Executive Summary of Key GST Changes (Effective Nov 2026 onwards)

Area	Key Change	Effective Date / Impact
GST Rates - Goods	Plastic scrap, e-waste, tyre scrap and used cooking oil procured from unregistered suppliers taxable under RCM; 2% TDS on B2B supplies. GST on re-treaded tractor tyres reduced to 5%.	Oct 2026
GST Rates - Services	EV passenger transport/rental eligible for 5% GST with restricted ITC. Delivery services via ECOs made taxable in hands of ECOs. ITC relaxation for restaurants, catering, hotels and fitness services used in same line of business.	Oct 2026

When a Subsidiary Investment Becomes a Business Loss

 

Key Takeaways

• Shares in a subsidiary are not automatically capital assets merely because they are shares.
• Three High Courts have recognized that losses arising from investments in subsidiaries can qualify as business losses when the investment is driven by commercial expediency and business objectives

Background

• The 57th GST Council Meeting was held on 8 October 2026 and focused mainly on process reforms relating to registration, assessments, appeals, refunds and enforcement.
• Eight GST Circulars and one Notification were issued on 26 October 2026 to implement part of the Council's recommendations.
• Most major legislative and rate-related changes are still pending and are expected to be effective from 1 April 2027 after necessary amendments.

Big Brother is Counting: How the Taxman Knows About Your Stock Sales and FD Interest

 Let’s start with a small story in this regard.

Mr. A, a mid-level software engineer, felt incredibly confident about his tax return last year. He had uploaded his Form 16, claimed his standard deduction, and proudly hit the submit button on the income tax portal. What he decided not to include was the ₹25,000 interest he earned from a couple of old Fixed Deposits (FDs) and a quick ₹50,000 profit he made selling shares on a popular trading app to fund a quick vacation. In his mind, these were minor, fragmented amounts. Who would possibly notice a few casual stock trades or interest accumulating in a secondary bank account?

CBIC Issues Circulars Pursuant to the Recommendations of the 57th GST Council Meeting

 The Central Board of Indirect Taxes and Customs (CBIC) has issued a series of circulars implementing the recommendations of the 57th GST Council Meeting. These clarifications provide greater certainty on export proceeds, refund eligibility, input tax credit (ITC) treatment, and adjudication-related matters, while addressing several long-standing areas of litigation.

GAAR Not Applicable to Genuine Capital Market Transactions: Telangana High Court

In a significant ruling, the Telangana High Court held that General Anti-Avoidance Rules (GAAR) cannot be invoked merely because a transaction results in a tax benefit. The case involved a taxpayer who invested surplus funds from a business slump sale into listed shares, received bonus shares, and subsequently incurred a short-term capital loss due to the statutory tax treatment of bonus shares and the FIFO method for identifying shares sold. The taxpayer legally set off this loss against long-term capital gains.

The Revenue attempted to invoke GAAR, alleging that the transactions were structured to obtain a tax advantage. However, the Court observed that the shares were purchased and sold through recognized stock exchanges at market prices, without any pre-arranged counterparties or collusive arrangements. The loss arose from the operation of specific provisions of the Income-tax Act and not from any artificial or abusive tax scheme.

The Court emphasized that legitimate tax planning and utilization of statutory computation mechanisms cannot be treated as tax avoidance. It further clarified that the burden of proving an impermissible 

Bombay High Court Clarifies Tax Exemption Eligibility for Venture Capital Funds

 In a significant ruling, the Bombay High Court has reaffirmed that a Venture Capital Fund (VCF) registered with SEBI is entitled to claim exemption under Section 10(23FB) of the Income-tax Act without requiring separate SEBI registration for each individual scheme operated by the fund. 

P&H HC holds exporter eligible for refund of interest paid under Rule 96A on subsequent realisation of export proceeds

 This Tax Alert summarizes a recent ruling of the Punjab & Haryana High Court (HC)¹ on the validity of paragraph 4.6 of Circular No. 197/09/2023-GST dated 17 July 2023, which denies refund of interest paid under Rule 96A of Central Goods and Services Tax Rules, 2017 (CGST Rules) where export proceeds are realized after the prescribed period.

The key observations of the HC are: