Tax Due Date - October 2025.

 

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Compliance to be made

GSTN issues advisory on the changes introduced in the Invoice Management System

 This Tax Alert summarizes the recent advisory ^[1] issued by Goods and Services Tax Network (GSTN) on the changes introduced in the Invoice Management System (IMS).

The highlights of the advisory are:

• Taxpayers can keep the following records pending for a limited period of one tax period i.e., one month for monthly taxpayers and one quarter for quarterly taxpayers:
  
  
  
• Credit notes, or upward amendment of credit notes.
• Downward amendment of credit notes where original credit note was rejected.
• Downward amendment of invoice / debit note where original invoice was accepted and GSTR-3B was filed.
• Downward amendment of documents issued by e-commerce operator where original document was accepted, and GSTR 3B was filed.
  
  The due date for keeping records pending will be calculated based on the date/ tax period in which such documents have been communicated by the supplier.
  
  

• No reversal of input tax credit (ITC) is required if the recipient has not availed ITC on the relevant invoice. In cases where ITC has been availed partially, the obligation to reverse ITC is limited to the amount actually availed.
  
  
  
• Accordingly, a new facility has been introduced in IMS allowing taxpayers to declare the actual amount of ITC availed and specify the reversal amount required, either in full or in part, for selected records. This feature can be used when reversal has already been made previously or ITC was never claimed on the relevant invoice or document.
  
  
  
• An option is also made available to the taxpayers to save remarks while marking records as rejected or pending. These remarks will be visible to the recipient in GSTR-2B for future reference and to suppliers via their outward supplies dashboard, facilitating corrective action.
  
  
  
• The changes, including the facility to keep credit notes pending and declaration of ITC amounts, will be effective from October 2025 tax period and shall apply prospectively to records filed by suppliers after the rollout of the changes.

Comments:

• Allowing taxpayers a defined timeframe to take action on specified records enhances their ability to make informed choices regarding acceptance or rejection, ensuring more deliberate and compliant decision-making.
  
  
  
• Businesses may need to closely assess potential ERP system updates and modifications arising from the new IMS requirements.

^[1] Advisory dated 23 September 2025

AAR holds credit of IGST paid on import of goods not required to be reversed on non-payment to foreign supplier within 180 days

 This Tax Alert summarizes a recent advance ruling ^[1] issued by the Authority for Advance Ruling, Gujarat (AAR) on applicability of second proviso to Section 16(2) of Central Goods and Services Tax Act, 2017 (CGST Act) in case of import of goods.

A Simple Guide to Economic Double Taxation in India

 When a company in India does business with its parent or sister company abroad (called Associated Enterprises or AEs), they must set prices for these transactions as if they were unrelated parties. This is the "arm's length principle." If the Indian tax authorities (Income Tax Department) find that the prices were too high or too low, they can adjust the company's profits upwards, leading to more tax in India.

Where Is Your Company Really Managed?

Imagine an entrepreneur sets up a company overseas. The paperwork is perfect, a local bank account is open, and the company has a physical office abroad. On paper, it looks like a foreign company.

CBIC issues Notifications giving effect to the recommendations made in 56th GST Council Meeting

 This Tax Alert summarizes recent Notifications¹ issued by the Central Board of Indirect Taxes and Customs (CBIC) giving effect to the recommendations made in the 56th Goods and Services Tax (GST) Council meeting² and notifying amendments made vide Finance Act, 2025.

 

Deduction for Gratuity Contributions to LIC Without a Trust: Legal Analysis under Sections 36(1)(v), 40A(7), and 43B of the Income-tax Act, 1961

Introduction

Employee welfare is a cornerstone of corporate responsibility, and gratuity forms a critical part of the social security benefits provided by employers. For private limited companies, one common question is whether contributions made directly to the Life Insurance Corporation of India (LIC) under its Group Gratuity Scheme—without creating a separate gratuity trust—qualify for deduction under the Income-tax Act, 1961. This issue primarily revolves around the interplay of Section 36(1)(v), Section 40A(7), and Section 43B.

This article examines statutory provisions, relevant case laws, CBDT circulars, and judicial interpretation to clarify the deductibility of such payments.

Key recent GST Rulings Simplify Compliance for Businesses

 Recent judgments from various High Courts have provided significant clarity and relief on several GST provisions.

CBIC clarifies treatment of post-sale and secondary discounts under GST

 This Tax Alert summarizes the recent Circular^[1] issued by the Central Board of Indirect Taxes and Customs clarifying tax treatment of secondary and post-sale discounts under GST.

The Tax Maze of Employer-Funded Foreign Education: A Guide for Companies and Employees

 Introduction: The Investment in Human Capital

In today's competitive global landscape, Indian and multinational companies are increasingly investing in high-potential employees by sponsoring advanced education abroad. This includes prestigious MBAs, specialized technical degrees, and executive programs. Often, this sponsorship is coupled with a bond or agreement requiring the employee to return to service for a stipulated period.

A Deep Dive into the Taxation of Carbon Credit Income in India

 Introduction: India's Green Economy and the Tax Conundrum

India stands as a global powerhouse in the fight against climate change, consistently ranking among the largest issuers of carbon credits under international mechanisms like the Clean Development Mechanism (CDM) of the Kyoto Protocol. This vibrant carbon market allows entities that reduce greenhouse gas emissions to generate and sell tradeable "carbon credits" to those needing to offset their emissions, creating a financial incentive for sustainable practices.

Selling a Property? Here’s What Counts as ‘Cost of Improvement’ to Save Capital Gains Tax

 Selling a property can trigger a significant tax liability in the form of capital gains tax. However, the Income-tax Act, 1961, allows you to reduce this tax burden by factoring in two key components: the cost of acquisition (what you paid to buy it) and the cost of improvement (what you spent to improve it).

 

Navigating the Intricacies of Service Permanent Establishment: A Summary of Key Legal Disputes

 The global business landscape has transformed dramatically. With the rise of digitalization and e-commerce, companies can now operate and provide services across borders without a traditional physical presence. This evolution has created a significant challenge for tax authorities worldwide: how to tax the profits generated by foreign enterprises in their jurisdiction. The long-established international tax rule is that a source state can only tax the business profits of a foreign enterprise if it has a Permanent Establishment (PE) there.

Judicial Insights into International Taxation: Key Rulings from April-June 2025

The period from April to June 2025 saw a series of significant rulings from various High Courts and Income Tax Appellate Tribunals (ITATs) across India, alongside a Supreme Court decision, offering crucial clarifications on international taxation matters. These decisions largely focus on the taxability of income for non-residents, the interpretation of Double Taxation Avoidance Agreements (DTAAs), and the applicability of withholding tax provisions.

The 56th GST Council Meeting: A Path Towards Simplification and Enhanced Compliance September 2025

 The 56th Goods and Services Tax (GST) Council Meeting, held in September 2025, represents a significant stride towards simplifying India's GST system. The recommendations from this pivotal meeting address several key areas, aiming to reduce litigation, improve compliance, enhance affordability, and strengthen institutional mechanisms.

Division bench of Sikkim HC sets aside the order of single judge bench and holds refund of unutilized ITC is not available on closure of business

This Tax Alert summarizes a recent ruling of the division bench of the Sikkim High Court (HC) on refund of unutilized input tax credit (ITC) upon closure of business under the Central Goods and Services Tax Act, 2017 (CGST Act).

Understanding the Difference Between Technical Services and Technical Consultancy under the Income Tax Act

In business, the terms “Technical Services” and “Technical Consultancy” are often used interchangeably. But under the Income Tax Act, 1961, and through judicial interpretations, these two carry distinct meanings—especially when it comes to the rate of Tax Deduction at Source (TDS) under Section 194J.

GST Council Meeting – Focus to boost consumption

• The GST council decided to move to a two rate structure – 5% and 18% with a special maximum rate of 40% with effect from 22nd September.
• Tax rates have been slashed across categories, with maximum benefit to FMCG, fertilizers, agricultural and medical equipment’s followed by cement, auto and durables.
• Health and life insurance will be exempt from GST.
• Tobacco products, luxury items will be charged at the highest rate of 40%.
• GST council indicated that the fiscal impact of the rate rationalisation would be to the tune of INR 480 Bn (0.15% of GDP).

 

Mumbai Tribunal Delivers Important Ruling for International Businesses

In a significant decision, the Mumbai Income Tax Tribunal has ruled that tax officials cannot use a powerful international anti-avoidance tool unless the government has officially implemented it into Indian law. This ruling provides crucial clarity for multinational companies, especially those in the aircraft leasing industry.