Indian Accounting Standards (Ind AS) are largely aligned with the IFRS Standards issued by the International Accounting Standards Board (IASB). Since IFRS Standards are periodically issued or revised by the IASB, the Accounting Standards Board (ASB) of the Institute of Chartered Accountants of India (ICAI) reviews such changes to consider corresponding amendments in Ind AS, ensuring continued convergence.

In line with this process, the ASB has issued an exposure draft for public comments on the “Amendments to Ind AS 21 – Translation to a Hyperinflationary Presentation Currency”. Stakeholders are invited to submit their comments on the draft by 25th January 2026.

This initiative is part of ICAI’s continuous efforts to ensure that Ind AS remains consistent with global accounting standards and addresses relevant reporting issues in practice.

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Case Details: Kelvion India (P.) Ltd. vs. Union of India - [2025] 181 taxmann.com 723 (Bombay)

Judiciary and Counsel Details

• M.S. Sonak & Advait M. Sethna, JJ.
• Rahul Thakar, C. B. Thakar & Yash Dethe, Advs. for the Petitioner.
• Karan Adik & Megha Bajoria, Advs. for the Respondent.

Facts of the Case

The petitioner, a manufacturer-exporter, imported raw materials under advance authorisation with exemption from customs duty and IGST and exported finished goods on payment of IGST during June 2019 to December 2019 and July 2020 to September 2020, claiming IGST refunds. The Directorate of Revenue Intelligence (DRI) alleged violation of Rule 96(10) of the CGST Rules due to use of advance authorisation, pursuant to which the petitioner repaid the refunded IGST along with interest. Claiming that excess tax had been paid, the petitioner filed a refund application, which was rejected by the adjudicating authority and the rejection was upheld in appeal, leading to the writ petition.

High Court Held

The High Court held that Rule 96(10) of the CGST Rules had been omitted without any saving clause, as already held in Hikal Ltd. v. Union of India. Since the authorities had proceeded on the basis of an omitted provision and without the benefit of the said decision, the impugned orders could not be sustained. Without examining the merits, the Court set aside the impugned orders and remanded the matter to the adjudicating authority to decide the refund application afresh after considering the legal position, thereby deciding the matter in favour of the assessee by way of remand.

List of Cases Reviewed

• Hikal Ltd. v. UOI [2025] 178 taxmann.com 333 (Bombay) (Para 16) followed

List of Cases Referred to

• Hikal Ltd. v. UOI [2025] 178 taxmann.com 333 (Bombay) (para 11).

The post HC Remands IGST Refund Case Involving Omitted Rule 96(10) appeared first on Taxmann Blog.

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Case Details: Sh. Samarendra Das vs. Win Medicare (P.) Ltd. [2025] 181 taxmann.com 184 (Delhi)

Judiciary and Counsel Details

• Tara Vitasta Ganju, J.
• Gautam Kumar Laha, Adv. for the Petitioner.
• Ms Pooja Sood, Aniket Singh, Jitesh Pandey, Hrishabh Tiwari & Naman Arora, Advs. for the Respondent.

Facts of the Case

In the instant case, the petitioner was employed as a sales executive/professional sales representative with the respondent company. The petitioner filed a claim petition before the Labour Court, which was dismissed on the ground that the petitioner was not a workman within the meaning of section 2(s) of the Industrial Disputes Act, 1947.

It was noted that the petitioner was not engaged in clerical or menial work but was a qualified graduate with a specialisation and had received specialised training for his field of work. There was, therefore, no doubt that the work performed by the petitioner involved specialised skills acquired through training imparted by the respondent company. In any event, this aspect had not been denied by the petitioner.

High Court Held

The High Court held that there was no infirmity in the impugned order warranting interference in the exercise of its supervisory jurisdiction.

List of Cases Referred to

• H.R. Adyanthaya v. Sandoz (India) Ltd. 1994 taxmann.com 2463 (SC) (para 5)
• Petcare, Division of Tetragon Chemie Pvt. Ltd. v. M.P. Medical and Sales Representatives Association Bhopal 2006 SCC OnLine MP 23 (para 9)
• Bharat Bhawan Trust v. Bharat Bhawan Artists’ Association 2001 taxmann.com 4991 (SC) (para 12.1)
• T.P. Srivastava v. National Tobacco Co. of India Limited (1992) 1 SCC 281 (para 12.1)
• Syed Yakoob v. K.S. Radhakrishnan 1963 SCC OnLine SC 24 (para 15).

The post Medical Sales Representative Not a ‘Workman’ Under ID Act | HC appeared first on Taxmann Blog.

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Case Details: Mohd. Farhan vs. State of Chhattisgarh - [2025] 181 taxmann.com 608 (Chhattisgarh)

Judiciary and Counsel Details

• Ramesh Sinha, CJ.
• Palash Soni, Prashant Dansena & Vikalp Sharma, Advs. for the Applicant.
• U.K.S. Chandel, Dy.A.G. for the Respondent.

Facts of the Case

The applicant was a freelance accountant against whom proceedings were initiated following a search on allegations that he was involved in creating bogus firms and facilitating fake e-way bills. Certain documents and digital records were seized, and the Department issued summons during the search. The applicant sought anticipatory bail due to the possibility of arrest, but the request was turned down. It was contended that he was merely discharging his professional duties as a freelance accountant, that the allegations were based primarily on documentary and digital evidence already seized. The matter was placed before the High Court.

High Court Held

The High Court held that the allegations against the applicant were based on documentary and digital evidence already in the custody of the investigating agency. It was held that the maximum punishment prescribed for the alleged offence under Section 132 of the CGST Act was five years. The offence did not fall within the category of heinous or violent crimes warranting pre-trial incarceration. The Court observed that the limited statutory severity of punishment, coupled with the nature of allegations and the fact that custodial interrogation was not indispensable. It was held that the investigation was likely to take time. Accordingly, the Court granted anticipatory bail to the applicant under Section 69 of the CGST Act.

The post HC Grants Anticipatory Bail to Accountant in Fake E-Way Bill Case appeared first on Taxmann Blog.

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Circular No. CO.DPSS.RLPD.No.S1039/04-07-001/2025-2026, Dated 24.12.2025

1. Regulatory Background

The Reserve Bank of India (RBI) has issued a circular in partial modification of its earlier directions relating to the introduction of Continuous Clearing and Settlement on Realisation (CCSR) under the Cheque Truncation System (CTS).

The modifications are aimed at providing banks with additional time to stabilise and streamline operational processes before the next phase of implementation.

2. Postponement of Phase 2

RBI has announced that:

• Phase 2 of the Continuous Clearing and Settlement on Realisation project has been postponed
• The postponement is until further notice

Regulatory Rationale

The deferment has been granted to:

• Allow banks to fine-tune internal workflows
• Address operational, technological, and reconciliation challenges
• Ensure smoother and more robust implementation of subsequent phases

3. Revised CTS Session Timings

The circular also revises the daily session timings under the Cheque Truncation System.

• Presentation Session – Revised timing: 09:00 AM to 03:00 PM
• Confirmation Session – Revised timing: 09:00 AM to 07:00 PM

These revised windows are intended to provide greater operational flexibility and improve processing efficiency across banks and clearing participants.

4. Applicability

• The revised timelines and session timings apply to all banks and participants operating under CTS
• Existing operational procedures will continue, subject to the updated session timings
• Phase 2–related requirements will remain on hold until RBI issues further instructions

5. Regulatory Intent

The RBI’s decision seeks to:

• Ensure operational readiness before scaling up continuous clearing
• Minimise settlement risks and processing disruptions
• Provide adequate transition time to regulated entities
• Maintain the integrity and efficiency of cheque-based payment systems

6. Implications for Banks

Banks should:

• Update internal CTS operating manuals and system configurations to reflect revised session timings
• Re-align staffing, reconciliation, and back-office processes
• Pause Phase 2–specific implementation activities until further RBI communication
• Monitor RBI circulars for future rollout timelines

7. Key Takeaway

RBI has deferred Phase 2 of Continuous Clearing and Settlement on Realisation under CTS and revised session timings—with the presentation window now from 09:00 AM to 03:00 PM and the confirmation window from 09:00 AM to 07:00 PM—to support smoother operational readiness across banks.

Click Here To Read The Full Circular

The post RBI Postpones Phase 2 of CCSR Under Cheque Truncation System appeared first on Taxmann Blog.

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Adv. Shivam Chaudhary & Harsh – [2025] 181 taxmann.com 844 (Article)

1. Introduction

Corporate governance in India has long grappled with the complex reality of Related Party Transactions (RPTs). While RPTs are often necessary for operational efficiency—allowing groups to leverage synergies and economies of scale—they simultaneously present the most significant risk for the expropriation of minority shareholder wealth. The challenge for the regulator has always been to distinguish between abusive tunnelling of funds and legitimate business exchanges.

In a decisive move to calibrate this balance, the Securities and Exchange Board of India (SEBI) has recently amended the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015(LODR Regulations). These amendments represent a paradigm shift from a “one-size-fits-all” approach to a more nuanced, scale-sensitive framework. By introducing a turnover-linked, slab-based materiality threshold under the newly added Schedule XII, and by tightening the noose around indirect RPTs routed through subsidiaries, SEBI has signalled that substance will prioritise over form. This article analyses the implications of these amendments, examining how the transition to proportional governance impacts the compliance landscape for India Inc.

2. The Death of the Fixed Threshold – Analysing Schedule XII

Under the erstwhile regime, the determination of a “material” RPT—which triggers the requirement for shareholder approval—was often a point of contention. Previously, a transaction was considered material if it exceeded 10% of the annual consolidated turnover of the listed entity. Subsequently, absolute monetary thresholds (such as Rs 1,000 crore) were introduced to capture high-value transactions of large conglomerates that might otherwise slip under the 10% radar.

However, fixed monetary thresholds suffered from a binary flaw: they were either too high to protect shareholders in smaller entities or too low for mega-corporations, resulting in a clutter of procedural compliances for routine operational transfers. The recent amendment replaces this rigid structure with a slab-based mechanism introduced in Schedule XII of the LODR Regulations. This change acknowledges that “materiality” is relative. A Rs 50 crore transaction might be negligible for a Nifty 50 company but existential for a small-cap entity.

By linking thresholds to specific turnover slabs, SEBI ensures that the governance burden scales with the size of the entity. For smaller companies, lower thresholds ensure that even moderate leakage of funds is scrutinised by shareholders. Conversely, for larger entities, the slabs prevent the Audit Committee and shareholders from being inundated with approval requests for transactions that, while large in absolute terms, are statistically insignificant relative to the company’s balance sheet.

This analytical shift aligns Indian governance with global best practices, where materiality is viewed as a function of risk and scale rather than an arbitrary number. It forces the Audit Committee to assess transactions not just on their face value, but on their relative impact on the company’s financial health.

3. Piercing the Veil – The Subsidiary Trap

One of the most profound aspects of the recent amendments is the tightening of norms regarding subsidiaries. Historically, promoters have often utilised the complex webs of holding and subsidiary companies to obfuscate the trail of transactions. A listed entity might divert funds to a subsidiary, which would then transact with a related party, effectively bypassing the approval mechanisms of the listed parent company.

The amendments dismantle this loophole by refining the approval norms for RPTs undertaken through subsidiaries. The regulator has introduced a bifurcation based on the reliability of financial data – separate thresholds now apply for subsidiaries with audited financials versus those without.

For subsidiaries without audited financials—often the opaque vehicles used for financial engineering—the thresholds for triggering parent-level approval are significantly stricter. This forces listed entities to either maintain higher standards of financial reporting for their subsidiaries or face the scrutiny of the listed entity’s shareholders.

Furthermore, the amendments clarify the triggers for approval. It is no longer sufficient for the subsidiary’s board to sign off on a transaction. If the value of the RPT exceeds the prescribed threshold under the new framework, it triggers a requirement for approval from the Audit Committee, the Board, or the shareholders of the listed entity itself.

This effectively pierces the corporate veil for the purpose of governance. It recognises that the economic interest of the shareholder in the listed parent extends to the assets held by the subsidiary. As noted in various judicial precedents, including Vodafone International Holdings BV v. Union of India, the legal independence of a subsidiary does not preclude the economic reality of control. SEBI’s amendments operationalise this economic reality into regulatory compliance.

Click Here To Read The Full Article

The post [Opinion] SEBI’s New RPT Framework – Turnover-Linked Thresholds and Stronger Subsidiary Controls appeared first on Taxmann Blog.

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Case Details: Sanjay Kumar Upadhyay vs. State of Jharkhand - [2025] 181 taxmann.com 542 (SC)

Judiciary and Counsel Details

• J.K. Maheshwari & Vijay Bishnoi, JJ.
• Sudhanshu S. Pandey, Arjun D. Singh, Roshan Kumar, Maitreya Mahaley, Yimyanger Longkumer, Kamei Bestman Kabui, Advs. & Gaichangpou Gangmei, AOR for the Appellant.
• Shantanu Sagar, AOR & Anil Kumar, Adv. for the Respondent.

Facts of the Case

In the instant case, pursuant to a common recruitment process conducted in 1981, the appellant was appointed as an Industries Extension Officer (IEO) by the State of Bihar. Upon reorganisation of the State of Bihar, the appellant was allocated to the State of Jharkhand. The appellant filed a writ petition before the High Court seeking issuance of an appropriate writ directing the respondent-employer to grant him the genuine pay scale in place of the anomaly in pay scale, in parity with other similarly situated persons.

The learned Single Judge of the High Court of Jharkhand allowed the writ petition, holding that the case was squarely covered by the judgments of the Patna High Court in Nagendra Sahani v. State of Bihar [CWJC No. 8419 of 1992], and directed the State to revise the appellant’s pay scale from the date of his appointment, with arrears and consequential benefits.

On appeal, the Division Bench of the High Court allowed the intra-court appeal and set aside the judgment of the learned Single Judge.

Supreme Court Held

The Hon’ble Supreme Court observed that the principle of equality enshrined in Article 14 does not permit discrimination between persons who are similarly situated, and that any differential treatment must be based on an intelligible differentia having a rational nexus with the object sought to be achieved. It was further observed that Section 34(4) mandates that judicial orders of the Patna High Court continue to bind the successor State.

By virtue of Section 34(4) of the Bihar Reorganisation Act, 2000, the judgment of the Patna High Court in Nagendra Sahani v. State of Bihar [CWJC No. 8419 of 1992], granting a higher pay scale to similarly situated employees, is binding on the State of Jharkhand in the appellant’s case. Once it is established that the factual matrix is identical and the legal issue involved is the same, similar relief is required to be granted. Therefore, when other similarly situated employees have already been granted the benefit through judicial pronouncement, denial of the same relief to the appellant would be unjust.

Accordingly, the Hon’ble Supreme Court held that the impugned judgment of the Division Bench was liable to be set aside, restoring the judgment of the learned Single Judge.

List of Cases Reviewed

•  Order of High Court of Jharkhand, Division Bench LPA No. 269 of 2012, judgment dated 30.03.2022 (para 33) set aside
• Nagendra Sahani v. State of Bihar [CWJC No. 8419 of 1992] (para 31) followed

List of Cases Referred to

• Nagendra Sahani v. State of Bihar [CWJC No. 8419 of 1992] (para 2)
• Alakh Kumar Sinha v. State of Bihar [CWJC No. 12301 of 2004] (para 2)
• Suprita Chandel v. Union of India [2025] 12 taxmann.com 1219 (SC) (para 11)
• Mary Pushpam v. Telvi Curusumary (2024) 3 SCC 224 (para 22)
• M.R. Gupta v. Union of India [1996] 1995 taxmann.com 1574 (SC) (para 24).

The post Jharkhand Appellant Entitled to Pay Parity under Bihar Reorganisation Act | SC appeared first on Taxmann Blog.

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Case Details: NBCC (India) Ltd. vs. Additional Commissioner CGST Delhi South - [2025] 181 taxmann.com 604 (Delhi)

Judiciary and Counsel Details

• Prathiba M. Singh & Shail Jain, JJ.
• Bhuvnesh Satija, Ms Vibhooti Malhotra, Udit Sharma & Aniket Khanduri, Advs. for the Petitioner.
• Ms Samiksha Godiyal, SSC, Tenzing N. Bhutia & B.D. Rao Kundan, Advs. for the Respondent.

Facts of the Case

The petitioner, a government enterprise, undertook the redevelopment and executed a memorandum of understanding (MOU) with the Ministry of Urban Development. An escrow agreement appointed the petitioner as the agency to manage lease proceeds, which were credited to escrow for onward transfer to the Ministry or the Consolidated Fund. The receipts originated from Government Departments, autonomous bodies, PSUs, and others. The Directorate General of GST Intelligence investigated the project and the escrow collections, confirming a GST demand on the escrow receipts. It was contended that the GST demand was unsustainable. The matter was accordingly placed before the High Court.

High Court Held

The High Court held that the GST demand raised lacked merit in view of the Ministry of Finance’s office memorandum. The Court observed that the memorandum clarified the treatment of escrow receipts from redevelopment projects and addressed the applicability of exemption and reverse charge mechanisms under Section 9 of the CGST Act. It was concluded that the petitioner’s claims were consistent with the memorandum and that the GST demand could not be sustained. Consequently, the Court set aside the impugned order.

The post HC Sets Aside GST Demand on Govt Enterprise’s Lease Proceeds appeared first on Taxmann Blog.

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