Author: inavatiq

Circular No. A.P. (DIR Series) Circular No. 20, Dated 16.01.2026

1. Introduction

Reserve Bank of India (RBI) has notified the Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026, following a comprehensive review of the existing regulatory framework under the Foreign Exchange Management Act, 1999.

2. Objective Of The New Regulations

The revised regulations aim to promote ease of doing business in cross-border trade by simplifying procedures and reducing compliance burdens, with a particular focus on small exporters and importers.

3. Empowerment Of Authorised Dealers

Under the new framework, authorised dealers have been empowered with greater operational flexibility to facilitate faster processing and more efficient handling of export and import transactions, improving service delivery to trade participants.

4. Supersession Of Existing Directions

The 2026 Regulations will supersede the existing master directions and circulars issued under FEMA relating to export and import of goods and services, ensuring a consolidated and updated regulatory structure.

5. Conclusion

Effective from October 1, 2026, the new FEMA Export and Import Regulations mark a significant step towards modernising India’s foreign exchange regime. The revised framework is expected to enhance compliance clarity, operational efficiency, and support growth in international trade.

Click Here To Read The Full Circular 

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Judiciary and Counsel Details

• Shekhar B. Saraf & Manjive Shukla, JJ.
• Surangama Sharma & Jagriti Vashisht for the Petitioner.

Facts of the Case

The petitioner challenged the action of the respondent authorities relating to the detention of its goods and vehicle, along with the consequential order passed under Section 129(3) of the CGST Act. The petitioner contended that it was the owner of the goods and, therefore, the goods were liable to be released in accordance with Section 129(1)(a) of the CGST Act. However, the authorities proceeded to compute tax and penalty under section 129(1)(b). It was further argued that the issue was squarely covered by earlier decisions of the Allahabad High Court, particularly in Halder Enterprises v. State of U.P., wherein it was held that in cases where the owner of goods comes forward, release must be governed by Section 129(1)(a).

High Court Held

The High Court, upon examining the record and the precedents relied upon, held that there was no justification to take a view different from that already settled in Halder Enterprises. It was observed that since the petitioner was the owner of the goods, the release ought to have been governed by Section 129(1)(a) of the CGST Act. Accordingly, the impugned order passed under Section 129(1)(b) was quashed and set aside, and the respondent authorities were directed to re-compute and release the goods in terms of Section 129(1)(a) on the basis of the valuation declared in the invoice, within the stipulated time.

List of Cases Reviewed

• Halder Enterprises v. State of U.P. [2023] 157 taxmann.com 231 (Allahabad)/[2024] 101 GST 313 (Allahabad)/[2024] 80 GSTL 357 (Allahabad) (Para 7) followed

List of Cases Referred to

• Halder Enterprises v. State of U.P. [2023] 157 taxmann.com 231 (Allahabad)/[2024] 101 GST 313 (Allahabad)/[2024] 80 GSTL 357 (Allahabad) (para 5)
• S.K. Trading Co. v. Additional Commissioner Grade 2 (Appeal) [2023] 150 taxmann.com 102 (Allahabad)/[2023] 97 GST 1110 (Allahabad)/[2023] 74 GSTL 50 (Allahabad) (para 5).

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Notification no. FEMA 23(R)/2026-RB; dated: 13.01.2026

The RBI has notified the Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026. The Regulations lay down norms relating to declaration of exports, the manner of receipt and payment, the time period for realization of exports, & set-off of export receivables against import payables. Further, it prescribes norms relating to the time period for making import payments, the import of gold and silver, & merchanting trade transactions. These regulations shall come into force w.e.f October 1, 2026.

The key provisions of the regulations include the following:

1. Declaration of Exports

An exporter of goods must furnish to the specified authority a declaration in the Export Declaration Form (EDF), specifying the amount representing the full export value of the goods at the time of export.
Where goods are exported through an Electronic Data Interchange (EDI) port, the Export Declaration Form (EDF) shall be deemed to have been submitted as part of the shipping bill.

Further, a traveller carrying personal effects, whether accompanied or unaccompanied, from India shall not be treated as an exporter for the purposes of these Regulations.

1.1 Time Limit for furnishing of Export Declaration Form to the specified authority

An exporter of services must furnish to the specified authority a declaration in the Export Declaration Form (EDF), specifying the amount representing the full export value of services, within 30 days from the end of the month in which the invoice for services is raised, subject to the following conditions:

(a) The exporter of services who has exported services to one or more recipients a month may submit a single EDF for all such exports.
(b) The exporter of services other than software may submit an EDF on or before the date of receipt of payment;
(c) The Authorised Dealer may, on a request from the exporter citing reasons for delay, extend the period for submission of EDF after satisfying itself about the reasonableness of the request.
(d) In the case of a non-EDI port for export of goods, or where the specified authority for export of services is other than an Authorised Dealer, the duly authenticated EDF must be forwarded by the specified authority to the respective Authorised Dealer.

2. Manner of Receipt and Payment

The receipts and payments for export and import of goods and services must be in the manner specified in the Foreign Exchange Management (Manner of Receipt and Payment) Regulations, 2023, as amended from time to time.

2.1 Authorised Dealer must make credit or debit to account of exporter/importer only after verifying genuineness

An authorised dealer must make a credit or debit to the account of an exporter or an importer for receipt of export proceeds or payments for import only after satisfying itself about genuineness of the transaction. Further, the AD must simultaneously close or update the relevant entry in the Export Data Processing and Monitoring System (EDPMS) or the Import Data Processing and Monitoring System (IDPMS).

3. Time Period for realisation of export proceeds

Under the extant norms, it is obligatory on the part of the exporter to realise and repatriate the full value of goods/software/services to India within 15 months from the date of export.
Under these Regulations, the amount representing the full export value (or reduced export value) of goods and services must be realised and repatriated by the exporter within the period as specified below:

(a) 15 months from the date of shipment in case of goods (other than goods exported to a warehouse outside India) and from the date of invoice in case of services;
(b) 15 months from the date of sale of goods from the warehouse in case of goods exported to a warehouse outside India;
(c) As per the payment terms of the contract, in case of project exports

Click Here To Read The Full Notification 

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PR No. 2025-2026/1926; Dated: 14.01.2026

1. Introduction

Reserve Bank of India (RBI) has recognised the Foreign Exchange Dealers’ Association of India (FEDAI) as a Self-Regulatory Organisation (SRO) for all authorised dealers under its Omnibus framework for SROs.

2. Recognition Under Omnibus SRO Framework

The recognition brings FEDAI within RBI’s broader Omnibus framework for SROs, aimed at strengthening market discipline, transparency, and self-regulation across regulated entities involved in foreign exchange transactions.

3. Scope Of FEDAI’s Role

As an SRO, FEDAI will play a key role in setting standards, promoting best practices, and ensuring compliance among authorised dealers operating in the foreign exchange market, subject to RBI’s overall regulatory oversight.

4. Alignment And Membership Expansion

RBI has granted FEDAI a period of one year to align its governance and operational framework with the Omnibus SRO requirements. During this period, FEDAI must also take steps to extend its membership to cover all categories of authorised dealers.

5. Conclusion

The recognition of FEDAI as an SRO marks a significant step in strengthening self-regulation in India’s foreign exchange market. By expanding its governance framework and membership base, FEDAI is expected to enhance consistency, accountability, and market integrity among authorised dealers.

Click Here To Read The Full Press Release 

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Case Details: Vinod Narayan Kachave vs. Presiding Officer (ICC) - [2025] 181 taxmann.com 527 (HC - Bombay)

Judiciary and Counsel Details

• Sandeep V. Marne, J.
• Ms. Sana Raees Khan, Juhi Kadu & Ms. Sanskriti Yagnik for the Petitioner.

Facts of the Case

In the instant case, the petitioner, an employee of respondent-employer, was proceeded against on a complaint by a female colleague alleging three incidents:

(i) petitioner commented on complainant’s hair and sang a song relating to her hair;

(ii) petitioner made remarks about a male colleague’s private parts in a common forum where female employees were present;

(iii) a separate allegation against complainant’s reporting manager (a female) that she checked complainant out and discussed her attire with male colleagues.

The Internal Complaints Committee (ICC) issued an adverse finding, recording that serious allegations were confirmed by multiple witnesses and that the petitioner was reluctant to accept his behaviour as unprofessional.
The petitioner filed an appeal under Section 18 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, before the Industrial Court, which was dismissed. Thereafter, an appeal was made before the High Court.

It was noted that even if three incidents recorded by the ICC were held to be proved, conduct attributed to Petitioner (particularly Incidents 1 and 2) could not be said to amount to ‘sexual harassment’ to the complainant, and the third incident did not pertain to the petitioner.

High Court Held

The High Court held that the ICC report was vague as it was drawn without discussing evidence on record, and most importantly, the ICC had not considered the issue of whether the allegations levelled against the petitioner in the first two incidents really constituted sexual harassment to the complainant. Therefore, the impugned judgment and order passed by the Industrial Court were indefensible and liable to be set aside.

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Case Details: Principal Commissioner of Income-tax Central vs. Priya Blue Industries (P.) Ltd. [2025] 181 taxmann.com 745 (Gujarat)

Judiciary and Counsel Details

• Bhargav D. Karia & Pranav Trivedi, JJ.
• Varun K.Patel, Sr. Standing Counsel for the Appellant.

Facts of the Case

The assessee was covered in a search operation. During the search, the Assessing Officer (AO) found undated cheques from the assessee. In response, the assessee submitted that no cash loan was given by any of the assessee of the group to the companies whose cheques in question were found during the search.

The assessee, in the normal course of its business and on account of a mutual understanding with the parties involved, had taken cheques that were not required to be deposited. However, AO made additions to the assessee’s income, contending that the undated cheques were issued in lieu of unaccounted cash loans.

The matter reached the Gujarat High Court.

High Court Held

The High Court held that the assessee submitted that it had taken the cheques from the parties in question, which were not required to be deposited. The assessee had discharged its onus of proving the identity and genuineness of the transactions. The assessee also demonstrated that the cheques in question were received in the normal course of business and that no cash loan was involved in the transaction.

During the search operation, no incriminating evidence was found to support the contention that the assessee had given any cash loan. Thus, the AO made the entire addition based on a presumption. Further, no cash trail or loose papers were found to support the presumption drawn by the AO. The cheques found during the search were also undated, and the AO did not make any inquiries of the parties who issued them.

AO made additions solely on the basis of presumptions and surmises, not on any evidence. Thus, the AO’s additions were deleted.

List of Cases Reviewed

• Balasinor Road Transport Co-Op. Society Ltd. v. ITO [IT Appeal No. 39/Ahd/2022, dated 28.06.2024] (para 4.2) affirmed

The post Unexplained Investment Addition Deleted For Lack Of Evidence | HC appeared first on Taxmann Blog.

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Editorial Team 

Global Financial Insights is a weekly feature for the Accounts and Audit Module subscribers of Taxmann.com. It provides you with the latest updates on financial reporting and auditing practices from across the globe. Here is this week’s financial update:-

1. ASIC proposes updates to guidance on financial reporting and audit relief by issuing Regulatory Guide 43

The Australian Securities and Investments Commission (ASIC) has proposed updates to its existing guidance on financial reporting and audit relief. The update aims to provide greater clarity and consistency in the application of relief measures by entities and auditors. The proposed update is issued under Regulatory Guide 43, Financial reports and audit relief.

According to ASIC, the proposed updates are intended to ensure the currency and clarity of guidance on ASIC’s approach to granting relief from the financial record-keeping, financial reporting, and audit requirements. Thus, the revised guidance seeks to clarify the circumstances under which financial reporting and audit relief may be available and the expectations placed on preparers, directors, and auditors when such relief is applied.

ASIC emphasised that the proposed changes are designed to support high-quality financial reporting, while ensuring that relief measures do not compromise transparency, investor protection, or audit integrity. The regulator highlighted the continued importance of professional judgment, adequate disclosures, and compliance with core accounting and auditing standards.

It is important to note that ASIC proposes to withdraw Regulatory Guide 29 (RG 29) after the updated Regulatory Guide 43 (RG 43) is published.

Source- Australian Securities and Investments Commission

2. IESBA launches firm culture and governance viewpoints as it begins Asia outreach with a focus on emerging markets

The International Ethics Standards Board for Accountants (IESBA) has launched a new series of “Firm Culture and Governance Viewpoints”, marking a significant step in its efforts to strengthen ethical behaviour, accountability, and governance within audit and professional services firms. The initiative was formally introduced as part of IESBA’s outreach activities in Asia.
The newly released viewpoints are intended to stimulate dialogue among firms, regulators, and stakeholders on how organizational culture and governance structures influence ethical decision-making and audit quality. The publication highlights the growing expectation that firm leadership plays a central role in embedding ethical values, professional scepticism, and public-interest responsibility throughout their organizations.

According to IESBA, the viewpoints focus on practical considerations relating to tone at the top, leadership accountability, incentive structures, and governance mechanisms, emphasizing that a strong ethical culture cannot be achieved through compliance alone but requires sustained commitment from senior management and those charged with governance. The “Firm Culture and Governance Viewpoints” form part of IESBA’s wider strategic focus on enhancing trust in the accountancy profession and reinforcing the profession’s role in serving the public interest.

Source- International Ethics Standards Board for Accountants

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PR No. 2025-2026/1925; Dated: 14.01.2026

1. Introduction

Reserve Bank of India (RBI) has issued draft amendment directions on the computation of Net Open Position (NOP) and the calculation of capital charge for foreign exchange (FX) risk, inviting public comments.

2. Objective Of The Draft Directions

The draft aims to strengthen the prudential framework for managing FX risk by ensuring consistent and comprehensive computation of net open positions. It seeks to align capital adequacy with the actual risk exposure arising from foreign exchange fluctuations.

3. Computation At Group And Consolidated Level

Under the proposed framework, banks are required to compute their net open positions and maintain capital charge for FX risk not only at the standalone level but also at the group or consolidated level, enhancing overall risk oversight.

4. Continuous Capital Requirement

The draft directions mandate that banks must meet capital requirements for foreign exchange risk on a continuous basis. This means compliance must be ensured at the close of each business day, rather than at periodic reporting intervals.

5. Conclusion

The proposed directions reflect RBI’s focus on strengthening risk management practices in the banking sector. Stakeholders may submit comments on the draft by February 3, 2026, after which the final framework is expected to be notified.

Click Here To Read The Full Press Release 

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Case Details: BirlaNu Ltd. vs. Union of India [2026] 182 taxmann.com 297 (Telangana) 

Judiciary and Counsel Details

• ApareshKumar Singh, CJ.
• G.M. Mohiuddin, J.
• Sparsh Bhargava, Learned Counsel and Smt. Shireen Sethna Baria for the Petitioner.
• Bokaro Sapna Reddy, Standing Counsel, B.Mukherjee, learned counsel and N.Bhujanga Rao, Deputy Solicitor General for the Respondent.

Facts of the Case

The petitioner challenged the validity of Rule 39(1)(a) of the CGST Rules and consequential proceedings initiated by the Department of Revenue. It was observed that the petitioner had accumulated Input Tax Credit (ITC) and distributed it in the last month of the year, contrary to the said rule, which mandates that credit available for distribution in a month shall be distributed in the same month. It was submitted that all particulars of ITC distribution were disclosed in periodical returns, rendering the invocation of extended limitation under Section 74 legally untenable. The matter was accordingly placed before the High Court.

High Court Held

The High Court held that Rule 39(1)(a) mandating distribution of ITC within the same month was ultra vires Section 20 of the CGST Act and the Telangana GST Act. It was observed that the inflexible requirement imposed by the rule could deny legitimately accrued ITC. The Court held that the show-cause notice issued was beyond the normal limitation period under Section 73, and the Department could not invoke an extended limitation under Section 74, as there was no suppression, misstatement, or fraud; all relevant ITC distributions were disclosed and available to the Department. Therefore, the final audit report, show-cause notice, and all consequential proceedings were set aside, allowing the petitioner to claim any amounts deposited in connection with the impugned proceedings.

List of Cases Referred to

• Lakshmi Rattan Engineering Works Ltd v. CST AIR 1968 SC 488 (para 13)
• STO v. K. I. Abraham [1967] 20 STC 367 (para 14)
• Global Energy Ltd v. Central Electricity Regulatory Commission (2009) 15 SCC 570 (para 15)
• Kirloskar Brothers Ltd v. State of Jharkhand [W.P. (T) No. 3944 of 2022, dated 26-4-2023] (para 17)
• Bharat Barrel and Drum Manufacturing Company Ltd v. ESI Corporation (1971) 2 SCC 860 (para 17)
• Pushpam Pharmaceuticals Company v. CCE 1995 Supp (3) SCC 462 (para 25).

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Case Details: Aggarwal Hotels (P.) Ltd. vs. Assistant Labour Commissioner [2025] 181 taxmann.com 247 (HC - Delhi)

Judiciary and Counsel Details

• Ms. Chandrasekharan Sudha, J.
• Anil K. Hajelay, Adv. for the Petitioner.
• Vinay Singh & Ms. Sangita Singh, Advs. for the Respondent.

Facts of the Case

In the instant case, the petitioner was involved in the hospitality business and had two hotels and a restaurant. Respondent No. 2, claiming to be a registered trade union, submitted an application before the petitioner seeking a declaration of seven of its office bearers as ‘protected workmen’.

The petitioner sent a reply to respondent No. 2, inter alia, stating that the total strength of the petitioner was around 80 only and the maximum number of workmen who could be granted protection could not exceed five.

It was also informed that five of the persons mentioned in their application were suspended for acts of misconduct, and that disciplinary proceedings were pending and in progress. However, respondent No. 2 filed an application before the Assistant Labour Commissioner seeking a declaration that the same seven office bearers be declared protected workmen.

High Court Held

The Assistant Labour Commissioner declared all seven workmen mentioned in the application by respondent No. 2 as protected workmen. Thereafter, the petitioner filed a writ petition challenging the said order.
The High Court held that since disciplinary proceedings were pending against five of the seven workmen proposed for recognition as protected workmen, the petitioner was well within its right to decline recognition to such workmen.

Further, the High Court held that the Assistant Labour Commissioner erred in holding that merely because an employer-employee relationship existed, management was bound to grant protected status to workmen named in the application. Therefore, the impugned order was to be set aside

List of Cases Reviewed

• HLL Lifecare Ltd. v. Hindustan Latex Labour Union (AITUC) [2011] 11 taxmann.com 536 (Kerala) (para 11) followed

List of Cases Referred to

• HLL Lifecare Ltd. v. Hindustan Latex Labour Union (AITUC) [2011] 11 taxmann.com 536 (Kerala) (para 10).

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