India-Mauritius DTAA Protocol Notified: Key Tax Implications

 The Government of India has notified the amendment to the Protocol of the India-Mauritius Double Tax Avoidance Agreement (DTAA) on 13 October 2026. The Protocol, originally signed in Mauritius on 7 March 2024, came into force on 10 August 2026 and introduces significant anti-abuse measures aligned with global tax standards.

Gujarat High Court Quashes ₹43.43 Crore GST Demand in Major Cross-Charge Dispute

 In a significant relief to taxpayers, the Gujarat High Court quashed a GST demand of ₹43.43 crore raised against M/s Gujarat Co-operative Milk Marketing Federation Limited. The dispute centered on common head office expenses that were incurred for services used by various branch offices but were not cross-charged to those branches.

Supreme Court Clarifies Excise Duty Treatment for Closing Stock

 The Supreme Court (SC), in the case of Lakshmi Sugar Mills Co. Ltd., has ruled that unpaid excise duty on finished goods lying in a bonded warehouse cannot be added to taxable income if the liability has neither been paid, claimed as a deduction, nor recognized as payable in the books of account.

Key Compliance Changes Every Taxpayer Should Know

 This paper highlights significant GSTN system and procedural changes following amendments approved after the 57th GST Council Meeting. The updates focus on GST registration, cancellation, composition levy, TDS compliance, and simplified registration for e-commerce sellers. 

GST Litigation Update: Key Judicial and Advance Rulings

 

High Court: Interest Refund Allowed on Subsequent Realisation of Export Proceeds

In Ernst and Young LLP v. UOI (2026-VIL-1215-P&H), the Punjab & Haryana High Court held that interest paid under Rule 96A is refundable when export proceeds are subsequently realized.

The taxpayer had exported services under a Letter of Undertaking (LUT) but failed to realize export proceeds within the prescribed one-year period. Consequently, it paid IGST along with interest under Rule 96A(1)(b). After the export proceeds were eventually realized, the department refunded the tax but denied the refund of interest relying on Para 4.6 of Circular No. 197/09/2023-GST.

The Court observed that Section 54(1) permits refund of tax as well as interest paid on such tax. Since Rule 96A does not prohibit refund of interest on subsequent realization of proceeds, the circular could not impose a restriction beyond the Act and Rules. The Court reiterated that interest is compensatory in nature and follows the principal amount. Accordingly, the restriction contained in Para 4.6 of the circular was struck down to that extent.

While the ruling correctly enforces the principle that a circular cannot override statutory provisions, it also raises an unresolved issue: Rule 96A itself does not expressly provide for refund of tax after delayed realization, unlike Rule 96B applicable to goods exports. Nevertheless, the judgment provides significant relief to service exporters facing delayed foreign exchange realization.

CESTAT Chennai Upholds Service Tax on Employee Secondment Arrangements

 The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Chennai, in Alstom T&D India Limited v. Commissioner [2026 (10) TMI 2027 - CESTAT Chennai], has reaffirmed the taxability of cross-border employee secondment arrangements under the service tax regime, relying extensively on the Supreme Court's landmark ruling in Northern Operating Systems Pvt. Ltd. (NOS). The decision provides important insights into determining whether a secondment arrangement constitutes an employer-employee relationship or a supply of manpower service by a foreign entity.

INDIA TAX DUE DATE NOVEMBER 2026

 

S No	Due Date	Related to	Compliance to be made
1	11.11.2026	GSTR – 1	Filing of GSTR 1 for the month of October 2026
2	13.11.2026	GST – ISD	Filing for the month of October 2026
3	20.11.2026	GST	-Payment of GST for the month of October, 2026 -Filing of GSTR 3B for the month of October, 2026

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.