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TMI Tax Updates - e-Newsletter
February 4, 2025
Case Laws in this Newsletter:
GST
Income Tax
Customs
Corporate Laws
Insolvency & Bankruptcy
Law of Competition
Service Tax
Central Excise
Indian Laws
Articles
By: DR.MARIAPPAN GOVINDARAJAN
Summary: The Finance Bill of 2025 introduces several amendments to the Customs Act, 1962. Key changes include the amendment of Section 18, allowing provisional duty assessments to be finalized within two years, extendable by one year. A new Section 18A permits voluntary revision of entry post-clearance, enabling self-assessment and potential duty adjustments. Section 27's amendment clarifies the refund claim period, while Section 28 addresses duty recovery timelines. Sections 127A to 127H redefine terms and transfer the functions of the Settlement Commission to an Interim Board starting April 1, 2025, with provisions for provisional assessments and immunity grants.
By: DR.MARIAPPAN GOVINDARAJAN
Summary: The Finance Bill, 2025 introduces several amendments to the Central Goods and Services Tax Act, 2017. Key changes include revised definitions for "Input Service Distributors" and "Local Authority," and the introduction of a "Unique Identification Mark." Amendments affect the time of supply for vouchers, input tax credit regulations, and the distribution of input tax credit. Modifications to credit and debit notes, return filing procedures, and appellate processes are also included. A new "Track and Trace" mechanism is established, with penalties for non-compliance. Amendments to Schedule III address warehoused goods, and a provision ensures no tax refund for certain transactions.
By: JM Kishore
Summary: The Finance Bill 2025 introduces a provision for Voluntary Revision of Entry Post-Clearance under Section 18A of The Customs Act, 1962, allowing importers/exporters to amend declarations after clearance. This necessitates new regulations under Section 157 to define eligibility, correctable errors, and verification processes. Concerns include increased workload for customs officers and potential misuse by traders to reduce declared values post-clearance. Solutions proposed include restricting eligibility, setting revision deadlines, and using AI for risk assessment. The provision aims to balance benefits with potential challenges in revenue collection and administrative workload.
By: Tushar Malik
Summary: The import process in India involves several steps managed by the Directorate General of Foreign Trade (DGFT) and the Customs Department. Importers must obtain an Importer Exporter Code (IEC) and comply with import policies and restrictions. They should select reliable suppliers, arrange financing, and obtain necessary licenses for restricted goods. Canalized imports require dealing with designated government agencies. Importers use Letters of Credit (LC) to secure transactions. Clearing and forwarding agents handle customs clearance, which involves filing a Bill of Entry and paying duties. After inspection and clearance, goods are transported to the importer's facilities for distribution.
By: YAGAY andSUN
Summary: The ongoing dispute over the Geographical Indication (GI) tag for Basmati rice between India and Pakistan centers on the protection of this traditional agricultural product's regional identity. India, having secured a GI tag in 2016 for specific regions, claims Basmati as integral to its cultural and agricultural heritage. Pakistan contests this, arguing for joint recognition due to shared historical cultivation practices. The GI tag's commercial benefits, such as authenticity and market value, are crucial, especially for exports. Despite discussions and legal proceedings, the issue remains unresolved, with potential outcomes including joint or separate GI registrations or continued exclusivity for India.
By: DR.MARIAPPAN GOVINDARAJAN
Summary: A charitable trust operating a marriage hall was scrutinized for its GST liability after claiming exemptions by issuing receipts as donations. The GST authorities determined a liability of Rs. 69,54,554 for the period from July 2017 to January 2020, rejecting the trust's cum-tax valuation method. The trust argued against the penalty and interest, claiming non-registration was neither willful nor fraudulent. However, the High Court found deliberate tax evasion attempts, as the trust failed to register timely and issued misleading receipts. The court upheld the decisions of the original and appellate authorities, dismissing the trust's petition.
By: Ishita Ramani
Summary: Selecting between a Limited Liability Partnership (LLP) and a Private Limited Company (Pvt Ltd) in India involves understanding key differences in taxation and compliance. LLPs are taxed like partnerships at 30% on profits without dividend distribution taxes, whereas Pvt Ltd companies face a corporate tax of 25-30% and a 15% dividend distribution tax. Compliance for LLPs is less stringent, requiring fewer statutory meetings and audits only if turnover exceeds 40 lakh. In contrast, Pvt Ltd companies must hold annual meetings, undergo yearly audits, and maintain detailed records. LLPs offer more flexible management, while Pvt Ltd companies provide easier share transferability, appealing to investors.
By: YAGAY andSUN
Summary: Under Indian Trademark Laws, registering a fragrance as a trademark is complex due to the requirement for graphical representation, which scents inherently lack. The Trade Marks Act, 1999, outlines that a trademark must be visually representable and distinctive, posing challenges for scent registration. While international precedents exist, such as in the EU and the US, where non-traditional marks like scents have been accepted, India lacks clear guidelines. Indian courts have recognized non-traditional marks like colors and sounds, but fragrance marks face hurdles due to distinctiveness and non-functionality requirements. Future legal developments may allow for fragrance registration in India.
By: YAGAY andSUN
Summary: India's Geographical Indication (GI) tags recognize and protect unique regional products, ensuring authenticity and quality. Notable GIs include Basmati Rice from northern states, known for its aroma; Darjeeling Tea from West Bengal, famed as the "Champagne of teas"; Alphonso Mangoes from Maharashtra; and Kashmir Saffron. Handicrafts like Kanchipuram Silk and Madhubani Paintings are also protected. Culinary products such as Tirupati Laddu and Hyderabadi Haleem are recognized for their cultural significance. These GIs preserve cultural heritage, promote local craftsmanship, and enhance economic growth by positioning products as premium in global markets.
By: YAGAY andSUN
Summary: Infringement under Intellectual Property Rights (IPRs) involves unauthorized use or violation of exclusive rights granted to IP holders. Each type of IP-patents, trademarks, copyrights, designs, geographical indications, and trade secrets-has specific infringement criteria. Legal recourse includes injunctions, damages, and criminal penalties. Patent infringement involves unauthorized use of a patented invention, while trademark infringement involves using a confusingly similar mark. Copyright infringement includes unauthorized reproduction or distribution of a work. Design infringement involves copying a registered design, and GI infringement involves misusing a geographical name. Trade secrets infringement involves unauthorized disclosure or use. Legal actions in India include civil and criminal remedies, ADR, and customs enforcement.
By: YAGAY andSUN
Summary: Intellectual Property Rights (IPR) in India provide legal protections for creators, inventors, and businesses, fostering innovation and granting exclusive rights to use, sell, or license their creations. Key types of IPR include patents, trademarks, copyrights, designs, geographical indications, and trade secrets, each with specific benefits and durations. Registering IPR ensures exclusive rights, legal protection, market value, and deterrence against infringement. Legal recourse includes civil and criminal remedies, alternative dispute resolution, and border measures. AI-generated works pose challenges under current IPR laws, necessitating potential updates to address AI authorship and protection.
News
Summary: Punjab reported an 11.87% increase in net GST collections up to January compared to the previous fiscal year, with collections reaching Rs 19,414.57 crore. Excise collections also saw a 15.33% rise, totaling Rs 8,588.31 crore. The state is among the top three general category states surpassing the national GST growth rate. In January 2025 alone, GST collections grew by 9.73% to Rs 2,008.58 crore. The Finance Minister attributed this success to efforts by the excise and taxation department to close loopholes and curb tax evasion.
Summary: Gross GST revenue in India rose by 12.3% to Rs 1.96 lakh crore in January, driven by increased domestic economic activity. Revenue from domestic sales grew by 10.4% to Rs 1.47 lakh crore, while tax revenue from imports surged by 19.8% to Rs 48,382 crore. After accounting for refunds, net GST revenue was Rs 1.72 lakh crore, up 10.9%. Experts noted that the growth reflects economic improvement and better tax compliance. However, while some large states saw significant increases in GST collections, others experienced more modest growth, raising concerns for GST authorities.
Summary: The Union Budget for 2025-26, featuring enhanced flight connectivity and e-visas, is set to significantly benefit Goa's tourism sector, according to a state minister. The introduction of e-visas is expected to increase international tourist arrivals, while the modified UDAN scheme aims to improve regional connectivity, aiding the sector's recovery post-COVID. The budget also emphasizes initiatives like MUDRA loans, wellness and spiritual tourism, and skill development, contributing to local employment in tourism. The government aims to promote Goa beyond its beaches, highlighting homestays and medical tourism as key opportunities for growth.
Summary: In a post-budget analysis by the Bangalore Chamber of Industry and Commerce and Deloitte, industry leaders emphasized the need for the government to enhance ease of doing business alongside stimulating consumption. Entrepreneurs face regulatory challenges, and the focus should be on robust R&D and execution of budget allocations. Sustained growth of over eight percent is crucial for poverty alleviation and increasing per capita income. Growth should be inclusive, involving MSMEs, agriculture, startups, and other sectors, with the private sector leading and the government providing supportive policies and infrastructure. Challenges in manufacturing and boosting demand and liquidity were also highlighted.
Summary: The Union Budget for 2025-2026 announced an increase of 10,000 medical seats next year, aiming for a total of 75,000 additional seats over five years. This initiative will benefit Goa, with the state expecting 100 more MBBS seats. The budget also includes plans to establish day care cancer centers in all district hospitals, with 200 centers set for 2025-26. These measures are expected to enhance Goa's medical tourism, boosting both health and tourism sectors. The state health minister highlighted these developments as essential for progress and addressing rising cancer cases.
Summary: The Finance Secretary urged India's private sector to embrace "animal spirit" and invest in the economy to achieve the goal of becoming a developed nation. He emphasized the need for collaboration between the government and industry to drive economic growth. The government has increased capital expenditure to Rs 11.21 lakh crore for FY26, providing a non-inflationary stimulus aimed at boosting savings, investment, and growth. The Budget also introduced a higher income tax rebate limit, encouraging increased disposable income. The fiscal deficit target is set at 4.4% of GDP for FY26, balancing growth and inflation considerations.
Summary: The Union Budget 2025, presented by the Union Finance Minister, has been positively received for its progressive measures aimed at economic growth. Key highlights include no income tax for earnings up to 12 lakh, increased capital expenditure, and initiatives like the Bihar Makhana Initiative and job creation in the footwear and leather industry. The budget also expands the UDAN Scheme for regional connectivity, introduces the Prime Minister Dhan-Dhaanya Krishi Yojana for agricultural development, and allocates funds for research and innovation. Incentives for electronics and electric vehicles, and exemptions for shipbuilding and railway goods, further underscore the government's commitment to holistic growth.
Summary: Rajasthan Agriculture Minister will not attend the ongoing Budget Session of the state Assembly due to health issues, as announced by the Speaker. Permission for his absence was granted amid opposition uproar. Previously, he missed a session for "unavoidable reasons" and had resigned after party losses in the Lok Sabha polls, but his resignation was not accepted. His brother's unsuccessful candidacy in a bypoll added to intra-party tensions. During the session, opposition members criticized the ruling party over the minister's absence and debated crop damage issues, leading to heated exchanges between party members.
Summary: The Union Budget 2025, presented by India's Finance Minister, has been praised by industry leaders for its transformative potential. It emphasizes infrastructure, clean energy, industrial growth, and MSME support. Key allocations include Rs. 1.5 lakh crore for state capital expenditure, the extension of the Jal Jeevan Mission, and a Nuclear Energy Mission targeting 100 GW by 2047. The budget also introduces a Rs. 1 lakh crore Urban Challenge Fund, plans for 120 new airports, and a Rs. 25,000 crore Maritime Development Fund. Loan limits for MSMEs and start-ups have been doubled, fostering innovation and entrepreneurship.
Summary: Members of the Startup Policy Forum have praised the Union Budget 2025 for its transformative impact on India's economy, highlighting measures such as tax relief for the middle class, enhanced credit access for MSMEs, and a fund of funds for startups. These initiatives are expected to spur consumption, entrepreneurship, and global competitiveness, aligning with India's vision of becoming an economic powerhouse. Key figures in the startup ecosystem emphasized the budget's role in fostering innovation, financial inclusion, and sustainable growth across various sectors, including insurance, tourism, healthcare, and the electric vehicle industry. The budget is seen as a catalyst for India's development and economic resilience.
Summary: The Finance Secretary stated that the FY26 Budget provides a non-inflationary stimulus to promote economic growth while balancing growth and inflation. The Budget includes measures to enhance savings, investment, and consumption, such as increasing the income tax rebate limit to Rs 12 lakh. It aims to control fiscal consolidation with a fiscal deficit target of 4.4% of GDP for FY26. The Budget addresses both demand and supply-side issues, including in agriculture, to manage food inflation and maintain macroeconomic stability. The focus is on balancing fiscal policies to avoid inflation while promoting growth.
Summary: The Union Budget 2025-26 introduces the National Manufacturing Mission, aimed at transforming India's industrial sector. The mission focuses on streamlining business operations, developing a future-ready workforce, supporting MSMEs, promoting technology adoption, and ensuring quality product standards. Strategic investments are planned in skilling, digitization, healthcare, education, agriculture, and electrification. The budget emphasizes clean energy initiatives, including renewable energy and electric mobility, to achieve net-zero emissions. Yokogawa India aligns with these goals, offering solutions to enhance business operations, workforce development, and technology integration, supporting India's goal to become a global manufacturing hub.
Summary: TCIEXPRESS, a leading B2B express delivery company in India, supports the Union Budget 2025-26, which introduces measures to boost the express delivery industry. Key initiatives include transforming rural post offices into logistics hubs, enhancing rural connectivity, and introducing a welfare scheme for gig workers to improve job security and attract talent. The budget also focuses on improving route planning and air cargo infrastructure, benefiting companies like TCIEXPRESS by reducing operational costs and transit times. These developments are expected to drive innovation, efficiency, and growth in the express delivery sector, strengthening TCIEXPRESS's market position.
Summary: The Chief Minister of Andhra Pradesh, leader of the Telugu Desam Party, endorsed the Union Budget 2025, aligning it with the Viksit Bharat 2047 vision. He emphasized collaboration with the central government and highlighted key growth areas: agriculture, MSMEs, investment, and exports. Stressing development over politics, he pointed to technological advancements, including artificial intelligence, as crucial for progress. The budget's focus on sectors like the poor, youth, farmers, and women aligns with his development principles. He expressed optimism about India's global economic position and advocated for innovative investment models to drive inclusive growth.
Summary: Union Minister criticized a prominent opposition leader for his negative remarks on the Union Budget 2025-26, suggesting the leader relies on others to write his speeches. The opposition leader had described the budget as a "band-aid for bullet wounds" and accused the government of lacking ideas. The minister defended the budget, highlighting significant income tax relief and substantial allocations for agriculture and rural development. He emphasized benefits for farmers, rural development, and poverty alleviation, aiming for a self-reliant nation. The minister claimed the budget prioritizes all societal sections and praised its impact on Madhya Pradesh.
Summary: Himachal BJP has praised the Union Budget for 2025-26, describing it as the foundation of a 'Viksit Bharat,' emphasizing benefits for the state through income tax relief and developmental schemes. The budget focuses on health, construction, Make-in-India, employment, and innovation, with tax exemptions for those earning below Rs 12 lakh and increased relief for senior citizens. It allocates Rs 67,000 crore to the Jal Jeevan Mission and plans to develop fifty tourist destinations. Additional measures include interest-free loans to states, increased MBBS seats, Atal Tinkering Labs in schools, and reduced costs for essential medicines.
Summary: The US-India Business Council (USIBC) praised India's Union Budget for 2025-26, highlighting its focus on agriculture, MSMEs, investment, and exports. However, USIBC emphasized the need for deeper systemic reforms in taxation and regulatory frameworks to enhance India's global competitiveness and attract more foreign investment. The council welcomed initiatives like a Nuclear Energy Mission and a National Manufacturing Mission but stressed the importance of regulatory streamlining and policy certainty. Additionally, USIBC supported the increase in FDI limits for insurance and the exemption of certain lifesaving drugs from Customs duty, while calling for broader structural reforms in various sectors.
Summary: The 'Gender Budget' in this year's Union Budget has increased by 37.5%, totaling Rs 4.49 lakh crore, as announced by the Women and Child Development Ministry. This allocation represents 8.86% of the overall budget, up from last year's Rs 3.27 lakh crore, which was 6.8% of the total. A record number of 49 ministries and departments, along with five Union territories, reported allocations under the Gender Budget Statement. Twelve new ministries, including Animal Husbandry, Biotechnology, and Railways, joined the initiative. The budget is divided into three parts, with significant contributions from the Ministry of Women and Child Development and other departments.
Summary: The Swadeshi Jagran Manch (SJM), affiliated with the RSS, has praised the 2025-26 Union Budget as prudent, addressing key economic concerns and promoting self-reliance. The budget, presented by the Finance Minister, includes tax exemptions for incomes up to Rs 12 lakh, reforms in the insurance sector, and support for MSMEs. It aims to tackle economic challenges like GDP deceleration, inflation, and trade deficits while boosting manufacturing and reducing dependence on imports. The budget also focuses on enhancing rural incomes, healthcare, and clean-tech initiatives, aligning with the goals of Aatmanirbhar Bharat and bridging rural-urban disparities.
Summary: Prime Minister Modi, at a Delhi election rally, hailed the Union Budget as the most middle-class-friendly in India's history, emphasizing tax relief for those earning up to Rs 12 lakh annually. He criticized the ruling Aam Aadmi Party (AAP) for alleged corruption and false promises, asserting that the BJP respects honest taxpayers and pledging to address corruption if elected. Modi highlighted the BJP's focus on employment, welfare for senior citizens and women, and development initiatives. He expressed confidence in BJP's victory in the upcoming Delhi elections, promising continued support for the poor and middle class.
Summary: The recent Budget announcement introduced zero tax for annual earnings up to Rs 12 lakh and revised tax slabs, which is expected to encourage over 90% of taxpayers to adopt the new tax regime, up from the current 75%, according to the CBDT Chairman. The government's strategy focuses on simplifying tax processes and utilizing AI for non-intrusive tax administration. The new regime simplifies tax calculations by eliminating deductions and exemptions. The Budget aims to benefit the middle class and stimulate economic growth. Enhanced technology and data analytics are being used to widen and deepen the tax base, promoting compliance among taxpayers.
Summary: A political leader expressed support for the government's decision to allocate a significant portion of the budget to defense, emphasizing the importance of projecting strength to deter conflicts, particularly referencing past tensions with China. He highlighted the need for a stronger navy and addressed the shortage of army officers. Regarding political alliances, he noted the complexities within the INDIA bloc, acknowledging that cooperation varies by state, as seen in differing dynamics in Tamil Nadu, Kerala, and Delhi. He suggested that alliances might shift again in future elections. The Jaipur Literature Festival featured numerous prominent figures from various fields.
Summary: The Union Budget 2025-26 has been praised by healthcare experts for its emphasis on a patient-centric ecosystem and medical tourism, supported by simplified visa norms. The initiatives aim to enhance India's status as a global healthcare hub through private sector collaboration, capacity building, and broadband connectivity to healthcare centers. Experts highlight the potential economic benefits and the importance of digital healthcare adoption. The budget's focus on infrastructure, skill development, and telemedicine is seen as a progressive step towards modernizing India's healthcare system, with calls for AI and digital innovations to further enhance healthcare delivery.
Summary: The Union Budget 2025-26 demonstrates the government's commitment to improving the middle class's lives and finances, according to the Solicitor General. It includes significant amendments to income tax rates, aiming to boost consumption and investments across the economy. The budget is seen as a catalyst for economic growth, job creation, and transformation into a global economic superpower. Key areas of investment include electric vehicles, artificial intelligence, R&D in life-saving drugs, shipbuilding, and hospitality. Additionally, measures for civil nuclear energy and a Rs 10,000 crore 'Funds of Funds for Startups' aim to enhance energy security and support MSMEs.
Summary: The Union Budget 2025-26 allocated Rs 1,16,132.5 crore for children, a 5.65% increase from the previous year. However, child rights organizations criticized the declining budget share, reduced allocations for key programs, and underutilization of funds in sectors like education, health, and child protection. The budget for children as a percentage of GDP fell to 0.33%. Education received the highest allocation, but fund utilization was uneven. Scholarships for marginalized groups showed mixed trends, and child protection remained underfunded. The Ministry of Minority Affairs faced significant cuts, raising concerns about the government's commitment to addressing child welfare challenges.
Summary: Lok Sabha has been allocated Rs 903 crore in the Union Budget, significantly more than the Rs 413 crore allocated to Rajya Sabha. Of the Lok Sabha's budget, Rs 558.81 crore is designated for the Lok Sabha Secretariat, including Grants in Aid to Sansad TV. The Rajya Sabha's budget includes Rs 2.52 crore for the salaries and allowances of its Chairman and Deputy Chairman, and Rs 3 crore for the Leader of the Opposition and their secretariat. The Lok Sabha budget allocates Rs 1.56 crore for the Speaker and Deputy Speaker, with Rs 338.79 crore for its 543 members. Rajya Sabha's 245 members receive Rs 98.84 crore.
Summary: India's Deep Ocean Mission received a significant boost with a Rs 600 crore allocation in the Union Budget, aimed at sending scientists to explore ocean depths using the Samudrayaan submersible. The Ministry of Earth Sciences was allocated Rs 3649.81 crore, up from Rs 3064.80 crore. The mission focuses on technologies for deep-sea mining, manned submersibles, and oceanic resources. Additionally, Rs 1,329 crore was allocated for Mission Mausam, enhancing weather forecasting with advanced technologies. India plans to explore ocean depths up to 6,000 meters and aims to improve severe weather detection by 2047.
Summary: The Union Budget 2025 has been praised by a US-based business advocacy group as a robust plan for advancing India's economic growth towards a USD 5 trillion economy. The US-India Strategic Partnership Forum highlighted the budget's landmark reforms and strategic investments, particularly in tax structure modernization. The budget emphasizes increased domestic consumption, rural and urban development, social welfare, and development of Northeast states. It also focuses on simplifying the tax regime, boosting domestic manufacturing, and enhancing ease of doing business. The budget aims to foster a resilient, inclusive, and globally competitive economic environment.
Summary: The CPI (M) has accused the central government of an "anti-Kerala" stance following the 2025-26 union budget, which they claim neglects the state's needs. Leaders criticized the budget presented by the Finance Minister and a Union Minister's suggestion that Kerala declare itself backward to receive more funds. They argue the BJP-led Centre discriminates against states based on politics, undermining federal principles. The ruling LDF and opposition UDF in Kerala have also expressed dissatisfaction, noting that key demands, including a significant financial package and rehabilitation funds for Wayanad, were ignored.
Summary: The Finance Minister described the Union Budget as "by the people, for the people, of the people," emphasizing its alignment with public interests. She noted that the Prime Minister supported tax cuts, though convincing bureaucrats took time. The Minister acknowledged the middle class's concerns about unmet aspirations despite their status as honest taxpayers.
Summary: The Telangana Deputy Chief Minister criticized the Union Budget 2025-26 for failing to address the state's critical issues, accusing it of lacking understanding and commitment to regional challenges. He highlighted concerns over reduced customs duties and increased cesses, which he claims diminish states' tax shares. The budget's 30.5% increase in Centrally Sponsored Scheme allocations undermines states' fiscal autonomy, he argued. The Deputy Chief Minister also noted disproportionate funding to Bihar, despite its fiscal health, and lamented the neglect of Telangana's irrigation projects. The state's Forest Minister expressed disappointment over insufficient allocations for Telangana.
Summary: The Union Budget 2025-26 received mixed reactions in Rajasthan. The Deputy Chief Minister praised it as a "game changer," highlighting tax exemptions for incomes up to Rs 12 lakh, which she believes will boost disposable income and domestic demand. She also commended initiatives for tourism and MSMEs. Conversely, the former Chief Minister criticized the budget for not addressing unemployment, inflation, or the trade deficit. He accused the central government of making election-focused announcements that could increase national debt and expressed disappointment over the lack of significant projects for Rajasthan, particularly in water resource management.
Summary: The union budget for 2025-26, presented by the Finance Minister, is described by a Union Minister as pro-farmer and supportive of the middle class, aligning with the vision of a developed India by 2047. It emphasizes organic farming, sustainability, and reducing costs for farmers, aiming to boost their income and empower the rural economy. The budget also focuses on expanding the electric vehicle sector and enhancing EV infrastructure. Additionally, it includes a significant allocation of interest-free loans to states and supports the 'Make in India' initiative to establish India as a global manufacturing hub.
Summary: Punjab farmer leaders expressed disappointment with the Union Budget, criticizing the lack of a legal guarantee for minimum support price (MSP) on crops. Despite the introduction of six new agricultural schemes and an increased Kisan Credit Card loan limit to Rs 5 lakh, they argue that this will exacerbate farmers' debt burdens. Protesters, including the Samyukta Kisan Morcha and Kisan Mazdoor Morcha, have been advocating for a legal MSP guarantee. They questioned the government's focus on boosting only three crops for four years and called for broader MSP coverage. They also suggested reallocating funds spent on imports to support domestic farmers and ensure crop diversity.
Summary: Child rights activists have expressed mixed reactions to the 2025-26 budget, which increased overall allocations for children but reduced funding for key welfare and education schemes. The total allocation rose to Rs 1,16,132.5 crore, but the proportion of child-focused expenditure in the Union Budget increased only slightly to 2.29%. Concerns were raised over cuts to programs like Navodaya Vidyalaya Samiti and scholarships for minority and tribal students. While some initiatives received boosts, such as Samagra Shiksha Abhiyan and PM SHRI Schools, activists emphasized the need for more robust support for child protection and welfare programs.
Summary: The Union Women and Child Development Minister praised the Union Budget as a pivotal move towards a developed and self-reliant India. The budget emphasizes empowerment for women, children, farmers, and the middle class, with a focus on tackling malnutrition through revised nutritional standards. It aims to improve nutrition for millions of children, mothers, and adolescent girls, and strengthen the Anganwadi system. The budget supports women entrepreneurs with term loans and online training. An increased allocation for women and child development programs and significant tax relief measures are also highlighted, marking a commitment to economic growth and social welfare.
Summary: The Union Budget presented by the Finance Minister was criticized by the Congress chief of Himachal Pradesh for neglecting the interests of hill states, especially Himachal Pradesh. The chief claimed that the budget did not allocate financial assistance for recent natural disasters or propose new development schemes for the state. Additionally, there was no relief for apple growers and farmers. The budget was accused of discriminating against Congress-governed states, while allegedly favoring Bihar, where upcoming assembly elections are scheduled.
Summary: The Congress party criticized the Union Budget 2025-26, claiming it fails to address economic issues like inflation and unemployment. They accused the BJP-led government of lacking innovative ideas and focusing on appeasing the middle class and Bihar voters. The budget was described as benefiting the wealthy while neglecting broader economic growth and essential sectors like health, education, and rural development. Cuts in allocations for marginalized communities and key development programs were highlighted. The Congress argued that the budget offers no substantial relief or solutions to the economic challenges facing the country.
Summary: The Punjab Finance Minister criticized the Union Budget as "completely disappointing," stating that none of Punjab's demands, including a package for crop diversification and infrastructure improvements, were addressed. He accused the government of bias towards states with BJP alliances and neglecting Punjab's needs, such as a special industrial package and police infrastructure funding. Other political leaders echoed these sentiments, highlighting the lack of support for farmers, including legal backing for MSP and loan waivers. In contrast, a Punjab BJP leader praised the budget for addressing various sectors, including agriculture and industry.
Summary: The Union Budget for 2025-26 includes an allocation of Rs 3,350 crore for the Ministry of Minority Affairs, marking an increase of Rs 166 crore from the previous year's budget estimate and Rs 1,481 crore from the revised estimate for 2024-25. The budget, presented by the Finance Minister, allocates Rs 678.03 crore for the educational empowerment of minority community students and Rs 1,237.32 crore for major schemes and projects. Additionally, Rs 1,913.98 crore has been designated for the 'Umbrella Programme for Development of Minorities'.
Summary: Several industry bodies in Jammu, including the Jammu Chamber of Commerce and Industry, praised the Union budget as balanced and comprehensive, covering major sectors like defense, health, agriculture, and exports. They expressed optimism for the development of a significant tourism destination in the region. However, there were calls for more public sector undertakings to boost industrial growth and employment. While the budget was seen as supportive of MSMEs and economic growth, there was disappointment over the lack of incentives for existing and new units in Jammu and Kashmir. Overall, the budget was viewed as progressive and growth-oriented.
Summary: Government employees' unions have expressed approval of the central government's proposal to exempt annual incomes up to Rs 12 lakh from income tax in the Union Budget for 2025-26. This measure is seen as a significant reform benefiting a large number of government employees. Union representatives anticipate that these reforms will be considered in the upcoming 8th Pay Commission's recommendations. The tax relief is expected to benefit approximately 70% of government employees, enhancing their financial well-being and purchasing power. The unions have expressed gratitude to the government for this initiative aimed at supporting middle-class families.
Summary: A political leader criticized the government for prioritizing budget figures over the fatalities and missing individuals from the Maha Kumbh stampede in Prayagraj, Uttar Pradesh. He accused the state and central governments of inadequate management and transparency, highlighting that official reports confirmed 30 deaths and 60 injuries. The leader questioned the government's ability to handle large events and called for an all-party meeting, suggesting the Army manage the situation. He also criticized the focus on VIP arrangements over common devotees and demanded increased funding and accountability from the central government. The incident led to protests in the Lok Sabha.
Summary: The Union Budget for 2025-26, as announced by the Union Housing and Urban Affairs Minister, is set to significantly enhance the income of street vendors and improve urban living standards. A key feature is the Rs 1 lakh crore Urban Challenge Fund, reflecting the government's commitment to sustainable urban development. The budget focuses on transformative reforms in urban development, housing, and infrastructure, aiming to modernize cities and improve infrastructure. The revamped PM SVANidhi scheme will provide street vendors with better access to bank loans and UPI-linked credit cards, further empowering them and enhancing their economic prospects.
Summary: The government has allocated Rs 2.52 lakh crore for the Railways in the 2025-26 budget, maintaining the previous year's allocation. The Railways aims to achieve Rs 3.02 lakh crore in revenue, with increased earnings from passenger and freight services. Passenger revenue is targeted at Rs 80,000 crore, a 13.2% increase, while goods revenue is set at Rs 1,80,000 crore, a 7% rise. Despite significant capital expenditure, experts express concerns over insufficient funds for safety and signaling projects, including the 'Kavach' rollout. Railway unions criticize the lack of focus on safety due to a hiring freeze.
Summary: The Union Budget 2025-26 has been criticized by the Leader of Opposition in the Odisha Assembly for failing to address significant issues like price rise and unemployment. He highlighted that Odisha's request for special category status, due to frequent natural calamities, was ignored, while other states received special provisions. The leader expressed concern over the lack of measures to tackle unemployment and inflation, affecting the youth and common citizens. A party spokesperson further alleged that the central government allocated funds to Bihar with an eye on upcoming assembly elections, suggesting political motivations behind budgetary decisions.
Summary: The Union Budget 2025, presented by the Finance Minister, focuses on boosting infrastructure and the electronics manufacturing ecosystem with intact capital allocation and simplified customs duties. The budget provides relief to the middle class by eliminating income tax for annual incomes up to Rs 12 lakh. It proposes a total capital expenditure of Rs 11.22 lakh crore and an effective capital expenditure of Rs 15.48 lakh crore. The budget supports various sectors, including agriculture, youth, MSMEs, and technology, while maintaining a fiscal deficit of 4.4% of GDP. Significant allocations are made for Indian Railways, enhancing connectivity and reducing logistics costs.
Summary: The Union Budget for 2025-26 allocates Rs 41,000.07 crore to Jammu and Kashmir, maintaining the previous year's revised estimate. The Jammu and Kashmir Police, under the Union home ministry, will receive Rs 9,325.73 crore, an increase from Rs 8,665.94 crore in 2024-25. The budget includes Rs 40,619.30 crore for central assistance, Rs 279 crore for disaster response, and Rs 101.77 crore for capital expenditure. Reactions are mixed; the Lieutenant Governor praised the budget, while opposition figures criticized it for insufficient support amid high inflation and unemployment. The budget is seen as favoring other regions politically.
Summary: Maharashtra's Deputy Chief Minister announced significant budgetary allocations aimed at boosting infrastructure projects in the state. Over Rs 3,500 crore is designated for Mumbai, including Rs 1,465 crore for the Mumbai Urban Transport Project-3, Rs 1,673 crore for the Mumbai Metro, and Rs 652 crore for the Integrated Green Urban Mobility project. The Mumbai-Ahmedabad high-speed rail corridor receives Rs 4,000 crore, with additional funds for a training institute. Other allocations include Rs 837 crore for Pune Metro, Rs 230 crore for river conservation, and funds for rural connectivity, agribusiness, energy conservation, and irrigation projects.
Summary: The Union Housing and Urban Affairs Ministry's budget for 2025-26 has been increased by 18% to Rs 96,777 crore to enhance urban infrastructure. A new Urban Challenge Fund of Rs 1 lakh crore has been introduced, with Rs 10,000 crore allocated for FY 2025-26, focusing on city growth, redevelopment, and sanitation. The PM Street Vendor's AtmaNirbhar Nidhi scheme will be revamped with increased financial support. Rs 3,500 crore is allocated for the second phase of the Pradhan Mantri Awas Yojana (Urban), and Rs 10,000 crore for the Urban Rejuvenation Mission. The Smart Cities Mission received no new funding as its deadline approaches.
Summary: The Union Budget has proposed amendments to the GST law, introducing a Track and Trace Mechanism for goods prone to tax evasion. A new clause defines "Unique Identification Marking," which includes secure, non-removable digital stamps or marks. The amendments also introduce penalties under new sections 122B and 148A to enforce this mechanism, reflecting a move towards digitization and improved supply chain monitoring.
Summary: The Delhi government received an additional Rs 100 crore in the Union Budget 2025-26, totaling Rs 1,348 crore, compared to the previous fiscal year. Despite this increase, the Aam Aadmi Party (AAP) criticized the budget as a "major disappointment," claiming it failed to provide relief on GST or home loans for the middle class. AAP leaders expressed concerns over reduced allocations for education and healthcare, arguing it hinders India's development goals. In contrast, BJP leaders praised the income tax relief for middle-class earners, asserting it would strengthen their support in the upcoming Delhi Assembly elections.
Summary: The Union Budget received praise from BJP chief ministers in states like Uttar Pradesh, Haryana, Uttarakhand, and Rajasthan, who described it as a milestone for a self-reliant India. They highlighted benefits such as tax exemptions, increased loan limits for farmers and entrepreneurs, and support for the middle class. In contrast, opposition leaders criticized the Budget for not addressing unemployment, inflation, and poverty. They argued it favored capitalists and lacked concrete plans for economic growth. The Budget's impact on sectors like agriculture, education, and health was noted, with mixed reactions from various state leaders.
Summary: The Finance Minister announced tax cuts for the middle class, raising the income tax exemption threshold from Rs 7 lakh to Rs 12 lakh and providing a Rs 75,000 standard deduction for salaried individuals. Tax slabs were adjusted, benefiting 6.3 crore taxpayers. The budget focuses on growth, proposing increased foreign investment in insurance, infrastructure spending, and support for social sectors, farmers, and MSMEs. Despite these measures, the fiscal deficit is projected at 4.4% of GDP for FY26. The budget also addresses geopolitical risks and aims for economic growth amidst global uncertainties, with a focus on consumption and investment.
Summary: Left parties criticized the Union Budget for neglecting key economic challenges in India, such as high inflation, stagnated income, and rising unemployment. They argued that the budget favors the wealthy by providing tax cuts and reducing government expenditures, which exacerbates inequality. The Communist Party of India (Marxist) highlighted insufficient allocations for essential sectors like food subsidies, agriculture, and education, while the Communist Party of India noted neglect in social welfare and regional disparities. The Communist Party of India (Marxist-Leninist) Liberation expressed disappointment over the lack of relief for the needy and insufficient allocations for rural schemes and welfare measures.
Summary: Industries and traders' organizations in Uttar Pradesh have expressed approval of the Union Budget presented by the Finance Minister. The Indian Industries Association noted increased focus on the MSME sector, highlighting its role in exports and economic development. The Budget includes measures to enhance MSME efficiency, technological advancement, and access to capital by raising investment and turnover limits. Additionally, steps to improve credit availability with guarantee cover were announced. Income tax relief, including making income up to Rs 12 lakh tax-free for the middle class, was also welcomed, aiming to boost the economy and support entrepreneurs.
Summary: The Union Budget 2025-26 has been described by the Meghalaya Chief Minister as growth-oriented, focusing on agriculture, MSMEs, connectivity, and youth opportunities. Key initiatives include the PM Dhan Dhanya Yojana, enhanced MSME credit, and the modified UDAN scheme, which aims to improve regional connectivity through helipads and smaller airports. The budget increases Meghalaya's tax devolution from Rs 9,566.09 crore to Rs 9,870.40 crore, with a 2025-26 estimate of Rs 10,910.14 crore. The extension of broadband to schools is expected to enhance educational outcomes and employability.
Summary: Farmer organizations criticized the Union Budget for neglecting demands for a legally guaranteed Minimum Support Price (MSP) for all crops and a farm loan waiver, labeling it as anti-farmer and pro-corporate. The Samyukt Kisan Morcha (SKM) condemned the budget's deregulation and privatization moves, highlighting the disparity between rising corporate profits and the lack of support for farmers. Despite a significant agricultural population, only a small budget percentage was allocated to the sector. Protests are planned for February 5, demanding the withdrawal of what they see as anti-people proposals. The All India Kisan Sabha also criticized the budget as favoring corporate interests.
Summary: A political leader criticized the Union Budget for 2025-26, claiming it primarily benefits the wealthy while offering minimal relief to ordinary citizens. He alleged that the budget drafting team lacked representation from backward classes and minorities, who form a significant portion of the population. Additionally, he accused another political leader of making unfulfilled promises regarding corruption, clean water, and air pollution, and criticized the leader's lifestyle changes. He further pointed out the lack of diversity in the leader's team and accused them of discriminatory practices despite claims of supporting marginalized communities.
Summary: The Manipur Congress president criticized the Union budget presented by the Finance Minister, stating it lacks provisions for those affected by violence in Manipur. He argued that the budget is biased, politically motivated, and not supportive of the people, particularly those in the northeastern region. Meghachandra highlighted that 60,000 people remain in relief camps without any budgetary allocation for their housing needs. He further alleged that the budget favors the wealthy, exacerbating economic disparities.
Summary: The Chief Minister of Puducherry praised the 2025-26 union budget as a "blueprint for development," highlighting its focus on infrastructure, tax exemptions, and support for farmers, the middle class, and MSMEs. He emphasized the benefits of new AI education centers and healthcare improvements in rural areas. In contrast, a senior Congress leader criticized the budget as "disappointing," citing a lack of measures for unemployment, industry support, and development plans for Puducherry. The AIADMK Puducherry unit also expressed dissatisfaction, noting the absence of specific development initiatives for the Union Territory.
Summary: The Congress criticized the Finance Minister's Budget speech for omitting the release of funds for the decadal population census, which has been delayed since 2021. The party emphasized that this delay impacts the state's administrative functions, notably excluding millions from the National Food Security Act. The Congress also expressed concern that the government may continue to avoid conducting a socio-economic caste census. This marks the first instance since Independence that a census has not been conducted on schedule, highlighting significant administrative repercussions.
Summary: Maharashtra Deputy Chief Minister praised the Union Budget 2025-26 for raising the income tax slab to Rs 12 lakh, calling it unprecedented and beneficial for the middle class, poor, and weaker sections. He highlighted the budget's focus on achieving 'Viksit Bharat' and its emphasis on agricultural schemes, AI technology, and employment generation. The budget also increased the Kisan Credit Card limit and provided support for start-ups and small industries. Initiatives for women and Scheduled Caste and Tribe women aim to promote self-employment. The Urban Challenge Fund and Heal in India programme were also noted as significant developments.
Summary: The opposition criticized the Union Budget as insufficient and politically motivated, accusing the ruling party of attempting to win votes in Bihar and Delhi. They argued that the budget lacked solutions for inflation, unemployment, and economic stagnation. While the Finance Minister announced tax cuts and reforms, the opposition claimed these measures came too late for the middle class, who have already faced high taxes and inflation. Critics also highlighted the budget's neglect of other states and sectors, arguing it failed to address fundamental economic issues such as stagnant wages and lack of investment.
Summary: The Union Budget for 2025-26, presented under Prime Minister Narendra Modi's leadership, has been described as a "common man's" budget by the Himachal Pradesh Leader of Opposition. It aims to achieve a developed India by focusing on the welfare of ordinary citizens. Key highlights include raising the income tax exemption limit to Rs 12.75 lakh annually, benefiting 10 crore taxpayers, and removing customs duties on cancer treatment drugs. The budget also plans to establish cancer hospitals, promote innovation through Atal Tinkering Labs, reduce prices on essentials, and expand air travel accessibility with new airports.
Summary: The Union Budget for 2025-26 allocated Rs 20,516 crore to India's Ministry of External Affairs, with a significant portion dedicated to development aid under the 'neighbourhood first' policy. Bhutan received the largest share of Rs 2,150 crore, followed by Nepal with Rs 700 crore and the Maldives with Rs 600 crore. The overseas development partnership portfolio was set at Rs 6,750 crore, marking a 20% increase from the previous fiscal year. Key allocations include Rs 100 crore for the Chabahar port project and aid to Afghanistan, Bangladesh, Sri Lanka, Myanmar, and other regions.
Summary: Delhi Police has been allocated Rs 12,259.16 crore in the Union Budget for 2025-26, marking a 7.52% increase from the previous year's Rs 11,400.81 crore. The budget, presented by the Finance Minister in Parliament, will fund routine expenses and initiatives such as a model traffic system and improved communication networks in the NCR region. The allocation aims to enhance law and order, traffic management, and communication infrastructure, incorporating the latest technology and training for personnel in the National Capital Territory of Delhi.
Summary: Industry leaders in Gujarat praised the Union Budget for its practical focus on healthcare, agriculture, MSMEs, and education. Key measures include exempting 36 life-saving drugs from customs duty, expanding medical education, and raising the income tax exemption limit to Rs 12 lakh, which is expected to boost consumption. The budget also emphasizes agriculture, MSME support, and digital transformation, with initiatives like a Rs 10,000-crore 'Fund of Funds' for startups. Additionally, it highlights education and innovation, with plans for 10,000 fellowships in technological research and the establishment of Atal Tinkering Labs to foster entrepreneurship and skill development.
Summary: The Union Budget for 2025-26 increased the Rural Development Ministry's allocation to Rs 1.88 lakh crore, a 5.75% rise from the previous year, while maintaining the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) allocation at Rs 86,000 crore. The budget also introduced the 'Rural Prosperity and Resilience' program to address underemployment in agriculture through skilling and investment. Key allocations include Rs 19,000 crore for the Pradhan Mantri Gram Sadak Yojna and Rs 19,005 crore for the Deendayal Antyodaya Yojana-National Rural Livelihoods Mission. The Pradhan Mantri Awas Yojana-Gramin received Rs 54,832 crore.
Summary: The BSE Sensex has shown positive returns on seven out of the 14 Union Budget presentation days since 2014 under the Narendra Modi government. On the latest Budget day, the Sensex experienced high volatility, closing with a marginal gain of 5.39 points. The 2025 Budget aims to spur economic growth by increasing disposable income through tax reliefs, benefiting sectors like consumer durables and e-commerce. However, a modest increase in capital expenditure has led to mixed market reactions. Historical data shows varied market responses on Budget days, with significant gains in 2021 and declines in 2020 and 2016.
Summary: West Bengal Governor described the Union budget as balanced and forward-looking, beneficial to all societal sections. He praised its focus on growth and inclusivity, highlighting sectors like housing, agriculture, MSME, investment, and exports. The budget also boosts tourism, potentially transforming West Bengal into a travel and healthcare hub. The increased income tax threshold to Rs 12 lakh is expected to enhance consumption and liquidity in the state. Emphasizing rural and agricultural schemes, the budget aims to benefit West Bengal's agrarian economy. The Governor views this as an opportunity for the state to advance and capitalize on these provisions.
Summary: The CPI(M) criticized the Union budget for 2025-26, claiming it targets upcoming elections in Delhi and Bihar rather than addressing national interests. The party's West Bengal secretary highlighted significant tax reliefs for the salaried class in Delhi and specific projects for Bihar, including a Makhana Board and support for IIT Patna. The budget reportedly neglects states like West Bengal and the northeast, with no increase in railway safety funding. The CPI(M) opposed the proposed 100% FDI in the insurance sector and criticized reduced allocations for MGNREGA, agriculture, education, and health sectors.
Summary: The Budget 2025-26 allocates Rs 2.52 lakh crore to enhance Indian Railways, approving projects including the manufacturing of 200 Vande Bharat trains, 100 Amrit Bharat trains, and 17,500 general coaches. Additional projects worth Rs 4.6 lakh crore focus on infrastructure improvements like new lines, station redevelopment, and flyovers. The target includes manufacturing 1,400 general coaches by March 31, with plans for 2,000 more in FY 2025-26. Aiming for 100% electrification by the end of the financial year, the Railways also seeks to boost cargo capacity to 1.6 billion tonnes and increase safety investments. The total budget, including PPP investments, is Rs 2.64 lakh crore.
Summary: The Union Budget 2025-26 announced several initiatives for Bihar, including a Makhana Board and support for the western Koshi canal project, sparking opposition claims that these measures aim to influence upcoming state elections. The budget also proposed a National Institute of Food Technology and greenfield airports in Bihar. Chief Minister praised the budget as progressive, while opposition leaders criticized it for lacking substantial benefits and accused the government of election-driven motives. They highlighted unfulfilled promises and questioned the absence of a special economic package for Bihar. The budget's focus on Bihar drew criticism for neglecting other states like Andhra Pradesh.
Summary: The union budget for 2025-26 aims to advance India's 'Viksit Bharat' vision, according to Andhra Pradesh's Deputy Chief Minister. Presented by the Finance Minister, the budget prioritizes national welfare over political interests, focusing on the development of farmers, women, the middle class, and youth. It significantly boosts micro, small, and medium enterprises (MSMEs) and raises the Income Tax exemption limit to Rs 12 lakh, benefiting the salaried class. Continued support for Andhra Pradesh by the central government is also highlighted in the budget.
Summary: The recent budget introduced by the Finance Minister includes significant reforms for micro, small, and medium enterprises (MSMEs) to boost growth and job creation. Key measures include increasing investment and turnover limits for MSME classification, enhancing credit guarantee cover, and introducing customized credit cards for micro enterprises. A new scheme will support 5 lakh women, Scheduled Castes, and Scheduled Tribes entrepreneurs with term loans. The budget also aims to make India a global hub for toys and establish a National Manufacturing Mission. Industry leaders welcomed these initiatives, emphasizing their potential to drive economic growth and employment.
Summary: The Principal Chief Advisor to the West Bengal Chief Minister criticized the central government's budget, labeling it as detrimental to common people, with no benefits for youth, women, or farmers. He questioned the rationale behind allowing 100% FDI in insurance while maintaining a high GST rate, suggesting a possible conspiracy involving international interests. The budget's cuts to social services, housing, and welfare were also condemned. Concerns were raised about the lack of measures to address inflation and the feasibility of achieving the government's manufacturing growth targets. The advisor expressed skepticism about the real benefits of the proposed tax changes amidst rising inflation.
Summary: The Intelligence Bureau (IB) has been allocated Rs 3,893.35 crore in the Union Budget 2025-26, reflecting a slight decrease of Rs 72.80 crore from the revised estimates of the previous year. The funds are designated for the IB's administrative expenses, which include intelligence gathering and counter-espionage activities. Meanwhile, the National Intelligence Grid (NATGRID) experienced a significant budget reduction of 36 percent, receiving Rs 158.23 crore compared to Rs 247.72 crore in 2024-25. NATGRID is tasked with linking databases to enhance capabilities against terrorism and internal security threats.
Summary: Shiv Sena (UBT) leader criticized the Union budget for omitting Maharashtra, a major tax contributor, calling it an insult. He expressed disappointment over the neglect of a new airport for Pune and accused the BJP government of consistently ignoring Maharashtra since 2014. The leader criticized the BJP for creating a contractor-based economy and failing to address unemployment. He questioned the fairness in the distribution of GST and development funds to Maharashtra. He also commented on the unmet promises to Bihar and raised concerns about inflation and the actual spending of the proposed capital expenditure.
Summary: The Union Budget has granted a slight increase in budgetary allocations for the Central Armed Police Forces (CAPFs) under the Ministry of Home Affairs. The Central Reserve Police Force (CRPF) received Rs 35,147 crore for 2025-26, up from Rs 34,328 crore. The Border Security Force (BSF) was allocated Rs 28,231 crore, the Central Industrial Security Force (CISF) Rs 16,084 crore, the Indo-Tibetan Border Police (ITBP) Rs 10,370 crore, and the Sashastra Seema Bal (SSB) Rs 10,237 crore. The National Security Guard (NSG) and Assam Rifles also saw budget increases, with Rs 1,274 crore and Rs 1,196 crore, respectively.
Summary: Education experts and stakeholders have praised the government's 2025-26 budget initiatives, which include establishing five Centres of Excellence for skilling and a Centre for Artificial Intelligence in education. These efforts aim to foster innovation and create a future-ready talent pool. The budget also plans infrastructure expansion at five new IITs to accommodate 6,500 more students, introduce 10,000 new medical seats, and increase AI-driven education. Additional measures include the Bharatiya Bhasha Pushtak scheme for digital access to regional language books, 50,000 Atal Tinkering Labs, and enhanced broadband connectivity in government schools to democratize innovation access.
Summary: Opposition parties in Gujarat, including Congress and the Aam Aadmi Party, criticized the Union Budget, claiming it lacks significant measures for farmers and job creation. They argue the budget neglects Gujarat's industries, such as diamond and textile, and fails to address unemployment and GST-related issues. Congress representatives expressed concern over inflation, economic inequality, and reduced funding for national institutions. AAP leaders emphasized the need for demand creation to boost employment, criticizing the limited support for farmers. They also highlighted perceived election-driven allocations for Bihar, contrasting with the lack of focus on Gujarat's development.
Summary: Madhya Pradesh Chief Minister praised the Union Budget 2025-26, highlighting its potential to fulfill India's development goals and benefit various sectors, including startups and artificial intelligence. Business and industrial groups in the state also welcomed the Budget, citing tax relief for incomes up to Rs 12 lakh and measures to boost entrepreneurship. However, the Opposition Congress criticized the Budget as disappointing, arguing it lacked specific benefits for Madhya Pradesh and failed to address issues like jobs and infrastructure. The Budget's tax exemptions and support for micro-enterprises were seen as significant steps towards economic growth and self-reliance.
Summary: The Kerala Finance Minister criticized the Union Budget 2025-26, presented by the Union Finance Minister, as disappointing and politically biased against certain states. He highlighted the absence of allocations for Kerala's significant projects like the Vizhinjam port and the lack of mention of the Wayanad landslide tragedy. The minister accused the central government of prioritizing states with political interests, particularly ahead of elections in Bihar and New Delhi, while neglecting others. He also pointed out inadequate allocations for agriculture, MGNREGA, and questioned the effectiveness of the zero income tax policy up to Rs 12 lakh.
Summary: The budget announced a social security scheme for one crore gig workers associated with online platforms, facilitating their registration on the e-Shram portal and providing identity cards. This initiative aims to extend social welfare benefits, including healthcare under PM Jan Arogya Yojana, to these workers. The e-Shram portal, launched in August 2021, has registered over 30.58 crore unorganised workers. The announcement has been welcomed by trade unions and industry experts, who see it as a step towards integrating gig workers into the social security framework and improving their working conditions. Suggestions include expanding benefits like pensions and unemployment insurance.
Summary: The Ministry of Ayush's budget for 2025-26 has been increased by 14.15% to Rs 3,992.90 crore from the previous year's revised estimate of Rs 3,497.64 crore. The National Medicinal Plants Board received Rs 18.59 crore, while the Pharmacopoeia Commission for Indian Medicine and Homoeopathy was allocated Rs 21.96 crore. Autonomous bodies under the ministry were allocated Rs 1,965.80 crore, with significant portions going to the Central Councils for Research in Ayurvedic Sciences, Homeopathy, and Unani Medicine, and the All India Institute of Ayurveda.
Summary: The Chief Minister of Tamil Nadu criticized the Union Budget for 2025-2026, claiming it was biased and ignored the state's needs. Despite numerous demands for infrastructure projects like highways and metro rail in Coimbatore and Madurai, the budget failed to address them. The Chief Minister noted that Tamil Nadu was praised in various government reports but was overlooked in the budget. He expressed concerns over reduced central funding increasing the state's financial burden and accused the ruling party of prioritizing election-bound or allied states. He labeled the budget as deceptive and questioned its fairness.
Summary: The Indian government has allocated Rs 5 crore in the 2025-26 budget to assist prisoners who cannot afford bail. This initiative is part of the 'Model Prisons and Correctional Services Act' 2023, which establishes Legal Service Clinics in jails managed by Legal Services Advocates and Para-Legal Volunteers. Despite a previous allocation of Rs 20 crore, only Rs 1 crore was utilized due to a lack of state and union territory cases. The Home Ministry has urged states to open dedicated accounts for fund distribution and form committees to oversee the process, ensuring efficient fund flow and case evaluation.
Summary: Kerala's Chief Minister criticized the union budget for neglecting the state's key demands, including a special financial package of Rs 24,000 crore and support for Wayanad's rehabilitation after a landslide. He highlighted the absence of allocations for projects like Vizhinjam port, AIIMS, and a railway coach factory. The budget, he argued, prioritizes electoral interests over balanced development, ignoring sectors like agriculture and education. The CM accused the budget of violating federal principles by denying states their dues, exacerbating inflation, unemployment, and poverty. The Leader of Opposition echoed these concerns, alleging political motives behind the budget's allocations.
Summary: The Modi 3.0 government's first full Budget has been praised by industry leaders for its bold reforms aimed at boosting economic growth and job creation in India. Key measures include slashing personal income tax rates, which is expected to uplift the middle class and stimulate private sector investment. The Budget emphasizes reforms in agriculture, MSMEs, investment, and exports, with a focus on inclusive development. Industry leaders highlighted the positive impact on consumption, particularly for middle-class families, and noted the government's commitment to maintaining a robust fiscal framework while encouraging innovation and skills development.
Summary: Real estate leaders in West Bengal praised the Union Budget 2025-26 for its supportive measures, such as tax reliefs and funds for stalled projects, which they believe will boost the real estate sector. They welcomed the revised tax slabs and increased TDS threshold on rent, which enhance disposable income and demand. The budget's infrastructure investments and funds like the Urban Challenge Fund and SWAMIH Fund were seen as positive for urban expansion and project completion. However, industry leaders expressed disappointment over the lack of industry status for real estate and the absence of a national rental housing policy.
Summary: Business chambers in West Bengal have praised the Union Budget 2025-26 as "progressive" and "forward-looking," highlighting its focus on tax reforms, infrastructure development, and the MSME sector. The Confederation of Indian Industry (CII) Eastern Region described it as "balanced and inclusive," emphasizing growth acceleration, private sector investment, and middle-class spending power. The budget's focus on agriculture, MSMEs, and exports is seen as a step towards a 'Vikshit Bharat' by 2047. While the budget was commended for tax cuts and credit access, some noted the need for further attention to manufacturing complexities and vocational training. The MSME sector welcomed measures for growth and competitiveness, though it noted the absence of a credit-linked capital subsidy scheme. The budget's initiatives, including raising FDI in insurance and prioritizing infrastructure, are expected to drive sustainable growth.
Summary: The Tamil Nadu Congress Committee criticized the Union Budget as "brazenly partial" and "anti-farmer," claiming it failed to address key issues like loan waivers for farmers and significant concessions for MSMEs. The budget was perceived as favoring Bihar disproportionately, undermining federal principles. Despite raising the personal income tax exemption limit to Rs 12 lakh, the relief was seen as benefiting only a small segment of the population, neglecting broader economic needs. The Tamil Nadu Congress condemned the budget for favoring high-income earners and neglecting the poor and ordinary citizens.
Summary: The Union Budget for the 2025-26 financial year has allocated Rs 123.75 crore for the expansion of the Supreme Court building, as announced by the Union Finance Minister. This marks an increase from the previous fiscal year, where Rs 46.63 crore was earmarked for the project. The allocation is part of a central sector project aimed at expanding the infrastructure of the Supreme Court.
Summary: The Chief Minister of Sikkim described the Union Budget 2025-26 as "transformative and inclusive," highlighting its alignment with the vision of a developed India. The budget, presented by the Union Finance Minister, emphasizes the GYAN framework, which aims to empower marginalized communities, support youth development, and create employment opportunities. It also reinforces the Make in India initiative by promoting innovation and self-reliance in indigenous industries. The Chief Minister praised the central government's commitment to national progress and the Prime Minister's leadership in building a people-centric economy and enhancing infrastructure for a brighter future.
Summary: The Goa Chief Minister praised the Union Budget for 2025-26, highlighting the exemption of income tax on earnings up to Rs 12 lakh as a significant relief for the middle class, encouraging savings and investments. The budget, presented by the Finance Minister, emphasizes development through initiatives under four pillars: Nari Shakti, Yuva Shakti, Annadata, and Gareeb Kalyan. It includes reforms in taxation, power, urban development, mining, financial regulations, and export promotion, with a focus on tourism, employment, and private sector innovation. The budget aims to drive India towards the vision of a developed nation by 2047 amidst global challenges.
Summary: Between April 2024 and January 2025, the MCA21 platform recorded 80.26 lakh form filings, an increase from 73.29 lakh in the previous year. The newly developed MCA21 V3 platform saw 53.08 lakh forms filed, up from 47.72 lakh the prior year. The platform enhances Ease of Doing Business with features like web-based forms, real-time data validation, user registration, and live chat support. Security is reinforced through multi-factor authentication and compliance with data security standards, ensuring confidentiality and data integrity. These improvements reflect increased stakeholder engagement and the platform's robustness.
Summary: The Investor Education and Protection Fund Authority (IEPFA) has signed a Memorandum of Understanding (MoU) with Strategic Educational Professionals Pvt. Ltd., a subsidiary of the Association of Chartered Certified Accountants (ACCA), to develop a digital program focused on experiential learning to enhance financial literacy among school children. The initiative aims to deliver content to selected schools, including those in rural areas, through a pilot project by training school teachers. This development was announced by a government minister in a written reply to the Lok Sabha.
Summary: The Reserve Bank of India (RBI) is expected to reduce the key interest rate by 25 basis points, marking the first cut since May 2020, to stimulate consumption-led growth. This potential move aligns with the Union Budget's initiatives aimed at boosting demand. The RBI has maintained the repo rate at 6.5% since February 2023. The decision will be made at the upcoming Monetary Policy Committee meeting chaired by the new Governor. While improved growth-inflation dynamics support a rate cut, concerns over the weakening rupee could delay the decision until April 2025.
Summary: India has reduced its average customs duty to 10.66% from 11.65%, aligning closer to Southeast Asian levels, according to a senior government official. The Central Board of Indirect Taxes & Customs (CBIC) aims to simplify the tariff structure, enhance competitiveness, and ease the tax regime. The reduction counters claims by developed nations, like the US, of India having high tariffs. The government has streamlined basic customs duties, reducing the number of levies to eight, while maintaining effective rates through cess adjustments. This initiative supports trade competitiveness and the availability of critical minerals for manufacturing and clean energy transitions.
Summary: The Indian rupee fell to a record low of 87.29 against the US dollar, but the Finance Secretary stated there is no concern over its value as the Reserve Bank of India (RBI) is managing the currency's volatility. The rupee's depreciation is attributed to foreign fund outflows and global trade tensions following tariff impositions by the US. Despite a 1.8% depreciation since December 2014, India's forex reserves increased by USD 5.574 billion recently, although they have been declining due to revaluation and RBI's market interventions.
Summary: The Central Board of Direct Taxes (CBDT) Chief has invited industry feedback on a new income tax bill set to replace the 1961 Income Tax Act. Drafted in six months, the bill aims to simplify tax compliance and align with international standards by removing outdated provisions. The CBDT Chief emphasized a participative approach, shifting from an adversarial stance, and highlighted the department's new "PRUDENT" approach. Additionally, the Finance Minister announced an extension for filing updated income tax returns from two to four years, with significant additional revenues collected from such filings in recent years.
Summary: India's manufacturing sector experienced significant growth in January 2025, reaching a six-month high due to a sharp increase in new export orders, the highest since February 2011. The HSBC India Manufacturing PMI rose to 57.7 from December's 56.4, indicating expansion. Enhanced domestic demand and international sales drove the increase in new orders, prompting manufacturers to boost production and hire more workers. Despite easing input cost inflation, selling prices rose due to strong demand. Optimism about future output remains high, with 32% of firms forecasting growth. The PMI survey is based on responses from around 400 manufacturers.
Summary: The Economic Affairs Secretary announced significant income tax cuts aimed at stimulating demand and growth, with a projected nominal GDP growth of 10.1% for the next financial year. The Finance Minister revealed that individuals earning up to Rs 12.75 lakh annually will be exempt from taxes, benefiting 1 crore taxpayers, though costing the exchequer Rs 1 lakh crore. The Union Budget addresses domestic challenges to boost consumption and private sector investment, targeting a growth rate of 6.8%. The Economic Survey forecasts a growth rate of 6.3-6.8% for 2025-26, supported by a strong external account and fiscal measures.
Summary: The commerce, MSME, and finance ministries in India will collaborate to establish an Export Promotion Mission with a budget of Rs 2,250 crore to enhance exports. This initiative aims to provide capital support for technology upgrades, marketing, and accessing new markets. The mission will facilitate affordable export credit and support MSMEs in overcoming non-tariff measures in foreign markets. Key sectors like textiles, marine, toys, and leather are expected to benefit. The government plans to target specific sectors for support, rather than providing blanket assistance, and will address issues like high tariffs and inverted duties to boost domestic manufacturing.
Summary: Finance Minister proposed a tax exemption for contributions up to Rs 50,000 annually under the NPS Vatsalya scheme, making it more attractive. This benefit applies to those opting for the old tax regime. Launched in September 2024, NPS Vatsalya allows contributions to minors' accounts, with 89,475 subscribers and Rs 61.98 crore in assets. The scheme aims to ensure financial security for minors, converting accounts to regular NPS upon adulthood. Additionally, the Kisan Credit Card limit was increased to Rs 5 lakh, enhancing short-term loan access for farmers. A Partial Credit Enhancement Facility for corporate bonds was also announced.
Summary: President Donald Trump plans to impose new tariffs on Canada, Mexico, and China, risking higher inflation and potential global economic disruptions. The tariffs include a 25% levy on North American allies and a 10% tax on Chinese imports, aimed at reshaping global trade. While Trump believes tariffs will boost U.S. economic power, they may also raise consumer prices and affect business investments. Canada and Mexico could negotiate to avoid tariffs by addressing immigration and fentanyl issues. The move has sparked market reactions and political opposition, with potential retaliatory measures from affected countries.
Summary: The government plans to introduce a new Income Tax bill in Parliament next week, replacing the existing Income Tax Act of 1961. The Finance Minister announced that the new bill aims to simplify the tax code, reducing its length by half and enhancing clarity for taxpayers and administrators. This initiative follows a comprehensive review and includes input from over 6,500 stakeholders. The bill, designed to increase tax certainty and reduce litigation, will be reviewed by the Standing Committee of Parliament. The government has implemented several taxpayer reforms over the past decade, and the new bill is part of this ongoing effort.
Notifications
Customs
1.
G.S.R. 109 (E) - dated
3-2-2025
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Cus
Corrigendum - Notification No. 50/2024-Customs, dated the 30th December, 2024
Summary: In the corrigendum to Notification No. 50/2024-Customs dated December 30, 2024, issued by the Ministry of Finance (Department of Revenue), a correction is made to the published document in the Gazette of India. Specifically, on page 460, under serial number 4 in the table, column 2, the code "20042110" is corrected to "22042110". This amendment is officially documented under reference number F. No. CBIC-190354/236/2021-TRU by the Deputy Secretary.
GST - States
2.
F.3.(26)/Fin(Exp-I)/2024-25/DS-I/120 - dated
30-1-2025
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Delhi SGST
Constitution of Search-cum-Selection Committee for the selection of Technical Member (State) of the State Bench of Goods and Service Tax Appellate Tribunal
Summary: A Search-cum-Selection Committee has been constituted for appointing a Technical Member (State) to the State Bench of the Goods and Services Tax Appellate Tribunal (GSTAT) for Delhi. This is in accordance with the Central Goods and Services Tax Act, 2017, and related provisions. The committee includes the Chief Justice of the Delhi High Court as Chairperson, a retired justice nominated by the Chief Justice, the Chief Secretary of Delhi, and senior officials from the Home and Finance Departments of Delhi. The Finance Department will provide secretarial support. The notification is issued by the Lt. Governor of Delhi.
Highlights / Catch Notes
GST
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Penalty Under GST Act Section 129(3) Upheld for Detained Machine Due to Ownership Claim Investigation
Case-Laws - HC : HC dismissed petition challenging penalty under GST Act Section 129(3) regarding detained Pokland Machine. Court found petitioner's claim of transferring goods to Varanasi parking yard required investigation. Petitioner's failure to claim ownership within 15-day period and casual handling of matter undermined credibility of assertions. Court directed petitioner to pursue statutory appeal remedy, permitting application of Limitation Act Section 14. Petition dismissed without prejudice to alternative remedies available under law.
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Tax Credit Cannot Be Claimed Under CGST Act Section 140(5) For Capital Goods In Transit During Transition
Case-Laws - HC : HC held that transitional credit under CGST Act is not available for capital goods in transit as of the appointed date. While Section 140 of CGST Act allows carrying forward unutilized CENVAT credit for both inputs and capital goods, sub-section (5) specifically distinguishes between them. The CENVAT Credit Rules 2017, which superseded the 2004 Rules, provides no facility for claiming credit of excise duty on capital goods in transit. Following RSPL Limited precedent, the court affirmed that treating inputs and capital goods differently is constitutionally valid under Article 14, as they form distinct classes. The distinction in transitional provisions between inputs and capital goods was found lawful and justified. Application dismissed.
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Services to GPSSB and GPSC for recruitment and selection not exempt under GST Notification 12/2017-CT(R)
Case-Laws - AAAR : AAAR determined that services provided to Gujarat Panchayat Service Selection Board (GPSSB) and Gujarat Public Service Commission (GPSC) are not exempt from GST under Notification No. 12/2017-CT(R). While interpreting exemption provisions strictly per SC precedent, AAAR found GPSSB does not qualify as Central/State Government, Union Territory or local authority under CGST Act definitions. Similarly, GPSC, despite being a constitutional body managed and financed by State Government, cannot be classified as State Government itself. Therefore, services to both entities fail to meet primary conditions for exemption under entries 3 and 3A, which specifically require services be provided to government bodies or local authorities. The appellant's claims for GST exemption were rejected.
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Mixed Flour Preparations for Indian Snacks Attract 18% GST Under HSN 2106 90 Despite Flour Being Key Component
Case-Laws - AAAR : AAAR determined instant mix flours for traditional Indian snacks and dishes cannot be classified under Chapter 11 (HSN 1101, 1102, or 1106) despite flour being a key component. Products were classified under HSN 2106 90 attracting 18% GST, as they constitute food preparations not specified elsewhere. The tribunal rejected appellant's argument that preparation requirements disqualify products from Chapter 21 classification. When supplied with accompaniments (chutney powder, masala pack), these constitute mixed supplies rather than naturally bundled composite supplies. Essential character test under Rule 3(b) of GRI was found inapplicable as products are explicitly excluded from Chapter 11 classification based on their composition.
Income Tax
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Finance Bill 2025 Overhauls Tax Rules: Crypto Reporting, Loss Carry-Forward, Return Filing, and Property Tax Changes
Circulars : The Finance Bill 2025 introduces key changes to income tax provisions focusing on crypto-asset reporting, loss carry-forward in amalgamations, and extended timelines for various tax procedures. Major outcomes include: Reporting entities must furnish prescribed crypto-asset transaction information to tax authorities as India implements the Crypto-Asset Reporting Framework (CARF). Loss carry-forward in amalgamations is limited to 8 years from first occurrence rather than merger date for amalgamations after April 1, 2025. Updated returns filing timeline extended from 24 to 48 months with graduated additional tax rates of 60-70%. Self-occupied property taxation simplified by relaxing occupancy conditions. Penalty impositions shifted from Joint Commissioner to AO with approval requirements. Time limits rationalized for assessment completion, document retention, and penalty orders. The amendments aim to enhance voluntary compliance, reduce litigation, and align with international reporting standards while providing clarity on procedural timelines and administrative processes.
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Income Tax Section 201 Orders Must Follow e-Appeals Process Despite Being Connected to Section 133A Survey Actions
Circulars : CBDT clarifies that orders under section 201 of Income Tax Act are not exempt from e-Appeals Scheme 2023, even when made pursuant to section 133A actions. These orders shall not be treated as assessment orders falling under exceptions specified in Board's order dated 16.06.2023. Joint Commissioner (Appeals) retains jurisdiction over appeals against such orders under the e-Appeals framework. This interpretation ensures consistent digital processing of section 201 appeals through the e-Appeals mechanism, streamlining the appellate procedure for tax deduction-related disputes.
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Tax Penalty Upheld: Business Owner Concealed Income Through Inflated Stock Transfer and Undisclosed Profit Withdrawal Under Section 271(1)(c)
Case-Laws - HC : HC upheld penalty under s271(1)(c) for concealment of income where appellant transferred stock-in-trade at inflated market value and withdrew profits without full disclosure. The formation of firm and transaction pattern constituted a tax evasion scheme. Mere filing of capital account with returns was deemed insufficient for true disclosure. Court found appellant's explanation patently false and unsubstantiated as bona fide. Despite Explanation 1 to s147 being inapplicable, Explanation 1 to s271 supported penalty imposition. The minimum prescribed penalty was justified given the deliberate device adopted to evade taxes, and the finality of income addition assessment. Appeal dismissed.
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Assessment Order Under Section 143(3) And 144B Valid Without Draft Order As Best Judgment Assessment Not Applicable
Case-Laws - HC : HC upheld the assessment order made under section 143(3) read with section 144B. The assessee's contention regarding violation of Faceless Assessment Scheme due to non-provision of draft assessment order was rejected. Court determined that since it wasn't a best judgment assessment, no draft order was required. The sequential issuance of notices under sections 143(2) and 142(1) was deemed procedurally valid as both served the assessment purpose. The assessee's compliance with both notices negated claims of insufficient opportunity. The scrutiny assessment following section 144B procedures was found legally compliant, with no procedural violations warranting interference.
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Tax Reassessment Against Dissolved Company Struck Down for Violating Section 148A and IBC Resolution Plan
Case-Laws - HC : HC quashed reassessment proceedings initiated against a dissolved company, finding them without jurisdiction and contrary to law. The proceedings violated statutory preconditions under Income Tax Act, 1961 as authorities failed to conduct preliminary inquiry under Section 148A(a) and acted mechanically on external reports. Additionally, the proceedings contravened IBC provisions, specifically Section 14's moratorium during CIRP and Section 238's overriding effect of NCLT-approved resolution plan which precluded reassessment for pre-effective date period. Court invalidated notices under Sections 148A(b), 148A(d), and 148, along with consequential proceedings, declaring them arbitrary and unsustainable in law.
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Typographical Error in Section 148 Notice Address Won't Invalidate IT Reassessment if Taxpayer Aware of Proceedings
Case-Laws - HC : HC determined that typographical error in address on notice under s.148 of IT Act does not invalidate reassessment proceedings. Taxpayer's claim for India-Singapore DTAA exemption without filing proper income tax return prompted IT Department's notice. Though taxpayer later filed manual return on 02.03.2022, department issued speaking order without considering CBDT Circular 3/2016. Court set aside speaking order dated 18.03.2022 and remanded matter, directing authorities to provide taxpayer reasonable opportunity to present case in light of CBDT Circular 3/2016. Mere address error on notice to Verizon Services Singapore Pte Ltd. (incorrectly sent to Visteon Tax Office, Michigan) does not render proceedings invalid.
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Penalties Waived For Cash Loans Under Section 269SS Due To Genuine Financial Crisis And Lender's Anonymity Concerns
Case-Laws - AT : ITAT quashed penalties under sections 271D and 271E for accepting cash loans of Rs. 17,00,000 in violation of section 269SS. Tribunal considered assessee's circumstances as middle-class, uneducated individual who received loans from agriculturists seeking anonymity due to CBI concerns. Reasonable cause was established given the timing of loans immediately after CBI actions and assessee's dire financial need. The subsequent cash repayment was made on lender's insistence. Given these mitigating factors and genuine circumstances, ITAT determined penalties were not warranted under sections 271D and 271E read with section 274, setting aside JCIT's penalty orders.
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Tax Officials Cannot Reopen Assessment Based Only On Investigation Wing's Report About Alleged Cash Loans Under Section 147
Case-Laws - AT : ITAT ruled against reopening of assessment concerning alleged unaccounted cash loans of Rs.11.05 crore. AO's action based solely on Investigation Wing's information about cash loans through a broker was deemed insufficient for establishing income escapement. The mere receipt of loans cannot constitute income without substantiating evidence of sham transactions. AO failed to discharge the burden of proof after assessee's denial, presenting no corroborating evidence of actual lenders or cash possession. No valuable assets or undisclosed income were discovered with the assessee. The tribunal invalidated the assessment reopening due to lack of tangible material demonstrating income concealment beyond mere information about loan transactions.
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Share Capital Addition Under Section 68 Deleted After Subscribers Prove Creditworthiness Through Financial Statements
Case-Laws - AT : ITAT allowed appeal against addition made under Section 68 for alleged bogus share capital. Three share subscribers - Aakansha Advisory Services Pvt Ltd, Sunirmiti Mercantile Pvt Ltd and Arihant Enterprises Ltd - demonstrated adequate creditworthiness through their balance sheets and financial statements for FY 2016-17. The Tribunal held that assessee successfully discharged onus by establishing identity, creditworthiness and genuineness of transactions. CIT(A)'s dismissal solely on grounds of FY 2015-16 statements being furnished instead of FY 2016-17 was incorrect. Non-compliance with notices under Section 133(6) alone cannot justify addition when substantive evidence of creditworthiness exists. Addition deleted.
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Assessment Order Invalidated Due to Missing Mandatory Notice Under Section 143(2) for Unexplained Cash Deposits Investigation
Case-Laws - AT : ITAT quashed assessment order due to jurisdictional defect in notice issuance under Section 143(2). While ACIT had pecuniary jurisdiction to conduct assessment of unexplained cash deposits, failure to issue mandatory notice under Section 143(2) rendered the entire assessment proceedings void ab initio. Following precedent set in previous rulings, ITAT held that proper notice issuance is a sine qua non for assuming jurisdiction in assessment proceedings. Department's representative failed to present contrary precedents regarding AO's jurisdiction. Assessment was declared legally invalid and set aside in favor of assessee, emphasizing procedural compliance as fundamental to valid assessment proceedings.
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Partnership Cash Credits Valid But Receivables Recovery Claim Rejected Under Section 69A and 115BBE Assessment
Case-Laws - AT : ITAT examined unexplained cash credits under s.69A r/w 115BBE. Tribunal validated partnership withdrawals based on capital account records of Sai Samarth Plaza. Regarding cash advances, assessee provided affidavits from 17 persons confirming pre-demonetization payments with identity proof. Revenue's failure to verify claims through s.131 statements worked in assessee's favor despite sub-20,000 daily transactions raising suspicion. However, claim of Rs. 3,14,500 as receivables recovery was rejected due to absence of bifurcation in IT return for AY 2016-17 and lack of concrete evidence proving genuineness of sundry debtors, despite assessee falling under Presumptive Taxation Scheme. Addition partially sustained.
Customs
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Major Customs Duty Cuts: Transport Vehicles 40% to 20%, Cars 125% to 70%, GST Pre-deposit Now 10%
Circulars : The document outlines significant tariff and duty changes in customs and GST legislation effective from 2025. Key modifications include reduction in tariff rates for motor vehicles (from 40% to 20% for transport vehicles, 125% to 70% for passenger vehicles), motorcycles (100% to 70%), and bicycles (35% to 20%). The Customs Act introduces voluntary revision of entry post-clearance and establishes a two-year time limit for finalizing provisional assessments. Notable GST amendments include new Track and Trace mechanisms, mandatory 10% pre-deposit for penalty-only appeals, and clarification on input tax credit distribution. The Settlement Commission will be abolished from April 1, 2025, with pending cases transferred to Interim Boards. These changes aim to streamline tax administration and modify duty structures across various sectors.
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Customs Rules Amendment Extends Quarterly Reporting and One-Year Compliance Timeline for Concessional Import Duties Under IGCR 2022
Notifications : The Dept of Revenue amended the Customs (Import of Goods at Concessional Rate of Duty or for Specified End Use) Rules, 2022 through Notification 07/2025-Customs. Key modifications include extending reporting periods from monthly to quarterly basis and prolonging certain compliance timelines from six months to one year. The amendment introduces definition of "quarter" as three consecutive calendar months ending March, June, September or December. These changes affect various compliance requirements under rules 6, 7, 8, 9, and 10, including submission of statements, reconciliation reports, and maintenance of account records. The amendments take effect from February 2, 2025, aiming to streamline administrative procedures and reduce compliance burden for importers.
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Customs Duty Exemption Under Section 25(1) Extended to Railway Equipment Imported for Repairs and Return
Notifications : The Central Government amended notification No. 153/94-Customs under Section 25(1) of the Customs Act, 1962, and Section 3(12) of the Customs Tariff Act, 1975. The amendment expands the scope of exemption for goods of foreign origin imported for repairs and return by including Chapter 86 (railway/tramway equipment) alongside the existing Chapters 88 (aircraft) and 89 (ships/boats) in the proviso to clause (ii) against serial number 1 in the notification's table. This modification broadens the categories of transportation equipment eligible for customs duty exemption when imported for repair purposes. The amendment takes effect from February 2, 2025, reflecting the government's policy to facilitate maintenance and repair operations across multiple transport sectors.
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Government Expands Customs Duty Exemption Under Section 25(1) for Defense Equipment and Ammunition Imports
Notifications : The Central Government amended Notification No. 19/2019-Customs regarding defense equipment imports by MoD and defense forces. The amendment modifies entries against serial numbers 10-13 by expanding the scope to include Chapter 93 alongside existing chapters, removes standalone "Ammunition" reference, and introduces a new category specifically for ammunitions related to previously specified goods. The changes, exercised under Section 25(1) of Customs Act 1962 and Section 3(12) of Customs Tariff Act 1975, aim to rationalize customs duty exemptions for defense-related imports. The notification becomes effective from February 2, 2025, demonstrating the government's continued support for defense procurement through targeted customs duty relief.
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Customs Duty Exemption Expanded for Manufacturing Equipment of Lithium-Ion Batteries Under Section 25(1)
Notifications : The Ministry of Finance amended notification No. 25/2002-Customs to expand customs duty exemptions for capital goods used in manufacturing lithium-ion batteries. The amendment introduces two distinct categories under S. No. 69 and 69A, covering specialized manufacturing equipment for mobile phone batteries and electrically operated vehicle batteries respectively. The notification details 50 types of equipment for mobile phone battery production and 57 types for electric vehicle battery manufacturing, including machinery for electrode production, cell assembly, testing, and quality control. The amendment becomes effective February 2, 2025, exercising powers under Section 25(1) of the Customs Act, 1962, aimed at promoting domestic battery manufacturing capabilities.
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Finance Ministry Amends Section 25(1) Customs Notification: Zero Duty on Mobile Phone and Telecom Equipment Components
Notifications : The Ministry of Finance amended notification No. 57/2017-Customs through powers under Section 25(1) of the Customs Act, 1962, modifying Basic Customs Duty (BCD) rates on components used in manufacturing cellular mobile phone parts and high-tech telecom equipment. Key changes include removal of entry 5E, reduction of duty rates from 2.5% to nil for items under entries 6A, 6B, 6C, and 7, modification of entry 6D to cover "Any Chapter," and revision of item (g) under entry 20 to include PTN and MPLS-TP products. The amendments aim to rationalize import duties on telecom equipment components and will take effect from February 2, 2025.
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Customs Duty Exemption Extended to 37 New Pharmaceutical Drugs Under Patient Assistance Programs Section 25(1)
Notifications : Under Customs Act s.25(1), MoF amended notification 16/2017-Customs to expand customs duty exemptions for specified pharmaceutical drugs distributed through Patient Assistance Programs (PAPs). The amendment adds 37 new pharmaceutical products (entries 53-89) from multiple manufacturers including MSD Pharmaceuticals, Pfizer, Novartis, AstraZeneca, Johnson & Johnson, Merck, Takeda, GSK, and Roche. The exempted drugs include treatments for cancer, rare diseases, and autoimmune conditions. The notification takes effect from February 2, 2025, demonstrating government's commitment to improve access to specialized medications through manufacturer-sponsored patient support programs.
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Finance Ministry Revises India-UAE CEPA Tariffs: New Rates for Marble, Automobiles, EVs and Electronics Under Notification 08/2025
Notifications : The Ministry of Finance amended notification No. 22/2022-Customs relating to India-UAE CEPA through notification No. 08/2025-Customs dated February 1, 2025. Key changes include removal of multiple serial numbers from Table I and insertion of new entries in Table II covering various goods. Notable additions include new tariff rates for marble/stone products (8-20%), automotive items including CKD kits (10.5-20%), electric vehicles (10.5-35% based on assembly level), motorcycles (0-35% based on type and assembly), and certain electronic components (0%). The amendments aim to update preferential tariff treatment under the trade agreement while introducing differentiated duty structures based on value addition and assembly levels. The notification takes effect from February 2, 2025.
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Government Expands Social Welfare Surcharge Exemptions Under Customs Act To Include Solar Cells And Medical Equipment
Notifications : The Central Government amended notification No. 11/2018-Customs to expand Social Welfare Surcharge exemptions under Section 25(1) of Customs Act, 1962 read with Section 110 of Finance Act, 2018. Key changes include addition of new tariff items under existing entries covering candles, footwear, vehicles, furniture, and toys. The amendment introduces new exemption categories 8A through 8H for specified goods including solar cells, motorcycles, electricity meters, and personal imports. Modifications also cover jewelry items under headings 7113-7114 and medical equipment under 9018-9022. The notification removes certain existing entries (Sl. No. 8 and 53) and revises scope of exemptions for motor vehicles under heading 8703. Changes effective February 2, 2025.
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AIDC: while added certain goods for levy of AIDC, Customs Notification Adds 167 Historical Entries to Rescission List Under Notification 11/2021, Effective February 2025
Notifications : A comprehensive amendment to Notification No. 11/2021-Customs for AIDC (Agriculture Infrastructure and Development Cess), expands the list of customs notifications by adding 167 new entries (from S.No. 12 to 178) to the Annexure. These additions include customs notifications issued between 1935 and 2023, covering various exemptions. The amendment will take effect from February 2, 2025.
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Basic Customs Duty Rates Revised: New Rates for Fish Products, Medicines, Vehicles, and Metal Scrap Under Notification 50/2017
Notifications : The notification amends the existing Customs notification No. 50/2017 to implement various Basic Customs Duty (BCD) rate changes effective February 2, 2025. Key modifications include: - New entries for frozen fish paste (5% BCD) and fish hydrolysate (5% BCD) for specific manufacturing purposes - Restructuring of duty rates for drugs/medicines in List 3 (5%) and List 4 (Nil) - Zero duty on wet blue leather and certain metal waste/scrap - Reduced BCD on motor cycles based on engine capacity and assembly condition (ranging from 10-40%) - Extended concessional rates until March 31, 2035 for certain items - Addition of several new life-saving drugs to List 4 for nil duty benefit - New condition for export obligation within 12 months for certain imported goods - Removal/modification of various provisos and conditions across multiple tariff entries The changes aim to rationalize duty structure, support domestic manufacturing, and reduce costs for essential items including pharmaceuticals and raw materials.
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Government Revises Import Duties: Metal Scrap Exempt, 70% on Vehicles, 20% on Consumer Goods Under Customs Act Section 25(1)
Notifications : Under s.25(1) of Customs Act 1962, GOI issued a notification establishing revised import duty rates for specified goods effective Feb 2, 2025. Key provisions include duty exemptions for various metal waste/scrap items, 70% duty on imported passenger vehicles and motorcycles, 20% duty on most consumer goods including furniture, bicycles, and smart meters. The notification sets differential rates: nil duty for metal scrap/waste (copper, tin, tungsten etc.), 7.5% for chemical compounds, 20% for most manufactured goods, and 70% for vehicles and personal imports. Special provisions apply to personal baggage and goods for personal use. The measure aims to rationalize the tariff structure while protecting domestic industries through strategic duty calibration.
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Government Amends Customs Notification 27/2011 To Reduce / Remove Export Duty On Crust Leather Under Section 25(1)
Notifications : The Central Government amended Notification No. 27/2011-Customs to modify classifications of tanned leather products and introduce new provisions for crust leather. The amendment redefines entries for tanned hides and skins of bovine/equine animals, sheep/lambs, and other animals, specifically excluding E.I. tanned leather from each category. A new entry 25J was inserted establishing nil export duty on crust leather (hides and skins) under tariff items 4104 41 00, 4104 49 00, 4105 30 00, 4106 22 00, 4106 32 00, and 4106 92 00. The notification, exercising powers under Section 25(1) of the Customs Act 1962, takes effect from February 2, 2025.
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CBIC Revises Import Tariff Values Under Section 14(2) for Palm Oil, Gold, Silver, and Brass Scrap
Notifications : CBIC exercised powers under Section 14(2) of Customs Act 1962 to revise tariff values for specified commodities. New values effective February 1, 2025, include: Crude Palm Oil at USD 1109/MT, RBD Palm Oil at USD 1158/MT, Brass Scrap at USD 5239/MT, Gold at USD 897/10g, and Silver at USD 1001/kg. The notification amends earlier tariff values established under Notification 36/2001-Customs (N.T.) and maintains Areca nuts value at USD 6448/MT. These revisions apply to imports and establish baseline values for customs duty assessment, ensuring standardized valuation across ports.
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Power Bank Components Qualify for Duty Exemption Under Entry 512, Following Broader Interpretation of Manufacturing Parts
Case-Laws - AT : CESTAT ruled in favor of the appellant regarding duty exemption benefits under Entry 512 of Notification 50/2017-Cus for power bank components. The tribunal rejected the department's narrow interpretation that the exemption applied only to lithium-ion battery parts. Following precedents from recent cases, CESTAT held that parts used in power bank manufacturing qualify for the exemption, regardless of their end use in power banks. The tribunal confirmed that components used in manufacturing lithium-ion batteries remain eligible for the duty exemption under the notification, even when incorporated into power banks. Appeal was allowed, granting the claimed exemption benefits to the appellant.
Corporate Law
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Related Party Under Section 5(24) IBC Removed from Committee of Creditors Due to Common Control Structure
Case-Laws - AT : Resolution Professional's decision to remove appellant from Committee of Creditors upheld by NCLAT. The appellant, Hari Vitthal Mission, was determined to be a related party of Corporate Debtor under Section 5(24) of IBC due to common control by Kanoria Foundation. Kanoria Foundation held 99.9% stake in appellant and effectively controlled 31% of Corporate Debtor through intermediary entities. The tribunal confirmed RP's authority to determine related party status and endorsed findings that appellant qualified as related party under Section 5(24)(i) and (j), being a subsidiary of the same holding company/trust controlling Corporate Debtor. As related parties are prohibited from CoC participation under Section 21(2), appellant's removal was legally justified. Appeal dismissed, affirming Adjudicating Authority's order.
IBC
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Security Interest Priority Outweighs Vote Share in CoC Resolution Plan Approval Under Section 30(4)
Case-Laws - AT : NCLAT upheld CoC's discretion in approving resolution plan based on security interest rather than vote share of financial creditors. The tribunal confirmed that post-amendment Section 30(4) empowers CoC to consider security interest priority while approving distribution mechanism. The dissenting financial creditor's claim for distribution based on security interest was rejected as the approved plan satisfied Section 30(2)(b) requirements by offering above liquidation value. The CoC's commercial wisdom in choosing distribution method was deemed final and binding on all creditors. The appeal challenging the Adjudicating Authority's order was dismissed, affirming that CoC's decision aligned with statutory provisions and required no interference.
Indian Laws
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Motor Accident Compensation: Parents' Death Claim of Rs. 1 Crore Each Partially Awarded Based on Monthly Income Assessment
Case-Laws - SC : SC upheld the Tribunal's compensation award in a motor accident death claim, restoring Rs. 58,24,000/- for father and Rs. 93,61,000/- for mother against claimed amounts of Rs. 1 crore each. The court endorsed Tribunal's assessment of Rs. 60,000/- monthly income for each deceased parent as reasonable, rejecting appellants' claims of higher earnings (Rs. 25 lakh and Rs. 20 lakh annually). The decision considered business succession limitations, noting that heirs' inexperience could affect future earnings. The court relied on established precedent regarding Income Tax Returns as reliable evidence for income assessment. HC's judgment was overturned for deviating from settled legal principles.
Law of Competition
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Messaging Platform Gets Relief on Data Sharing Ban for Ads While Privacy Safeguards Stay; Must Pay 50% Penalty
Case-Laws - AT : NCLAT partially stayed CCI's order against Whatsapp messaging platform operator and its parent company regarding privacy policy violations. The tribunal stayed the five-year ban on sharing user data for advertising purposes, noting it could jeopardize the operator's free service business model. However, other directives concerning data sharing for non-advertising purposes remain enforceable. The operator must comply with remaining privacy safeguards and deposit 50% of the penalty amount (considering 25% already paid) within two weeks. The tribunal acknowledged CCI's jurisdiction for suo moto proceedings, following Supreme Court precedent, while emphasizing that final orders must be evaluated on individual merits.
Service Tax
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Foreign Banks' Payment Processing Fees During Export Remittance Not Taxable Under Service Tax Reverse Charge Mechanism
Case-Laws - AT : CESTAT determined no service tax liability existed under Reverse Charge Mechanism for payment processing services from AFL and foreign banks. The tribunal found no direct service provider-recipient relationship between appellant and foreign entities. Charges deducted by foreign banks during remittance process were part of trade arrangements, not constituting taxable services. Following precedents in AKR Textile and SKM Egg Products cases, the tribunal held that remittance services by foreign banks to Indian banks for exporters are not subject to service tax. For post-July 2012 period, services performed by Hong Kong intermediary were outside taxable territory. The appeal was allowed, setting aside the original tax demand.
Central Excise
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Additional Excise Duty Timeline on Unblended Diesel Extended Under Section 5A(1) from 2025 to 2026
Notifications : The Central Government exercised powers under Section 5A(1) of Central Excise Act, 1944 to amend notification No. 11/2017-Central Excise dated June 30, 2017. The amendment extends the implementation timeline for additional excise duty on unblended diesel from 2025 to 2026. Two specific modifications were made: first, in the Table against Serial No. 3, column (3), after item (ii) in the proviso, and second, in the proviso after Annexure, item (b). The notification takes effect from February 2, 2025. This amendment, deemed necessary in public interest, follows the previous modification made through notification No. 28/2024-Central Excise dated November 19, 2024.
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Excess Duty Payments Can Be Adjusted Against Shortfalls Under Rule 7 Provisional Assessment Without Unjust Enrichment Test
Case-Laws - AT : CESTAT ruled that in provisional assessment cases, adjustments of excess duty payments against shortfalls must be handled comprehensively. The tribunal determined that Rule 7 does not explicitly address duty adjustment scenarios, while Sub-rule 6 preserves the assessee's refund rights subject to unjust enrichment principles. Following the Karnataka HC's precedent in similar cases, when provisional assessment applies to entire goods, final duty calculations require consolidated adjustments of excess payments against shortfalls. The doctrine of unjust enrichment was found inapplicable where duty burden was not transferred. The appellant successfully established their right to adjust excess duty payments without being subject to unjust enrichment considerations. Appeal sustained.
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Manufacturer's Component Specifications and Drawings to Vendors Cannot Be Added to Excise Duty Assessable Value Under Section 4
Case-Laws - AT : CESTAT ruled that specifications, designs, and drawings provided by manufacturer M to vendors for manufacturing vehicle components should not be included in assessable value under Section 4 of Central Excise Act and Rule 6 of Valuation Rules. The Tribunal distinguished between mere specifications and detailed engineering drawings, holding that only when there exists a contract of sale can additional elements be considered as consideration. The specifications provided were merely dimensional requirements for component fitment rather than additional consideration. The Tribunal emphasized that materials supplied by buyers before identifying potential manufacturers cannot constitute additional consideration. Appeal allowed, rejecting inclusion of notional cost of specifications in assessable value.
Case Laws:
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GST
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2025 (2) TMI 97
Levy of penalty u/s 129(3) of the GST Act - HELD THAT:- The plea sought to be raised by the petitioner regarding the transfer of the goods, a Pokland Machine, to its parking yard at Varanasi, needs investigation inasmuch as the conduct as projected by counsel for the respondents and which is not denied, despite the fact that petitioner had full 15 days to claim the ownership of the goods, no steps were taken and thereafter also the matter has been dealt with casually, the assertions made in the petition cannot be taken at face value. There are no reason to entertain this writ petition under Article 226 of the Constitution. The same is, therefore, dismissed leaving it open for the petitioner to avail the alternative remedy of appeal with the aid of Section 14 of the Limitation Act as indicated by counsel for the respondents. Petition dismissed.
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2025 (2) TMI 96
Entitlement to seamless transfer of CENVAT credit for excise duty paid on capital goods in transit as of the appointed date under the Central Goods and Services Tax Act, 2017 (CGST Act) - input under Rule 2(g) of the CENVAT Credit Rules, 2017 includes capital goods or not - transitional credit under Section 140(5) of the CGST Act for capital goods in transit - distinction between inputs and capital goods under the CGST Act - HELD THAT:- Prior to 01.07.2017, a manufacturer was entitled to claim CENVAT credit of duty paid by him on inputs as well as on the capital goods utilized in the manufacturing process, subject, however, to the conditions which were placed in the CENVAT Credit Rules, 2004. There is no difficulty in understanding that the facility providing the manufacturers to claim credit of the duties paid on inputs as well as capital goods continued even after 01.07.2017 but with certain modifications. CGST Act contained transitional provision according to which unutilized CENVAT credit was eligible to be brought over to the GST regime. The statute made provisions to enable the assessee to avail the credit of duty paid on inputs which were in transit as on 01.07.2017. But under the CENVAT Credit Rules, 2017 which were framed by the Central Government by virtue of powers conferred upon it under Section 37 of the Central Excise Act, 1944, no facility has been provided to enable the assessee to claim credit of the excise duty paid on such capital goods. The word capital goods found its definition also in Rule 2(A) of the CENVAT Credit Rules, 2004. Sub-rule (1) of Rule 3 provided that the manufacturer or purchaser of final products are a provider of output service shall be allowed to claim credit of the CENVAT credit of the various duties specified in Clauses (i) to (xi) contained therein paid on any input or capital goods received in the factory of manufacturer of final product or by the provider of output services or on after the tenth day of September, 2004. A reading of subsection (3) of Section 16 makes it crystal clear that it provides for claim of depreciation of tax component of the cost of capital goods or plant and machinery under the Income Tax Act, 1961 and if such claim has been made by a registered person, the input tax credit on such tax component would not be allowed. Sub-section (1) and (2) of Section 17 pertain to restriction of the tax credit when the goods or services are utilized partially for business purpose and partially for other purposes or partially for effecting taxable supplies and partially for non-taxable supplies, these provisions do not make any distinction between capital goods and inputs. The distinction in the matter of giving benefit of CENVAT credit on capital goods during the transitional period may be found in Section 140 of the CGST Act. While this provision enables an assessee to carry forward and take credit of unutilized CENVAT credit paid on inputs as well as on capital goods, in the manner as may be prescribed and subject to the conditions contained in the provisions, sub-section (5) of Section 140 makes a distinction between the capital goods and inputs. An identical question had fallen for consideration before the Hon ble Division Bench of the Gujarat High Court in the case of RSPL Limited [ 2018 (10) TMI 1521 - GUJARAT HIGH COURT ] where it was held that Article 14 as is well-known, prohibits class legislation but not reasonable classification. To bring in the element of discrimination in terms of Article 14 of the Constitution, the onus would be on the petitioner to establish that the persons or things treated differently form a homogeneous class. In the present case, the source of the petitioner s grievance or dissatisfaction is that the inputs and capital goods are treated differently. When we find that the inputs and capital goods form different and distinct classes, the question of subclassification or artificial demarcation would not arise. This Court finds that the CENVAT Credit Rules, 2017 has superseded CENVAT Credit Rules, 2004 and conjoint reading of the provisions of GST Act and CENVAT Rules, 2017 leaves no room for taking any different view from that of the Hon ble Gujarat High Court in the case of RSPL Limited. Conclusion - The transitional credit under the CGST Act is not available for capital goods in transit, as established in RSPL Limited. The claim for transitional credit denied. The distinction between inputs and capital goods under the CGST Act was lawful and justified. There are no error in the impugned orders - application dismissed.
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2025 (2) TMI 95
Exemption from GST - Services provided to the Panchayat Service Board, amounts to services provided to the Panchayat, and covered under entries 3 and 3A, of the Notification or not - services provided to the Gujarat Public Service Commission amounts to services provided to the State Government, covered under entries 3 and 3A of the Notification or not - services provided to the Gujarat Technological University amounts to services provided to the Government Entity or Government Authority, eligible for tax exemption under entry 3 and 3A of the notification or not. Whether the services provided by the appellant to the Gujarat Panchayat Service Selection Board (GPSSB) qualify as services provided to a Panchayat and are exempt from Goods and Services Tax (GST) under entries 3 and 3A of Notification No. 12/2017-CT (R)? - HELD THAT:- As is evident, in terms of the serial no. 3 of notification No. 12/2017-CT (R), as amended, pure services [excluding works contract services or other composite services involving supply of any goods], provided to a Central Government, State Government, Union territory or local authority by way of any activity in relation to any function entrusted to a Panchayat under article 243G or to a Municipality under article 243W of the Constitution of India, is exempt. Likewise, in terms of serial no. 3A of notification ibid, composite supply of goods and services, in which the value of supply of goods constitutes not more than 25% of the value of the said composite supply provided to the Central Government, State Government or Union territory or local authority by way of any activity in relation to any function entrusted to a Panchayat under article 243G or to a Municipality under article 243 W of the Constitution are exempt. While dealing with an exemption notification, an exemption notification is to be strictly interpreted in terms of the judgement of the Constitution Bench of the Hon ble SC in the case of Dilip Kumar and Company [ 2018 (7) TMI 1826 - SUPREME COURT (LB) ] wherein it was held that Exemption notification should be interpreted strictly; the burden of proving applicability would be on the assessee to show that his case comes within the parameters of the exemption clause or exemption notification. It was also held that When there is ambiguity in exemption notification which is subject to strict interpretation, the benefit of such ambiguity cannot be claimed by the subject/assessee and it must be interpreted in favour of the revenue. The services provided to the Panchayat Service Board amounts to services provided to the Panchayat, and is covered under entries 3 and 3A, of the notification and is hence, exempted from GST. GPSSB is neither a Central/State Government nor a Union territory. Further as far as Local authority is concerned, the term having been defined under the CGST Act, there appears to be no need to borrow it from elsewhere. On going through each of the clauses from a to g of the definition of local authority, it is found that the GPSSB does not fall within the ambit of either of the sub-clauses. Thus, GPSSB is neither a Central Government, State Government, Union Territory or a local authority. The primary condition of the composite services having been provided to a Central Government, State Government, Union territory or local authority, not having been satisfied, the appellant is not eligible for the benefit of the notification. Whether the services provided to the Gujarat Public Service Commission (GPSC) are considered services provided to the State Government and are therefore exempt from GST under the same notification entries? - HELD THAT:- The contention of the appellant that GPSC, a constitutional body, managed, financed by the State Government, which has 100% control, is liable to be classified as the State Government, not agreed upon. The appellant is not eligible for the benefit of the exemption notification, ibid, in respect of the services provided to GPSC. Conclusion - i) GPSSB is neither a Central Government, State Government, Union Territory or a local authority. The primary condition of the composite services having been provided to a Central Government, State Government, Union territory or local authority, not having been satisfied, the appellant is not eligible for the benefit of the notification. ii) The contention of the appellant that GPSC, a constitutional body, managed, financed by the State Government, which has 100% control, is liable to be classified as the State Government, not agreed upon. The appellant is not eligible for the benefit of the exemption notification, ibid, in respect of the services provided to GPSC.
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2025 (2) TMI 94
Classification of goods - applicable rate of tax - supply of instant mix flours for gota, khaman, dalwada, dahiwada, idli, dhokla, dhosa, pizza, methi gota and handvo - supply of instant mix flour for gota/methi gota along with chutney powder/kadhi chutney powder - supply of khaman along with masala pack. Mix flours of Khaman, Gota, Dalwada, Dahiwada and Methi Gota - instant mix of Idli, Dhokla, Dhosa and Handvo - HELD THAT:- What Rule 3(b), ibid, encapsulates is that mixtures consisting of different material which cannot be classified by reference to 3(a) shall be classified as if they consisted of the material or component which gives them their essential character. The argument put forth is that as the essential character of the instant flour mixes is given by the Flour, so in terms of Rule 3(b) of the GRI, it would fall under chapter heading 1101, 1102 or 1106. The argument is not legally tenable owing to the fact that in the paragraphs above, we have already held that on account of the composition, etc. the product gets excluded from falling under chapter headings 1101, 1102 and 1106. Therefore, the question of relying on Rule 3(b) of the GRI to classify the goods based on the essential character, does not arise. It is owing to this finding, that the averment of the appellant that entry most beneficial to the appellant needs to be preferred, also stands rejected. None of the products of the appellant merit classification under Chapter 11 of the Customs Tariff Act, 1975 and specifically under Chapter Headings 1101, 1102 or 1106 of the Customs Tariff Act, 1975. Instant Gota mix supplied with chutney powder - Methi gota instant mix supplied with kadhi chutney powder - instant Khaman mix supplied with masala pack - HELD THAT:- The appellant has stated that they are naturally bundled hence supplied in conjunction with each other the GST rate applicable to principal supply ie instant mix flour would be applicable. The findings of GAAR recorded in para 8.3 of the impugned ruling dated 19.7.2021 agreed upon and it is held that it is a mixed supply. Mix Flour / Instant Mix Flour - appellant submitted that Mix Flour / Instant Mix Flour is not a ready-to-eat food - HELD THAT:- Chapter Heading 21.06 and specifically Tariff Item 2106 90 is not confined to processed or semi processed food, cooked or semi cooked food, preserved food and ready to eat food. In fact, any product which is a food preparation and which is not elsewhere specified or included in the CTA, 1975, gets covered under Chapter Heading 2106 of the CTA, 1975. Therefore, merely because the end consumer of the Instant Mix Flour is required to follow certain food preparation processes before such product(s) can be consumed, is no ground to take these products out of Chapter Heading 2106 of the CTA, 1975. Conclusion - i) The products are classifiable under HSN 2106 90, attracting an 18% GST rate. ii) The products do not qualify for classification under HSN 1101, 1102, or 1106. iii) Supplies with additional items are considered mixed supplies.
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Income Tax
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2025 (2) TMI 93
Prosecution Proceedings initiated u/s 276C - Bogus LTCG - guilty mind i.e., mens rea - willful evasion of tax on claims made under the head LTCG/Short Term Capital Loss - allegation of crime invoking Section 200 of the CrPC for offence punishable under Section 276C - HC [ 2024 (1) TMI 1007 - KARNATAKA HIGH COURT] decided mens rea is an element that is to be present in a proceeding under Section 271 of the Act. The mere fact of not accurate tax, not exact tax or erroneous tax would not lead to the proceedings under Section 276 of the Act. Thus proceedings instituted against the petitioners cannot but be termed to be an error in law. Order taking Cognisance is not in compliance with applicable law and therefore is set aside. HELD THAT:- Since, the other connected petitions [ 2024 (12) TMI 1180 - SC ORDER] have already been dismissed by this Court, the present petitions also stand dismissed on the similar terms, leaving the question of law open, if any, to be decided in some other appropriate matter.
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2025 (2) TMI 92
Penalty u/s 271 (1) (c) - Appellant had not only transferred the stock-in-trade at the market value but also withdrawn the profits arising therefrom, about which there was no full and frank disclosure - whether the appellant had concealed income or furnished inaccurate particulars? - HELD THAT:- From the factual findings, we are satisfied that the very constitution of the firm and the transaction of the Appellant inflating the value of the plot of land and contributing it to the stock in trade, followed by withdrawals within a short period, amounted to a device or subterfuge or conduit to facilitate tax evasion. For these reasons, the Assessing Officer was justified in imposing the minimum prescribed penalty, and there is no warrant to interfere with the same. The circumstance that the assessee had filed the capital account copy along with the returns does not amount to true or full disclosure in the present case. The entry in the capital account copy also, in the peculiar facts of the present case, does not amount to disclosure of the primary facts. Even if the disclosure issue is kept aside, the penalty was still liable to be imposed upon the Appellant for having adopted such a device or subterfuge to evade taxes. The primary facts about which there is no dispute, are sufficient to sustain the findings regarding the Appellant adopting a device or subterfuge to evade the taxes. These are also good enough grounds to sustain the minimum penalty imposed upon the Appellant. If Explanation 1 to Section 147 was not strictly speaking applicable, still, Explanation 1 to Section 271 could not have been ignored. This was a case where the Explanation offered by the Appellant was found to be patently false. In any event, the Appellant failed to substantiate or demonstrate that such Explanation was bona fide. As noted earlier, the addition to the Appellant s income has already attained finality. Based on these factors, the minimum penalty imposed upon the Appellant warrants no interference. Decided against assessee.
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2025 (2) TMI 91
Failure to provide a draft assessment order to the petitioner under section 144B - violation of the Faceless Assessment Scheme, 2019 - HELD THAT:- As asssessment was made invoking provision in section 143(3) read with section 144B on the assessee having complied with both notices, firstly issued under section 143 (2) and then u/s 142 (1). We accept contention of revenue that the sequence does not matter inasmuch as power to issue notice provided for in section 143 (2) and section 142 (1) is for purpose of making the assessment. There is no dispute that petitioner s return was picked up for scrutiny assessment. The assessment had to be done. Commencement of the exercise of assessment was by issuance of section 143 (2) and then further enquiry felt necessary for purpose of the assessment and therefore second notice under section 142 (1). Petitioner having complied with both notices, the allegation of not having had full opportunity, particularly in view of statements made in the counter, are without basis. As the return filed was picked up for scrutiny assessment. Procedure provided for in section 144B on faceless assessment was adopted. It not being a case of best judgment assessment there was no draft assessment order made and thus no question of furnishing it to the National e-Assessment Centre arose. No merit in the contentions raised on behalf of petitioner.
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2025 (2) TMI 90
Reassessment proceedings against company dissolved - HELD THAT:- On perusal of the documents brought before the Court and considering the submissions made on behalf of the parties, this Court is of the view that the initiation of reassessment proceedings under Sections 148A (b) and 148A (d) of the Income Tax Act, 1961 and the subsequent issuance of the notice under Section 148, were in violation of the statutory preconditions under the Act. The respondents failed to conduct a preliminary inquiry under Section 148A(a) and acted solely on external reports without demonstrating independent application of mind, thereby rendering the proceedings arbitrary and illegal. Section 14 of the IBC imposes a moratorium that prohibits proceedings against a company undergoing Corporate Insolvency Resolution Process (CIRP). The resolution plan approved by the National Company Law Tribunal (NCLT) has overriding authority, as per Section 238 of the IBC and expressly precludes reassessment or revision proceedings for the period prior to the effective date stipulated in the plan. The respondents actions are in direct contravention of these provisions. Court holds that the reassessment proceedings initiated against the petitioner are without jurisdiction, arbitrary, and unsustainable in law. Consequently, the writ petition is allowed, and the impugned notices and orders issued under Sections 148A (b), 148A (d), and 148 of the Income Tax Act, along with all consequential proceedings, are quashed.
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2025 (2) TMI 89
Reopening of assessment - issuance of no valid service of notice within the statutory period of limitation - liability to file a return of income despite claiming exemption under India-Singapore DTAA HELD THAT:- Challenge to the impugned notice issued u/s 148 of the IT Act cannot be countenanced merely because there is an typographical error in the address mentioned therein, notice has not been served to the petitioner s address i.e., M/s.Verizon Services Singapore Pte Ltd., instead of which, the same has been served to the incorrect address i.e., Visteon Tax Office, One Village Centre Drive, Van Baren Township, Michigan, USA . Without filing of proper Return of Income, the petitioner has claimed exemption under India-Singapore Double Taxation Avoidance Agreement. Hence, the respondent/Income Tax Department has issued Notice under Section 148 of the IT Act to the petitioner, which was culminated in the impugned Speaking Order as per the decision of GKN Driveshafts (India) Ltd [ 2002 (11) TMI 7 - SUPREME COURT] Income Tax Department has passed the impugned Speaking Order dated 18.03.2022 without considering the CBDT Circular No.3/2016 dated 26.02.2016 and taking note of the fact that the petitioner had subsequently filed its Return of Income manually on 02.03.2022, the petitioner can be given a reasonable opportunity to explain its case afresh in the light of CBDT Circular No.3/2016 dated 26.02.2016. Therefore, the impugned Speaking Order dated 18.03.2022 can be set aside by way of remand.
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2025 (2) TMI 88
Penalty u/s 271(1)(c) - defective notice issued u/s 274 - non specification of clear charge - as argued no specific charge has been brought in the impugned penalty order by AO against the Appellant for initiation and subsequent levy of penalty - HELD THAT:- As in notice it shows that as for the purpose of section 271(1)(c), it is not specifically mentioned as to under which limb of the default for which penalty is leviable, the assessee was called on to reply and face penalty proceedings. In this context, the law is now quite settled that the penalty proceedings should be based on a notice wherein it should be specifically mentioned as to penalty proceedings in regard to concealment of income or for furnishing inaccurate particulars of income. We find that even there is no striking of the irrelevant part while issuing notice u/s 274 of the Act. Thus, the penalty notices are not sustainable under law. See MANJUNATHA COTTON AND GINNING FACTORY [ 2013 (7) TMI 620 - KARNATAKA HIGH COURT] , MR. MOHD. FARHAN [ 2021 (3) TMI 608 - BOMBAY HIGH COURT (LB)] and M/S. SAHARA INDIA LIFE INSURANCE COMPANY, LTD. [ 2019 (8) TMI 409 - DELHI HIGH COURT] - Appeal of the assessee is allowed.
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2025 (2) TMI 87
Penalties levied u/s 271D - accepting cash loans in violation of section 269SS - Receipt of on-money - Middle class and uneducated assessee - The persons who advanced money to her were agriculturist and that was why they had given cash loans, in anonymity, in the fear of CBI actions on them also. - HELD THAT:- As there is a reasonable cause for not only accepting cash loans of Rs. 17,00,000/- immediately after the CBI actions on the assessee in the fear of the arrest but also the repayment of part of the loan on insistence of the person who advanced the said loan to the assessee in the dire need as mentioned above. We are of the firm opinion that there are reasonable causes for not levying penalties u/s 271D and 271E r.w.s. 274 of the Act. Accordingly, we set aside the impugned orders and quash the penalties levied by the JCIT, Range Panipat. Decided in favour of assessee.
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2025 (2) TMI 86
Unverifiable purchases - Disallowance on account of direct expenses - disallowance confirmed by the CIT(A) under the head vehicle expenses, festival expense, travelling expenditure telephone expenses and conveyance expenses - HELD THAT:- As submitted that there are expenses incurred with the running of the business and no personal element can be attributed to these expenses and since these expenses of conveyance and small repairs have been self vouched, we find that 1/10th of the telephone expenses and conveyance expenses may be treated as personal expenses and so far regarding the festival expenses are concerned are incurred for performing Pooja at office premises etc may be taken and allowed as business expenditure and no disallowance required. There is no any evidence on record of travelling expenses, so deserves to be deleted. Regarding the TDS issued, the learned AO is directed to reconsider the TDS mismatch and due credit for the tax paid accordingly. Appeal of the assessee is allowed.
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2025 (2) TMI 85
Penalty u/s 271(1)(c) - assessee could not furnish any justifiable evidence regarding writing off of bad debts and even the documents furnished by the assessee regarding Sundry Creditors were disbelieved by the AO - assessee s appeal before FAA was dismissed for want of prosecution - HELD THAT:- Appeal of the assessee cannot be adjudicated on merits at this stage. Although the assessee has been a chronic defaulter and seems to have taken proceedings before the Tribunal in a casual manner, all the same in the interest of substantial justice, restore this file to the office of the AO for providing one last opportunity to the assessee to explain before the AO why the penalty u/s 271(1)(c) of the Act should not be imposed. Accordingly, the AO is directed to adjudicate the issue of imposition of penalty de novo. Apeal of the assessee is allowed for statistical purposes.
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2025 (2) TMI 84
Reopening of assessment - Unaccounted cash loan received - as argued broker who facilitated Rukka transaction had himself confessed under oath the genuineness of transaction and Rukka being unaccounted cash transaction document cannot be expected to bear name, signature of parties - HELD THAT:- A perusal of the reasons recorded would show that the Assessing Officer had received information that the assessee had received cash loan to the tune of Rs.11.05 crore through broker namely, Shri Jai Bhagwan Agarwal. This information in itself is not sufficient to form the belief by the AO regarding escapement of income of the assessee. AO has only the information that the assessee had received loan and the amount received as loan in no circumstances can be said to be the income of the recipient. If the allegation is to be treated as that the said loan was a sham transaction and that the same was the own income of the assessee routed through the said broker Shri Jai Bhagwan Agrawal (though there is no such averment made in the reasons recorded, even then, such an information may be treated a trigger point for making further investigations but that information alone cannot be said to be sufficient information for reopening of the assessment. AO in this case, blindly acted on the information received from Investigation Wing and reopened the assessment, even though in the said information it has been mentioned that the assessee had received loan and there is no allegation that the said loan was a sham transaction to route the undisclosed income of the assessee. Assessee having denied of receipt of any cash loan as alleged by the Assessing Officer, the burden shifted on the Assessing Officer to confront the assessee with any such evidence showing that the assessee had entered into any such transaction. Admittedly, in this case, no such cash was found from the possession of the assessee. There is no name mentioned by the Assessing Officer of any lender, who allegedly gave loan to the assessee, only the name of the broker has been mentioned, that in itself is totally a vague allegation without any corroborating evidence. Neither the assessee has been found to be owner of any money, bullion, jewellery or valuable article nor any such money, bullion, jewellery or valuable article has been found in possession of the assessee nor there is any such allegation even in the reasons recorded for reopening of the assessment. Therefore, the impugned assessment is liable to be quashed on this score also - Decided in favour of assessee.
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2025 (2) TMI 83
Unexplained cash credit u/s 68 - Bogus share capital - HELD THAT:- CIT (A) simply dismissed the appeal of the assessee on the ground that the replies of three subscribers contained the information i.e. the balance sheet and Profit and Loss account for F.Y. 2015-16, and not for F.Y. 2016-17. The assessee has filed all these information before us for F.Y. 2016-17. After examining the balance sheets of three subscribers namely; Aakansha Advisory Services Pvt. Ld., Sunirmiti Mercantile Pvt. Ltd and Arihant Enterprises Ltd. We find that they have adequate creditworthiness to make investments in the assessee company. Even on the basis of balance sheet and Profit and Loss account for F.Y. 2015-16, the creditworthiness of the assessee s subscribers could be judged. Therefore assessee has discharged its onus cost upon it by the statute and in our opinion, addition cannot be made mainly on the ground that notice issued u/s 133(6) of the Act were not complied with. Appeal of the assessee is allowed.
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2025 (2) TMI 82
Estimating net profit @25% of turnover and restricted the disallowance of expenses as 20% of adhoc disallowance made by AO - HELD THAT:- Assessee has filed return of income declaring income on presumptive basis under provisions of section 44AD of the Act. Revenue has not disputed the fact that the assessee is an eligible assessee under provision of section 44AD. Once, the return of income has been filed under the special provision of section 44AD of the Act, the assessee cannot claim deduction allowable under provisions of section 28 to 43C of the Act. Assessee u/s. 44AD of the Act as against presumptive tax of 8% has offered income to tax @ 9.8%. After accepting the assessee as eligible assessee u/s. 44AD of the Act the Revenue cannot look into each and every expenditure and make ad-hoc disallowance with regard to the expenditure separately. Appeal of the assessee is allowed.
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2025 (2) TMI 81
Non issue of notice u/s 143 - Unexplained cash deposits addition in bank account - assessee treating the same as income of the assessee from undisclosed sources - HELD THAT:- As held in the case of ACIT vs. Hotel Blue Moon [ 2010 (2) TMI 1 - SUPREME COURT] that the issue of notice u/s 143(2) is sine qua non to assume jurisdiction to proceed with the assessment in a case. If the said notice had been issued by the AO who did not have the jurisdiction over the assessee, then such notice is to be treated as non-est. The assessment carried out in such cases will be bad in law. DR has not pointed out any contrary decision to the above propositions relied by the ld. Counsel in respect of pecuniary jurisdiction of the concerned Assessing Officer to frame the impugned assessment in question. In this case, since the concerned ACIT who had pecuniary jurisdiction to frame the assessment but did not issue notice u/s 143(2) of the Act, therefore, the assessment framed was bad in law in view of the case laws cited above. The impugned assessment order framed by the AO, therefore, is bad in law and the same is hereby quashed. Decided in favour of assessee.
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2025 (2) TMI 80
Unexplained cash credit - Addition u/s. 69A r/w 115BBE - HELD THAT:- So far as the amount withdrawn from the partnership is concerned, the same is not in dispute as the copy of capital account of Sai Samarth Plaza is placed. Refund of advances, the assessee has furnished list of 17 persons who have sworn on the affidavits stating that they have given the amount in cash to the assessee prior to the demonetization period scheme. Their proof of identity is also furnished. Revenue authorities before declining the claim of the assessee ought to have carried out the verification by way of calling the persons to record the statements u/s. 131 - No such exercise has been carried out. Therefore, even if the cash received from those debtors are below Rs. 20,000/- on each day creates doubt but in absence of any cross verification, the claim of the assessee cannot be denied. For recovery of receivables it is an admitted fact that the assessee had not given any bifurcation of the said sum in the income-tax return for A.Y. 2016-17. Even if the assessee falls under the Presumptive Taxation Scheme, he has to provide the detail of cash, bank, stock and receivables etc. In absence of any other concrete evidence and proof of genuineness of sundry debtors the claim of the assessee having received Rs. 3,14,500/- as recovery of receivables did not have any merit and the said claim is not allowed. Addition partly allowed.
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Customs
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2025 (2) TMI 79
Duty exemption benefit under Entry No. 512 of N/N. 50/2017-Cus dated 30.06.2017 - import of parts and components used in the manufacture of power banks - denial of benefit on the ground that this benefit will apply only to parts and components of lithium-ion batteries - HELD THAT:- An identical question was before this bench in Customs Appeal No. 55572 of 2023, M/s XO or Technologies LLP vs. Principal Commissioner [ 2024 (10) TMI 297 - CESTAT NEW DELHI] and in M/s Ambrane India Pvt Ltd Vs Commissioner of Customs (Preventive)- New Delhi [ 2024 (10) TMI 911 - CESTAT NEW DELHI] . In both appeals, it was decided that parts of power banks were eligible for exemption under notification number 50/2017-Cus (S. No. 512). Conclusion - The appellant was eligible for the exemption under Notification No. 50/2017-Cus for the parts and components used in manufacturing lithium-ion batteries, even if these were used in power banks. Appeal allowed.
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Corporate Laws
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2025 (2) TMI 78
Classification of Appellant as a related party of Corporate Debtor - powers of RP to decide about the related party - Appellant s removal from the Committee of Creditors (CoC) of Corporate Debtor (CD). Powers of RP to decide about the related party - HELD THAT:- It is clear from the language of the Section that IRP is responsible for constituting Committee of Creditors. As per the proviso of sub-Section 2 of Section 21 the related party of Corporate Debtor has no right of representation participation or voting in a meeting of Committee of Creditors. It is evident from that IRP has to decide about related party status of creditors of the CD for constituting the CoC as related parties cannot form part of CoC. After confirmation as RP appointment of IRP as RP the matters relating to CoC continue to be handled by RP as he chairs the CoC meetings - RP is empowered to decide on the related party status of a creditor. Determination of appellant as related party of the CD in terms of various clauses of Section 5(24) of the Code - HELD THAT:- This network of shareholding establishes a clear connection between the Corporate Debtor and Hari Vitthal Mission, with both entities being subsidiaries or affiliates under the broader umbrella of Kanoria Foundation. Given this relationship, Hari Vitthal Mission is not only indirectly linked to the Corporate Debtor, but is effectively part of the same corporate group. Therefore, under Section 5(24)(i), Hari Vitthal Mission qualifies as a related party by virtue of its position as a subsidiary of Kanoria Foundation, the holding company/trust that controls the Corporate Debtor - Section 5(24)(j) defines a related party as any person or entity that controls more than 20% of the voting rights in the Corporate Debtor. As seen earlier the Kanoria Foundation holds 99.9% in the appellant which is the Financial Creditor. On the other side the Kanoria Foundation through a series of entities holds a 31% stake in CD. The control of Kanoria Foundation on CD is through several intermediary entities including Adisri, SIFL, TAIML, SAIT, SIPL and PCPL. This layered ownership has been clearly shown in the organogram and even though there may be intermediary entities between Kanoria Foundation and the Corporate Debtor the overall control through shareholding and appointment of Directors through the clauses of trust deed and investment agreement is real and substantial. Hari Vitthal Mission which is 99.9% owned by Kanoria Foundation is a subsidiary company of Kanoria Foundation. The holding entity Kanoria Foundation in this case holds more than 20% in both CD and appellant and appellant therefore squarely falls in the definition of related party of CD. Conclusion - RP is empowered to decide about the status of a creditor as related party. The findings of RP and AA endorsed, wherein the appellant has been held as related party in terms of provisions of Section 5 (24) of the Code. There are no infirmity in the order of AA - appeal dismissed.
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Insolvency & Bankruptcy
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2025 (2) TMI 77
Distribution of distribution mechanism - Whether CoC was justified in approving the Resolution Plan on the basis of security interest of the Financial Creditor and not approving the distribution mechanism on the basis of vote share of the financial creditors? - HELD THAT:- The amended provisions clearly empower the CoC to vote after considering its feasibility and viability. The manner of distribution proposed which may take into account the order of priority amongst creditors as laid down in sub-section (1) of Section 53, including the priority and value of the security interest of a secured creditor. After the amendment of sub-section (4) of Section 30, the priority and value of the security interest of a secured creditor has also become one of the factor which may be considered by the CoC for approval of a plan. Section 30(2)(b) also provided that the Financial Creditor who do not vote in favour of the Resolution Plan shall be paid an amount not less than the amount to be paid to such creditors in accordance with sub-section (1) of Section 53 in the event of a liquidation of the corporate debtor takes place. In the present case, the Resolution Plan was submitted by the SRA which contains provision for pertaining to mechanism for payment amongst the Financial Creditors and payment to the dissenting financial creditor. Judgment of the Hon ble Supreme Court in India Resurgence ARC (P) Ltd. [ 2021 (6) TMI 684 - SUPREME COURT ] which has been relied by both the parties clearly has laid down the law on the subject. In case before the Hon ble Supreme Court, the CoC has approved the Resolution Plan approving the distribution as per the vote share of the financial creditor. The Appellant who was a financial creditor with vote share of 3.94% expressed reservations on the distribution mechanism. The CoC, however, approved the Resolution Plan with 95.35% vote shares which decision was challenged by the Appellant. The Adjudicating Authority approved the Resolution Plan and rejected the objection and Appeal filed by Appellant was also dismissed by this Tribunal against which the matter was taken by the Appellant before the Hon ble Supreme Court. As per liquidation value of the Appellant, he was to receive Rs.97 Crores and as per the plan approved by the CoC he has been offered Rs.1.05 Crores, thus, provision of Section 30(2)(b) are fully satisfied. Conclusion - i) It is clear that after amendments made in Section 30(4), the CoC have been given jurisdiction to take a decision as to distribute the amount as per vote share of the financial creditor or as per the security interest which is in their commercial wisdom and decision taken by requisite vote share by the CoC is final and binding on all including the dissenting financial creditors and dissenting financial creditors at best is entitled for minimum of liquidation value. The use of expression may in Section 30(4) clearly indicate the discretion vested in the CoC to take into account of the matter of security interest of the secured creditors in approving the Resolution Plan. ii) There are no error has been committed by the Adjudicating Authority rejecting the application filed by the Appellant seeking direction to distribute the amount as per security interest. The decision of the CoC approving the Resolution Plan as per security interest was in accordance with Section 30(4) and has rightly been not interfered with by the Adjudicating Authority in the impugned order. There are no error in the impugned order warranting interference by this Tribunal. There is no merit in the Appeal. The Appeal is dismissed.
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Law of Competition
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2025 (2) TMI 76
Prayer for stay of effect and operation of the impugned order - jurisdiction of Competition Commission of India (CCI) to initiate suo moto proceedings against WhatsApp LLC and Meta Platforms for the 2021 update of WhatsApp s Privacy Policy under the Competition Act, 2002 - breach of Section 4 of the Competition Act, 2002 - HELD THAT:- The decision of Supreme Court [ 2022 (10) TMI 1269 - SUPREME COURT ] clearly supports the submissions of the CCI that suo moto proceeding initiated by the CCI was not to be interfered with. However, the Hon ble Supreme Court has observed that the proceedings shall be decided and disposed of in accordance with law and on its own merits. The initiation of proceeding was thus, not interfered but the ultimate order passed by the Commission has to be tested on its own merits. The directions which have been issued in paragraph 247.1 and 247.2 are with respect to for advertising purposes and for purpose other than advertising . Insofar as sharing of user data for advertising purposes, the said is going on from 2016 when 2016 privacy policy was enforced. The ban of five years which was imposed in paragraph 247.1 may lead to the collapse of business model which has been followed by WhatsApp LLC. It is also relevant to notice that WhatsApp is providing WhatsApp services to its user free of cost - the ban of five years imposed in paragraph 247.1 need to be stayed. We, however, are of the view that the directions issued by the CCI under paragraph 247.2 and 247.3 need not be stayed and they need to be complied with. The only limited interim order which we are inclined to grant is to stay the direction in paragraph 247.1 by which five years ban has been imposed. The direction in paragraph 247.1 are stayed. Penalty - It is submitted by Appellant that 25% penalty has already been deposited - HELD THAT:- Subject to deposit of 50% of penalty (after taking into consideration 25% already deposited), the direction in paragraph 263 need to be stayed. The Appellant is directed to deposit 50% of penalty as indicated above within two weeks from today. Conclusion - The five-year ban on sharing user data for advertising purposes stayed, subject to conditions imposed. The other directions and penalties imposed by the CCI upheld. Application disposed off.
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Service Tax
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2025 (2) TMI 75
Levy of service tax - service received from AFL and other foreign bank - service provided to an account holder or not - applicability of Rule 3 of the Place of Provision of Services Rules, 2012 - reverse charge mechanism. Whether the appellant has received payment processing services from AFL engaged by M/s. C A Buying, Germany-the foreign buyer to process payments to the appellant and if so, whether the demand of Service tax under Reverse Charge Mechanism is sustainable? - HELD THAT:- The identical issues as involved in the present case, were also involved in the case of M/S. AKR TEXTILE AND OTHERS VERSUS COMMISSIONER OF CENTRAL EXCISE SERVICE TAX COIMBATORE [ 2020 (10) TMI 479 - CESTAT CHENNAI] wherein Chennai Tribunal has allowed 22 appeals of the exporters by setting aside the impugned orders. It is pertinent to reproduce the relevant findings of the Tribunal where it was held that If at all, the Hong Kong entity is an intermediary within the meaning assigned in Place of Provision of Service Rules, 2012 to render the service, it has been performed in Hong Kong and, thus, not in the taxable territory. The demand for the period after 1st July 2012 also fails. Consequently, the liability for allegedly having received services provided by M/s Amsco Finance Ltd also does not sustain. The service of remittance by a foreign bank to Indian bank of the exporter is not liable to service tax at the hands of the exporter. In this regard, reference is drawn to the decision of Chennai Bench of the Tribunal in the case of M/S. SKM EGG PRODUCTS EXPORT (I) LTD. VERSUS THE COMMISSIONER OF CENTRAL EXCISE (APPEALS) , ANNAI MEDU SALEM. [ 2023 (3) TMI 1384 - CESTAT CHENNAI] wherein the Tribunal after relying upon the decision of M/S DILEEP INDUSTRIES PVT. LTD. VERSUS CCE, JAIPUR [ 2017 (10) TMI 1231 - CESTAT NEW DELHI] has observed it appears that while exporting their goods, they lodged their bills for collection to the Indian Bankers who in turn send the same to the foreign banks. The foreign banks while remitting the money to the Indian Bank, deduct their charges for collection of bills which in turn are charged by the Indian Banks from the appellants. When it is so, then the appellant are not entitled to pay the service tax. Conclusion - For a service tax liability to arise under the Reverse Charge Mechanism, there must be a direct service provider and service recipient relationship. The deduction of charges by foreign entities as part of a trade arrangement does not constitute a taxable service to the appellant. The appellant was not liable for service tax on the services allegedly received from AFL and foreign banks. Appeal allowed.
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Central Excise
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2025 (2) TMI 74
Adjustment of excess duty paid by the Appellant against the demand for differential duty - applicability of doctrine of unjust enrichment to reject the claim for a refund of the excess duty paid upon the finalization of provisional assessment? - HELD THAT:- Sub-rule 6 ibid safeguards the right of the assessee to claim refund in case any amount is found paid in excess. However, this right is subject to the applicability of principle of unjust enrichment. Rule 7 nowhere talks about adjustment of excess duty paid towards the duty short paid. The view held by the Larger Bench in the Excel Rubber Limited case [ 2011 (3) TMI 527 - CESTAT, NEW DELHI (LB)] relied in the impugned order is that before grant of adjustment, the authority finalizing the provisional assessment will have to ascertain whether such excess amount is to be actually refunded or is liable either wholly or partly to be credited to the Consumer Welfare Fund and only thereafter make an order of adjustment to the extent the amount found to be actually refundable. Hon ble High Court of Karnataka in the case of Toyota Kirloskar Auto Parts Pvt. Ltd. [ 2011 (10) TMI 201 - KARNATAKA HIGH COURT] where it was held that when there is provisional assessment, the same is applicable to the entirety of the goods and to arrive at final duty liability, adjustments of duty excess paid against short payment will have to be made. Conclusion - In cases of provisional assessment, adjustments of excess duty paid against shortfalls should be made in a consolidated manner, and the doctrine of unjust enrichment does not apply when the duty incidence has not been passed on. The Appellant was entitled to adjust excess duty payments and was not subject to the doctrine of unjust enrichment. Appeal allowed.
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2025 (2) TMI 73
Interpretation of statute - Rule 6 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000, in conjunction with Section 4 of the Central Excise Act, 1944 - inclusion in the assessable value, cost of specifications provided by the manufacturer of the final products manufactured by the appellant and cleared to the manufacturer along with interest and penalty - invocation of extended period of limitation - HELD THAT:- The issue raised in the case of Denso India Pvt Ltd. [ 2024 (3) TMI 686 - CESTAT NEW DELHI] was whether the notional cost of specifications in the form of drawings and designs supplied free of cost by Maruti to the potential vendors should be included in the assessable value of the parts or components manufactured by the vendors and cleared to Maruti for their motor vehicles. To appreciate the said issue, the Principal Bench considered the provisions of section 4 of the Central Excise Act, 1944 and Rule 6 of the Valuation Rules and observed that anything which is supplied by the buyers to the manufacture before even identifying the potential seller/ manufacturer cannot be treated as additional consideration for sale. It was, therefore, held that something can be treated as an additional consideration for sale of goods only when there exists a contract of sale or an agreement to sale between two parties and in terms thereof the buyer pays something over and above the price agreed. It is also pertinent to take note of the fact that the Principal Bench had noted the distinction between mere specification and detailed engineering drawing as considered in the earlier decision in Mangalore Refinery Petrochemicals Ltd. Vs. CC, Mangalore [ 2012 (9) TMI 712 - CESTAT, BANGALORE] , where the Tribunal has held that there is a distinction between mere specifications and detailed engineering drawing. It is only the latter which is covered under rule 9(1)(b)(iv) of the Customs Valuation (Determination of Price of Imported Goods) Rules, 1988 (which is now rule 10(1)(b)(iv) of the 2007 Customs Valuation Rules). Conclusion - The specifications in the nature of design/drawings provided by MSIL were merely layout or dimensions of the desired parts and components as they have to be necessarily manufactured as per the requisite dimensions so that they can be fitted in the vehicle manufactured by the Maruti. Appeal allowed.
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Indian Laws
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2025 (2) TMI 72
Challenge to Arbitral Award - reduction in the compensation awarded by the Motor Accidents Claims Tribunal to the appellants for the death of their parents in a motor vehicle accident - assessment of income of the deceased parents - HELD THAT:- The Court finds that the Award rendered by the Tribunal is well-considered. Though the claimed compensation was Rs.1,00,00,000/- each with regard to the father and the mother, the Tribunal granted Rs. 58,24,000/- re the father and Rs.93,61,000/- the mother. The documents produced by the appellants and the reasoning given by the Tribunal as well as the Karnataka High Court s Division Bench judgment in B Parimala [ 2000 (7) TMI 1016 - KARNATAKA HIGH COURT] indicate, and, rightly so, that merely because the appellants stepped into the shoes of the deceased, by such factum itself, the appellants would not be capable of running the Mill. It would be of relevance as to whether due to their lack of experience and maturity, real/expected downfall in the profitability of the firm or the business would ensue. Such factor, while considering a claim pertaining to loss of future income/earnings, would have to be dealt with. In the present cases, even the monthly incomes of the parents as claimed by the appellants i.e.. income of the father being Rs.25,00,000/- per year and the mother s being Rs.20,00,000/- per year, the notional income fixed by the Tribunal of Rs.60,000/- each per month, is much more reasonable. It is no longer res integra that Income Tax Returns are reliable evidence to assess the income of a deceased, reference whereof can be made to Amrit Bhanu Shali v National Insurance Co. Ltd. [ 2012 (4) TMI 839 - SUPREME COURT] ; KALPANARAJ AND ORS. VERSUS TAMIL NADU STATE TRANSPORT CORPN. [ 2014 (4) TMI 1332 - SUPREME COURT] , and K. RAMYA AND ORS. VERSUS NATIONAL INSURANCE CO. LTD. AND ORS. [ 2022 (9) TMI 1654 - SUPREME COURT] . It is satisfying that between the formula applied by the Tribunal vis-a-vis the approach adopted by the High Court, the view of the Tribunal rendered in the form of the Award satisfies judicial conscience. The High Court s reasoning militates against settled law - the Impugned Judgment of the High Court deserves to be interfered with. Appeal disposed off.
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