SC holds extended period cannot be invoked if allegations are not justified in the show cause notice issued under section 74

 This Tax Alert summarizes a recent judgement of the Supreme Court (SC) ^[1] on whether a show cause notice (SCN) under Section 74 of the Central Goods and Services Tax Act, 2017 (CGST Act) can be sustained merely on a generic allegation of fraud or concealment of facts, without the notice itself setting out the grounds for such allegation.

The Arbitrator’s Ledger: Financial Forensics in ODR

 Let’s start with a small story in this regard. Client B, a mid-sized electrical components manufacturer registered as an MSME, supplied materials worth ₹2.5 crore to Firm Y, a large infrastructure developer. After receiving the goods, Firm Y delayed the payments well beyond the agreed credit period. Frustrated, Client B filed a delayed payment claim against Firm Y on the government's MSME ODR portal. The dispute was referred to an Online Dispute Resolution (ODR) platform. To counter the claim, Firm Y suddenly produced a complex web of internal debit notes, backdated emails, and quality rejection reports, arguing that the materials were defective and no payment was due. The sole arbitrator was faced with hundreds of digital documents and conflicting accounting entries. This is exactly where CA X was brought in as a financial forensic expert to decode the ledger.

Gujarat HC upholds levy of GST on corporate guarantee while reads down mandatory 1% valuation where actual consideration is lower

 This Tax Alert summarizes a recent ruling of the Gujarat High Court (HC)1 on the taxability of corporate guarantee provided by the Petitioners on behalf of their related party located in India and the constitutional validity of Rule 28(2) of the Central Goods and Services Tax Rules, 2017 (CGST Rules).

The key observations of the HC are:

Foreign Assets disclosure scheme operationalized - CBDT prescribes valuation rules, forms and compliance framework

 This Tax Alert summarizes the recent Notification notifying “The Foreign Assets of Small Taxpayers - Disclosure Scheme Rules 2026” (Rules) issued by the Central Government and 50 Frequently Asked Questions (FAQs) issued by Central Board of Direct Taxes^[2] (CBDT), pertaining to “The Foreign Assets of Small Taxpayers – Disclosure Scheme 2026” (Scheme) which was introduced vide Finance Act (FA) 2026^[3].

Taxability of Crypto Derivatives Under Indian Income-tax Law

 The Finance Act, 2022 introduced India's first dedicated tax regime for Virtual Digital Assets (VDAs) through Sections 2(47A), 115BBH and 194S of the Income-tax Act, 1961. The framework was designed to tax income arising from the transfer of cryptocurrencies, NFTs and similar digital assets.

However, the growing popularity of crypto futures and options traded on offshore exchanges has created an interpretational challenge. Unlike spot crypto transactions, many derivative contracts are cash-settled, meaning parties pay or receive only the price difference without acquiring, delivering or transferring the underlying cryptocurrency.

This raises a crucial question: should profits from cash-settled crypto derivatives be taxed under the special VDA regime of Section 115BBH, or under the ordinary provisions relating to business income and speculative transactions? The answer has significant tax implications because the two regimes operate differently.

GAAR vs SAAR: A Practical Note for Businesses in India

 Taxation is one of the most significant financial obligations for any business. Alongside managing operations, growth, and profitability, companies must carefully plan their tax affairs to ensure compliance while optimizing cash flows. Effective tax planning begins well before the financial year-end and typically involves using the deductions, exemptions, and incentives provided under the Income-tax Act, 1961.

India’s Position on the OECD Model Tax Convention – At a Glance

 Comparison table highlighting how India’s treaty policy differs from the OECD Model Tax Convention, especially on key articles such as Permanent Establishment (Article 5), Business Profits (Article 7), Royalties (Article 12) and Capital Gains (Article 13).

𝗪𝗼𝗿𝗸𝗶𝗻𝗴 𝗖𝗮𝗽𝗶𝘁𝗮𝗹 𝗮𝗱𝗷𝘂𝘀𝘁𝗺𝗲𝗻𝘁 𝗰𝗮𝗻𝗻𝗼𝘁 𝗯𝗲 𝗺𝗮𝗱𝗲 𝗶𝗻 𝘁𝗵𝗲 𝗮𝗯𝘀𝗲𝗻𝗰𝗲 𝗼𝗳 𝗮𝗻𝘆 𝗳𝗶𝗻𝗮𝗻𝗰𝗶𝗻𝗴 𝗰𝗼𝘀𝘁

 In DCIT v. Coca Cola India Inc., the Delhi ITAT held that a Working Capital Adjustment cannot be made merely because receivables from an AE remain outstanding for an extended period. The Tribunal observed that such adjustments under TNMM are intended to improve comparability and must be supported by evidence of actual financing cost or economic disadvantage. Since the assessee had no external borrowings, incurred no interest cost, and was fully funded by its US Head Office, the Revenue failed to establish any real financial burden arising from delayed receivables. Accordingly, the TP adjustment was deleted.

TAX AMENDMENT BILL 2026

The Lok Sabha has passed the Taxation & Other Laws (Amendment) Bill, 2026 (‘Amendment Bill’). The said Amendment Bill replaces the Income-tax (Amendment) Ordinance, 2026 which was earlier passed on 5 June 2026 and also proposes other amendments to the Income-tax Act, 2025 (‘the Act’), the most notable amendment being in respect of taxation of unitholders and SPVs of business trusts.

SC confirms omission of Rule 96(10) applies to even pending proceedings absence any saving clause

 This Tax Alert summarizes a recent judgement of the Supreme Court (SC)^[1] dealing with the effect of omission of Rule 96(10) of the Central Goods and Services Tax Rules, 2017 (CGST Rules) on any proceedings pending disposal on the date of such omission.

Rule 96(10) inter alia restricted any person from claiming refund of integrated tax paid on export of goods or services if benefit of specified exemption notifications was availed. The said rule was omitted w.e.f. 8 October 2024^[2].

Subsequently, the Gujarat High Court (HC)^[3] held that such omission will be applicable to all proceedings/cases which are pending for final adjudication either before courts or adjudicating authorities. Revenue filed an appeal before SC.

The key observations of the SC are:

Delhi HC holds 10% pre-deposit requirement for penalty-only appeals inapplicable where SCN was issued before amendment

 This Tax Alert summarizes a recent ruling of the Delhi High Court (HC)^[1] on whether the newly introduced pre-deposit requirement for filing an appeal against penalty-only order applies where the show cause notice (SCN) was issued before 1 October 2025, while the adjudication order was passed thereafter.

The key observations of the HC are: