Author: inavatiq

Case Details: State of Karnataka vs. Santhosh Kumar C - [2026] 184 taxmann.com 541 (SC)

Judiciary and Counsel Details

• Vikram Nath & Sandeep Mehta, JJ.

Facts of the Case

In the instant case, the question was placed before the Supreme Court regarding whether the vacancy from selected candidate’s non-joining in 2011 recruitment can be filled from same select list as the Karnataka Recruitment of Gazetted Probationers (Appointment by Competitive Examinations) Rules, 1997, lack waiting list mechanism.

It was noted that under 1997 Rules, a vacancy arising in course of 2011 recruitment process on account of a selected candidate not undergoing mandatory pre-appointment formalities or not reporting for duty could not be claimed, as of right, by candidate immediately next below in order of selection, and such vacancy had to be treated in accordance with governing rules as a vacancy to be filled only through a subsequent recruitment process.

Further, the 1997 Rules did not provide for any reserve list, waiting list, or additional list, nor did they contain any provision enabling State to revert to same list and travel further downward to fill a post left unfilled on account of non-completion of pre-appointment formalities or non-joining by a selected candidate.

Supreme Court Held

The Supreme Court held that the Karnataka Civil Services (Validation of Selection and Appointment of 2011 Batch Gazetted Probationers) Act, 2022, which validated 2011 batch selection and mandated issuance of appointment orders as per KPSC selection list, underscored legislative intent to attach finality to 2011 selection and appointments as made in accordance with KPSC selection list.

Therefore, the High Court was not justified in holding that Rule 11(3) of 1997 Rules had no application to case at hand.

List of Cases Reviewed

• Order of High Court of Karnataka at Bengaluru in Writ Petition No. 24455 of 2023, dated 21.04.2025 (para 22) set aside

List of Cases Referred to

• Shankarsan Dash v. Union of India (1991) 3 SCC 47 (para 9)
• State of Orissa v. Rajkishore Nanda [2010] 6 taxmann.com 137 (SC) (para 9)
• Rakhi Ray v. High Court of Delhi [2010] 2 taxmann.com 1005 (SC) (para 10).

The post No Filling Vacancy from Same Select List Without Waiting List | SC appeared first on Taxmann Blog.

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PR No. 21/2026; Dated: 27.03.2026

1. Background of the Suspension

Earlier, SEBI directed stock exchanges with a commodity derivatives segment to suspend trading in derivative contracts for seven agro commodities for a period of one year. This step was taken as part of regulatory measures to address market concerns.

2. Subsequent Extensions

Following the initial suspension, SEBI extended the restriction multiple times:

• First extension up to December 20, 2023
• Further extended to December 20, 2024
• Then extended to January 31, 2025
• Subsequently extended to March 31, 2025
• Again extended to March 31, 2026

3. Latest Extension

SEBI has now further extended the suspension of trading in derivative contracts for these agro commodities until March 31, 2027.

4. Key Takeaway

The continued extensions indicate SEBI’s cautious approach towards regulating commodity derivatives trading in select agro commodities, ensuring market stability and preventing excessive volatility.

Click Here To Read The Full Press Release

The post SEBI Extends Agro Derivatives Trading Ban to March 2027 appeared first on Taxmann Blog.

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Case Details: Flipkart India (P.) Ltd., In re - [2026] 184 taxmann.com 53 (AAR-TAMILNADU)

Judiciary and Counsel Details

• C. Thiyagarajan & B. Suseel Kumar, Member

Facts of the Case

The applicant proposed to transport goods by road for customers placing orders through electronic commerce operator (ECO) portals. Under the proposed model, sellers hand over goods at a Source Mother Hub, which issues a single consignment note for delivery to the end customer. It retains lien and custody of goods, assumes responsibility for safe delivery, and maintains transit insurance until delivery, while transportation is executed either through its own network or third-party carriers. The end customer is responsible for the transport charges. An advance ruling was sought on whether such activity qualifies as Goods Transport Agency (GTA) services. The matter was accordingly placed before the Authority for Advance Ruling (AAR).

AAR Held

The AAR held that the essential characteristic of a GTA service is the issuance of a consignment note evidencing receipt of goods, transfer of custody, and assumption of responsibility for delivery. It was observed that the applicant satisfies all conditions as it transports goods by road and issues a consignment note while retaining custody and liability till delivery, thereby qualifying as a ‘supply’ under Section 7 of the CGST Act and the Tamil Nadu GST Act. It was held that exemption under Section 11 of the CGST Act and the Tamil Nadu GST Act is applicable to GTA services provided to an unregistered person. It was clarified that customers ordering through ECO portals who are not registered under GST would fall within the scope of the exemption. Consequently, GTA services supplied by the applicant to such unregistered recipients were held to be exempt from GST.

List of Cases Referred to

• Mangalore Chemicals and Fertilisers Limited v. Deputy CCTes 1992 Supp (1) SCC 21 (para 3.10)
• Union of India v. Wood Papers Ltd. (1990) 4 SCC 256 (para 3.20)
• Saravana Perumal, In re [2020] 113 taxmann.com 288 (AAR – KARNATAKA)/[2020] 78 GST 275 (AAR – KARNATAKA)/[2020] 33 GSTL 39 (AAR – KARNATAKA) (para 3.23)
• CCE v. JWC Logistics Pvt. Ltd. 2019 (22) GSTL 237 (Tri-Mum) (para 3.8).

The post GTA Services Exempt if Recipient is Unregistered | AAR appeared first on Taxmann Blog.

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Case Details: Pidilite Industries Ltd. vs. Union of India - [2026] 184 taxmann.com 456 (Bombay)

Judiciary and Counsel Details

• G. S. Kulkarni & Aarti Sathe, JJ.
• Prakash Shah, Sr. Adv. & Mohit Raval, PDS Legal for the Petitioner.
• Ms Jyoti Chavan, Additional Govt. Pleader, Ms Sheetal Malvankar, AGP, Ms Maya Majumdar & Ms Megha Bajoria for the Respondent.

Facts of the Case

The petitioner, a manufacturer of chemical products, duly registered under GST, claimed transitional input tax credit (ITC) through TRAN-1 and TRAN-2 forms. Pursuant to an audit of such transition, a show cause notice (SCN) was issued proposing recovery of ITC along with interest and penalty. It submitted its reply and was granted a hearing; however, it specifically requested copies of verification reports prepared by the authorities in respect of invoice validation. Despite such requests, the verification reports were not furnished. The impugned order nevertheless confirmed the demand and penalty, citing incomplete invoice verification and column-wise discrepancies in the TRAN forms. It was contended that denial of access to relied-upon documents and incomplete verification of invoices vitiated the proceedings as being contrary to principles of natural justice. The matter was accordingly placed before the High Court.

High Court Held

The High Court held that the furnishing of verification reports relied upon by the adjudicating authority was imperative to ensure compliance with principles of natural justice. It observed that denial of such documents, despite specific requests, effectively deprived the petitioner of a meaningful opportunity to contest the allegations. It was held that the adjudication was conducted without complete verification of invoices and without granting adequate opportunity for rectification of discrepancies. It emphasised that a fair hearing necessarily includes access to all material relied upon by the authority in reaching its conclusions. Accordingly, the impugned order was quashed, and the matter was remanded for de novo consideration with directions to furnish the verification reports.

List of Cases Referred to

• Pidilite Industries Ltd. v. Union of India [2025] 170 taxmann.com 135/94 GSTL 17/108 GST 305 (Bombay) (para 3).

The post GST ITC Demand Set Aside for Denial of Fair Hearing | HC appeared first on Taxmann Blog.

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Press Release No. 19/2026, Dated: 25.03.2026

The Securities and Exchange Board of India and Investor Education and Protection Fund Authority will conduct the sixth Niveshak Shivir in Bhubaneswar on March 27, 2026.

1. Event Details

• Venue – Event Square, Jaydev Vihar
• Timings – 10:00 AM to 4:00 PM
• Participants:

1. 1. Bombay Stock Exchange
   2. National Stock Exchange of India
   3. Central Depository Services Limited
   4. National Securities Depository Limited
   5. Registrars & Transfer Agents (RTAs)

2. Key Objectives of the Camp

The Niveshak Shivir aims to assist investors in:

• Transfer of unpaid dividends
• Claiming unclaimed shares and dividends held with IEPFA
• KYC updates and nomination registration
• Resolution of pending investor grievances

3. Why This Matters

• Provides on-ground, one-to-one assistance to investors
• Simplifies recovery of unclaimed financial assets
• Encourages investor awareness and financial inclusion
• Strengthens trust in the capital market ecosystem

4. Takeaway

The initiative is part of SEBI and IEPFA’s continued efforts to empower investors and ensure that rightful owners can reclaim their investments with ease through a guided and structured support platform.

Click Here To Read The Full Press Release

The post SEBI IEPFA to Hold Niveshak Shivir in Bhubaneswar appeared first on Taxmann Blog.

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Circular No. HO/(92)2026-IMD-POD-2/I/7885/2026, Dated: 25.03.2026

The Securities and Exchange Board of India has issued an addendum to its earlier circular on borrowing by mutual funds, deferring the implementation of provisions relating to intraday borrowings.

1. Revised Timeline

• The applicability of intraday borrowing guidelines has been deferred to July 15, 2026
• Earlier timelines have been extended due to operational challenges highlighted by Asset Management Companies (AMCs)

2. Regulatory Basis

The circular has been issued under:

• The SEBI Act, 1992
• The SEBI (Mutual Funds) Regulations, 1996

3. Key Rationale

• AMCs raised concerns regarding system readiness and operational implementation
• SEBI has provided additional time to ensure smooth transition and compliance

4. What This Means

• Mutual funds will get extra time to align systems and processes
• The move supports ease of implementation without disrupting fund operations
• Regulatory intent remains unchanged—better liquidity management and investor protection through controlled borrowing mechanisms

Click Here To Read The Full Circular

The post SEBI Defers Intraday Borrowing Rules for Mutual Funds appeared first on Taxmann Blog.

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Group ESOP arrangements are widely used to align incentives across entities, but their accounting—especially in the subsidiary’s books—often creates confusion. This case-based explanation simplifies how Ind AS 102 applies when a parent grants shares to employees of its subsidiary.

1. Core Issue – Who Recognises the Expense?

Even when:

• The parent company grants shares, and
• The subsidiary has no obligation to settle,

The subsidiary must still recognise employee benefit expense.

1.1 Why?

Because:

• Employees are rendering services to the subsidiary, not the parent
• The benefit (ESOP) is compensation for those services

Hence, expense recognition follows where the services are received, not who settles the award.

2. Classification – Equity-Settled (Not Liability-Based)

Under Ind AS 102:

• The transaction is treated as equity-settled in the subsidiary’s books
• This is because the subsidiary does not have a cash or settlement obligation

Even though shares are issued by the parent, the nature of settlement (equity) drives classification.

3. Accounting Treatment in Subsidiary

3.1 Expense Recognition

• Recognise employee benefit expense over the vesting period
• Based on fair value of ESOPs at grant date

3.2 Corresponding Entry

Instead of liability:

• Recognise Capital Contribution from Parent

4. Step-by-Step Considerations

4.1 Fair Value Measurement

• Determined at grant date
• Based on valuation models (e.g., Black-Scholes)

4.2 Vesting Period Allocation

• Expense spread over vesting period
• Adjusted for expected forfeitures

4.3 Changes in Estimates

• If employee attrition changes:

1. 1. Revise total expense
   2. Adjust cumulative expense prospectively

5. Why Capital Contribution?

• The parent is effectively bearing the cost on behalf of the subsidiary
• This is treated as a deemed capital infusion

Reflects the economic substance:

The subsidiary receives employee services + parent support → hence equity, not liability

6. Key Principle – Substance Over Form

Even though:

• Legal form = Parent issues shares
• Economic reality = Subsidiary receives employee services

Accounting follows substance over form, a fundamental principle in financial reporting.

7. Why This Matters

For professionals dealing with:

• Ind AS implementation
• Audit reviews
• Group financial reporting

This clarity helps:

• Avoid misclassification (liability vs equity)
• Ensure accurate expense recognition
• Maintain compliance with Ind AS 102

8. Takeaway

Group ESOPs are not just a parent-level transaction—they directly impact the subsidiary’s P&L and equity.

Understanding:

• Where the service is received
• How the transaction is classified
• Why capital contribution is recognised

is critical to getting the accounting right.

Click Here To Read The Full Story

The post Accounting for Group ESOPs under Ind AS 102 appeared first on Taxmann Blog.

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Circular no. HO/38/12/12(1)2026-MIRSD-SEC-FATF/I/7933/2026; Dated: 25.03.2026

The Securities and Exchange Board of India has amended its Master Circular for Research Analysts (RAs) and Investment Advisers (IAs) dated February 6, 2026, to expand the scope of professionals eligible to conduct compliance audits.

1. Key Update

• Members of the Institute of Cost Accountants of India are now permitted to conduct annual compliance audits for RAs and IAs
• Cost accountants have been formally recognised as eligible audit professionals alongside existing categories

2. Compliance Requirement

• RAs and IAs must conduct an annual audit of their compliance framework
• The audit must be completed within 6 months from the end of each financial year

3. Significance of the Amendment

• Expands the pool of qualified professionals for compliance audits
• Enhances ease of doing business for intermediaries
• Strengthens regulatory oversight and audit quality through broader professional participation

4. What This Means for Market Participants

• Research Analysts and Investment Advisers now have greater flexibility in appointing auditors
• Cost accountants can play a more active role in financial regulatory compliance and governance
• The move aligns with SEBI’s focus on robust compliance frameworks and accountability

Click Here To Read The Full Circular

The post SEBI Allows Cost Accountants to Audit RAs and IAs appeared first on Taxmann Blog.

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Editorial Team – [2026] 184 taxmann.com 565 (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. Australia Proposes the Exclusion of Tobacco and Gambling Activities from the R&D Tax Incentive

The Treasury Laws Amendment (Delivering an Efficient and Trusted Tax System) Bill 2026 was introduced and received its first reading in the Australian House of Representatives on 25 March 2026. A key proposal under the Bill seeks to amend the Income Tax Assessment Act 1997 (ITAA 1997) to exclude research and development (R&D) activities associated with tobacco and gambling from eligibility under the R&D Tax Incentive.

This exclusion is proposed to apply to income years commencing on or after 1 July 2025. However, an exception has been made for the activities undertaken exclusively for harm minimisation purposes. The scope of the exclusion extends to activities involving tobacco products, nicotine products, and vaping goods, as well as those connected with gambling services, gambling, and similar practices.

Source – Treasury Laws Amendment (Delivering an Efficient and Trusted Tax System) Bill 2026

2. Cyprus Introduces 25% Tax Exemption Incentive for Returning Non-resident Individuals

Cyprus has introduced a new tax incentive granting a 25% exemption to non-resident individuals who return to Cyprus to take up employment or commence a self-employed business. This measure has been enacted through Law No. 17(I) of 2026, published in the Official Gazette on 6 March 2026, and is deemed to have come into force retrospectively from 1 January 2025.

Under this incentive, 25% of annual employment or business income is exempt from tax, subject to a maximum exemption of EUR 25,000 per annum. To be eligible, individuals must have been non-residents for a minimum of seven consecutive years, must have previously qualified as Cyprus tax residents, and must satisfy specified full-time employment abroad conditions.

The employment abroad requirement mandates that the individual must have been employed outside Cyprus by a non-resident employer for at least:

• 36 out of the 84 months immediately preceding the month in which employment or business activities commence in Cyprus, in the case of individuals holding a university degree; and
• 84 months immediately preceding such month, in the case of individuals not holding a university degree.

The exemption is available from the year in which employment or business activity begins in Cyprus and for the subsequent six years, provided such activity commences on or after 1 January 2025 and up to and including 2030. Additionally, the exemption applies only where the annual employment or business income exceeds EUR 30,000.

Source – Official Gazette

Click Here To Read The Full Article

The post [World Tax News] Australia R&D Tax Changes and Global Updates appeared first on Taxmann Blog.

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Press Release; Dated: 25.03.2026

The International Financial Services Centres Authority has granted recognition to India International Bullion Exchange Limited under the Securities Contracts (Regulation) Act, 1956, read with the IFSCA Act and the IFSCA (Bullion Market) Regulations, 2025.

1. Key Approval

• IIBX is authorised to function as:

1. 1. Bullion Exchange, and
   2. Bullion Clearing Corporation

• The recognition is applicable within the GIFT IFSC

2. Market Infrastructure Status

• IIBX has been designated as a Market Infrastructure Institution (MII)
• This designation reflects its systemic importance in the IFSC ecosystem
• It will operate under the regulatory oversight of IFSCA

3. Regulatory Significance

• Strengthens the bullion trading ecosystem in IFSC
• Enables integrated trading and clearing infrastructure
• Enhances transparency, efficiency, and global competitiveness

4. Bigger Picture

This move supports India’s ambition to position GIFT IFSC as a global hub for bullion trading, while ensuring robust regulatory supervision and market integrity.

Click Here To Read The Full Press Release

The post IFSCA Grants QCCP Status to IIBX in GIFT IFSC appeared first on Taxmann Blog.

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