Navigating the Complexities of GST Pre-deposit Requirements Before GSTAT

 The introduction of the Goods and Services Tax Appellate Tribunal (GSTAT) has brought significant changes to the pre-deposit framework for taxpayers appealing adverse orders. Understanding these nuanced requirements is essential for ensuring seamless appellate proceedings and avoiding procedural pitfalls.

Power of Commissioner to Reduce or Waive Income Tax Penalty

Overview of Penalties Under the New Act

Before looking at the waiver provisions, it's helpful to know what penalties exist. The 2025 Act, under Chapter XXI, continues to impose penalties for various defaults, including:

• Under-reporting and misreporting of income (Section 439)

• Failure to keep, maintain, or retain books of account (Section 441)

• Failure to get accounts audited (Section 442)

• Failure to deduct TDS (Sections 448 & 449)

Cross border 'fast track' merger permitted under automatic route

On 6 June 2026, the Reserve Bank of India (RBI) issued a notification ^[1] amending the rules governing cross-border mergers under the Foreign Exchange Management Act, 1999 (FEMA), as part of India’s ongoing efforts to simplify the regulatory framework and enhance ease of doing business.

Inbound Merger of a U.S. Company into an Indian Company: Regulatory Framework, Benefits and Key Compliance Requirements

Introduction

India has emerged as a preferred jurisdiction for multinational groups and technology startups seeking to simplify global structures, access Indian capital markets, and align their corporate domicile with business operations. One of the most effective mechanisms for achieving this objective is an inbound merger, wherein a foreign company merges into an Indian company, and the Indian company becomes the surviving entity.

A common scenario involves a U.S. holding company being merged into its Indian subsidiary or affiliate, resulting in the Indian company absorbing the U.S. entity. This structure has gained significant momentum due to the increasing trend of "reverse flipping," where overseas holding companies relocate their corporate headquarters to India in anticipation of domestic fundraising or public listing opportunities. Recent regulatory reforms have also streamlined the approval process for eligible inbound mergers, making India a more attractive destination for corporate reorganizations.

GST Insights: Three Key Rulings on Taxability, Intermediary Status, and ITC

1. Healthcare Services Retain Exemption Even When Provided Through Another Hospital

Valuation vs Demerger: Kolkata ITAT Clarifies the Boundaries

 Recently, the Kolkata ITAT held that no addition under section 56(2)(x) can be made in respect of assets received pursuant to a qualifying demerger, where the prescribed conditions under the Income-tax Act are duly satisfied. The Tribunal further clarified that valuation principles as prescribed under Rule 11UA of Income-tax Rules (ordinarily applicable for determining fair market value of shares) cannot be imported to challenge a demerger that otherwise complies with the statutory framework.

India Grants Full Tax Exemption to FIIs and BIS on Government Securities via Ordinance

 In a significant policy move, the Government of India has promulgated the Income-tax (Amendment) Ordinance, 2026, granting complete tax exemption to Foreign Institutional Investors (FIIs) and the Bank for International Settlements (BIS) on interest and capital gains arising from investments in government securities (G-Secs).

The ordinance, which took effect retrospectively from April 1, 2026, was promulgated by President Droupadi Murmu as Parliament was not in session.

Single Show Cause Notice for Multiple Financial Years Under GST: Why Courts Are Striking It Down

 A single show cause notice (SCN) issued for multiple financial years has become a common flashpoint under the Goods and Services Tax (GST) regime. While the tax department often adopts this practice for administrative convenience, it is now consistently being struck down by various High Courts across India. This article examines why such consolidated proceedings are legally untenable.

CBDT guidelines for compulsory scrutiny selection for FY 2026-27

 Recently, the Central Board of Direct Taxes (“CBDT”) has issued guidelines prescribing the parameters for compulsory selection of income-tax returns filed in FY 2025-26 for complete scrutiny during FY 2026-27. The guidelines identify specific categories of cases that will be mandatorily selected for scrutiny and set out the procedure to be followed by the tax authorities for such selection.

Mumbai ITAT Rejects LIFO and Upholds FIFO Approach for Capital Gains Computation

 In a recent ruling of Megasolis renewable , the Mumbai ITAT upheld the application of the First-In-First-Out ("FIFO") method for computing capital gains on the sale of shares held in physical form, rejecting the taxpayer's attempt to compute gains based on LIFO method. Significantly, the Tribunal invoked the doctrine of substance over form and characterised the taxpayer's approach as a colourable device aimed at reducing its tax liability.

ITAT Mumbai Upholds Tax Certainty for Category III AIFs

In a significant ruling delivered in the case of 360 One Core Aggressive, the Mumbai bench of the Income Tax Appellate Tribunal (ITAT) has reinforced crucial tax principles for Category III Alternative Investment Funds (AIFs).

Independent Director Eligibility – Cousin of Promoter/Promoter Group Member is Eligible

 In a recent informal guidance letter, SEBI clarified whether a cousin of a Promoter Group member qualifies as a person ‘related to promoters or directors’ for the purposes of Independent Director eligibility under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘LODR Regulations’) and concluded that such a relationship, standing alone, does not trigger disqualification.

Background

olkata ITAT reaffirms that suspicion alone cannot justify additions under Section 68 (Unexplained Cash Credits)

 Recently, the Kolkata ITAT in Action Tie-up Pvt. Ltd. v. DCIT ruled in favour of the taxpayer and reiterated that additions towards alleged bogus sale transactions cannot be sustained merely on the basis of suspicion, third-party statements, or general allegations of accommodation entries, especially where the taxpayer has furnished complete documentary evidence supporting the transactions.

In the present case, the assessee company had sold investments in unlisted shares during the relevant assessment years. The tax authorities alleged that the transactions were accommodation entries and treated the sale proceeds as unexplained cash credits. The allegation was primarily based on statements recorded from certain third parties during search proceedings and the observation that some purchaser entities were subsequently struck off by the Registrar of Companies. The Assessing Officer further alleged that the assessee and related entities were merely “pass-through” or “shell” entities facilitating accommodation entries.

However, the assessee submitted detailed documentary evidence to substantiate the genuineness of the transactions, including audited financial statements, bank statements, confirmations, income tax records, details of investments held over multiple years, and responses received directly from purchasers in compliance with notices issued by the department. It was also highlighted that the investments had been acquired in earlier years and accepted by the department in scrutiny assessments.

The Hon’ble Tribunal, after examining the facts and legal position, ruled in favour of the assessee and made the following key observations:

SC holds GST is leviable on supply of actionable claim in online gaming, fantasy sports and casinos, retrospectively from July 2017

This Tax Alert summarizes a recent ruling  of the Supreme Court (SC) addressing the GST implications on online gaming, fantasy sports and casino transactions, including constitutional validity of levy on actionable claims and the valuation mechanism prescribed under the Central Goods and Services Tax Act, 2017 (CGST Act) and the Rules framed thereunder.

The key observations of the SC are:

Gains from Derivatives based trading income not taxable in India but only in Mauritius

 Under Article 13(3A) of the India-Mauritius DTAA capital gains from the transfer of shares of an Indian company acquired by a Mauritius resident on or after 1 April 2017 are taxable only in India. Article 13(4) provides that capital gains from transfer of any other property not covered specifically under any other Para of the said article, are taxable in the country of residence of the transferor, i.e., Mauritius.

GST Not Leviable on Transfer of Leasehold Rights of MIDC Plots: SC Dismisses Revenue’s SLP

 In a significant development, the Supreme Court has dismissed the Revenue’s Special Leave Petition (SLP) challenging a Bombay High Court (Nagpur Bench) ruling in the case of Aerocom Cushions Private Limited v. Assistant Commissioner. The High Court had previously held that the assignment of leasehold rights in an industrial plot allotted by the Maharashtra Industrial Development Corporation (MIDC) does not constitute a “supply of services” under Section 7 of the CGST Act, and therefore is not subject to GST.

Tax Due Date - June 2026.

 

Sr No	Due Date	Related to	Compliance to be made
1.	11.06.2026	GST	Filing of GSTR1 for the month of May 2026
2.	13.06.2026	GST	ISD Return

3.	20.06.2026	GST	Payment of GST for the month of May 2026 Filing of GSTR 3B for the month of May 2026
4.	7.06.2026	TDS/TCS (Income Tax)	Deposit TDS for payments of Salary, Interest, Commission or Brokerage, Rent, Professional fee, payment to Contractors, etc. during the month of May 2026. · Deposit TDS from Salaries deducted during the month of May 2026 • Deposit TCS for collections made under section 394 including sale of scrap during the month of May 2026, if any
5	15.06.2026	Income tax	Payment of Advance tax for the Corporate assesses –Amount not less than 15% of advance tax.