying Forms Prescribed In Appendix-Ii Of The Income Tax Rules ,1962 To Be Fuurnished Elecctronically Under Sub-Rule (1) And Sub-Rule (2) Of Rule 133
  1. In exercise of the powers conferred under sub-rule (1) and sub-rule (2) of Rule 131 of the Income-tax Rules, 1962 (‘the Rules’), the Director General of Income Tax (Systems), with the approval of the Board, hereby specifies that the following Forms that shall be furnished electronically and shall be verified in the manner prescribed under sub-rule (1) of Rule 131:—

   

  Form	Description
  Form 42	Appeal against refusal to recognise or withdrawal of recognition from a provident fund
  Form 43	Appeal against refusal to approve or withdrawal of approval from a superannuation fund
  Form 44	Appeal against refusal to approve or withdrawal of approval from a gratuity fund

   

  2024. This notification shall come into effect from 22-11-2024.
  • Section 119, Read With Section 220 Of The Income Tax Act, 1961-Cbdt-Fixing Monetary Limit Of Income–Tax Authorities In Respect Of Reduction Or Waiver Of Interest Paid Or Payable Under Section 220(2)
  1. Section 220(2) of the Income-tax Act (‘the Act’) deals with the consequences of non-payment of income tax by a taxpayer. As per Section 220(2) of the Act, if a taxpayer fails to pay the amount specified in any notice of demand under section 156 of the Act,the person shall be liable to pay simple interest at the rate of 1 % per month or part of the month for the period of delay in making the payment. Further, section 220(2A) of the Act empowers the Principal Chief Commissioner (Pr. CCIT) or Chief Commissioner (CCIT) or Principal Commissioner (Pr. CIT) or Commissioner (CIT) for reduction or waiver of the amount paid or payable under section 220(2) of the Act in the circumstances specified therein.
  2. The Central Board of Direct Taxes, for the proper administration of the Act, hereby specifies the following monetary limits as below:

  Income-Tax Authority	Monetary limits for reduction or waiver of interest
  Pr. CIT/CIT	Upto Rs. 50 lacs
  CCIT/DGIT	Above Rs. 50 lacs to Rs. 1.5 crore
  Pr. CCIT	Above Rs. 1.5 crore

   

  1. The powers of reduction or waiver of interest paid or payable u/s 220(2) of the Act shall continue to be subject to satisfaction of all the following conditions-
  • Payment of such amount has caused or would cause genuine hardship to the assessee,
  • Default in the payment of the amount on which interest has been paid or was payable under the sub-section was due to circumstances beyond the control of the assessee; and
  • The assessee has co-operated in any inquiry relating to the assessment or any proceeding for the recovery of any amount due from him.
  1. The above shall come into effect from the date of issue of this circular.

   

  • Section 119 of the income tax act,1961-cbdt-condonation of the dealy under section 119(2)(b) in filing of form no. 10-ic and from no. 10-id for assessment years 2020-21, 2021-22 and 2022-23
  1. In exercise of the powers conferred under section 119(2)(b) of the Income-tax Act, 1961, the Central Board of Direct Taxes by Circular No. 6/2022, dated 17-03-2022 and Circular No. 19/2023, dated 23-10-2023 condoned the delay in filing of Form No. 10-IC as per Rule 21AE of the Income-tax Rules, 1962 for Assessment Years 2020-21 and 2021-22 in cases where the conditions mentioned in the said Circulars are satisfied.
  2. With a view to avoid genuine hardship to the assessee in exercising the option, under section 115BAA of the Act, read with Rule 21AE of the Rules or under section 115BAB of the Act, read with Rule 21AF of the Rules, the CBDT in exercise of the powers conferred under section 119(2)(b) of the Act, hereby authorizes: –
     • the Pr. Commissioners of Income Tax (‘Pr. CsIT’)/ Commissioners of Income Tax (‘CslT’) to admit and deal with the applications for condonation of delay in filing of Form No. 10-IC or Form No. 10-ID for Assessment Years 2020-21, 2021-22 and 2022-23 where there is a delay of upto 365 days.
     • the Pr. Chief Commissioners of Income Tax (‘Pr. CCsIT’)/Chief Commissioners of Income Tax (‘CCsIT’)/ Directors General of Income Tax (‘DsGIT’) to admit and deal with the applications for condonation of delay in filing of Form No. 10-IC or Form No. 10-ID for Assessment Years 2020-21, 2021-22 and 2022-23 where there is a delay of more than 365 days.
  3. The Pr. CCsIT/CCsIT/DsGIT/Pr. CsIT/CsIT shall ensure that the following conditions are satisfied, while deciding such applications: –
     • The return of income for relevant assessment year has been filed on or before the due date specified under the section 139(1) of the Act.
     • The assessee has opted for taxation, u/s 115BAA of the Act in case condonation of delay is for Form No. 10-IC and u/s 115BAB of the Act in case condonation of delay is for Form No. 10-ID, in “Filing Status” in “Part A-GEN” of the Form of Return of Income ITR-6; and
     • The assessee was prevented by reasonable cause from filing such Form before the expiry of the time allowed and the case is of genuine hardships on merits.

  No application for condonation of delay in filing of Form No. 10-IC or Form No. 10-ID shall be entertained beyond three years from the end of the assessment year for which such application is made. The time limit for filing of such application within three years from the end of the assessment year will be applicable for application filed on or after the date of issue of this Circular. A condonation application should be disposed of, as far as possible, within six months from the end of the month in which such application is received by the Competent Authority.

• Circular No. 237/31/2024-GST [F.NO. CBIC-20001/6/2024-GST] Clarifying the issues regarding implementation of provisions of Sub- Section (5) and Sub-Section (6) in section 16 OF CGST ACT, 2017
• Section 16 Amendments:
• The Finance (No. 2) Act, 2024 extends the time for claiming Input Tax Credit (ITC) retrospectively, especially for taxpayers affected by wrongful ITC claims under Section 16(4) of the CGST Act.
• ITC can be claimed under newly inserted provisions 16(5) and 16(6) for past periods where it was previously denied.
• Refunds and Appeals:
• No refund for taxes or ITC reversals due to violations of Section 16(4), even if ITC is now allowed under Section 16(5) or 16(6) (as per Section 150 of the Finance Act, 2024).
• Taxpayers who were denied ITC due to Section 16(4) can now apply for rectification through a special procedure (Notification No. 22/2024, dated 8th October 2024).
• Rectification applications must be submitted electronically within 6 months from the notification date.
• Action for Rectification:
• Taxpayers can apply for rectification if ITC was wrongly denied due to Section 16(4). The rectification will be handled by the officer who issued the original order and must be completed within 3 months.
• In case of adverse effects from rectification, natural justice principles will apply.

• Implementation:
• The tax authorities must consider the new provisions when issuing orders or rectifications for cases involving wrongful ITC claims under Section 16(4).
• Suitable notices should be issued to inform the public about these changes.
• Limitations:

Rectification applications under Notification No. 22/2024 can only be filed for cases where ITC was denied under Section 16(4) but is now allowed under Section 16(5) or 16(6). Other cases must follow the regular process within the set time limits.

• Further Clarifications: Any difficulties in implementation should be communicated to the Board for resolution.

• Circular No. 238/32/2024-GST [F. NO. CBIC-20001/6/2024-GST] Clarification of various doubts related to Section 128A OF THE CGST ACT, 2017
• Waiver of Interest/Penalty: Section 128A, effective from 1-11-2024, allows taxpayers to waive interest or penalty related to tax demands under Section 73 for FY 2017-18 to 2019-20, subject to certain conditions. The waiver applies only if the taxpayer fulfills the specified conditions.
• Key Provisions:
• Notification & Rule: Rule 164, effective from 1-11-2024, outlines the procedure for applying for the waiver. Taxpayers must pay the demanded tax by 31-03-2025 or within six months if re-determined by a proper officer.
• Application Forms: Taxpayers must file applications in FORM GST SPL-01 or FORM GST SPL-02 on the portal by 31-03-2025 or within six months in specific cases.
• Payment Process:
• Payment Deadlines: Tax must be paid through FORM GST DRC-03 or ELR before the waiver can be processed. Any amounts due to Section 16(4) violations, now eligible under Sections 16(5) or 16(6), are excluded from the tax amount for waiver eligibility.
• Waiver Eligibility: The waiver applies only to tax demands related to the specified periods and issues like erroneous refunds.
• Processing Applications:
• Applications are reviewed by the proper officer. If they meet criteria, the officer issues a waiver order (FORM GST SPL-05). If not, the application may be rejected (FORM GST SPL-07).
• Appeals: Appeals can be filed against rejection orders but not against approvals. The appellate authority can modify the tax liability in such cases.

• Additional Clarifications:
• Rejection & Appeal: If a waiver application is rejected, the taxpayer may file an appeal. If the appeal is in his favor, the liability is adjusted in the Electronic Liability Register (ELR).
• Final Decisions: Once an order is passed, the taxpayer must pay any remaining interest or penalties within three months to keep the waiver valid. This process ensures clarity on tax demands and provides taxpayers with an opportunity to avoid interest and penalty payments under specified conditions.

Further, the following issues with respect to availing the benefit of waiver of interest or penalty or both provided under Section 128A, are also clarified hereby: –

• Tax Paid Before Section 128A Came into Effect: Tax paid before or after Section 128A came into effect will be considered for the waiver, as long as it was paid for the specified demand.
• Tax Paid by Another Person on Behalf of Taxpayer: Amount recovered by tax officers from another person on behalf of the taxpayer can be counted as tax paid under Section 128A, if it was recovered before the notified date.
• Interest/Penalty Adjustments: Interest or penalty amounts cannot be adjusted against tax dues for Section 128A benefits.
• Tax Paid & Only Interest/Penalty Demand: If tax is already paid and only interest/penalty remains, Section 128A benefits can still apply, except for interest due to delayed returns or supply reporting.
• Partial Waiver & Litigation: Partial payments for interest/penalty and litigation are not allowed; full payment is required for Section 128A benefits.
• Multiple Tax Periods in One Notice: For a notice covering multiple periods, tax for the entire period must be paid, but the waiver only applies to the periods under Section 128A.
• Erroneous Refund Demand: Tax must be paid in full (including for erroneous refunds) to avail waiver, but the waiver applies only to tax demand, not the erroneous refund penalty.
• Appeals & Enhanced Tax Liability: If the tax liability is increased in an appeal, the taxpayer must pay the additional amount within 3 months for the Section 128A waiver to remain valid.
• Pending SLP in Supreme Court: If an SLP is pending, the taxpayer must withdraw it and apply in FORM GST SPL-01 or SPL-02, with proof of withdrawal.
• IGST & Compensation Cess: Section 128A applies to IGST and Compensation Cess, provided the full tax (including CGST, SGST, IGST, and Cess) is paid.
• Irregular Transitional Credit: If wrongly availed transitional credit is involved and the demand is under Section 73, it’s covered under Section 128A.
• Late Fees and Redemption Fine: Late fees and redemption fines are not covered by Section 128A, but penalties under sections 73, 122, and 125 are.
• Payment Using ITC: Tax payments for Section 128A can be made using ITC, except for reverse charge or erroneous refund cases, which require payment in cash.
• Reduced Tax Due to Retroactive Changes: Pay only the adjusted tax amount after applying the changes due to Sections 16(5) or (6) for transitional credit issues.
• Filing Adjustments for DRC Payments: If tax is paid through FORM GST DRC-03, the taxpayer must adjust the payment using FORM GST DRC-03A before filing an application in FORM GST SPL-02.

• It is requested that suitable trade notices may be issued to publicize the contents of this Circular.
• Difficulty, if any, in implementation of the above instructions may please be brought to the notice of the Board.
• Notification No. G.S.R. 644(E) [NO. 109 (F. NO. A-50050/2/20… Goods and Services Tax Council Secretariat, Group ‘A’ Executive posts recruitment (Amendment) Rules, 2024 – Amendment in Rule 7 and Schedule

The Goods and Services Tax Council Secretariat, Group ‘A’ Executive Posts Recruitment (Amendment) Rules, 2024 are as follows:

1. Title and Commencement: These are called the “Goods and Services Tax Council Secretariat, Group ‘A’ Executive Posts Recruitment (Amendment) Rules, 2024” and will come into force from the date of publication in the Official Gazette.
2. Amendments:

• Rule 7: Add “Other Backward Classes” after “Scheduled Tribes”.
• Schedule Changes:
• For the Director post (Serial No. 1), the requirement “is necessary” in column (13) is changed to “is not necessary”.
• For the Deputy Secretary post (Serial No. 2), the requirement “is necessary” in column (13) is changed to “is not necessary”.
• For the Under Secretary post (Serial No. 3), the requirement “is necessary” in column (13) is changed to “is not necessary”.

• Corrigendum G.S.R. 652(E) [F. NO. 190354/149/2024-TO (TRU-II)-PART-I CBEC], Dated 22-10-2024, Section 9 of the Central Goods and Services Tax Act, 2017

In the Notification No. 09/2024-Central Tax (Rate) dated 8th October 2024, the term “any property” in serial number 5AB, column (2), line 12 is corrected to “any immovable property”.

• Corrigendum to Circular No. 237/31/2024-GST [F.NO. CBIC-20001/6/2024- GST, dated 25-10-2024, Clarifying the issues regarding implementation of provisions of Sub- Section (5) and Sub-Section (6) in section 16 of CGST ACT, 2017

The following is added to the end of para 4 of the circular:

“The restriction on refunds under Section 150 of the Finance (No. 2) Act, 2024 does not apply to refunds of pre-deposits made by the taxpayer under Section 107(6) or Section 112(8) of the CGST Act, if the appeal is decided in the taxpayer’s favor.”

• Notification No. 26/2024–CENTRAL TAX [G.S.R. 713(E)/F. NO CBIC-20001/8/2024-GST], Dated 18-11-2024, Section 39 of the Central Goods and Services Tax Act, 2017-Furnishing of Returns- Extension of due date to furnish form GSTR-3B for month of October 2024, for registered person having specified principal place of business.

The Commissioner, based on the GST Council’s recommendation, extends the deadline for filing FORM GSTR-3B for October 2024 until November 21, 2024, for registered taxpayers whose principal place of business is in Maharashtra or Jharkhand.

• Filing of Financial Statements of Producer Companies within 60 days of Annual General Meeting

The Ministry of Corporate Affairs has notified that Producer companies shall file their Financial Statements with the Registrar within 60 days of the annual general meeting, as per section 378ZA(10) of the Companies Act,2013. Additional fee logic changes in Form AOC-4 are expected to be deployed in the next week to enable filing within 60 days with nominal fee.

• Reporting of Foreign Exchange Transactions to Trade Repository

The Reserve Bank of India has expanded the reporting requirements for foreign exchange contracts. Authorised Dealers are now required to report all foreign exchange spot, cash, and tom deals to the Trade Repository of Clearing Corporation of India Limited (CCIL), ensuring completeness of transaction data. Starting February 10, 2025, inter-bank FX contracts must be reported in hourly batches, while client FX contracts exceeding USD One Million (USD 1,000,000) and USD Fifty Thousand (USD 50,000) must be reported by May 12, 2025, and November 10, 2025, respectively. Dealers must ensure the accuracy of transactions and reconcile outstanding balances with the Trade Repository.

• Operational Framework for Reclassification of Foreign Portfolio Investment to Foreign Direct Investment (FDI)

The Reserve Bank of India (RBI) has informed that the the Central Government has notified the Foreign Exchange Management (Non-debt Instruments) Rules, 2019, which require that foreign portfolio investors (FPIs) and their investor group limit their investments to less than Ten (10%) of a company’s total paid-up equity capital on a fully diluted basis, if this limit is breached, FPIs must either divest their holdings or reclassify them as Foreign Direct Investment (FDI), An operational framework for this reclassification has been provided in the Circular, and AD Category – I banks are tasked with facilitating the reporting of such transactions. The directions are effective immediately.

• Onboarding Process on the Trade Receivables Discounting System Description

The Ministry of Micro, Small and Medium Enterprises has issued a notification  wherein:

1. All companies registered under the Companies Act, 2013 (18 of 2013) with a turnover of more than Rs. 250 crore (two hundred and fifty crore rupees) and all Central Public Sector Enterprises shall be required to get themselves onboarded on the Trade Receivables Discounting System platforms, set up as per the notification of the Reserve Bank of India.
2. The onboarding process on the Trade Receivables Discounting System platforms shall be completed by 31st March 2025

• SEBI (Bankers to an Issue) (Amendment) Regulations,2024

The Securities and Exchange Board of India has notified amendments in the SEBI (Bankers to an Issue) Regulations, 1994 wherein Regulation 2 and 3  has been amended as specified therein and these regulations may be called SEBI (Bankers to an Issue) (Amendment) Regulations, 2024. They shall come into force from immediate effect.

Disclaimer: Information in this note is intended to provide only a general update of the subjects covered. It is not intended to be a substitute for detailed research or the exercise of professional judgment. KNM accepts no responsibility for loss arising from any action taken or not taken by anyone using this publication. Updates are for    the period 30.11.2024.

Executive Summary

Income Tax

• Further Extension of due date for furnishing Audit Report in Form nos. 10B and 10BB by Trusts and Financial Institutions.
• Section 206 of The Income Tax Act,1961- TCS – Profits and Gains from business of trading in alcoholic liquor, forest produce, scrap etc. – No TCS shall be made under section 206(1F) on any payment received from RBI.
• Ease in Claiming credit for TCS collected/TDS deducted for salaried employees by introducing Form no. 12BAA and enabling claiming TCS credit of minors in the hands of parents.

Goods And Service Tax (GST)

• Instruction No. 4/2024 – GST [F. NO.: CBIC-20016/26/2024-GST], Dated 4-10-2024, Systemic improvement with respect to Mapping/ De-Mapping of the officers on the GSTN portal -Regarding
• Notification No. 8/2024- Central Tax (Rate) [G.S.R. 620(E)/F. NO. 190354/149/2024-TO(TRU-II) – PART-I CBEC], Dated 8-10-2024
• Notification No. 9/2024- Central Tax (Rate) [G.S.R. 623(E) /F. NO. 190354/149/2024-TO(TRU-II) – PART-I CBEC], Dated 8-10-2024
• Notification No. 20/2024 – Central Tax [G.S.R. 626(E)/F. NO. CBIC-20006/20/2023-GST], Dated 8-10-2024
• Notification No. 21/2024– Central Tax [S.O. 4372(E)/F. NO. CBIC-20006/20/2023-GST], Dated 8-10-2024
• Notification No. 22/2024– Central Tax [S.O. 4373(E)/F. NO. CBIC-20006/20/2023-GST], Dated 8-10-2024
• Notification No. 23/2024– Central Tax [S.O. 4374(E)/F. NO. CBIC-20006/20/2023-GST], Dated 8-10-2024
• Notification No. 24/2024- Central Tax [G.S.R 628(E)/F.NO. CBIC-190354/149/2024-TO(TRU-II)], Dated 9-10-2024
• Circular No. 234/28/2024 – GST [F. NO. CBIC-190354/149/2024-TO(TRU-II)-CBEC], Dated 11-10-2024
• Circular No. 235/29/2024 – GST [F. NO. CBIC-190354/149/2024-TO(TRU-II)-CBEC], Dated 11-10-2024
• Circular No. 236/30/2024 – GST [F. NO. CBIC-190354/149/2024-TO(TRU-II)-CBEC], Dated 11-10-2024

Companies Act 2013/ Other Laws

• Companies (Indian Accounting Standards) Third Amendment Rules, 2024
• Directions – Compounding of Contraventions under FEMA, 1999
• Investor Education and Protection Fund Authority (Form of Annual Statement of Accounts) Amendment Rules, 2024
• Companies (Adjudication of Penalties) Second Amendment Rules, 2024
• Directions – Compounding of Contraventions under FEMA, 1999 (Notification Date: 2024-10-01 vide Notification No: RBI/FED/2024-25/78 A.P. (DIR Series) Circular.No.17/2024-25

Further Extension Of Due Date For Furnishing Audit Report In Form Nos.10b And 10bb By Trusts And Financial Institutions

a)      By Circular NO. 2/2024, CBDT had allowed those trusts/institutions/funds which have furnished audit report on or before 31st October, 2023 in Form No. 10B where Form No. 10BB was applicable and vice-versa to furnish the audit report under clause (b) of the tenth proviso to clause (23C) of section 10 and sub-clause (ii) of clause (b) of sub-section (1) of section 12A of the Income-tax Act, 1961, in the applicable Form No. 10B/10BB for the assessment year 2023-24, on or before 31st March, 2024,

2024. On consideration of the matter, with a view to avoid genuine hardship to those trusts/institutions/funds, for which the date of 31st March, 2024 was prescribed to furnish the audit report in the applicable Form No. 10B/10BB, by the above mentioned Circular No. 2/2024, dated 5-3-2024, the CBDT in exercise of the powers conferred under section 119 of the Act, hereby further allows such trusts/institutions/funds to furnish such audit report in the applicable Form No. 10B/10BB on or before 10th November, 2024.

• Section 206 of the income tax act, 1961 – tcs – profits and gains from business of trading in alcoholic liquor, forest produce, scrap, etc. – no collection of tax shall be made under sub-section (1f) of said section on any payment received from reserve bank of india

1. Central Government hereby specifies that no collection of tax shall be made under sub-section (1F) of section 206C of the said Act on any payment received from the Reserve Bank of India.
2. This notification shall come into force on the date of its publication in the Official Gazette.

• CBDT Notifies Amendments In Income-Tax Rules For Ease In Claiming Credit For Tcs Collected/Tds Deducted For Salaried Employees And Enabling Claiming Tcs Credit Of Minors In The Hands Of Parents

1. Sub-section (2B) of Section 192 of the Income-tax Act, 1961 was amended videthe Finance (No. 2) Act, 2024 (FA (No. 2)) to include any tax deducted or collected at source under the provisions of Chapter XVII-B or Chapter XVII-BB, as applicable, for the purpose of making tax deductions in the case of salaried employees.
2. Vide CBDT Notification No. 112/2024, dated 15-10-2024, the Income-tax Rules, 1962 have been amended, introducing Form No. 12BAA as the prescribed statement of particulars required under sub-section (2B) of Section 192 of the Act. Employees must provide these particulars to their employers, who are responsible for making payments under sub-section (1) of Section 192. The employer, in turn, shall deduct TDS on salary after taking into account the furnished particulars.
3. Further, sub-section (4) of Section 206C of the Act was amended videFA (No. 2) to allow the credit of TCS to a person other than the collectee —such as a parent in the case of a minor collectee—when the minor’s income is clubbed with that of the parent. Accordingly Vide CBDT Notification No. 114/2024, dated 16-10-2024 Rule 37-I of the Rules has been amended to allow credit of tax collected at Source to a person other than the collectee, in whose hands the income of the collectee is assessable.

• Instruction No. 4/2024-GST [F. NO.: CBIC-20016/26/2024-GST], Dated 4-10-2024, Systemic improvement with respect to Mapping/ De-Mapping of the officers on the GSTN portal -Regarding

1. A reference has been received from the DGoV, CBIC, New Delhi stating therein that a GST officer, mapped in the GSTN portal, was not de-mapped with immediate effect after his relieving from the charge, which resulted into fraudulent sanction of refund by the officer.
2. DGoV (Hqrs) has recommended that officers should be immediately de-mapped from the GSTN portal upon completing the GFR-33. Supervisory officers, ideally at the Joint or Additional Commissioner level, should monitor this process and submit a compliance report to the jurisdictional Commissioner within a specified timeframe. Additionally, responsibility and accountability for mapping/un-mapping officers on the GSTN portal should be clearly assigned to the relevant jurisdictional officers.
3. In view of the above, it is requested that all Principal Commissioners/ Commissioners or equivalent, may be directed to ensure strict compliance of the directions given by the Directorate General of Vigilance (DGoV) in this regard.

• Notification No. 8/2024- Central Tax (Rate) [G.S.R. 620(E)/F. NO. 190354/149/2024-TO(TRU-II) – PART-I CBEC], Dated 8-10-2024, Section 11 of the Central Goods and Services Tax Act, 2017- Power to grant exemption from tax – CGST exempt services (NIL rated services) – Amendment in Notification No. 12/2017-Central Tax (Rate), Dated 28-6-2017

The Central Government, exercising its powers under the Central Goods and Services Tax Act, 2017, amends notification number 12/2017-Central Tax (Rate) dated 28th June 2017, based on the Council’s recommendations. The key amendments are as follows:

1. New Entries Added:

25A: Services related to metering equipment on rent and ancillary services for electricity transmission and distribution are classified under HS 9969 or 9986 with a GST rate of Nil.

1. • 44A: Research and development services funded by government entities or specific institutions under HS 9981 also attract a Nil GST rate.
   • 66A: Services of affiliation provided by educational bodies to government-controlled schools are classified under HS 9992 with a Nil GST rate.
2. Amended Entry:
   • 69: Services provided by recognized skill development entities related to national skill programs are classified under HS 9983, 9991, or 9992, attracting a Nil GST rate.
3. Terminology Update:
   • “National Council for Vocational Training” is replaced with “National Council for Vocational Education and Training” in multiple instances.
4. Effective Date:
   • These amendments will come into force on 10th October 2024.

• Notification No. 9/2024- Central Tax (Rate) [G.S.R. 623(E) /F. NO. 190354/149/2024-TO(TRU-II) – PART-I CBEC], Dated 8-10-2024, Section 9 of the Central Goods and Services Tax Act, 2017 – Levy and collection of Tax – Reverse charge on certain specified supplies of services -Amendment in Notification No. 13/2017 – Central Tax (Rate), Dated 28-6-2017

In exercise of the powers conferred by sub-section (3) of section 9 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on the recommendations of the Council, hereby makes the following further amendments in the notification of the Government of India, in the Ministry of Finance (Department of Revenue), number 13/2017-Central Tax (Rate), dated the 28th June, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 692(E), dated the 28th June, 2017, namely: –

• In the said notification, in the Table, after serial number 5AA and the entries relating thereto, the following serial number and entries relating thereto in columns (2), (3) and (4) shall be inserted, namely: –

• This notification shall come into force with effect from the 10th day of October, 2024.

• Notification No. 20/2024 – Central Tax [G.S.R. 626(E)/F. NO. CBIC-20006/20/2023-GST], Dated 8-10-2024, Central Goods and Services Tax (Second Amendment) Rules, 2024 – Amendment in rules 36, 46, 66, 86, 88B, 88D, 89, 96, 96B, 121 & 142, and forms GST REG-31, GSTR-9, GST APL-01, GST-APL-05, GST INS-01 and GST DRC-01A; insertion of rules 47A & 164, and forms GST SPL-01, GST SPL-02, GST SPL-03, GST SPL-04, GST SPL-05, GST SPL-06, GST SPL-07 and GST SPL-08; Substitution of Form GST REG-20.

1. In the said rules, after rule 163, the following rule shall be inserted with effect from the 1st day of November, 2024, namely: –

“164. Procedure and conditions for closure of proceedings under section 128A in respect of demands issued under section 73.-

• Eligible individuals can apply for a waiver of interest or penalty related to a notice or statement under section 128A by submitting FORM GST SPL-01 electronically on the common portal, including relevant details and payment information from FORM GST DRC-03.
• Eligible individuals can apply for a waiver of interest or penalty related to orders under section 128A by submitting FORM GST SPL-02 electronically on the common portal. The application must include order details and payment information. Payments should be made by crediting the electronic liability register against the debit entry created by the order. If payment was made through FORM GST DRC-03, the individual must first file FORM GST DRC-03A to credit that amount in the register before submitting FORM GST SPL-02.
• Where the notice or statement or order mentioned in sub-section (1) of section 128A includes demand of tax, partially on account of erroneous refund and partially for other reasons, an application under sub- rule (1) or sub-rule (2) may be filed only after payment of the full amount of tax demanded in the said notice or statement or order, on or before the date notified under the said sub-section.
• Where the notice or statement or order mentioned in sub-section (1) of section 128A includes demand of tax, partially for the period mentioned in the said sub-section and partially for the period other than that mentioned in the said sub-section, an application under sub-rule (1) or sub-rule (2) may be filed only after payment of the full amount of tax demanded in the said notice or statement or order, on or before the date notified under the said sub-section.
• The amount payable under sub-rule (1) or sub-rule (2) shall be the amount that remains payable, after deducting the amount not payable in accordance with sub-section (5) or sub-section (6) of section 16, from the amount payable in terms of the notice or statement or order under section 73, as the case may be.
• Any person who wishes to file an application under sub-rule (1) or sub-rule (2), may do so within a period of three months from the date notified under sub-section (1) of section 128A:

Provided that where an application in FORM GST SPL-02 is to be filed in cases referred to in the first proviso to sub-section (1) of section 128A, the time limit for filing the said application shall be six months from the date of communication of the order of the proper officer redetermining such tax under section 73.

• Applications under sub-rule (1) or sub-rule (2) must include documents proving the withdrawal of any appeal or writ petition to demonstrate eligibility for a waiver of interest or penalty under section 128A. If the withdrawal order has not been issued at the time of application, the applicant should upload the withdrawal request along with the application. Additionally, the order for withdrawal must be uploaded on the common portal within one month of its issuance.
• Where the proper officer is of the view that the application made in FORM GST SPL-01 or FORM GST SPL-02 is liable to be rejected as not being eligible for waiver of interest, or penalty, or both, as per section 128A, he shall issue a notice on the common portal to the applicant in FORM GST SPL-03 within three months from the date of receipt of the said application and shall also give the applicant an opportunity of being heard.
• On receiving the notice under sub-rule (8), the applicant may file a reply to the said notice on the common portal in FORM GST SPL-04, within a period of one month from the date of receipt of the said notice.
• If the proper officer is satisfied that the applicant is eligible for waiver of interest and penalty as per section 128A, he shall issue an order in FORM GST SPL-05 on the common portal accepting the said application and concluding the proceedings under section 128A.
• In cases where the order in FORM GST SPL-05 is issued by the proper officer under sub-rule (10). –
• In respect of an application filed in FORM GST SPL-01 pertaining to a notice or statement referred to in clause (a) of sub-section (1) of section 128A, the summary of order in FORM GST DRC-07 as per sub-rule (5) of rule 142 shall not be required to be issued by the proper officer, in respect of the said notice or statement;
• In respect of an application filed in FORM GST SPL-02 pertaining to an order referred to in clause (b) or clause (c) of sub-section (1) of section 128A, the liability created in the part II of Electronic Liability Register, shall be modified accordingly.
• If the proper officer is not satisfied with the reply of the applicant, the proper officer shall issue an order in FORM GST SPL-07 rejecting the said application.
• (a) In cases where notice in FORM GST SPL-03 has not been issued, the proper officer shall issue the order under sub-rule (10) within a period of three months from the date of receipt of the application in FORM GST SPL-01 or FORM GST SPL-02, as the case may be.

(b) In cases where notice in FORM GST SPL-03 has been issued, the proper officer shall issue the order in sub-rule (10) or sub-rule (12) within a period of three months from the date of receipt of reply of the applicant in FORM GST SPL-04, or within a period of four months from the date of issuance of notice in FORM GST SPL-03 where no reply is received from the applicant.

• If no order is issued by the proper officer within the time limit specified in sub-rule (13), then the application in FORM GST SPL-01 or FORM GST SPL-02, as the case may be, shall be deemed to be approved and the proceedings shall be deemed to be concluded.
• (a) In cases where no appeal is filed against the order in FORM GST SPL-07 within the time period specified in sub-section (1) of section 107, the original appeal, if any, filed by the applicant against the order mentioned in clause (b) or clause (c) of sub-section (1) of section 128A, and withdrawn for filing the application in FORM GST SPL-02 in accordance with sub-section (3) of section 128A, shall be restored.

(b) In cases where an appeal is filed against the order in FORM GST SPL-07 for rejection of application for waiver of interest, or penalty, or both, if

• the appellate authority has held that the proper officer has wrongly rejected the application for waiver of interest, or penalty, or both, in FORM GST SPL-07, the said appellate authority shall pass an order in FORM GST SPL-06 on the common portal accepting the said application and concluding the proceedings under section 128A; or
• If the appellate authority upholds the rejection of an interest or penalty waiver in FORM GST SPL-07, any original appeal withdrawn to file an application in FORM GST SPL-02 (under section 128A(3)) will be reinstated. This is conditional on the applicant submitting an undertaking in FORM GST SPL-08 electronically within three months of the appellate order (FORM GST APL-04), affirming they have not and will not appeal the decision.
• In cases where the taxpayer is required to pay an additional amount of tax liability as per the second proviso to sub-section (1) of section 128A, and such additional payment is not made within the time limit specified in the said proviso, the waiver of interest, or penalty, or both, under the said section as per the order issued in FORM GST SPL-05 or FORM GST SPL-06, if any, shall become void.
• If a taxpayer must pay interest, penalty, or both for demands related to an erroneous refund or a period outside that specified in section 128A (1), as stated in FORM GST SPL-05 or SPL-06, they must pay this amount within three months of the order date. Failure to pay within this period will void any waiver granted under section 128A in FORM GST SPL-05 or SPL-06.

Explanation. – For the purposes of this rule, the proper officer for issuance of order under this rule, –

(a) In cases where the application for waiver of interest, or penalty, or both is made with respect to a notice or statement mentioned in clause (a) of sub-section (1) of section 128A, shall be the proper officer for issuance of order as per section 73; and

(b) In cases where the application for waiver of interest, or penalty, or both, is made with respect to an order mentioned in clause (b) or clause (c) of sub-section (1) of section 128A, shall be the proper officer referred to in section 79 of the Act.”

• In the said rules, for FORM GST REG-20, the following form shall be substituted, namely: –
• In the said rules, in FORM GST REG-31, after paragraph 6, the following shall be inserted, namely: –

OR

SUSPENSION DUE TO VIOLATION OF RULE 10A

1. You have not provided valid bank account details within 30 days of your registration, as required by Rule 10A.
2. This non-compliance indicates a violation of the Central Goods and Services Tax Act, 2017, which could lead to the cancellation of your registration if not satisfactorily explained.
3. Due to the seriousness of this issue, your registration is suspended effective immediately under Rule 21A.
4. You are required to submit valid bank account details on the common portal or respond to the jurisdictional tax officer within 30 days, addressing the discrepancies. Report any potential misuse of your GST credentials.
5. The suspension will be lifted once you provide the valid bank account details within the specified time.
6. Failure to comply may result in cancellation of your registration.

OR

1. It has been noticed that as per the provisions of rule 10A, requiring you to furnish the details of bank account within thirty days from the grant of registration. The information regarding bank account details furnished by you are not matching with the details available with bank.
2. These discrepancies or anomalies prima facie indicate contravention of the provisions of the Central Goods and Services Tax Act, 2017(12 of 2017) and the rules made thereunder, such that if not explained satisfactorily, shall make your registration liable to be cancelled.
3. Considering that the above discrepancies or anomalies are grave and pose a serious threat to interest of revenue, as an immediate measure, your registration stands suspended, with effect from the date of this communication, in terms of rule 21A.
4. Accordingly, you are requested to furnish the valid details of bank account on the common portal or submit a reply to the jurisdictional tax officer within thirty days from the receipt of this notice, providing explanation to the above stated discrepancy or anomaly or contravention. Any possible misuse of your credentials on GST common portal, by any person, in any manner, may also be specifically brought to the notice of jurisdictional officer.
5. The suspension of registration shall be lifted after you furnish the valid details of bank account on the common portal within stipulated time.
6. You may please note that your registration may be cancelled in case you fail to furnish the valid details of bank account on the common portal within stipulated time or fail to furnish a reply within the stipulated time.

OR

SUSPENSION DUE TO VIOLATION OF RULE 21

1. It has been noticed that as per the provisions of clause (h) or clause (i) of rule 21, requiring you to file return under sub-section (1) of section 39, have not furnished for a continuous period of six months or for a continuous period of two quarters.
2. These discrepancies or anomalies prima facie indicate contravention of the provisions of the Central Goods and Services Tax Act, 2017(12 of 2017) and the rules made thereunder, such that if not explained satisfactorily, shall make your registration liable to be cancelled.
3. Considering that the above discrepancies or anomalies are grave and pose a serious threat to interest of revenue, as an immediate measure, your registration stands suspended, with effect from the date of this communication, in terms of sub-rule (2A) of rule 21A.
4. You are requested to file a return under section 39(1) on the common portal or submit a response to the jurisdictional tax officer within 30 days of this notice, explaining the noted discrepancy or anomaly. Any suspected misuse of your GST portal credentials should also be reported to the jurisdictional officer.
5. The suspension of registration shall be lifted after you file the returns under sub-section (1) of section 39 on the common portal.
6. You may please note that your registration may be cancelled in case you fail to file returns under sub-section (1) of section 39 on the common portal within stipulated date or fail to furnish a reply within the stipulated time.”

• In the said rules, in FORM GSTR-9, in the table, in Pt. III, in serial number 8, for serial number A and the entries relating thereto, the following serial number and entries shall be substituted, namely: –

• In the said rules, in FORM GST APL-01, with effect from the 1st day of November, 2024. –

(a)  in entry number 15, –

(i)   in clause (a), in the Table, in the first column relating to “Particulars”, in item (b) relating to “pre-deposit”, for the brackets, letters, words and figures “(b) Pre- deposit (10% of disputed tax /cess but not exceeding Rs. 25 crore each in respect of CGST, SGST or cess or not exceeding Rs.50 crore in respect of IGST and Rs. 25 crore in respect of cess)”, the brackets, letters, words, and figures “(b) Pre- deposit (10% of disputed tax /cess but not exceeding Rs. 20 crore each in respect of CGST, SGST, cess, and not exceeding Rs. 40 crore in respect of IGST)” shall be substituted;

(ii)  in clause (b), in the opening portion, for the brackets, words, figures and letters ” (pre-deposit 10% of disputed tax and cess but not exceeding Rs. 25 crore each in respect of CGST, SGST or cess or not exceeding Rs.50 crore in respect of IGST and Rs. 25 crore in respect of cess)”, the brackets, words, figures and letters “(pre- deposit 10% of disputed tax and cess but not exceeding Rs. 20 crore each in respect of CGST, SGST, cess, and not exceeding Rs. 40 crores in respect of IGST)” shall be substituted.

• In the said rules, in FORM GST APL-05, with effect from the 1st day of November, 2024, –

(a)in entry number 14, –

(i) In clause (a), under “Particulars” in item (b) for “pre-deposit,” replace “(20% of disputed tax/cess, max Rs. 50 crores for CGST, SGST, or cess, Rs. 100 crores for IGST, Rs. 50 crore for cess)” with “(10% of disputed tax/cess, max Rs. 20 crores for CGST, SGST, cess, and Rs. 40 crores for IGST).”

(ii) In clause (b), for the opening portion, the following shall be substituted, namely: –

(b) Details of payment of admitted amount and pre-deposit of 10% of the disputed tax and cess but not exceeding Rs. 20 crore each in respect of CGST, SGST, cess and not exceeding Rs. 40 crores in respect of IGST.”.

• In the said rules, after FORM SBY-06, the following forms shall be inserted with effect from the 1st day of November, 2024, namely: –

• ‘FORM GST SPL – 01 [See rule 164(1)]- Application for waiver of interest or penalty or both under section 128A in respect of a notice or a statement mentioned in clause (a) of sub-section (1) of the said section
• FORM GST SPL -02 [See rule 164(2)]- Application for waiver of interest or penalty or both under section 128A, in respect of an order mentioned in clause (b) or clause (c) of sub-section (1) of the said section
• FORM GST SPL -03 [See rule 164(2)]- 1 Notice in response to an application filed under Section 128A
• FORM GST SPL-04 [See rule 164(9)]– Reply to notice issued under rule 164(8)
• FORM GST SPL -05 [See rule 164(10)]- Order for conclusion of proceedings as per section 128A
• FORM GST SPL -06 [See Rule 164(15)(b)(i)]- Order for conclusion of proceedings as per section 128A
• FORM GST SPL -07 [See rule 164(12)]- Order for Rejection of Application submitted under section 128A
• FORM GST SPL -08 [See rule 164(15)(b)(ii)]- Undertaking submitted under rule 164(15)(b)(ii)

• Notification No. 21/2024– Central Tax [S.O. 4372(E)/F. NO. CBIC-20006/20/2023-GST], Dated 8-10-2024, Waiver of Interest or Penalty or both relating to demands raised under Section 73, for certain Tax periods

In exercise of the powers conferred by sub-section (1) of section 128A of the Central Goods and Services Tax Act, 2017 (12 of 2017) (the said Act), the Central Government, on the recommendations of the Council, hereby notifies the respective date specified in Column (3) of the Table below, as the date up to which payment for the tax payable as per the notice, or statement, or the order referred to in clause (a) or clause (b) or clause (c) of the said section, as the case may be, can be made by the class of registered person specified in the corresponding entry in column (2) of the said Table, namely:-

2. This notification shall come into effect from the 1st day of November, 2024

• Notification No. 22/2024– Central Tax [S.O. 4373(E)/F. NO. CBIC-20006/20/2023-GST], Dated 8-10-2024, Section 148, read with Section 16 of the Central Goods and Services Tax Act, 2017- special procedure for certain processes – special procedure for certain processes- special procedure for rectifying an order confirming incorrect input tax credit availment under Sub-Section (4) of Section 16, where credit is now available under Sub-Sections (5) OR (6) and no appeal has been filled

1. Under section 148 of the Central Goods and Services Tax Act, 2017, the Central Government, based on Council recommendations, notifies a special procedure for order rectification. This applies to registered persons with confirmed demands under sections 73, 74, 107, or 108 for wrongful input tax credit (ITC) availment due to contraventions under section 16(4). This procedure applies if the ITC is now permissible under sections 16(5) or 16(6) and no appeal has been filed against the order.
2. The said person shall file, electronically on the common portal, within a period of six months from the date of issuance of this notification, an application for rectification of an order issued under section 73 or section 74 or section 107 or section 108 of the said Act, as the case may be, confirming demand for wrong availment of input tax credit, on account of contravention of provisions of sub-section (4) of section 16 of the said Act, but where such input tax credit is now available as per the provisions of sub-section (5) or sub-section (6) of section 16 of the said Act, and where appeal against the said order has not been filed.
3. The said person shall, along with the said application, upload the information in the proforma mentioned the notification.
4. The proper officer for carrying out rectification of the said order shall be the authority who had issued such order, and the said authority shall take a decision on the said application and issue the rectified order, as far as possible, within a period of three months from the date of the said application.
5. Where any rectification is required to be made in the order referred to in paragraph 1 and, the said authority has issued a rectified order thereof, then the said authority shall upload a summary of the rectified order electronically-

6. The rectification is required to be made only in respect of demand of such input tax credit which has been alleged to be wrongly availed in contravention of provisions of sub-section (4) of section 16 of the said Act, but where such input tax credit is now available as per the provisions of sub-section (5) or sub-section (6) of the said section 16.
7. Where such rectification adversely affects the said person, the principles of natural justice shall be followed by the authority carrying out such rectification.

• Notification No. 23/2024– Central Tax [S.O. 4374(E)/F. NO. CBIC-20006/20/2023-GST], Dated 8-10-2024, Section 47, read with Sections 51 and 128 of the Central Goods and Services Tax Act, 2017- Return- Levy of late fee – Waiver of late fee for failure to furnish return in form GSTR-7 for month of June, 2021 onwards, by due date, which is in excess of an amount of twenty- five rupees for every day during which such failure continues

Under section 128 of the Central Goods and Services Tax Act, 2017, the Central Government, with Council recommendations, supersedes the previous notification (No. 22/2021-Central Tax, dated June 1, 2021) and waives late fees under section 47 for registered persons required to deduct tax at source under section 51, for delays in filing FORM GSTR-7 from June 2021 onwards, except for an excess of twenty-five rupees per day of delay.

Provided that the total amount of late fee payable under section 47 of the said Act by such registered person for failure to furnish the return in FORM GSTR-7 for the month of June, 2021 onwards, by the due date, shall stand waived which is in excess of an amount of one thousand rupees:

Provided further that the total amount of late fee payable under section 47 of the said Act by the registered person, who fails to furnish the return in FORM GSTR-7 for a month by the due date, where the total amount of central tax deducted at source in the said month is nil, shall stand waived.

2. This notification shall come into force on the 1st day of November, 2024.

• Notification No. 24/2024- Central Tax [G.S.R 628(E)/F.NO. CBIC-190354/149/2024-TO(TRU-II)], Dated 9-10-2024, Section 23, read with section 9 of the central Goods and Services Tax Act, 2017 – registration – persons not liable for – notified persons-

In exercise of the powers conferred by sub-section (2) of section 23 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on the recommendations of the Council, hereby makes the following amendments in the notification of the Government of India, Ministry of Finance (Department of Revenue) No. 5/2017- Central Tax, published in the Gazette of India, Extraordinary, Part II, section 3, sub-section (i) vide number G.S.R. 607(E), dated the 19th June, 2017, namely:—

In the said notification, after the opening paragraph, the following proviso shall be inserted, namely: –

“Provided that nothing contained in this notification shall apply to any person engaged in the supply of metal scrap, falling under Chapters 72 to 81 in the first schedule to the Customs Tariff Act, 1975 (51 of 1975).”.

3. This notification shall come into force with effect from the 10th day of October, 2024

• Circular No. 234/28/2024 – GST [F. NO. CBIC-190354/149/2024-TO(TRU-II)-CBEC], Dated 11-10-2024, Section 9 of the Central Goods and Services Act, 2017- Levy and collection- Clarifications Regarding applicability of GST on certain services
• Based on the recommendations of the GST Council in its 54th meeting held on 9th September 2024, at New Delhi, in exercise of the powers conferred under section 168(1) of the Central Goods and Services Tax Act, 2017, clarifications on the following issues are being issued through this Circular as under:
• Applicability of GST on the service of affiliation provided by universities to colleges:
• Representations have been received seeking clarification on the applicability of GST on the service of affiliation provided by universities to colleges.
• The activity of affiliation is to monitor and ensure whether the institution possesses the required infrastructure in terms of space, technical prowess, financial liquidity, faculty strength, etc. and is thereby eligible for the privileges to conduct the course/program of study for the degree/title extended by the University to the students enrolled in such institutions. The affiliation services provided by the universities to colleges are not by way of services related to the admission of students to such colleges or the conduct of examinations by such colleges.
• Thus, as recommended by the 54th GST Council, it is hereby clarified that the affiliation services provided by universities to their constituent colleges are not covered within the ambit of exemptions provided to educational institutions in the notification No. 12/2017-CT(R), dated 28-6-2017 and GST at the rate of 18% is applicable on the affiliation services provided by the universities.
• Applicability of GST on the service of affiliation provided by Central and State educational boards or Councils, or other similar bodies, to schools:
• Representations have been received to clarify the applicability of GST on the service of affiliation provided by the Central and State educational boards or councils, or other similar bodies, to schools and to regularize the payment of tax on such services for the past period.
• The activity of affiliation carried out by educational boards or councils, or other similar bodies, is to monitor and ensure whether the schools possess the required infrastructure, finances, faculty strength etc. and are thereby eligible for the privileges to operate under the aegis of said boards or councils. The services of affiliation provided to schools by educational boards or councils, or other similar bodies, are not by way of services related to the admission of students to such schools or the conduct of examinations by such schools.
• The GST Council, in its 54th meeting on 9th September 2024, clarified that affiliation services provided by educational boards to schools are taxable. However, it recommended exempting affiliation services provided to government schools (established or controlled by the government or local authority). This exemption is effective from 10th October 2024, as per notification No. 08/2024-Central Tax (Rate), dated 8th October 2024.
• In its 54th meeting, the GST Council further recommended regularizing the GST liability on such services provided to all schools for the period from 1-7-2017 to 17-6-2021, e., the date of issuance of Circular No. 151/07/2021-GSTwherein accreditation services of boards are clarified to be taxable at the rate of 18%.
• Therefore, as recommended by the GST Council, it is clarified that services of affiliation, provided to schools by Central or State educational boards or councils, or other similar bodies, by whatever name called, are taxable. Further, as recommended by the Council, the payment of GST on the services of affiliation provided by Central and State educational boards or Councils, or other similar bodies, to all schools is regularized on ‘as is where is’ basis for the period from 1-7-2017 to 17-6-2021.
• Applicability of GST on the Directorate General of Civil Aviation (DGCA) approved flying training courses conducted by Flying Training Organizations approved by the DGCA:
• Representations have been received regarding the applicability of GST on the DGCA-approved flying training courses conducted by Flying Training Organizations (FTOs) which are approved by the Directorate General of Civil Aviation (DGCA). The same has been examined.
• Under GST Law, vide  No. 66 of the notification No. 12/2017- Central Tax (Rate), dated 28-6-2017, services provided by educational institutions to its students, faculty and staff are exempt from levy of GST. In the above notification, “educational institution” has been defined to mean an institution providing services by way of education as a part of a curriculum for obtaining a qualification recognized by any law for the time being in force.
• In exercise of the power vested by Section 5 of the Aircraft Act, 1934, the Central Government has made the Aircraft Rules, 1937, which, inter alia, provide for ‘approved training’, e.training the curriculum of which has been approved by the DGCA, and ‘approved training organization’, i.e. a flying training organization which shall obtain the approval of DGCA before the students are enrolled to acquire flying experience. The said rules further state that flying experience required for the issue of private pilot and commercial pilot licenses shall be acquired at the Flying Training Organization (FTO) approved/recognized by the DGCA. The Civil Aviation Requirements (CAR) issued under the said rules also provide for a completion certificate to be issued by an approved FTO to each student who completes its approved course of training.
• It is evident from the above that the DGCA not only approves FTOs but also flying training courses and mandates the requirement of course completion certificates to be issued to successful candidates in terms of the Aircraft Act, 1934 and the rules prescribed thereunder. Therefore, the approved flying training courses conducted by FTOs approved by DGCA, wherein the DGCA mandates the requirement of a completion certificate, are covered under Sl. No. 66 of Notification No. 12/2017-Central Tax (Rate), dated 28-6-2017 and are hence, exempt.
• Regularizing payment of GST on transport of passengers by helicopter:
• 54th GST Council has recommended that the GST rate on transportation of passengers, with or without accompanied baggage, by air, in a helicopter on seat share basis may be notified at 5%. Accordingly, notification No. 07/2024- Central Tax (Rate), dated 8-10-2024 effective from 10-10-2024 has been issued.
• The Council further recommended to regularize payment of GST on transportation of passengers, with or without accompanied baggage, by air, in a helicopter on seat share basis on ‘as is where is’ basis.
• In addition to above, the Council also recommended to clarify that charter of helicopter would continue to attract GST at the rate of 18%.
• Thus, as recommended by the 54th GST Council, payment of GST on transportation of passengers, with or without accompanied baggage, by air, in a helicopter on seat share basis is hereby regularized on ‘as is where is’ basis for the period from 1-7-2017 to 9-10-2024.
• Further, as recommended by the 54th GST Council, it is hereby clarified that transport of passengers by helicopter on other than seat share basis e., for charter operations will continue to attract GST at the rate of 18%.
• Whether incidental/ancillary services such as loading/unloading, packing, unpacking, transshipment, temporary warehousing etc., provided in relation to transportation of goods by road is to be treated as part of Goods Transport Agency service, being composite supply, or these services are to be treated as separate independent supplies:
• Representations have been received to clarify whether incidental/ ancillary services such as loading/ unloading, packing, unpacking, transshipment, temporary warehousing etc., provided in relation to transportation of goods by road is to be treated as part of Goods Transport Agency (GTA) service, being composite supply, or these services are to be treated as separate independent supplies.
• It has been brought to notice that enforcement agencies are raising demands for such services holding them leviable to GST at the rate of 18% by interpreting last para of Question No. 6 of the FAQ issued by CBIC which states that “If such incidental services are provided as separate services and charged separately, whether in the same invoice or separate invoices, they shall be treated as separate supplies”, to mean that if a GTA shows packing charges, loading, unloading charges etc., separately in the invoice, the GTA becomes liable to pay GST at the rate of 18% on these services by treating them as cargo handling services.
• Following the 54th GST Council’s recommendations, it is clarified that ancillary services provided by Goods Transport Agencies (GTAs) during the transportation of goods by road—such as loading, unloading, packing, unpacking, transshipment, and temporary warehousing—are considered a composite supply of transport. The invoicing method used by GTAs generally does not change this classification. However, if these ancillary services are invoiced separately and not provided during transportation, they will not be classified as a composite supply of transport.
• Regularizing payment of GST on import of services by an establishment of a foreign airlines company from a related person or any of its establishment outside India, when made without consideration:
• 54th GST Council has recommended to exempt import of services by an establishment of a foreign airlines company from a related person or any of its establishment outside India, when made without consideration. Accordingly, notification No. 08/2024-Integrated Tax (Rate), dated 8-10-2024 effective from 10-10-2024 has been issued.
• The Council further recommended to regularize payment of GST on import of services by an establishment of a foreign airlines company from a related person or any of its establishment outside India, when made without consideration for the past period on ‘as is where is’ basis.
• Therefore, on recommendations of the 54th GST Council, the payment of GST on import of services by an establishment of a foreign airlines company from a related person or any of its establishment outside India, when made without consideration is hereby regularized for the period from 1-7-2017 to 9-10-2024 on ‘as is where is’ basis.
• Applicability of GST on Preferential Location Charges (PLC) collected along with consideration for sale/transfer of residential/commercial properties:
• Allowing choice of location of apartment is integral part of supply of construction services and therefore, location charge is nothing but part of consideration charged for supply of construction services before issuance of completion certificate. Being charged along with supply of construction services for the apartment, the same attract GST at same rate as of construction services before issuance of completion certificate.
• Therefore, based on the recommendations of the 54th GST Council, it is hereby clarified that location charges or Preferential Location Charges (PLC) paid along with the consideration for the construction services of residential/commercial/industrial complex forms part of composite supply where supply of construction services is the main service and PLC is naturally bundled with it and are eligible for same tax treatment as the main supply of construction service.
• Regularizing payment of GST on certain support services provided by an electricity transmission or distribution utility:
• GST Council in its 54th meeting held on 9th September, 2024 has recommended to exempt supply of services by way of providing metering equipment on rent, testing for meters/transformers/capacitors etc., releasing electricity connection, shifting of meters/service lines, issuing duplicate bills etc., which are incidental or ancillary to the supply of transmission and distribution of electricity provided by transmission and distribution utilities to their consumers.
• The same have been exempted vide notification No. 08/2024- Central Tax (Rate), dated 8-10-2024 effective from 10-10-2024.
• The GST Council in its 54th meeting has also recommended to regularize the payment of GST for supply of such services for the period e., from 1-7-2017 to 9-10-2024 on ‘as is where is’ basis.
• Therefore, as recommended by the 54th GST Council, the payment of GST on services provided by an electricity transmission or distribution utility which are incidental or ancillary to the supply of transmission and distribution of electricity by such utility, such as those listed in para 9.1 above is hereby regularized on ‘as is where is’ basis from 1-7-2017 to 9-10-2024.

• Regularizing payment of GST on services of film distributors or sub-distributors who act on a principal basis to acquire and distribute films:
• Representations have been received to clarify regarding the GST liability for the period from 1-7-2017 to 1-10-2021 on transaction between distributors and exhibitors wherein the distributors grant the theatrical rights to the exhibition centers. Field formations have viewed that such transaction are classifiable under SAC 9996 and attracts GST at the rate of 18%.
• Before 1st October 2021, GST was charged at 18% on “Motion Picture, videotape and television programmed distribution services” (Heading 9996) and at 12% on “temporary or permanent transfer or permitting the use of intellectual property rights” (Heading 9973). Both entries included licensing rights to broadcast films. The issue was discussed in the 45th GST Council meeting on 17th September 2021, leading to a recommendation for a uniform GST rate of 18% on both entries effective from 1st October 2021.
• The GST Council in its 54th meeting held on 9th September 2024 has recommended to regularize the payment of GST on transaction between distributors and exhibitors wherein the distributors grant the theatrical rights to the exhibition centers on ‘as is where is’ basis from 1-7-2017 to 30-9-2021.
• Therefore, as recommended by the GST Council, the payment of GST on transaction between distributors and exhibitors wherein the distributors grant the theatrical rights to the exhibition centers is regularized for the period from 1-7-2017 to 30-9-2021 on ‘as is where is’ basis.
• Difficulties, if any, in the implementation of this circular may be brought to the notice of the Board.

• Circular No. 235/29/2024 – GST [F. NO. CBIC-190354/149/2024-TO(TRU-II)-CBEC], Dated 11-10-2024, Section 9 of the Central Goods and Services Tax Act, 2017- Levy and Collection- Clarification Regarding GST rates & classifications (Goods) bases on recommendations of the GST council in its 54^TH GST Council in its 54^th meeting held on 9-09-2024, at New Delhi

Based on the recommendations of the GST Council in its 54th meeting held on 9th September, 2024, at New Delhi, in exercise of the powers conferred under section 168(1) of the Central Goods and Services Tax Act, 2017, the Board hereby clarifies the following issues through this circular for the purpose of uniformity in their implementation:

1. Clarification regarding GST rate on Extruded/Expanded Savoury food products:

Clarifications regarding the classification of savoury or salted extruded snack pellets under HS 2106 have been made. Effective from 10th October 2024, extruded or expanded savoury or salted products (excluding un-fried or un-cooked snack pellets) will be classified under HS 1905 90 30, attracting a GST rate of 12%. This rate aligns with namkeens and similar ready-to-eat preparations under HS 2106 90. Un-fried or un-cooked snack pellets will continue to have a GST rate of 5%. The 12% rate on extruded products will apply prospectively, while an 18% GST will be payable for the past period.

1. Clarification regarding GST rate on Roof Mounted Package Unit (RMPU) Air Conditioning Machines for Railways:

Representations have been received regarding the classification of Roof Mounted Air Conditioners (RMPUs) for Railways. It has been clarified that these units should be classified under HS 8415, which has a GST rate of 28%. In contrast, goods under HS 8607, such as parts for railway locomotives, attract an 18% GST rate.

According to Section Note 2 of Section XVII of the Customs Tariff Act, machines under HS 8415 are excluded from classification as ‘parts’ under HS 8607. Therefore, RMPUs for Railways will definitively fall under HS 8415, confirming the applicable 28% GST rate.

• Clarification regarding GST rate on Car and Motor cycle seats:
  1. Clarifications were sought on the GST classification and rates for seats designed for four-wheeled cars and two-wheelers.
  2. Seats for two-wheelers are classified under HS 8714, which includes saddles (seats) and attracts a GST rate of 28% as per Schedule IV of notification No. 1/2017-Central Tax (Rate).
  3. Seats for four-wheeled vehicles fall under HS 9401, which covers vehicle seats and parts. This category does not exclude vehicle seats, so car seats are also classified under HS 9401.
  4. Car seats (HS 9401) attract a GST of 18%, while two-wheeler seats (HS 8714) attract 28%.
  5. To align the GST rates for both categories, car seats classified under HS 9401 will attract a GST of 28% starting from October 10, 2024, as per notification No. 1/2017-Central Tax (Rate).
  6. Difficulty, if any, in the implementation of this circular may be brought to the notice of the Board.
• Circular No. 236/30/2024 – GST [F. NO. CBIC-190354/149/2024-TO(TRU-II)-CBEC], Dated 11-10-2024, clarification regarding the scope of “AS IS/AS IS, where is basis” mentioned in GST circulars issued on basis of recommendation of GST council in its meetings
• Instances were brought to the notice of the Board pertaining to the prevailing doubts among the field formations/trade as regards the scope of regularization on “as is” or “as is, where is basis” vide various GST Circulars issued for clarification regarding applicable GST rates and appropriate classification of specified goods or service or both on the basis of recommendation of the GST Council in its various meetings.
• The GST Council in its 54th Meeting held on 9th September 2024 has recommended issuance of clarification to clarify the intent behind the regularization done in the past meetings. Therefore, this Circular is being issued in exercise of power under Section 168 of CGST Act, 2017 to clarify scope of “as is” or ” as is, where is basis”.
• Circulars have been issued based on GST Council recommendations to regularize GST non-payment or short-payments for past periods on an “As is” basis in certain cases. This applies when genuine doubts arise from competing entries with different rates or diverse interpretations leading to varying GST payments by suppliers. It is clarified that taxpayers who paid a higher GST rate are not entitled to refunds.
• The phrase “as is where is” refers to transferring property in its current condition, accepting all faults and defects. In the context of GST, “regularized on as is where is basis” means that payments made at a lower rate or claims for exemptions by taxpayers will be accepted, with no refunds for those who paid a higher rate. The Council’s intention is to treat payments at a lower or nil rate as full discharge of tax liability, as indicated in the returns filed by the taxable person, which declare the applicable tax rate or relevant exemptions.
• Thus, in cases where the matters have been regularized on “as is” or ” as is, where is basis”, in case of two competing rates and the GST is paid at lower of the two rates, or at nil rate where one of the competing rates was nil under notification entry, by some suppliers while other suppliers have paid at higher rate, payment at lower rate shall be treated as tax fully paid for the period that is regularized.
• Accordingly, suitable instructions shall be passed on to the field formations under your charge.
• Difficulty, if any, in the implementation of this circular may be brought to the notice of the Board.

• Companies (Indian Accounting Standards) Third Amendment Rules, 2024 (Notification on 2024-09-28)

The Ministry of Corporate Affairs has notified Companies (Indian Accounting Standards) Third Amendment Rules, 2024 wherein:

1. Rule 5 of Companies (Indian Accounting Standards) Rules, 2015, the following proviso shall be inserted:

Provided that an insurer or insurance company may provide its financial statement as per Ind AS 104 for the purpose of Consolidated Financial Statements by its parent or investor or venturer till the Insurance Regulatory and Development Authority notifies the Ind AS 117 and for this purpose, Ind AS 104 shall, as specified in the Schedule to these rules, continue to apply, etc.

2. They shall come into force on the date of their publication in the Official Gazette.

• Investor Education and Protection Fund Authority (Form of Annual Statement of Accounts) Amendment Rules, 2024 (Notification Date: 2024-10-03, Notification No: G.S.R. 607(E)

The Ministry of Corporate Affairs has notified Investor Education and Protection Fund Authority (Form of Annual Statement of Accounts) Amendment Rules, 2024 wherein:

1. In the Investor Education and Protection Fund Authority (Form of Annual Statement of Accounts) Rules, 2018, in rule 5, in sub-rule (2), for the words “one Member”, the words “the chief executive officer” shall be substituted.

2. They shall come into force on the date of their publication in the Official Gazette.

• Companies (Adjudication of Penalties) Second Amendment Rules, 2024

The Ministry of Corporate Affairs has notified Companies (Adjudication of Penalties) Second Amendment Rules, 2024 wherein:

1. In the Companies (Adjudication of Penalties) Rules, 2014, in sub-rule (1) of rule 3A, the following proviso shall be inserted, namely:-

“Provided that the proceedings pending before the Adjudicating Officer or Regional Director on the date of such commencement shall continue as per provisions of these rules existing prior to such commencement.”

2. They shall come into force on the date of their publication in the Official Gazette.

• Directions – Compounding of Contraventions under FEMA, 1999 (Notification Date: 2024-10-01 vide Notification No: RBI/FED/2024-25/78 A.P. (DIR Series) Circular.No.17/2024-25

The Reserve Bank of India has reiterated that in terms of Section 11(3) of FEMA, 1999, the Reserve Bank may impose on the authorized person a penalty for contravening any direction given by the Reserve Bank under this Act or failing to file any return as directed by the Reserve Bank, Additionally, provided a list of earlier circulars that are superseded by this notice, and advised Authorised Dealer to take necessary steps to ensure that checks and balances are incorporated in systems relating to dealing with and reporting of foreign exchange transactions so that contraventions of provisions of FEMA, 1999, attributable to the Authorised Dealers do not occur.

Disclaimer: Information in this note is intended to provide only a general update on the subjects covered. It is not intended to be a substitute for detailed research or the exercise of professional judgment. KNM accepts no responsibility for loss arising from any action taken or not taken by anyone using this publication. Updates are for the period 31.10.2024.