Author: inavatiq

Editorial Team – [2026] 185 taxmann.com 754 (Article)

World Tax News provides a weekly snippet of tax news from around the globe. Here is a glimpse of the tax happening in the world this week:

1. Finland to Introduce Tourist Tax to Boost Local Revenue

The Finland Ministry of Finance has evaluated the feasibility of introducing a tourist tax. Following a preliminary report and stakeholder consultations, the Government has decided to commence legislative drafting.

The proposed tax would allow municipalities in popular tourist destinations to generate additional revenue from tourism, with adoption left to their discretion. It would apply to short-term paid accommodation for both domestic and foreign travellers, ensuring equal treatment across accommodation types. The objective is to offset tourism-related municipal costs through a simple and clear tax model.

As a new levy, it will require enactment through legislation specifying the conditions for adoption. Tax proceeds will remain with the respective municipality. The tax is expected to be a moderate percentage of accommodation charges, with details to be finalised during drafting.

The Ministry has initiated drafting, and a proposal will be released for public consultation via Lausuntopalvelu.fi. If enacted in 2027, municipalities may implement it from 2028. No pilot project is proposed.

2. Australian Tax Office Updates Transfer Pricing Compliance Approach for Inbound Distribution Arrangements

On 23 April 2026, the Australian Taxation Office (ATO) published an updated Practical Compliance Guideline (PCG) setting out its compliance approach to transfer pricing issues arising in inbound distribution arrangements. The updated PCG builds on PCG 2019/1, which the ATO originally issued in 2019 and which introduced a risk-rating framework for assessing the transfer pricing risk profile of foreign-owned entities distributing goods in Australia. The 2026 update reflects evolving market conditions, updated benchmarking data, and operational lessons learned since the original guideline came into effect.

The ATO assesses the transfer pricing risk of inbound distribution arrangements by comparing the profit outcome—measured as earnings before interest and tax (EBIT) relative to sales—against industry-specific profit markers. Arrangements that fall within the designated “green zone” (low risk) are generally not subject to ATO compliance activity. A new “white zone” has been introduced in the updated PCG, providing a safe harbour for certain taxpayers that meet specified criteria, offering an additional tier of certainty for compliant arrangements. Arrangements falling in the higher-risk “red zone” remain subject to priority review and potential audit.

The updated guidance is of significant relevance to the many multinational groups that distribute goods into Australia through related-party arrangements with foreign manufacturers or principals. Transfer pricing in this context is a perennial area of ATO focus, and the refresh of the compliance framework signals continued scrutiny. MNE groups with inbound distribution arrangements in Australia should review their EBIT margins against the updated profit markers, assess their zone classification, and consider whether contemporaneous transfer pricing documentation adequately supports their pricing outcomes in line with the arm’s length standard.

Source – Australian Taxation Office

Click Here To Read The Full Article

The post [World Tax News] Finland to Introduce Tourist Tax to Boost Local Revenue and More appeared first on Taxmann Blog.

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The Reserve Bank of India (RBI), through a circular dated April 20, 2026, has revised norms on risk management and inter-bank foreign exchange dealings, including withdrawal of an earlier circular dated April 1, 2026.

1. Withdrawal of Earlier Relaxation

• RBI has withdrawn the relaxation granted earlier
• The revised framework introduces stricter controls on FX derivative transactions

2. Prohibition on Related Party Transactions

• Authorised Dealers (ADs) are now restricted from entering into INR-based FX derivative contracts with related parties

3. Permitted Exceptions

Two limited exceptions have been allowed:

• Cancellation or Rollover of Existing Contracts – Existing derivative contracts may be cancelled or rolled over
• Back-to-Back Transactions

1. 1. Permitted with non-related, non-resident users
   2. Must comply with existing RBI guidelines

4. Definition of ‘Related Party’

• The term shall be interpreted as per Ind AS 24 / IAS 24 (Accounting Standards)

5. Legal Framework

• The directions have been issued under Foreign Exchange Management Act (FEMA), 1999
• Applicable with immediate effect
• Subject to any other approvals or permissions required under applicable laws

6. Objective of the Circular

The measure aims to:

• Strengthen prudential risk management
• Prevent conflicts of interest and misuse of derivatives
• Ensure arm’s length transactions in FX markets

7. Conclusion

The revised directions reinforce RBI’s focus on market integrity and risk containment, ensuring that FX derivative transactions remain transparent, compliant, and free from related-party influence.

Click Here To Read The Full Circular

The post RBI Bars INR Forex Derivatives with Related Parties appeared first on Taxmann Blog.

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Case Details: Commissioner vs. Uttam Kumar [2026] 185 taxmann.com 221 (SC)[02-04-2026]

Judiciary and Counsel Details

• Dipankar Datta & Satish Chandra Sharma, JJ.
• Ms Archana Pathak Dave, A.S.G., Mukesh Kumar Maroria, AOR, Garvil Singh, Kamal Digpaul, Ms Harshita Choubey & Padmesh Mishra, Advs. for the Appellant.
• Ms Jagrati Singh, AOR, Shivanshu Bhardwaj, Rajpal, Surendar Kumar, Himanshu Bhardwaj & Raghuvansh Misra, Advs. for the Respondent.

Facts of the Case

In a Constable recruitment, the advertisement clearly stated that the date for the Physical Efficiency & Measurement Test (PE&MT) was final and could not be changed. The candidate, Uttam Kumar, passed the first stage but did not appear on the scheduled PE&MT date, citing illness (fever, cough, body pain, etc.). He later sent representations requesting another chance, but there was no clear evidence that these requests were properly submitted or received.

The Tribunal and High Court earlier allowed him another chance, mainly because his requests were not answered. However, the Supreme Court of India disagreed. It noted that the candidate himself admitted he could move around the day before the test. So, at the very least, he should have gone to the test centre, informed authorities about his condition, and requested rescheduling there. Simply not showing up was not justified.

Supreme Court Held

The Court held that not replying to his representations does not give him a legal right to get a new date. His illness was not serious enough to be treated as an exceptional case. Also, belonging to a backward community cannot be the only reason to give special treatment. Therefore, the Supreme Court cancelled the orders of the Tribunal and High Court and upheld that marking him “ABSENT” was correct.

List of Cases Reviewed

• Order of High Court of delhi in WPC-13553-2025, dated 03-09-2025 (para 12) set aside

The post SC Denies PE&MT Reschedule for Unjustified Absence appeared first on Taxmann Blog.

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Case Details: Jivanbhai Somabhai Patel vs. Deputy Commissioner of Income-tax, CPC, Bengaluru [2026] 185 taxmann.com 517 (Ahmedabad-Trib.)

Judiciary and Counsel Details

• Ms Suchitra Kamble, Judicial Member
• P F Jain, AR for the Appellant.
• Umesh Kumar Agarwal, Sr. D.R. for the Respondent.

Facts of the Case

The assessee, a commission agent registered with the APMC, facilitated the sale of farmers’ agricultural produce to traders at an auction held in the APMC’s open market. While filing the return, the assessee claimed TDS of Rs. 1.48 lakhs, including Rs. 53,000 under Section 194Q. During the processing of the return, the Assessing Officer (AO) allowed TDS of only Rs. 5,777. AO contended that the income corresponding to TDS reflected in Form 26AS in the assessee’s PAN was not included in the assessee’s returned income.

On appeal, the CIT(A) held that the TDS in dispute was deducted by purchasers on the sale of agricultural produce belonging to farmers. The assessee acted only as an APMC commission agent. Since the corresponding income was not assessable in the assessee’s hands despite TDS appearing in his PAN, credit could not be allowed under section 199 read with Rule 37BA(2). The assessee was required to get the TDS corrected in the names of the actual beneficiaries. The matter reached the Ahmedabad Tribunal.

ITAT Held

The Tribunal held that the assessee himself had accepted that the TDS made by the purchasers was not his sales, but those of the agriculturist/farmer. Hence, the TDS had been made wrongly in the PAN of the assessee, and the credit thereof ought not to have been claimed by the assessee in the return.

Therefore, the CIT(A) had rightly concluded that the assessee was at liberty to seek an appropriate remedy in respect of any mismatch in TDS as per the return filed by the deductor. The same cannot be rectified by getting an appropriate correction statement filed by the deductor. On the issue of granting credit for TDS under section 194Q, there was no infirmity in the action of the AO, CPC, and therefore, no interference was needed.

As a result, the assessee’s appeal is dismissed.

The post TDS u/s 194Q Not Creditable if Income Not Assessee’s | ITAT appeared first on Taxmann Blog.

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Case Details: Smt. Zaverben Popatlal Premji Arrogyadham vs. Employees State Insurance Corporation [2026] 185 taxmann.com 227 (Bombay)

Judiciary and Counsel Details

• Jitendra Jain, J.
• S. C. Naidu, Manoj Gujar, T. R. Yadav & Pradeep Kumar for the Appellant.
• Ms Seema Chopda for the Respondent.

Facts of the Case

In the instant case, the appellant trust ran a sanatorium for patients requiring isolation. It provided one-BHK apartments with individual kitchens for occupants, and did not operate any central kitchen or supply food.

A leave and license agreement was executed between KVO Sthanakwasi Jain Mahajan, Mumbai (licensor) and M/s. Manisha Caterers (licensee), permitting the latter to use the premises for its independent catering business. There was no arrangement appointing M/s. Manisha Caterers as a contractor or agent of the appellant, nor was the appellant a party to the catering operations for sanatorium occupants.

A Corporation Inspector surveyed M/s. Manisha Caterers and concluded that it was independently coverable under the ESI Act; accordingly, a separate ESI code was allotted. Subsequently, another Inspector visited the appellant’s premises, noted that a canteen employing seven persons was functioning, and that M/s. Manisha Caterers was complying under its own ESI code. Despite this, he recommended coverage of the appellant under Section 2(12).

Pursuant thereto, an order under Section 45A was passed, clubbing the appellant with M/s. Manisha Caterers on the ground that the canteen was located in the same premises, was incidental or complementary to the sanatorium, and that there existed a nexus between the two.

High Court Held

The High Court observed that the order under Section 45A merely recorded conclusions without furnishing reasons. It reiterated that clubbing of entities requires satisfaction of established tests such as unity of ownership, control and supervision, financial integrality, management, employment, geographical proximity, and functional integrity.

Since neither the Employees’ Insurance Court, Pune nor the respondent had examined or satisfied these parameters, the finding that the appellant and M/s. Manisha Caterers constituted a single establishment was unsustainable.

The Court further noted that M/s. Manisha Caterers had vacated the premises prior to the adjudication by the trial court, indicating lack of due application of mind and that the proceedings were based on mere suspicion. Accordingly, the impugned order passed under Section 45A was quashed and set aside.

List of Cases Referred to

• Saurashtra Trust Karmachari Sangh v. States People (P.) Ltd. 1995 (71) FLR 1034 (para 9).

The post ESI Clubbing Order Quashed for Lack of Integration Tests | HC appeared first on Taxmann Blog.

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Circular No. RBI/CO.DPSS.POLC.No.S56/02.14.003/2026-27, Dated 21.04.2026

The Reserve Bank of India (RBI) has issued the “Digital Payments – E-mandate Framework, 2026”, consolidating all existing instructions on e-mandates for recurring digital transactions.

1. Scope and Applicability

The Directions apply to:

• All Payment System Providers and Participants
• Transactions through:

1. 1. Cards
   2. Prepaid Payment Instruments (PPI)
   3. UPI

• Covers both domestic and cross-border recurring payments

2. Registration of E-Mandate

• Requires one-time validation using Additional Factor of Authentication (AFA)
• Customers must be provided the ability to:

1. 1. Modify the mandate
   2. Withdraw the mandate at any time

3. Authentication Requirements

3.1 First Transaction

• Must be authenticated using AFA

3.2 Subsequent Recurring Transactions

• Can be processed without AFA up to ₹15,000 per transaction

3.3 Higher Limit for Specified Categories

• For transactions such as:

1. 1. Insurance premiums
   2. Mutual fund investments
   3. Credit card bill payments

• AFA not required up to ₹1,00,000 per transaction

4. Customer Protection Measures

The framework mandates:

• Pre-transaction notification at least 24 hours before debit
• Post-transaction notification
• Opt-out facility for customers
• Robust grievance redressal mechanism

5. No Charges to Customers

• Customers shall not be charged any fee for registration or usage of e-mandate facility

6. Objective of the Framework

The Directions aim to:

• Enhance security and user control
• Promote convenience in recurring payments
• Strengthen consumer protection in digital payments

7. Conclusion

The consolidated e-mandate framework provides a balanced approach between convenience and security, ensuring seamless recurring payments while safeguarding customer interests through robust controls and transparency.

Click Here To Read The Full Circular

The post RBI E-Mandate Framework 2026 for Recurring Payments appeared first on Taxmann Blog.

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Case Details: Liberty Square Apartment Owners Association, In re [2026] 185 taxmann.com 477 (AAR-KARNATAKA)

Judiciary and Counsel Details

• Kalyanam Rajesh Rama Rao & Sivakumar S Itagi, Member
• Ms Deepa K Shetty, CA for the Applicant.

Facts of the Case

The applicant, being a Resident Welfare Association (RWA), filed an application before the Authority for Advance Ruling (AAR), seeking a determination on the GST implications and time of supply in respect of corpus/sinking fund collected from its members. It was engaged in managing and administering common areas of a residential complex and collecting monthly maintenance charges for recurring expenditure such as salaries of staff, upkeep of common areas, and utilities. It was further stated that, in addition to maintenance charges, the applicant collected corpus funds for future contingencies and long-term capital expenditure, which were separately accounted for and governed by the bylaws. It contended that the corpus fund was distinct from monthly maintenance charges and sought a ruling on whether such collections constituted ‘consideration’ and whether GST was payable at the time of collection or utilisation. The matter was accordingly placed before the Authority for Advance Ruling (AAR).

AAR Held

The AAR held that corpus fund collected by RWA constitutes ‘consideration’ for a future supply of services within the meaning of Section 2(31) read with Section 7 of the CGST Act and Karnataka GST Act, and is taxable under SAC 9995 in terms of Notification No. 11/2017-Central Tax (Rate), dated 28-06-2017. It held that such corpus/sinking fund amounts are in the nature of advances and not deposits, as they are collected upfront for future supply of services by the association. The Authority further held that, in view of Section 13(2)(a) of the CGST Act and Karnataka GST Act, the time of supply is triggered at the time of receipt of such corpus fund, since it represents an advance towards future taxable supply. It also observed that corpus fund is distinct and independent from monthly maintenance charges, which relate to ongoing services, whereas corpus fund pertains to future capital requirements. Accordingly, it was held that GST is payable at the time of collection itself on corpus/sinking fund contributions.

List of Cases Referred to

• State of West Bengal v. Calcutta Club Ltd. [2019] 110 taxmann.com 47/29 GSTL545/ 76 GST 614 (SC) (para 8).

The post GST on RWA Corpus Fund Payable on Receipt as Advance | AAR appeared first on Taxmann Blog.

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Case Details: Lubrizol Advance Materials India (P.) Ltd. vs. Union of India [2026] 185 taxmann.com 270 (Bombay)

Judiciary and Counsel Details

• G. S. Kulkarni & Aarti Sathe, JJ.
• Bharat Raichandani, Adv. for the Petitioner.
• Ms Jyoti Chavan, Addl. GP & Himanshu Takke, AGP for the Respondent.

Facts of the Case

The petitioner filed a writ petition challenging the rejection of its refund claim. It had entered into agreements with its overseas group entities and provided administrative and sales support services on a principal-to-principal basis. It was submitted that during the service tax regime, the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) had held in its own case that such services were not intermediary services but qualified as export of services. Under the GST regime, it continued to provide identical services under similar contractual arrangements for consideration computed on a cost-plus markup basis, which was received in convertible foreign exchange. It filed a refund application in Form GST RFD-01; however, a show cause notice (SCN) was issued alleging that the services were intermediary services and therefore not export of services. Subsequently, the refund was rejected. The matter was accordingly placed before the High Court.

High Court Held

The High Court held that the impugned order rejecting the refund claim under Section 54 of the CGST Act and Maharashtra GST Act was unsustainable due to failure to properly evaluate the petitioner’s contractual arrangements. The Court observed that the failure to consider relevant submissions and agreements amounted to a violation of the principles of natural justice and vitiated the adjudication process. It further held that a proper opportunity of hearing and reasoned examination of agreements was mandatory before determining the eligibility of a refund under Section 54 of the CGST Act and the corresponding provisions of the Maharashtra GST Act. Accordingly, the Court quashed the order rejecting the refund and remanded the proceedings for de novo consideration, with a direction to pass a fresh order after granting an adequate hearing opportunity.

List of Cases Referred to

• Vistex Asia Pacific (P.) Ltd. v. Union of India [2026] 182 taxmann.com 883/106 GSTL 279 (Bombay) (para 5)
• Sundyne Pumps and Compressors India (P.) Ltd. v. Union of India [2025] 175 taxmann.com 685 (Bombay) (para 5).

The post GST Refund Rejection Set Aside for Ignoring Contracts | HC appeared first on Taxmann Blog.

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Notification No. G.S.R. 300(E) dated 21st April, 2026

Click Here To Read The Full Notification

The post MCA Revises DIR-3 KYC Fees | ₹500 for DIN Updates appeared first on Taxmann Blog.

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Case Details: Principal Commissioner of Income-tax vs. Sunil Devkishan Panwar [2026] 185 taxmann.com 638 (Gujarat)

Judiciary and Counsel Details

• A.S. Supehia & Pranav Trivedi, JJ.
• Karan G Sanghani for the Appellant.

Facts of the Case

The assessee filed his return of income for the relevant assessment year. The Assessing Officer (AO) completed the assessment under section 143(3). Subsequently, based on the information received from the Investigation Wing, a notice under section 148 was issued. The AO made additions to the assessee’s income, contending that the assessee was engaged in bogus purchases and sales of goods.

The matter was carried to the Tribunal, which deleted the additions made by the AO. The Tribunal held that the assessee furnished all the details of purchases and sales. The assessee also furnished the purchase and sale bills, and the VAT was duly paid. The assessee also furnished the sales tax assessment, and the input credit was also allowed in favour of the assessee. There was no adverse material brought on record to substantiate the allegation that the assessee had shown purchases from the impugned party.

The AO made the addition without rejecting the books of account and recasting the trading results. Thus, the assessee had discharged the onus cast upon him. The aggrieved AO filed an appeal to the Gujarat High Court.

High Court Held

The High Court held that the AO made the additions based on the information received from the Investigation Wing. The assessee had contended that the reopening of the assessment was not justified, as it was based on information received from the Investigation Wing. However, no material was supplied to him, and no opportunity for cross-examination was also allowed.

The CIT(A) allowed full relief, accepting the assessee’s contentions. The same was challenged before the Tribunal, and after considering the respective submissions, the Tribunal held that the CIT(A) allowed full relief to the assessee by appreciating the facts in the right perspective. Thus, the High Court held that the CIT(A) deleted the entire addition based on the appreciation of facts and affirmed the order of the Tribunal.

List of Cases Reviewed

• ITO v. Sunil Devkishan Panwar IT Appeal No.61/srt/2024, Dated 28-6-2024 (para 8) Affirmed

The post Bogus Purchase Addition Deleted for Lack of Evidence | HC appeared first on Taxmann Blog.

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