Author: inavatiq

Editorial Team – [2026] 186 taxmann.com 632 (Article)

Global IDT Insights provides a weekly snippet of tax news specifically related to Indirect Taxes from around the globe.

1. South Korea Announces Domestic Tax Refund for Cruise Tourists

The Korean Customs Services has announced that, effective from 06-04-2026, cruise tourists visiting Korea are eligible to receive Value-added tax (VAT) refunds and individual consumption tax refunds for the goods purchased from downtown duty-free shops.

The domestic tax refund system applicable to cruise tourists is discussed below:

(a) Domestic Tax Refund System – The domestic tax refund system is described as a system that refunds domestic taxes included in the purchase amount through customs confirmation of export when a foreigner purchases goods from downtown duty-free shop and departs the country.

(b) Issues Faced by Cruise Tourists – Although the domestic tax refund system already existed in Korea, but it was based on immigration screening data by the Ministry of Justice regarding foreign tourists. Since cruise tourists undergo separate entry procedures different from those of applicable to regular tourists, they faced difficulties in using refund systems during their short stays in the country.

To solve this issue, measures have been enabled for cruise tourists to use immediate refunds and city refunds by linking their own port entry report data and passenger manifests with the refund system.

(c) Overview of Domestic Tax Refund System – The domestic tax refund system in South Korea allows foreign tourists to obtain refunds of domestic taxes included in the purchase price of goods bought from designated duty-free shops, subject to prescribed refund procedures and purchase limits.

Immediate refunds are available directly at designated duty-free shops at the time of purchase. Under this method, goods are purchased at prices excluding tax. The facility is available where the value of a single purchase is less than KRW 1 million and the total purchase amount does not exceed KRW 5 million.

Under the city-centre refund system, tourists may first purchase the goods and subsequently claim a refund at designated refund counters located in city centres. In such cases, the buyer is required to secure an amount equivalent to the refundable tax in advance. This facility is available for purchases of up to KRW 6 million per transaction.

Refunds may also be claimed at refund counters located inside airports or seaports at the time of departure after purchase of goods. No purchase limit has been prescribed for this refund method.

(d) Designated Duty-Free Shops – By the end of 2025, approximately 23,000 sales outlets, including department stores and cosmetic shops, had been designated as duty-free shops.

(e) Verification of Eligibility for Domestic Tax Refunds – Tax refund operators can verify eligibility for domestic tax refunds through data from the Korean customs service.

With the implementation of this measure, cruise tourists will be able to receive domestic tax refunds more conveniently. This is because the waiting time for customs export verification is shortened.

Source – Korea Customs Service Press Release

2. Sri Lanka Withdraws Zero-Rated VAT Treatment on Fabric Imports

Sri Lanka has revised the VAT treatment applicable to fabric imports and supplies with effect from 01-04-2026. The changes follow the rescission of the earlier notifications under which fabric imports were subject to VAT at the zero rate, and also remove the CESS levy previously imposed on specified fabric imports.

The revised treatment of fabric imports has been discussed below:

(a) Fabric Imports – Importation of fabric is liable to VAT at 18% w.e.f. from 01-04-2026.

(b) Local Supply of Fabric – The local supply of fabric is also liable to VAT at 18% from the same date.

(c) CESS-Related Exemption – Supplies of fabric imported prior to 01-04-2026 and subject to CESS levy at importation remain exempt from VAT, subject to maintenance of proper and separate records and documentation.

Source – Official Notice

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Case Details: New India Assurance Company Ltd. vs. Smt. Jamuna Kanwar [2026] 186 taxmann.com 81 (HC-Rajasthan)

Judiciary and Counsel Details

• Sandeep Shah, J.
• Jagdish Vyas & Shyam Charan for the Appellant.
• Sanjeev Beniwal for the Respondent.

Facts of the Case

In the instant case, the Claimant-widow filed a claim under the Workmen’s Compensation Act, stating that her husband was employed as a driver by the employer-owner to drive a tempo, met with an accident, and died of injuries.

The Employer admitted an employer-employee relationship, death in an accident, and a salary of Rs. 4,000 per month, and stated the vehicle was duly insured, shifting liability to the insurer. The appellant-insurance company denied employment and accident, disputed stated income as exaggerated, and objected that the deceased did not hold a valid driving licence for the vehicle, disclaiming liability for breach of policy conditions.

The Commissioner framed issues on relationship, quantum, and liability, allowed the claim, and awarded compensation, directing payment within 60 days, failing which interest at 12% per annum would apply.

It was noted that since the unladen weight of the tempo in question was only 1180 kilograms, which was far below the statutory limit of 7500 kilograms prescribed for a vehicle to fall within the category of ‘Light Motor Vehicle’, said tempo clearly qualified as a ‘Light Motor Vehicle’.

Further, it was noted that since the deceased’s license specifically mentioned entitlement to drive a tractor, such a license must be treated as a license to drive a ‘Light Motor Vehicle’.

High Court Held

The High Court held that since the claimant consistently stated that the deceased was earning Rs. 4,000 per month. This assertion was reiterated in her examination-in-chief, and the employer himself appeared in the witness box and categorically admitted that he was paying Rs. 4,000 per month to the deceased.

Further, the High Court held that the Insurance Company had failed to prove anything contrary to the claimant’s stand, and, accordingly, the Commissioner had rightly assessed the salary of the deceased at Rs. 4,000 per month. Thus, the objection raised by the Insurance Company in this regard was to be rejected.

List of Cases Reviewed

• New India Assurance Co. Ltd. v. Harshadbhai Amrutbhai Modhiya 2006 taxmann.com 2369 (SC)/AIR 2006 SC 1926 (para 15) followed

List of Cases Referred to

• New India Assurance Co. Ltd. v. Harshadbhai Amrutbhai Modhiya 2006 taxmann.com 2369 (SC) (para 5)
• Oriental Insurance Co. v. Zahirulnisha (2008) 12 SCC 385 (para 7)
• Beli Ram v. Rajendra Kumar [2020] 9 taxmann.com 1301 (SC) (para 7)
• Oriental Insurance Co. v. Mastana (2006) 2 SCC 261 (para 8)
• New India Insurance Co. v. Smt. Pappu Devi [S.B. Civil Misc. Appeal No. 1142 of 2016, dated 12-8-2024] (para 9)
• Bajaj Allianz General Insurance Co. Ltd. v. Rambha Devi (2025) 3 SCC 95 (para 12)
• Mukund Dewangan v. Oriental Ins.Co. Ltd (2016) 4 SCC 298 (para 24)
• HDFC Ergo General Insurance Company v. Master Sonu [S.B. Misc. Appeal No. 4635 of 2015] (para 24).

The post Insurance Company Liable as Tempo Qualified as LMV and Driver Held Valid Licence | HC appeared first on Taxmann Blog.

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1. Facts

XYZ Limited, a company operating in the FMCG sector, reported significant growth in revenue during the last quarter of the financial year. A substantial portion of the sales was recorded in the final month through bulk dispatches to distributors and dealers under special incentive schemes. The schemes included:

• higher trade discounts linked to sales targets,
• extended credit periods,
• volume-based rebates, and
• rights to return unsold or near-expiry goods.

Management recognised the entire sales value as revenue at year-end and created only a minimal provision towards sales returns and discounts. The basis for estimating such provisions was primarily prior-year averages, despite a significant increase in year-end dispatches and revised sales schemes during the current year.

During the audit, the auditor observed:

• unusually high sales recorded near year-end;
• substantial post year-end sales returns and credit notes;
• inventory lying unsold with distributors;
• increased promotional schemes introduced in the last quarter; and
• pressure on sales teams to achieve annual targets.

Management argued that the sales were valid dispatches made before year-end and that the existing provision methodology had been consistently followed in earlier years.

Whether revenue recognised at year-end appropriately reflects expected sales returns and discounts? Whether the provision created by the company is adequate in accordance with the applicable financial reporting framework?

2. Relevant Provisions

Ind AS 115, Revenue from Contracts with Customers

Para 51. An amount of consideration can vary because of discounts, rebates, refunds, credits, price concessions, incentives, performance bonuses, or other similar items. The promised consideration can also vary if an entity’s entitlement to the consideration is contingent on the occurrence or non-occurrence of a future event. For example, an amount of consideration would be variable if either a product was sold with a right of return or a fixed amount is promised as a performance bonus on achievement of a specified milestone.

Para 53. An entity shall estimate an amount of variable consideration by using either of the following methods, depending on which method the entity expects to better predict the amount of consideration to which it will be entitled:

(a) The expected value—the expected value is the sum of probability-weighted amounts in a range of possible consideration amounts. An expected value may be an appropriate estimate of the amount of variable consideration if an entity has a large number of contracts with similar characteristics.

(b) The most likely amount—the most likely amount is the single most likely amount in a range of possible consideration amounts (i.e. the single most likely outcome of the contract). The most likely amount may be an appropriate estimate of the amount of variable consideration if the contract has only two possible outcomes (for example, an entity either achieves a performance bonus or does not).

Para 55. An entity shall recognise a refund liability if the entity receives consideration from a customer and expects to refund some or all of that consideration to the customer. A refund liability is measured at the amount of consideration received (or receivable) for which the entity does not expect to be entitled (i.e. amounts not included in the transaction price). The refund liability (and corresponding change in the transaction price and, therefore, the contract liability) shall be updated at the end of each reporting period for changes in circumstances. To account for a refund liability relating to a sale with a right of return, an entity shall apply the guidance in paragraphs B20-B27.

Para 56. An entity shall include in the transaction price some or all of an amount of variable consideration estimated in accordance with paragraph 53 only to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue recognised will not occur when the uncertainty associated with the variable consideration is subsequently resolved.

Para 57. In assessing whether it is highly probable that a significant reversal in the amount of cumulative revenue recognised will not occur once the uncertainty related to the variable consideration is subsequently resolved, an entity shall consider both the likelihood and the magnitude of the revenue reversal. Factors that could increase the likelihood or the magnitude of a revenue reversal include, but are not limited to, any of the following:

(a) the amount of consideration is highly susceptible to factors outside the entity’s influence. Those factors may include volatility in a market, the judgment or actions of third parties, weather conditions and a high risk of obsolescence of the promised good or service.

(b) the uncertainty about the amount of consideration is not expected to be resolved for a long period of time.

(c) the entity’s experience (or other evidence) with similar types of contracts is limited, or that experience (or other evidence) has limited predictive value.

(d) the entity has a practice of either offering a broad range of price concessions or changing the payment terms and conditions of similar contracts in similar circumstances.

(e) the contract has a large number and broad range of possible consideration amounts.

Para 59. At the end of each reporting period, an entity shall update the estimated transaction price (including updating its assessment of whether an estimate of variable consideration is constrained) to represent faithfully the circumstances present at the end of the reporting period and the changes in circumstances during the reporting period. The entity shall account for changes in the transaction price in accordance with paragraphs 87-90.

2.1 Sale with a Right of Return

Para B20. In some contracts, an entity transfers control of a product to a customer and also grants the customer the right to return the product for various reasons (such as dissatisfaction with the product) and receive any combination of the following:

(a) a full or partial refund of any consideration paid;

(b) a credit that can be applied against amounts owed, or that will be owed, to the entity; and

(c) another product in exchange.

Para B20AA. In some contracts, an entity transfers control of a product to a customer with an unconditional right of return. In such cases, the recognition of revenue shall be as per the substance of the arrangement. Where the substance is that of a consignment sale, the entity shall account for such a contract as per the provisions of paragraph B77 of this Appendix. In other cases, the accounting for contracts with customers shall be as per paragraphs B21-B27.

Para B21. To account for the transfer of products with a right of return (and for some services that are provided subject to a refund), an entity shall recognise all of the following:

(a) revenue for the transferred products in the amount of consideration to which the entity expects to be entitled (therefore, revenue would not be recognised for the products expected to be returned);

(b) a refund liability; and

(c) an asset (and corresponding adjustment to cost of sales) for its right to recover products from customers on settling the refund liability.

Para B22. An entity’s promise to stand ready to accept a returned product during the return period shall not be accounted for as a performance obligation in addition to the obligation to provide a refund.

Para B23. An entity shall apply the requirements in paragraphs 47-72 (including the requirements for constraining estimates of variable consideration in paragraphs 56-58) to determine the amount of consideration to which the entity expects to be entitled (i.e. excluding the products expected to be returned). For any amounts received (or receivable) for which an entity does not expect to be entitled, the entity shall not recognise revenue when it transfers products to customers but shall recognise those amounts received (or receivable) as a refund liability. Subsequently, at the end of each reporting period, the entity shall update its assessment of amounts for which it expects to be entitled in exchange for the transferred products and make a corresponding change to the transaction price and, therefore, in the amount of revenue recognised.

Para B24. An entity shall update the measurement of the refund liability at the end of each reporting period for changes in expectations about the amount of refunds. An entity shall recognise corresponding adjustments as revenue (or reductions of revenue).

Para B25. An asset recognised for an entity’s right to recover products from a customer on settling a refund liability shall initially be measured by reference to the former carrying amount of the product (for example, inventory) less any expected costs to recover those products (including potential decreases in the value to the entity of returned products). At the end of each reporting period, an entity shall update the measurement of the asset arising from changes in expectations about products to be returned. An entity shall present the asset separately from the refund liability.

Para B26. Exchanges by customers of one product for another of the same type, quality, condition and price (for example, one colour or size for another) are not considered returns for the purposes of applying this Standard.

Para B27. Contracts in which a customer may return a defective product in exchange for a functioning product shall be evaluated in accordance with the guidance on warranties in paragraphs B28-B33.

SA 240, The Auditor’s Responsibilities Relating to Fraud in an Audit of Financial Statements

Para 26. When identifying and assessing the risks of material misstatement due to fraud, the auditor shall, based on a presumption that there are risks of fraud in revenue recognition, evaluate which types of revenue, revenue transactions or assertions give rise to such risks. Paragraph 47 specifies the documentation required when the auditor concludes that the presumption is not applicable in the circumstances of the engagement and, accordingly, has not identified revenue recognition as a risk of material misstatement due to fraud.

Para A28. Material misstatement due to fraudulent financial reporting relating to revenue recognition often results from an overstatement of revenues through, for example, premature revenue recognition or recording fictitious revenues. It may result also from an understatement of revenues through, for example, improperly shifting revenues to a later period.

Para A29. The risks of fraud in revenue recognition may be greater in some entities than others. For example, there may be pressures or incentives on management to commit fraudulent financial reporting through inappropriate revenue recognition in the case of listed entities when, for example, performance is measured in terms of year-over-year revenue growth or profit. Similarly, for example, there may be greater risks of fraud in revenue recognition in the case of entities that generate a substantial portion of revenues through cash sales.

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Case Details: P. Venugopal Naidu vs. Union of India - [2026] 185 taxmann.com 770 (Andhra Pradesh)

Judiciary and Counsel Details

• R. Raghunandan Rao & T.C.D. Sekhar, JJ.
• M.V.J.K. Kumar for the Petitioner.
• Y.V. Anil Kumar, Central Govt. Counsel & N.V.S. Prasada Varma for the Respondent.

Facts of the Case

The petitioners, contractors engaged in execution of works contract services, provided construction services to Tirumala Tirupati Devasthanams (TTD) and claimed concessional GST rate of 12% under the relevant GST notifications applicable to supplies made to Governmental authorities/entities. It was contended that TTD was constituted under a state enactment, had a board and officers appointed and controlled by the State Government and it discharged functions akin to a local authority, thereby satisfying the criteria of Governmental authority/entity. The petitioners further submitted that, where contracts provided for reimbursement clauses, they were entitled to recover the differential GST arising from rate changes during the relevant period. The matter was accordingly placed before the High Court.

High Court Held

The High Court held that TTD qualifies as both a ‘Governmental Authority’ and ‘Governmental Entity’ under Section 9 of the CGST Act read with Notification No. 11/2017-Central Tax (Rate) dated 28-06-2017, as amended by Notification Nos. 20/2017-CGST (Rate), 24/2017-CGST (Rate) and 31/2017-CGST (Rate). It held that the statutory criteria of 90% government control and performance of municipal/panchayat functions were satisfied as TTD was constituted under statute, fully controlled by the State Government, and its executive officer discharged civic functions in the Tirumala Hills area. It further held that eligibility for the concessional rate of 12% under Sl. No. 3 of Notification No. 11/2017 for works contract services under Heading 9954 depended on factual verification of whether the works fell within the specified categories under Section 8 and Section 9 of the CGST Act. Accordingly, the Court remanded the matters to the authorities for fresh adjudication after due hearing.

The post HC Holds TTD a Governmental Entity for Concessional GST on Works Contracts appeared first on Taxmann Blog.

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Mitesh Thakkar, Gaurav Agarwal & Mukund Jindal – [2026] 186 taxmann.com 631 (Article)

1. Introduction

The indirect transfer provisions introduced in Indian income tax law seek to tax offshore transfers that directly or indirectly derive substantial value from assets located in India. While the legislative intent is clear—particularly following the introduction of detailed explanations to the charging provision. However, their application in real-world transactions continues to present material practical challenges for acquirers, sellers, and advisors.

Broadly, the process for determination of applicability of indirect transfer provisions for any offshore deal is as follows:

As mentioned above, many challenges are arising not from the charging provision, but from the mechanics prescribed for determining whether a transaction falls within section 9(10)(a) of the Income-tax Act, 2025 (‘the Act’).

Concepts such as the ‘specified date’, identification of ‘assets located in India’, and computation of FMV for the substantial value test frequently involve judgement, imperfect information, and timing gaps. This article discusses selected practical issues encountered while evaluating indirect transfer implications, particularly at pre-deal and transaction-execution stages.

2. Practical Difficulties in Determining the ‘Specified Date’

Determination of the ‘specified date’ is a threshold step in applying the substantial value test since the applicability of indirect transfer provisions is to be evaluated based on values as on the specified date.

Specified date for evaluating the applicability of indirect transfer provisions is determined as follows:

1. Ascertaining the actual date of transfer and book value of assets as on date of transfer

Indirect transfer implications or analysis often needs to be undertaken well before deal execution, when the exact transfer date may not be finalised and may depend on the fulfilment of conditions precedent to the transaction or regulatory approvals. However, the ‘specified date’ test requires a comparison of book values as on the actual date of transfer. This creates a practical difficulty, as reliable book values for that future date are not available at the time of undertaking the analysis.

For example, shares of a US company (holding shares in an Indian company) may be agreed to be sold in January 2026, but the transaction could close only after regulatory approval at a later date. At the time of signing, while book values as at the preceding financial year-end may be available, the book values as on the transfer date may not be available since the actual date of transfer itself is not finalised. Since the specified date determination depends on comparing these values—including whether the 15% threshold is met—it becomes uncertain at the pre-deal stage whether the specified date would be the earlier year-end or the actual date of transfer.

2. Financial statements versus interim accounting data

Another issue that arises is whether the book value of assets for the “specified date” should be derived from formally prepared financial statements or whether unaudited trial balances or MIS reports would suffice. The provision does not explicitly clarify the acceptable source of book values, thereby resulting in divergent practices being adopted in transactions.

Further, preparing financial statements as on the date of transfer is often impractical, especially where timing is driven by commercial constraints. Reliance on trial balances or MIS data may raise concerns around completeness, consistency of accounting policies, and finalisation of adjustments. The absence of guidance on acceptable source for the book value of assets raises ambiguity and concerns (especially in cases where increase is close to 15% threshold).

3. Whether liabilities are to be offset against assets

The term “book value of assets” is not defined for this purpose, leading to uncertainty on whether assets should be considered on a gross basis or net of asset-linked provisions such as depreciation, impairment, or obsolescence. A literal interpretation suggests no netting, whereas a purposive view supports adjusting for such provisions to reflect meaningful asset values. The lack of clarity can materially affect the specified date determination.

For example, whether for the purpose of book value of asset whether gross block of assets are to be considered or whether net block of assets i.e. after adjusting provision for depreciation from the gross block of assets is to be considered. Similarly whether provision for taxation is to be netted off against the prepaid taxes.

3. Issues in Determining ‘Assets Located in India’

Section 9(10)(a) of the Act provides that shares or interest of a foreign company shall be deemed to be situated in India if they derive value substantially from the assets located in India. Thus identification of “assets located in India” is another key determinant under the indirect transfer provisions. A literal reading suggests that only assets physically or legally situated in India should be considered, aligning with a situs-based approach.

An alternative interpretation considers that all assets owned by an Indian company irrespective of physical location should be included, on the basis that the Indian entity itself represents the economic nexus to India. This issue becomes particularly relevant in structures involving overseas subsidiaries, centrally held intangibles, or mobile digital assets. The absence of express clarification creates uncertainty and increases dependence on interpretational judgement.

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The post [Opinion] Indirect Transfers Under Indian Income Tax Law – Easier Said Than Applied appeared first on Taxmann Blog.

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Case Details: Midas Tankers (P.) Ltd. vs. Union of India - [2026] 186 taxmann.com 445 (Bombay)

Judiciary and Counsel Details

• G. S. Kulkarni & Aarti Sathe, JJ.
• Durgesh Nadkarni, Ashok Singh & D.B. Shroff, Sr. Adv. for the Petitioner.
• Ms Shruti D. Vyas, Addl. Govt. Pleader & Aditya R. Deolekar, APP for the Respondent.

Facts of the Case

The petitioner, a GST-registered shipping line, provided vessel transportation services on a hire and freight basis under Cost, Insurance, and Freight (CIF) import contracts. The imports were undertaken on CIF terms, under which the foreign exporter arranged shipment to the Indian port, and the Indian buyer discharged customs duty, including the freight component embedded in the import value. The jurisdictional audit authorities raised an objection that the plac e of supply for transportation of goods was in India and accordingly proposed the levy of IGST under forward charge on the petitioner along with the disallowance of refund. A show cause notice (SCN) was issued, and subsequently an adjudication order confirmed the demand and also denied the refund claim. It contended that the freight element in CIF imports formed part of a composite supply of goods already subjected to customs duty and therefore could not be subjected to a separate GST levy. The matter was accordingly placed before the High Court.

High Court Held

The High Court held that the levy of IGST under forward charge on the petitioner in respect of CIF import transactions was not sustainable in law. The Court interpreted that in CIF contracts, the freight and transportation component forms an integral part of a composite supply of goods between the foreign exporter and the Indian importer, and such import transactions are governed under Section 7 read with Section 5 of the IGST Act. It further held that the determination of place of supply under Section 13 of the IGST Act and the charging provisions under Section 8 of the CGST Act could not be applied in a manner that results in separate taxation of the freight component when customs duty, including freight, had already been discharged at the time of import. It was observed that such a dual levy would be contrary to the statutory scheme governing composite supply and import taxation. Accordingly, the SCN and adjudication order were quashed.

List of Cases Reviewed

• Union of India v. Mohit Minerals (P.) Ltd [2022] 138 taxmann.com 331/92 GST 101/61 GSTL 257 (SC)/(2022) 10 SCC 700 (para 11)followed

List of Cases Referred to

• Union of India v. Mohit Minerals (P.) Ltd [2022] 138 taxmann.com 331/92 GST 101/61 GSTL 257 (SC) (para 8).

The post HC Rules Ocean Freight on CIF Imports Not Taxable Again Under GST appeared first on Taxmann Blog.

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Case Details: Commissioner of Income-tax - LTU vs. Mahindra Holidays and Resorts (India) Ltd. - [2026] 186 taxmann.com 146 (Madras)

Judiciary and Counsel Details

• Dr. G. Jayachandran & Shamim Ahmed, JJ.
• V. Pushpa, Senior Standing Counsel for the Appellant.
• Arvind P. Datar, Senior Counsel, Sandeep Bagmar & Rahul Unnikrishnan for the Respondent.

Facts of the Case

The assessee was engaged in selling time-share units and providing holiday facilities to members for a specified week each year over a fixed tenure, in return for membership fees collected either upfront or in instalments. The assessee offered 60% of the membership fee as income in the year of admission and spread the remaining 40% equally over the membership period. Annual Maintenance Charges and utility charges were collected separately. The Assessing Officer held that the entire membership fee was taxable in the year of receipt, as the assessee had claimed full expenditure while deferring part of the income, contrary to the matching principle. However, the Commissioner (Appeals), following earlier orders in the assessee’s own case, accepted the deferred revenue concept, and the Tribunal upheld the same.

High Court Held

The matter reached the High Court. The Court held that the Time-share Agreement and Membership Rules were valid and observed that the membership fee was not merely an entrance fee but was linked to continuing obligations to provide accommodation and holiday facilities throughout the membership period. The agreement specifically provided that 40% of the fee represented accommodation costs, while 60% represented an Advance Payment towards Facilities (APF) to be apportioned equally over the membership tenure. The Court held that the assessee had an ongoing obligation to provide assured accommodation and related facilities. Therefore, the receipts could not be treated as income entirely accruing in the year of receipt.

Further, Annual Maintenance Charges and utility charges were independent of membership fees and could not be linked to them. Accordingly, the Court upheld the assessee’s method of accounting and answered the substantial questions of law in favour of the assessee.

List of Cases Reviewed

• CIT v. Shyam Telelink Ltd. [2019] 101 taxmann.com 218/260 Taxman 402/410 ITR 31 (Delhi) (para 16) followed
• Order of Tribunal, Chennai, dated 06.07.2010 in I.T.A.No.1705/Mds/2008 (para 23) affirmed

List of Cases Referred to

• Calcutta Co. Ltd. v. CIT [1959] 37 ITR 1 (SC) (para 2)
• Treasure Island Resorts (P.) Ltd. v. Dy. CIT [2004] 90 ITD 814 (Hyderabad) (para 4)
• Asstt. CIT/Dy. CIT v. Mahindra Holidays & Resorts (India) Ltd. [2010] 39 SOT 438/131 TTJ 1 (Chennai) (para 5)
• E.D. Sassoon & Co. Ltd. v. CIT [1954] 26 ITR 27 (SC) (para 7)
• Indian Molasses Co. (P.) Ltd. v. CIT [1959] 37 ITR 66 (SC) (para 7)
• CIT v. Southern Cables & Engg. Works [2006] 156 Taxman 59/289 ITR 167 (Kerala) (para 7)
• CIT v. British Paints India Ltd. [1991] 54 Taxman 499/188 ITR 44 (SC) (para 7)
• CIT v. Bazpur Co-operative Sugar Factory Ltd. [1988] 38 Taxman 195/172 ITR 321 (SC) (para 7)
• Tuticorin Alkali Chemicals & Fertilizers Ltd. v. CIT [1997] 93 Taxman 502/227 ITR 172 (SC) (para 7)
• CIT v. United Club [1986] 29 Taxman 245/161 ITR 853 (Patna) (para 7)
• CIT v. Beldih club [1986] 186 ITR 861/29 Taxman 268 (Patna) (para 7)
• CIT v. Winner Business Link (P.) Ltd. [2015] 55 taxmann.com 468/230 Taxman 399 (Gujarat) (para 8)
• Pr. CIT v. Sistema Shyam Teleservices Ltd. [2019] 108 taxmann.com 333/265 Taxman 549 (SC) (para 8)
• CIT v. Shyam Telelink Ltd. [2019] 101 taxmann.com 218/260 Taxman 402/410 ITR 31 (Delhi) (para 8)
• CIT v. Dinesh Kumar Goel [2011] 9 taxmann.com 188/197 Taxman 375/331 ITR 10 (Delhi) (para 8)
• Rotork Controls India (P.) Ltd. v. CIT [2009] 180 Taxman 422/314 ITR 62 (SC) (para 8)
• Madras Industrial Investment Corpn. Ltd. v. CIT [1997] 91 Taxman 340/225 ITR 802 (SC) (para 8)
• Metal Box Company of India Ltd v. Their Workmen [1969] 1968 taxmann.com 162 (SC) (para 12)
• CIT v. Treasure Island Pvt Ltd [I.T.T.A. No. 241 of 2012, dated 10-7-2013] (para 12)
• Godhra Electricity Co. Ltd. v. CIT [1997] 225 ITR 746/91 Taxman 351 (SC) (para 12).

The post HC Allows Deferral of Time-Share Membership Fees Over Membership Tenure appeared first on Taxmann Blog.

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Case Details: Directorate of Enforcement vs. Sharad Chandra Toshniwal - [2026] 186 taxmann.com 377 (HC-Telangana)

Judiciary and Counsel Details

• K. Sujana, J.

Facts of the Case

In the instant case, the Respondent filed an application for regular bail before the Trial Court. The Trial Court granted bail primarily on the ground of parity with the anticipatory bail granted by the High Court to Neelima, successor auditor to the respondent, and also considering that the respondent was in judicial custody and was cooperating with the investigating officer, notwithstanding the rigours of Section 45 of the PMLA.

It was noted that anticipatory bail granted to the said Neelima was in respect of offences under the BNS and TSPDFE Act and not under the PMLA.

It was noted that since the respondent was charged with an offence under Section 3 of PMLA, the rigours of Section 45 of the Act were attracted.

Further, the Trial Court had not adverted to or recorded satisfaction with regard to mandatory twin conditions under Section 45 of PMLA and granted bail merely on the ground that the respondent was cooperating with the investigating officer, which, by itself, was insufficient in the context of the stringent statutory requirements under Section 45 of PMLA.

High Court Held

The High Court held that the order passed by the Trial Court granting bail to the respondent was to be set aside, and consequently, bail granted to the respondent stood cancelled.

The post HC Sets Aside Bail Granted Without Meeting PMLA Twin Conditions appeared first on Taxmann Blog.

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Notification No. S.O. 2442(E), Dated: 12.05.2026

The Central Government has issued multiple notifications appointing competent authorities, appellate authorities, Recovery Officers and officers for compounding of offences under various provisions of the Code on Social Security, 2020.

The appointments relate to Chapters V and VI of the Code and apply to establishments where the Central Government is the appropriate Government.

1. Appointment of Competent Authorities

The notifications designate competent authorities for administration and enforcement of provisions relating to Chapters V and VI of the Code on Social Security, 2020.

Assistant Labour Commissioners, Regional Labour Commissioners and other designated officers have been entrusted with powers for adjudication, implementation and compliance-related matters within their respective jurisdictions.

2. Appellate Authorities Notified

The Government has also appointed appellate authorities for hearing appeals arising under the relevant provisions of the Code.

Deputy Chief Labour Commissioners and other specified officers will exercise appellate jurisdiction over designated States and Union Territories to facilitate resolution of disputes and appeals relating to social security matters.

3. Recovery Officers Appointed

The notifications further appoint Recovery Officers for enforcement and recovery-related functions under the Code on Social Security, 2020.

These officers will exercise powers relating to recovery of dues, enforcement of orders and execution of statutory obligations in accordance with the provisions of the Code.

4. Officers Authorised for Compounding of Offences

The Central Government has also notified officers authorised to compound offences under applicable provisions of Chapters V and VI.

The composition mechanism enables settlement of specified offences through payment of prescribed compounding amounts, thereby facilitating administrative resolution of eligible contraventions.

5. Jurisdiction-Wise Allocation of Powers

The notifications specify territorial and jurisdiction-wise powers of Assistant Labour Commissioners, Regional Labour Commissioners, Deputy Chief Labour Commissioners and other officers.

Different authorities have been assigned responsibility over specified States, Union Territories and regions to ensure effective implementation and enforcement across establishments governed by the Central Government.

6. Applicability to Chapters V and VI

The appointments specifically relate to Chapters V and VI of the Code on Social Security, 2020 and are intended to strengthen administration of social security-related obligations, dispute resolution and enforcement mechanisms under the labour code framework.

7. Objective of the Notifications

The notifications aim to operationalise the institutional and enforcement framework under the Code on Social Security, 2020 by clearly designating authorities for adjudication, appeals, recovery and compounding of offences.

The move is intended to strengthen compliance monitoring, improve dispute resolution and ensure efficient implementation of social security provisions in establishments where the Central Government is the appropriate Government.

Click Here To Read The Full Notification

The post Govt. Appoints Authorities and Officers Under Social Security Code 2020 appeared first on Taxmann Blog.

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Press Release No.30/2026, Dated 15.05.2026

The Securities and Exchange Board of India (SEBI), pursuant to discussions with the Central Board of Direct Taxes (CBDT), has issued clarifications to address operational difficulties faced by Foreign Portfolio Investors (FPIs) in obtaining Permanent Account Number (PAN) under the Income-tax Rules, 2026 and the newly notified PAN application forms.

The clarifications aim to simplify the PAN application process and facilitate smoother onboarding of FPIs in India.

1. Use of Authorised Signatory Details Permitted

SEBI has clarified that FPIs may use the details of the authorised signatory in fields relating to:

• Representative Assessee; or
• Authorised Representative

in the PAN application forms.

Further, supporting documents relating to such authorised signatories shall not be mandatory for this purpose.

2. Alternative Contact Details Allowed

In cases where details of the authorised signatory are unavailable, the following relaxations have been permitted:

FPI details may be provided in place of:

• 1. Mobile number
  2. Landline number
  3. Email ID

This measure is intended to avoid procedural difficulties where authorised signatory-specific contact information is not readily available.

3. FPI Registration Number Can Replace PAN, Aadhaar or Passport Details

The clarification further provides that where PAN, Aadhaar or Passport details of the authorised signatory are unavailable, the FPI registration number may be furnished instead in the application process.

This relaxation is aimed at easing documentation requirements for foreign entities and their representatives.

4. Clarification on Taxpayer Identification Number (TIN)

SEBI has also clarified that where Taxpayer Identification Number (TIN) is not applicable, applicants may use “0000000000” in the relevant field of the PAN application form.

The clarification seeks to address technical validation issues faced during application filing.

5. Landline Number Allowed in Place of Mobile Number

To facilitate ease of onboarding of FPIs, the clarification additionally permits furnishing of a landline number in place of a mobile number in PAN application forms wherever required.

6. Objective of the Clarifications

The clarifications are intended to simplify PAN application procedures for Foreign Portfolio Investors and reduce compliance-related bottlenecks arising from documentation and technical requirements under the revised Income-tax Rules, 2026.

The move is expected to facilitate smoother registration and onboarding of FPIs while improving ease of doing business for foreign investors participating in Indian securities markets.

Click Here To Read The Full Press Release

The post SEBI Relaxes PAN Allotment Norms for Foreign Portfolio Investors appeared first on Taxmann Blog.

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