Today's Digest Summary
TaxCorp Daily Digest
Your Authoritative Source for Indian Tax & Corporate Law Updates
September 24, 2026
⚡ Quick Summary
- GST Compliance Alert: Delhi High Court mandates nationwide biometric Aadhaar authentication for all GST registrations, signalling a zero-tolerance stance on fraudulent registrations amidst Rs. 28,000+ Crore detected evasion over two years
- Income Tax Deadlines Under Pressure: Sales Tax Bar Association formally requests a one-month extension of AY 2026-27 tax audit deadlines (Section 44AB), citing portal issues and transitional complexities as the Income-tax Act, 2025 takes effect
- Reassessment Jurisprudence Tightening: Multiple tribunals and High Courts — Mumbai, Bangalore, Visakhapatnam, Telangana, and Delhi — invalidate Section 148 notices on grounds ranging from improper service to wrong sanctioning authority, reinforcing strict jurisdictional requirements
- Customs Duty Reset: Notification No. 31/2026-Customs slashes Basic Customs Duty rates across multiple product categories effective September 24, 2026, with one category receiving full exemption — immediate ERP updates required
📂 Category-wise Updates
🧾 Income Tax
The ITAT Mumbai ruled in favour of ASK Investment Managers on three fronts: ESOP discount is deductible under Section 37(1) even without a P&L debit; professional fees of Rs. 17.08 Crore for business-growth strategy qualify as revenue expenditure; and performance fees determinable only at year-end do not trigger Section 234C interest.
🎯 Action Item: Investment management firms should document ESOP discount calculations with third-party valuations and ensure performance-linked fee accrual policies align with year-end determinability principles.
The ITAT Mumbai quashed a penalty order for AY 2015-16 because the Section 274 notice failed to specify whether the charge was concealment of income or furnishing inaccurate particulars — a defect the Bombay HC Full Bench in Mohd. Farhan A. Shaikh has held to be fatal.
🎯 Action Item: Upon receipt of any Section 271(1)(c) penalty notice, immediately verify that the applicable limb is clearly struck off. Challenge omnibus notices at the earliest stage.
ITAT Bangalore quashed a PCIT's revision order under Section 263, holding that an AO who issued Section 133(6)/131(1) notices, recorded statements, and analysed digital records cannot be said to have conducted "no enquiry" merely because the revisional authority preferred a wider sample.
🎯 Action Item: Where Section 263 revision proceedings are initiated, compile a complete record of all enquiries undertaken by the AO to demonstrate that assessment was not passed without application of mind.
The ITAT Mumbai annulled a reassessment where the Section 148 notice was affixed on a locked room with no proven connection to the assessee. The Tribunal clarified that "LEFT" postal remarks do not constitute "REFUSED" and cannot support an inference of deliberate evasion.
🎯 Action Item: Assessees receiving reassessment orders should immediately verify whether the original Section 148 notice was validly served at their registered address. Raise service objections promptly before assessment completion.
ITAT Mumbai held that an order under Section 148A(d) based on mismatched PAN details and unverified third-party NSEL data — without distinguishing gross trading turnover from actual unexplained investment — is void ab initio.
🎯 Action Item: Upon receiving a Section 148A show cause notice, verify whether the underlying information correctly identifies your client's PAN and accurately characterises the alleged escaped income before the 148A(d) order is passed.
6. ITAT Mumbai: Renewal of Section 12AB Registration Cannot Be Denied Solely for Want of Trust Deed
The Mumbai ITAT held that charitable/religious institutions not created under a written instrument cannot have their Section 12AB renewal denied merely for absence of a trust deed, as Rule 17A(2) explicitly provides for alternative documentation.
🎯 Action Item: Religious and charitable trusts without formal trust deeds should compile their state trust registration certificates, historical IT registration records, and activity evidence before approaching CIT(E) for renewal.
ITAT Mumbai ruled that zero business receipts do not justify blanket disallowance of establishment and administrative costs under Section 37(1). Assessing Officers must examine underlying evidence to determine whether expenses were genuinely incurred to maintain the corporate entity.
🎯 Action Item: Companies reporting nil turnover in any year should maintain comprehensive documentation of business-maintenance activities and expenses to rebut any automatic disallowance during scrutiny.
ITAT Bangalore remanded an ex parte Section 147/144 order where the AO had ignored Form 16 and denied cost of acquisition in capital gains computation, while also imposing a ₹10,000 cost on the assessee for repeatedly failing to respond to notices.
🎯 Action Item: Assessees must respond to all statutory notices at both assessment and appellate stages. Silence during proceedings carries cost consequences even when the ultimate order is in their favour.
9. ITAT Mumbai annuls search-linked assessment done via scrutiny instead of Section 148
For searches conducted on or after April 1, 2021, additions for preceding years must be made only through the Section 147/148 reassessment route with prior Section 148B approval — a regular Section 143(3) scrutiny assessment cannot substitute this mandatory regime.
🎯 Action Item: Where search proceedings have been initiated post April 1, 2021, verify whether any consequential assessments for earlier years have followed the mandatory reassessment pathway with appropriate prior approvals.
10. Proportionate Section 80P Deduction Allowed Despite Excess Nominal Members: ITAT Bangalore Ruling
ITAT Bangalore held that partial non-compliance (exceeding nominal member limits) does not result in total denial of Section 80P(2)(a)(i) deduction. Only the proportionate income from non-compliant operations is taxable, aligning with the Supreme Court's ruling in Mavilayi Service Co-operative Bank.
🎯 Action Item: Co-operative credit societies exceeding nominal member limits should immediately compute profit apportionment between compliant and non-compliant member operations for accurate Section 80P claim filing.
ITAT Bangalore remanded an assessment where turnover discrepancies arose from the assessee's bank accounts being used for his sister-in-law's business, holding that such mixed-account evidence must be examined at the AO level first.
🎯 Action Item: Assessees operating with shared or family bank accounts must maintain segregated documentation — separate books, statements, and audit evidence — for each distinct business entity using those accounts.
12. Reassessment notice against amalgamated company held invalid by Telangana High Court
The Telangana High Court quashed a Section 148 notice issued to Dr. Reddy's Holdings Limited, a company that had ceased to exist post-merger with Dr. Reddy's Laboratories effective April 1, 2019, even though the Revenue had been duly informed of the NCLT-approved merger.
🎯 Action Item: Upon completion of any NCLT-approved merger, formally notify all jurisdictional income tax authorities with a copy of the NCLT order and effective date to prevent invalid notices being issued in the name of the amalgamated entity.
ITAT Bangalore annulled a reassessment where the Revenue could only show that the Section 148 notice was uploaded to the e-filing portal, with no evidence of electronic despatch. Under Section 13 of the IT Act 2000, actual despatch is a mandatory prerequisite for a notice to be treated as "issued."
🎯 Action Item: Assessees should monitor their e-filing inbox and email carefully. If a reassessment order arrives without any prior notice of despatch, raise the jurisdictional challenge at the earliest stage before the Assessing Officer.
14. Nine-Day Delay in Filing Form 10-IE Cannot Justify Denial of Section 115BAC Benefit: ITAT Amritsar
ITAT Amritsar directed acceptance of a Form 10-IE filed nine days late due to e-filing portal technical difficulties, reaffirming that procedural requirements must not be applied mechanically when the assessee's intent is clear and no deliberate conduct is alleged.
🎯 Action Item: Taxpayers experiencing portal errors during time-sensitive filings should immediately document the technical difficulty (screenshots, error logs) and submit contemporaneous grievance applications to establish bona fide cause.
15. Calcutta High Court Upholds Section 263 Revision for Unsupported TDS & Reimbursement Claims
The Calcutta High Court confirmed that where large expense payments lack proper TDS deduction evidence and nearly half are claimed as unsubstantiated reimbursements, the Commissioner can validly invoke Section 263 to direct a fresh assessment.
🎯 Action Item: Assessees claiming reimbursement deductions must maintain principal agreements, cost-sharing arrangements, and evidence of TDS compliance for all such payments to withstand Section 263 scrutiny.
For AY 2018-19, Section 148 notices issued after March 31, 2022 (beyond three years) require sanction from the Principal Chief Commissioner or above under Section 151(ii) — PCIT-level approval is insufficient and renders such notices void.
🎯 Action Item: Assessees facing belated Section 148 reassessment notices should verify the sanctioning authority's designation. Where the approving authority is only a PCIT for notices beyond the three-year threshold, challenge jurisdiction immediately.
ITAT Bangalore held that a joint bank account is a financial facility, not proof of an AOP. The Revenue must establish a voluntary union driven by a common profit-generating motive under Section 2(31) before assessing a group as an AOP.
🎯 Action Item: Joint account holders — particularly trustees, community custodians, and family members — should document the fiduciary or administrative nature of the account to preempt arbitrary AOP assessments.
Where a property seller pays Rs. 3 Crore to extinguish an agreement holder's enforceable prior rights on a Rs. 6 Crore sale, such payment qualifies as deductible expenditure under Section 48 for capital gains computation, as it constitutes expenditure incurred to improve title.
🎯 Action Item: In property transactions encumbered by prior agreements or possessory rights, ensure all settlement payments are made through banking channels and supported by documented legal arrangements to qualify for Section 48 deduction.
19. Time-Barred Scrutiny Notice After Defect Cure: Key Takeaways from Uber Health Tech ITAT Ruling
Curing a defective return under Section 139(9) does not reset the limitation clock for Section 143(2) scrutiny notices — the timeline runs from the original filing date. A notice issued beyond the permissible window renders the entire assessment void.
🎯 Action Item: Maintain clear records of the original return filing date and any defect-cure communication. Monitor Section 143(2) notice dates carefully and raise limitation objections if the notice is issued beyond the prescribed period.
20. PF Withdrawal Before 5 Years: ITAT Bangalore Clarifies Taxability of Employee's Own Contribution
On premature PF withdrawal, the assessee's own contribution — already taxed as salary — cannot be re-taxed as income. Only the employer's contribution and interest portions are taxable, and the AO must segregate these components before completing the assessment.
🎯 Action Item: Employees making premature PF withdrawals should obtain a detailed PF statement segregating own contributions, employer contributions, and interest accrued for each year to ensure correct tax computation.
Under Karnataka High Court precedent (N. Govindaraju, 377 ITR 243), an AO in reassessment can make additions on issues emerging during proceedings even if no addition is made on the original reopening ground — but such additions still require examination of all evidence on record.
🎯 Action Item: Assessees in Karnataka facing reassessment should be prepared for scope expansion beyond the stated reopening reason. Proactively submit all relevant documentation at the first opportunity during reassessment proceedings.
22. Karnataka High Court Mandates Release of Withheld TDS on Land Acquisition Compensation
The Karnataka High Court held that Section 28 interest on enhanced land acquisition compensation is a capital receipt forming part of the compensation itself and is not subject to TDS under Section 194-LA or taxable under Section 56(2)(viii).
🎯 Action Item: Acquiring authorities must review their TDS deduction practices on enhanced land acquisition compensation awards and ensure Section 28 interest is correctly classified as capital receipt before applying any withholding.
ITAT Bangalore deleted two of four Section 68 additions — commission receivable already taxed and house advance paid through banking channels — while remanding cash balance and sundry debtor entries for fresh fact-finding, reinforcing that Section 68 cannot be applied mechanically to asset-side entries.
🎯 Action Item: In scrutiny proceedings involving Section 68, segregate balance sheet entries by their factual character and maintain evidence of prior taxation, banking trails, and opening balance origins for each category.
The Delhi High Court quashed a reassessment notice targeting a Rs. 85 Lakh cash payment that had been specifically queried, responded to, and accepted without addition in the prior Section 143(3) scrutiny assessment — a clear case of impermissible change of opinion.
🎯 Action Item: Retain complete records of all queries raised and responses submitted during scrutiny assessments. Where a subsequent reassessment revisits an accepted transaction, cite the prior assessment record to establish change of opinion.
25. Professional body urges one-month extension of AY 2026-27 tax audit and related due dates
The Sales Tax Bar Association has formally requested extension of the Section 44AB tax audit deadline from September 30 to October 31, 2026 and the ITR deadline for audit cases from October 31 to November 30, 2026, citing portal issues, increased AIS/TIS reconciliation burden, and Income-tax Act 2025 transition complexities.
🎯 Action Item: Tax professionals should not rely on this extension being granted. Continue prioritising audit completion by September 30, 2026 while monitoring CBDT's official response.
26. ITAT Mumbai Quashes Section 69A Additions on Cash and Jewellery Seized During Search Operations
ITAT Mumbai deleted additions of Rs. 8.5 Lakh (cash) and Rs. 1.35 Crore (jewellery) under Section 69A, holding that documented opening cash balances and aggregate jewellery reconciliation backed by Wealth-tax Returns and purchase invoices constitute satisfactory explanations.
🎯 Action Item: Families holding significant jewellery assets should compile historical Wealth-tax Returns, purchase invoices, and remodelling records to create a defensible reconciliation trail ahead of any possible search action.
ITAT Delhi allowed a deduction of Rs. 44.9 Lakh for PF/ESI contributions deposited on Monday June 17, 2019, because the due date fell on a Saturday/Sunday when banks were closed — establishing that administrative unavoidability constitutes reasonable cause under Section 36.
🎯 Action Item: Employers should implement a policy of depositing PF/ESI contributions by Thursday or Friday each month to avoid weekend banking closure issues, and document any bank holiday-driven delays contemporaneously.
For AY 2022-23, ITAT Mumbai confirmed 0.60% per annum as the arm's length rate for corporate guarantee commission to overseas AEs, derived from the assessee's own bank facility letter — overturning the TPO/DRP's 1% rate and maintaining consistency with a decade of prior rulings.
🎯 Action Item: Companies issuing corporate guarantees to AEs should benchmark the commission rate using their own comparable bank guarantee charges and document the CUP analysis contemporaneously in the Transfer Pricing documentation.
🏛️ GST
The Delhi High Court issued a nationwide enforcement directive on September 8, 2026 mandating biometric Aadhaar authentication without exception for every GST registration, following parliamentary disclosures of Rs. 15,085 Crore and Rs. 13,109 Crore in detected evasion in FY 2023-24 and 2024-25.
🎯 Action Item: All new GST registration applicants must be prepared for mandatory biometric verification. Businesses with pending registrations should account for additional processing time at GST Suvidha Kendras or facilitation centres.
The Madras High Court clarified that the 10% penalty pre-deposit requirement under the Section 107(6) proviso is triggered only when the original order demands penalty without any accompanying tax — where tax is also demanded, the pre-deposit is computed on disputed tax, not on penalty separately.
🎯 Action Item: Before filing GST appeals, carefully analyse the foundational adjudication order to determine whether tax, interest, and/or penalty are independently demanded, and compute pre-deposit requirements accordingly.
The AP High Court directed manual acceptance of GSTR-3B returns for an assessee whose registration had been cancelled, enabling the statutory Section 62(2) remedy of deemed withdrawal of the best judgment assessment upon filing of valid returns within 60 days.
🎯 Action Item: Assessees whose registrations are cancelled but who wish to file pending returns to avail Section 62(2) relief should promptly approach the High Court if the electronic filing route is unavailable due to cancellation.
4. Kerala High Court Overturns ITC Rejection, Mandates Re-evaluation Under Section 16(5) of CGST Act
The Kerala High Court quashed a Section 73 assessment that denied ITC for FY 2019-20, confirming that returns filed before November 30, 2021 qualify for Section 16(5) protection. The Court also gave the assessee one month to file supplier declarations addressing Section 16(2)(c) concerns.
🎯 Action Item: Assessees with pending ITC disputes for FY 2017-18 to 2020-21 should audit whether their returns were filed before November 30, 2021 and invoke Section 16(5) protection in all pending proceedings.
A second Kerala High Court ruling confirms that Section 16(5) protection extends to all assessees who filed pending returns before November 30, 2021, overriding the restrictive application of Section 16(4)'s limitation, while conceding undisputed Section 50 interest liability to focus litigation on ITC rights.
🎯 Action Item: Strategically concede indisputable interest liabilities under Section 50 while focusing appeals on substantive ITC entitlements under Section 16(5) — this approach has judicial endorsement and conserves litigation resources.
The Telangana High Court held that a refund officer cannot disregard a binding Order-in-Appeal under Section 107(16) merely because the department intends to file an appeal. Withholding refunds under Section 54(11) requires an actually pending appeal — not an intent to appeal.
🎯 Action Item: Where a favourable Order-in-Appeal has been passed, immediately file a Section 54 refund application. If the department withholds the refund citing appeal intentions without actual filing, challenge the withholding by writ.
The Madras High Court clarified that tax authorities cannot reject refund applications on limitation grounds by merely issuing a deficiency memo under Rule 90(3). Substantive rejection on limitation must follow the Rule 92(3) procedure — Show Cause Notice, hearing, and speaking order.
🎯 Action Item: Upon receiving a deficiency memo that appears to be addressing a substantive limitation objection, immediately respond in writing demanding conversion to a proper Show Cause Notice under Rule 92(3) and the opportunity to be heard.
Where an erroneous cash refund of ITC is recalled and repaid by the assessee with interest, the Madras High Court confirmed that the tax department is obligated to restore the equivalent credit to the Electronic Credit Ledger, establishing a structured 15+15 day timeline for resolution.
🎯 Action Item: Assessees who have repaid erroneously refunded ITC in cash should immediately apply for re-credit to the Electronic Credit Ledger citing this ruling, supported by copies of the repayment challan and original assessment order.
🏢 Company Law
The Sikkim High Court held that employee-protection clauses in amalgamation schemes apply only to those employed on the effective merger date. Employees who had already transitioned to fixed-tenure positions under an IBC resolution plan prior to the merger date cannot claim permanent absorption under the amalgamation order.
🎯 Action Item: HR and legal teams managing corporate restructurings must document the exact employment status of all staff on the merger effective date and clearly communicate to transitional employees that fixed-tenure arrangements under IBC resolution plans may override future amalgamation entitlements.
2. ICAI January 2027 CA Examination Schedule, Fees, Cities and Application Dates — Complete Guide
ICAI has announced CA Foundation and Intermediate examinations for January 2027. Intermediate Group I runs January 2–6, Group II January 8–12, and Foundation January 3–9, 2027. The application window opens November 3, 2026, with a fee-free deadline of November 16 and a late-fee deadline of November 19.
🎯 Action Item: CA students and article clerks must apply between November 3–16, 2026 to avoid late fees. City/medium correction requests are accepted only during the narrow November 20–22, 2026 window — plan accordingly.
3. Supreme Court Sends Election Commissioners Appointment Act to Constitution Bench for Final Word
A two-Judge Supreme Court Bench was divided on whether a two-Judge bench or a Constitution Bench under Article 145(3) should determine the constitutional validity of the Chief Election Commissioner and other Election Commissioners (Appointment, Conditions of Service and Term of Office) Act, 2023. The matter has been referred to the Chief Justice of India for Constitution Bench formation.
🎯 Action Item: Constitutional law practitioners and public policy professionals should monitor this development closely, as the eventual Constitution Bench ruling will have significant implications for institutional independence frameworks.
IRDAI's September 23, 2026 consultation paper proposes consolidating intermediaries into IDEs, IDPs, and MIIs; capping Expense of Management at 12.5% (life) and 20% (general) of GDPI within five years; prohibiting volume-linked incentives for bank/NBFC staff; and integrating Bima Sugam and Public Insurance Registry infrastructure.
🎯 Action Item: Insurance intermediaries, banks distributing insurance products, and compliance officers should review the consultation paper and submit responses before the deadline to shape the final regulatory framework under the Sabka Bima Sabki Raksha Act, 2025.
📦 Customs
CESTAT Chennai ruled that where excess export duty surfaces through a subsequent departmental note (not an original assessment), that note constitutes a reassessment under Section 2(2) of the Customs Act, anchoring the Section 27 limitation period to the date of the note rather than the original payment date.
🎯 Action Item: Exporters with unassessed duty overpayments surfacing through post-facto departmental communications should file refund claims under Section 27 promptly, treating the communication date as the reassessment date for limitation purposes.
CESTAT Mumbai quashed a customs valuation enhancement where authorities rejected the declared CIF transaction value by referencing upstream FOB prices between foreign entities, reinforcing the primacy of Section 14(1) of the Customs Act and Rule 3(1) of the Customs Valuation Rules 2007.
🎯 Action Item: Importers operating in multi-tier supply chains should maintain comprehensive transaction documentation at the importer level — including CIF invoices, freight and insurance records — and resist attempts by customs authorities to invoke upstream foreign transaction prices as comparable values.
Producer-specific CVD rates ranging from USD 9.11 to USD 69.19 per MT have been imposed on Calcium Carbonate Filler Masterbatch (HS 3824 99 00) from Vietnam for five years under Notification No. 4/2026, in addition to pre-existing anti-dumping duty under Notification No. 37/2025-Customs (ADD).
🎯 Action Item: Importers of Calcium Carbonate Filler Masterbatch from Vietnam must immediately verify the applicable producer-specific CVD rate and assess the combined incidence of CVD and ADD before placing fresh import orders.
4. Comprehensive Analysis of Revised Basic Customs Duty Rates via Notification No. 31/2026-Customs
Notification No. 31/2026-Customs, effective September 24, 2026, reduces BCD rates: Serial Nos. 41 & 46 from 10% to 5%, Serial Nos. 42 & 47 from 32.5% to 27.5%, Serial No. 50 from 32.5% to 22.5%, and Serial No. 49 from 10% to Nil (full exemption).
🎯 Action Item: Importers of goods covered by the amended serial numbers must update ERP and customs software immediately to reflect new rates effective September 24, 2026. Review in-transit shipments to capture potential duty savings.
Notification No. 77/2026-Customs (N.T.) designates the Principal Commissioner/Commissioner of Customs (Import-I), Mumbai Customs Zone-I as the common adjudicating authority for two DRI show cause notices issued to Meenakshi Trading Corporation in 2014, transferring jurisdiction from Nhava Sheva-V.
🎯 Action Item: Entities named in the identified DRI show cause notices should immediately update their legal representation details and correspondence address for the Mumbai Customs Zone-I authority.
6. CBIC Designates Campbell Bay and Car Nicobar for Import and Export Operations under Customs Act
Notification No. 76/2026-Customs (N.T.) adds Campbell Bay and Car Nicobar in the Andaman and Nicobar Islands as designated customs locations for loading exports and unloading imports, amending the 1994 customs port regulations.
🎯 Action Item: Logistics and supply chain managers routing goods through the Andaman and Nicobar region should update compliance manuals, customs declarations, and logistics software to recognise Campbell Bay and Car Nicobar as valid customs stations.
📅 Key Deadlines & Action Items
| Deadline | Requirement | Reference |
|---|---|---|
| September 24, 2026 | New Basic Customs Duty rates take effect under Notification No. 31/2026-Customs | Customs |
| September 30, 2026 | Section 44AB Tax Audit Report due date (extension requested but NOT yet granted) | Income Tax |
| October 31, 2026 | ITR due date for audit cases (extension requested but NOT yet granted) | Income Tax |
| November 3, 2026 | ICAI CA Exam application window opens | Professional |
| November 16, 2026 | Fee-free deadline for ICAI January 2027 exam applications | Professional |
| November 19, 2026 | Late-fee deadline for ICAI January 2027 exam applications | Professional |
| November 20–22, 2026 | Narrow window for city/medium correction in ICAI January 2027 exam forms | Professional |
| November 30, 2021 (Historical — ongoing disputes) | Statutory cutoff for Section 16(5) CGST ITC protection for FY 2017-18 to 2020-21 | GST |
| 60 days from Section 62 assessment order | File valid GSTR-3B return to trigger deemed withdrawal under Section 62(2) | GST |
| Within 4 months | Kerala HC directed fresh ITC hearings to be completed by assessing authorities | GST |
| 15 days from certified copy | GST assessee in Vinayak Electricals to apply for Electronic Credit Ledger re-credit | GST |
⚠️ Critical Advisory: Do NOT defer tax audit completion in anticipation of the extension requested by the Sales Tax Bar Association. CBDT has not yet responded — treat September 30, 2026 as the operative deadline.
💡 Professional Takeaways
1. 🔐 Reassessment Jurisdiction Is Now the Frontline Battleground
Across at least eight separate rulings covered in today's digest — spanning Mumbai, Bangalore, Visakhapatnam, Telangana, and Delhi forums — courts and tribunals are consistently annulling reassessments on procedural and jurisdictional grounds: invalid service, wrong sanctioning authority, notice to non-existent entities, upload without despatch, and post-scrutiny change of opinion. Tax professionals should build a reassessment jurisdiction checklist as a first-response tool for every Section 148 notice received, examining: (a) timeliness of issuance, (b) validity of service, (c) appropriateness of the sanctioning authority for the assessment year and notice date, (d) prior Section 148B approval in search-linked cases, and (e) whether the underlying information is fact-based or merely a change of opinion on already-scrutinised transactions.
2. 📋 Section 16(5) ITC Relief Window Remains Actively Enforceable — Use It Now
Two Kerala High Court rulings today confirm that Section 16(5) of the CGST Act remains a live, enforceable protection for assessees whose pending returns for FY 2017-18 through 2020-21 were filed before November 30, 2021. Despite this clear legislative and judicial position, departmental officers continue to deny ITC using the restrictive Section 16(4) limitation. Tax professionals advising clients with historical ITC denials should conduct an immediate audit of return filing dates, invoke Section 16(5) in all pending assessments and appeals, and adopt the litigation strategy of conceding undisputed Section 50 interest while contesting ITC entitlement — an approach specifically endorsed by the Kerala High Court.
3. 📦 Customs Duty Landscape Shifting — Simultaneous Relief and New Levies Demand Immediate Attention
September 24, 2026 presents a dual customs development that requires immediate action from trade and logistics professionals. On one hand, Notification No. 31/2026-Customs delivers meaningful BCD relief effective today, including full exemption on Serial No. 49 goods. On the other hand, Notification No. 4/2026-Customs (CVD) imposes fresh producer-specific countervailing duties on Vietnamese Calcium Carbonate Filler Masterbatch, layered on top of pre-existing anti-dumping duty. The practical lesson: customs duty profiles of imported goods can shift materially within a single notification cycle. Businesses should establish a monthly duty rate monitoring protocol and ensure ERP/customs software updates are treated as a same-day compliance obligation whenever a new Customs Notification is issued.
This digest is prepared exclusively from TaxCorp India's original research and analysis. All article links direct to thetaxcorp.in. Content is for informational purposes and does not constitute legal advice. Consult your tax advisor for guidance specific to your facts.
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