Recent Policy Changes Impacting Indian Manufacturing and Exports

 In a series of recent policy and regulatory interventions, the Government has introduced a set of measures aimed at strengthening export competitiveness, easing compliance, and enhancing domestic manufacturing resilience. Together, these measures spanning customs facilitation, import policy, sustainability regulation, and trade support reflect a calibrated policy response balancing trade facilitation, cost competitiveness, domestic industry protection, and sustainability alignment.

Deferred Customs Duty for Manufacturers: EMI Scheme Takes Effect from 1 April 2026

 In a significant move to ease working capital pressures for manufacturers, the Central Board of Indirect Taxes and Customs (CBIC), vide Circular No. 08/2026-Customs dated 28.02.2026, has extended the facility of deferred payment of Customs import duty to a new category of importers termed Eligible Manufacturer Importers (EMI), effective from 1^st April 2026. Under this framework, eligible importers can clear goods without upfront payment of Customs duty and instead discharge the duty liability on a consolidated monthly basis, thereby enabling more efficient cash flow management. This reform announced as part of the Union Budget 2026–27, is governed by the Deferred Payment of Import Duty Rules, 2016, is also aimed at expediting Customs clearance of imported goods at ports, airports, and inland container depots.

Interest on Foreign Currency Loan & Corresponding Forex Loss for Strategic Share Acquisition Held Deductible as Revenue Expenditure

 The tax treatment of interest on funds borrowed to acquire shares hinges on a single, crucial distinction: the purpose behind the acquisition.

Landmark ITAT Delhi Ruling: Share Buy-Backs Qualify as "Corporate Reorganization" under India-Netherlands DTAA

 In a significant victory for multinational enterprises and foreign portfolio investors, the Delhi bench of the Income Tax Appellate Tribunal (ITAT), via a Third Member ruling, has held that a share buy-back by an Indian subsidiary from its Netherlands-based parent constitutes a “corporate reorganization” under the India-Netherlands Double Taxation Avoidance Agreement (DTAA). The decision, pronounced on March 25, 2026, in the case of Huntsman Investment [Netherlands] BV vs. ADIT (Assessment Year 2009-10), sets a powerful precedent on treaty interpretation.

CBDT amends Income Tax Rules to clarify GAAR grandfathering provisions

 On 31 March 2026, the Central Board of Direct Taxes (CBDT) issued two Notifications^[1] amending General Anti Avoidance Rules (GAAR) providing grandfathering benefit for income derived from transfer of investments which were made prior to 1 April 2017. The first Notification amends Rule 10U under Income Tax Rules (ITR), 1962 applicable to the erstwhile Income Tax Act (ITA), 1961, whereas the second Notification amends comparable Rule 128 under ITR 2026 applicable to the new ITA 2025 effective from 1 April 2026.

The Notifications state that GAAR provisions shall not apply with respect to any income derived from transfer of investments which were made before 1 April 2017 even though the arrangement, irrespective of the date on which it had been entered into, is not grandfathered.

The amendments to ITR 1962 are effective from 31 March 2026, while those relating to ITR 2026 apply from 1 April 2026.

CBIC notifies concessional rate of customs duty on goods manufactured by SEZ unit and cleared into DTA

 This Tax Alert summarizes a Notification¹ issued by Central Board of Indirect Taxes and Customs (CBIC) notifying concessional rates of basic customs duty (BCD) and Agriculture Infrastructure and Development Cess (AIDC) on specified goods manufactured by a unit in Special Economic Zone (SEZ) and cleared into Domestic Tariff Area (DTA).

Recent Income Tax Rulings

I. International Taxation & Treaty Jurisprudence

The Tiger Global Ruling: A Watershed Moment

Perhaps the most significant development in India's treaty jurisprudence is the ruling concerning Tiger Global. The decision marks a pivotal shift in how India approaches treaty shopping and beneficial ownership determinations. The ruling reinforces that mere routing of investments through tax-friendly jurisdictions will not automatically confer treaty benefits unless genuine commercial substance and beneficial ownership are established. This judgment is expected to have far-reaching implications for foreign portfolio investors and private equity funds operating in India.

Select amendments to the Companies Act, 2013 and the Limited Liability Partnership Act, 2008

 The Corporate Laws (Amendment) Bill, 2026 has been introduced in the Lok Sabha, proposing various changes to the Companies Act, 2013 and the Limited Liability Partnership Act, 2008. The amendments aim to improve ease of doing business, simplify compliance and provide clarifications.

The select proposed changes are as follows:

TAX DUE DATE - APRIL 2026.

 

Sr No	Due Date	Related to	Compliance to be made