Case Details: The Coimbatore Branch of Indian Medical Association, In re - [2026] 185 taxmann.com 479 (AAR-TAMILNADU)

Judiciary and Counsel Details

• C. Thiyagarajan & B. Suseel Kumar, Member

Facts of the Case

The applicant sought an advance ruling on whether its activities of collecting subscription from members, conducting seminars, workshops, and providing related facilities would constitute ‘business’ and ‘supply’ under GST. It was submitted that although its primary objective included conducting health camps for economically weaker sections of society and organising educational programmes for medical professionals, such activities were carried out for mutual benefit and professional development, and therefore ought not to be treated as taxable supplies. It further contended that the principle of mutuality applied to member-related transactions and accordingly excluded such activities from GST levy. The matter was accordingly placed before the Authority for Advance Ruling (AAR).

AAR Held

The AAR held that under the Section 2(17)(e) of the CGST Act, the provision of facilities or benefits by an association to its members for subscription or other consideration constitutes ‘business’ and therefore the applicant’s activities fall within its ambit. It further held that under Section 7(1)(aa) of the CGST Act, read with its explanation deeming a body and its members as distinct persons notwithstanding any other law or judicial principle, transactions between an association and its members constitute ‘supply’ under GST. The Authority observed that collection of subscription and organisation of seminars and workshops for members clearly involved consideration and fell within the statutory definition of supply. It accordingly ruled that such activities are taxable under GST.

List of Cases Referred to

• Madras Gymkhana Club Employees Union v. Management of the Gymkhana Club 1967 taxmann.com 49 (SC) (para 2.2)
• Cricket Club of India Ltd. v. Bombay Labour Union [1969] 1968 taxmann.com 146 (SC) (para 2.2)
• Joint Commercial Tax Officer v. Young Men’s Indian Association 1970 taxmann.com 192 (SC) (para 2.2)
• Ranchi Club Ltd. v. Chief CCE & ST [2012] 22 taxmann.com 217/26 STR 401/36 STT 64 (Jharkhand) (para 2.2)
• Indian Medical Association v. UOI [2024] 164 taxmann.com 626/105 GST 445/88 GSTL 258 (Kerala) (para 5.5).

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Editorial Team – [2026] 185 taxmann.com 848 (Article)

World Labour Law News provides a weekly snapshot of Labour law developments from around the globe. Here’s a glimpse of the key Labour law update this week.

1. Labour Law

1.1 U.S. Proposes Unified Joint Employer Test Across FLSA, FMLA, MSPA with Clear Vertical and Horizontal Standards

On April 22, 2026, the U.S. Department of Labor announced a Notice of Proposed Rulemaking (NPRM) to revise its analysis for assessing joint employer status under three federal wage and hour laws. Specifically, the NPRM proposes to:

(1) to implement regulatory guidance for determining joint employer status under the Fair Labor Standards Act (FLSA) at 29 CFR part 791; and

(2) amend provisions in existing regulations implementing the Family and Medical Leave Act (FMLA) and Migrant and Seasonal Agricultural Worker Protection Act (MSPA) so that the proposed FLSA analysis would be used to determine joint employer status under those laws too.

In particular, the NPRM’s proposed analysis would:

• Set forth distinct standards for determining joint employer status in “vertical” and “horizontal” scenarios—a distinction that courts and the Department have long drawn.
• Advise that horizontal joint employment exists when separate employers are sufficiently associated with respect to the employment of the same employee, but that business relationships which have little to do with the employment of specific employees—such as sharing a vendor or being franchisees of the same franchisor—are alone insufficient to establish joint employment.
• Adopt a four-factor analysis for use in every case of potential vertical joint employment, examining whether the potential joint employer:

1. 1. hires or fires the employee;
   2. supervises and controls the employee’s work schedule or conditions of employment to a substantial degree;
   3. determines the employee’s rate and method of payment; and
   4. maintains the employee’s employment records.

• Explain that additional factors may be relevant in assessing vertical joint employment, but that a unanimous finding on the four factors in either direction would establish a “substantial likelihood” regarding whether an individual or entity is a joint employer with another.

Source – Notice

1.2 The Government of Canada Invests in Programs that have a Proven Track Record of Delivering Positive Employment Outcomes for Young People

On April 13, 2026, On April 13, 2026, the Government of Canada highlighted expanded youth employment and skills programs, including student aid, work placements and apprenticeship support.

Backgrounder

1. Managing the cost of studying and training:

The Canada Student Financial Assistance Program

The Canada Student Financial Assistance Program (CSFA Program) provides Canada Student Grants and Loans to help students pay for their post-secondary education. It also offers repayment assistance to borrowers with financial difficulty.

Through the CSFA Program, the Government of Canada funds about 60% of a full-time student’s financial need. The province or territory covers the remaining 40%.

The Program works in partnership with provinces and territories to deliver student aid. Funding is available to full- and part-time students that:

• are from low- and middle-income families
• have dependants
• have disabilities

Apprentices can also get help through Canada apprentice loans and apprenticeship grants.

To help students manage costs, ESDC extended temporary increases to Canada Student Grants and Loans for the 2026-27 school year. Approximately 571,000 Canadian students are expected to benefit from the 40% increase to non-repayable grants and 422,000 students could benefit from the weekly loan limit increase. Additionally, the Canada Student Loan Forgiveness benefit is now available for family doctors, nurses, early childhood educators, dentists, dental hygienists, pharmacists, midwives, teachers, social workers, personal support workers, physiotherapists, and psychologists in over 200 new rural and remote communities.

Source – News

Click Here To Read The Full Article

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Case Details: Anjani Technoplast Ltd. vs. Shubh Gautam - [2026] 185 taxmann.com 816 (SC)

Judiciary and Counsel Details

• Pamidighantam Sri Narasimha & Alok Aradhe, JJ.
• Dama S Naidu, Sr. Adv., Pankaj Pandey, Girish Tripathi, Digvijay Prasad, Ashish Yadav, Ms Ranjeeta Rohtagi, Advs. & Ms Megha Karnwal, Aor for the Appellant.
• Kapil Sibal, S. Niranjan Reddy, Sr. Advs., Ms Shloka Narayanan, Aor, Gaurav Singh, Ms Rajeshwari & Ms Shubhani D Krishan, Advs. for the Respondent.

Facts of the Case

In the instant case, the respondent, a money lender, advanced loans of about Rs. 2.50 crore (12.75% p.a.) and Rs. 2 crore (3% monthly) in 2010. After cheque dishonour and a 2013 compromise, the appellant paid about Rs. 3.53 crore by July 2014. A 2016 summary suit claimed Rs. 4.38 crore; a second compromise fixed Rs. 2.39 crore as full settlement. On 11.01.2018, the Delhi High Court decreed Rs. 4.38 crore with 24% interest from 01.02.2016. Appeals failed up to the Supreme Court in 2021.

In December 2021, the respondent filed a Section 7 IBC plea instead of execution. The NCLT (June 2022) dismissed it, holding a decree holder is not automatically a financial creditor and IBC cannot be used for recovery. The NCLAT (November 2022) reversed this, allowing admission on the basis of time value of money.

Meanwhile, the Delhi High Court directed recomputation of dues and deposit of Rs. 3 crore (paid in November 2022). Tax proceedings and ITAT records showed lower outstanding figures, creating inconsistencies. On appeal to the Supreme Court, the appellant later deposited Rs. 60.99 lakh before the Supreme Court in October 2024.

Supreme Court Held

The Supreme Court observed that a decree for money in favour of a financial creditor would give rise to a fresh cause of action for initiating proceedings under Section 7 of IBC. However, that principle does not operate in a vacuum and does not mean that every decree holder who also happens to be a financial creditor is entitled, as a matter of right, to invoke insolvency process in preference to execution.

Accordingly, the application of this principle must be tested on the facts of each case. The question of whether, in each case, invocation of IBC amounts to misuse of process or use of the Code as a recovery mechanism remains to be examined on facts. Where the respondent, holding a final money decree and having full machinery of civil execution at his disposal, chose instead to invoke insolvency jurisdiction, such conduct was precisely what the Supreme Court in GLAS Trust Company LLC v. BYJU Raveendran [2024] 167 taxmann.com 619/[2025] 187 SCL 14 (SC)/(2025) 3 SCC 625 had characterised as an improper use of IBC, using insolvency as a substitute for debt enforcement and as a means of coercing the corporate debtor into payment.

The Supreme Court held that where the quantum of “debt” itself, as contemplated under the Code, was seriously disputed, initiation of CIRP was nothing more than use of IBC as a recovery mechanism and was an abuse of process. Insolvency process is a remedy with far-reaching consequences and must be reserved for cases of genuine insolvency or financial distress, not for enforcement of money decrees.

List of Cases Reviewed

• Shubh Gautam v. Anjani Technoplast Ltd. [2023] 146 taxmann.com 106 (NCLAT- New Delhi) (para 34) reversed
• GLAS Trust Company LLC v. BYJU Raveendran [2024] 167 taxmann.com 619/[2025] 187 SCL 14 (SC)/(2025) 3 SCC 625 (para 21)
• Tottempudi Salalith v. State Bank of India [2023] 155 taxmann.com 380/[2024] 181 SCL 406 (SC)/(2024) 1 SCC 24 (para 22) followed
• Dena Bank v. C. Shivakumar Reddy [2021] 129 taxmann.com 60/167 SCL 453 (SC)/(2021) 10 SCC 330 (para 31) distinguished

List of Cases Referred to

• Anjani Technoplast Ltd. v. Shubh Gautam [SLP (C) Diary No. 22264 of 2021, dated 13-12-2021] (para 5)
• Kotak Mahindra Bank Ltd. v. A. Balakrishnan [2022] 138 taxmann.com 567/172 SCL 696 (SC) (para 9)
• Dena Bank v. C. Shivakumar Reddy [2021] 129 taxmann.com 60/167 SCL 453 (SC) (para 9)
• Shubh Gautam v. Anjani Technoplast Ltd. [SLP (C) Nos. 21131-21132 of 2022, dated 28-11-2022] (para 11)
• Shubh Gautam v. Asstt. CIT [IT Appeal No. 555 (Kol.) of 2020, dated 1-9-2022] (para 12)
• Swiss Ribbons (P.) Ltd. v. Union of India [2019] 101 taxmann.com 389/152 SCL 365 (SC) (para 19)
• Pioneer Urban Land & Infrastructure Ltd. v. Union of India [2019] 108 taxmann.com 147/155 SCL 622 (SC) (para 20)
• GLAS Trust Company LLC v. BYJU Raveendran [2024] 167 taxmann.com 619/[2025] 187 SCL 14 (SC) (para 21)
• Tottempudi Salalith v. State Bank of India [2023] 155 taxmann.com 380/[2024] 181 SCL 406 (SC) (para 22).

The post SC Bars Use of IBC as Recovery Tool by Decree Holders appeared first on Taxmann Blog.

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Sumaksh Mahajan – [2026] 185 taxmann.com 834 (Article)

An Examination of Competing Interpretations and the Emerging Judicial Position

Sections 153A and 153C of the Income Tax Act, 1961 ceased to apply to searches conducted on or after 1 April 2021. Their continuing relevance, however, is not in doubt. A substantial volume of search assessments from the pre-2021 period remains pending before CIT(A)s, ITA Tribunals, and the High Courts. Within this body of litigation, one interpretive question surfaces with considerable frequency: for a person who has received a notice under Section 153C—the ‘other person,’ who was not searched but whose material was recovered during a search of a third party—from which date should the block period of six assessment years be computed? The Revenue’s position is that the date of search governs. The counter-position, which has found support in a consistent line of judicial decisions, is that the First Proviso to Section 153C creates a deeming fiction that displaces the date of search with the date on which the seized material was received by the jurisdictional Assessing Officer. This article sets out the statutory framework, examines the competing arguments, and surveys the current judicial position.

I. The Statutory Framework

Section 153A, introduced by the Finance Act, 2003, governs assessments of searched persons. Upon a search under Section 132 or a requisition under Section 132A, the Assessing Officer is required to issue notice for the six assessment years immediately preceding the year of search. The notice is mandatory—no precondition of satisfaction, no room for discretion. Abatement of pending assessments for those years follows automatically on the date of search.

Section 153C addresses a different scenario: where material seized from a searched person is found to belong to a third party—the ‘other person.’ That person’s assessment is conducted in accordance with the procedure under Section 153A. However, two conditions must be satisfied before any notice can issue:

(i) the AO of the searched person must record satisfaction that the seized material belongs to the ‘other person,’ and

(ii) the jurisdictional AO of the ‘other person’ must separately record satisfaction that the material has a bearing on the determination of their income.

The provision at the heart of this article is the First Proviso to Section 153C(1), which reads, in material part:

…for this purpose, references to the date of initiation of the search under section 132 or making of requisition under section 132A in section 153A shall be deemed to be references to the date of receiving the books of account, other documents or assets by the Assessing Officer having jurisdiction over such other person.—First Proviso to Section 153C(1)

On a textual reading, the First Proviso creates a deeming fiction: the date of search is substituted, for the purposes of the ‘other person’s’ proceedings, with the date of receipt of seized material by the jurisdictional AO. The six-year block runs backward from the assessment year relevant to the year of receipt—not the year of search.

II. Structural Distinction Between Sections 153A and 153C

Before examining the competing interpretations, it is useful to set out the key structural differences between the two provisions. These differences underlie the interpretive controversy and are frequently not pressed with sufficient clarity before lower authorities.

Click Here To Read The Full Article

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Case Details: Paramjeet Singh vs. BSES Rajdhani Power Ltd. [2026] 185 taxmann.com 276 (Delhi)[30-03-2026]

Judiciary and Counsel Details

• Manoj Kumar Ohri, J.
• Karan Luthra & Shiven Asthana, Advs. for the Petitioner.
• Sandeep Prabhakar, Sr. Adv. & Vikas Mehta, Adv. for the Respondent.

Facts of the Case

In the instant case, the workman, Paramjeet Singh, claimed that he was employed as a driver from 14.12.2003 to 31.05.2012 and that his services were illegally terminated on 01.06.2012 after he demanded statutory benefits. He filed a claim against both the principal employer (BSES Rajdhani Power Ltd.) and the contractor. He relied on two identity cards issued by the contractor and a vehicle log slip to support his claim. However, BSES denied any employer–employee relationship with him, while the contractor admitted that he was its employee but stated that he had left the job on 19.05.2012 and had not completed 240 days of continuous service in the preceding year.

The Labour Court examined the facts and found that Paramjeet Singh failed to prove continuous service of 240 days, as required under Section 25F of the Industrial Disputes Act, 1947. The identity cards produced were not sufficient evidence, and there was a clear break in service, he stopped working after 30.04.2011 and rejoined only on 02.11.2011 before finally working till 19.05.2012. Importantly, he did not file any response to challenge the contractor’s version that he had voluntarily left the job. Based on these findings, the Labour Court dismissed his claim.

High Court Held

On appeal, the High Court of Delhi upheld the Labour Court’s decision. The Court noted that Paramjeet Singh had claimed to be an employee of BSES. Still, there was no evidence to establish such a relationship, especially since the contractor had admitted employment. It further held that in the absence of any allegation that the contract between BSES and the contractor was illegal, the workman could not claim to be an employee of the principal employer. Additionally, since he sought no relief against the contractor, there was no basis to interfere with the Labour Court’s award. Accordingly, the petition was dismissed.

List of Cases Referred to

• Ram Singh v. Union Territory 2003 taxmann.com 4074 (SC) (para 12)
• Bharat Heavy Electricals Limited v. Mahendra Prasad Jakhmola [2019] 2 taxmann.com 1932 (SC) (para 13)
• Kirloskar Brothers Limited v. Rancharan [2023] 12 taxmann.com 1375 (SC) (para 14)
• Syed Yakoob v. K.S. Radhakrishnan 1963 SCC OnLine SC 24 (para 16).

The post No Claim Against Principal Employer Without Employment Proof | HC appeared first on Taxmann Blog.

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Case Details: Saurabh Agarwalla vs. Union of India [2026] 185 taxmann.com 739 (Gauhati)

Judiciary and Counsel Details

• Anjan Moni Kalita, J.
• R.S. Mishra, Ms B. Sarma & Ms M. Dey, Advs. for the Petitioner.

Facts of the Case

The petitioner, a registered person under the CGST and Assam GST Acts, had availed input tax credit (ITC) for FY 2018–19, which was denied by the department on the ground that it was availed beyond the time limit prescribed under Section 16(4). A show cause notice was issued, and thereafter an Order-in-Original dated 07.02.2024 was passed confirming demand along with interest and penalty. The petitioner challenged the order before the High Court, contending that subsequent insertion of Section 16(5) and 16(6) retrospectively extended the time limit for availing ITC up to 30 November 2021 for the relevant financial years, and thus the denial of ITC was no longer sustainable.

High Court Held

The High Court held that in view of the retrospective amendment inserting Section 16(5), the petitioner was entitled to avail ITC for the relevant period notwithstanding the limitation under Section 16(4), as the extended timeline directly covered the petitioner’s case; consequently, the basis of denial ceased to exist, and the Order-in-Original confirming demand, interest, and penalty was set aside, subject to payment of excess utilized amount and applicable interest within the stipulated time.

The post ITC Claim for Tax Year 2018-19 Allowed Under Section 16(5) Extension | HC appeared first on Taxmann Blog.

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The Reserve Bank of India (RBI) has cancelled the banking licence of Paytm Payments Bank, effective April 24, 2026, bringing an end to all its regulated banking operations.

1. Cessation of Banking Operations

Following the cancellation:

• The bank is no longer permitted to:

1. 1. Accept deposits
   2. Undertake fund transfers
   3. Provide any regulated banking services

• The process of winding up has been initiated

2. Regulatory Reasons for Cancellation

The RBI’s action is based on:

• Serious lapses in governance standards
• Persistent non-compliance with regulatory directions
• Failure to adhere to licence conditions

3. Prior Supervisory Actions

Before cancellation, RBI had:

• Imposed restrictions on operations
• Limited the bank’s activities to:

1. 1. Contain risks
   2. Protect customer interests

Despite these measures:

• The bank was unable to rectify regulatory deficiencies

4. Protection of Depositors

• RBI has clarified that the bank has adequate funds to repay depositors
• Customers will:

1. 1. Receive their funds through the prescribed winding-up process
   2. Be safeguarded during the transition

5. Regulatory Significance

This action underscores RBI’s:

• Commitment to strict regulatory enforcement
• Focus on governance and compliance standards
• Priority towards protecting depositors and financial stability

6. Conclusion

The cancellation marks a decisive regulatory step, ensuring that non-compliance and governance failures are addressed firmly, while maintaining confidence in the banking system through depositor protection measures.

Click Here To Read The Full Press Release

The post RBI Cancels Paytm Payments Bank Licence Over Compliance Failures appeared first on Taxmann Blog.

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Editorial Team – [2026] 185 taxmann.com 827 (Article)

Taxmann presents Practical Insights on Ind AS and SAs, a weekly series exclusively for Accounts and Audit Module subscribers on Taxmann.com, that simplifies complex accounting concepts through real-world applications.

This edition explains the measurement framework under Ind AS in a simple, practical, and relatable manner, so that users not only understand the concepts but can also apply them confidently in real-life situations.

Introduction

Financial statements are not merely a record of transactions; they are intended to present a meaningful and faithful picture of an entity’s financial position and performance. To achieve this, every recognised element, i.e., assets, liabilities, equity, income, and expenses, must be expressed in monetary terms. This process, known as “measurement”, lies at the very heart of financial reporting under Ind AS.

A key question inevitably arises while preparing financial statements is

“ At what value should an asset or liability be reported? ” The answer to this question directly affects how relevant, reliable, and comparable the financial statements will be for users.

The Ind AS Conceptual Framework does not mandate a single measurement approach. Instead, it follows a principles-based framework that allows entities to select the most appropriate measurement basis, considering the nature of the item and the information needs of users. This flexibility ensures that financial information remains meaningful and decision-useful, rather than mechanically uniform.

For instance, consider land purchased for ₹10 lakh five years ago, which is now valued at ₹50 lakh. Whether the asset is reported at its historical cost or current value depends on the measurement basis applied. Such decisions require careful evaluation and professional judgment.

This article explores the different measurement bases under Ind AS, their practical application, and the challenges encountered in real-world scenarios.

1. Different Measurement Bases under Ind AS Framework

Measurement is the process of determining the monetary amount at which assets and liabilities are recognised and carried in financial statements. It requires selecting an appropriate measurement basis, such as historical cost, fair value, or fulfilment value, which determines how an item is valued and also affects related income and expenses.

Different measurement bases may be applied to different elements depending on what provides the most relevant and reliable information, guided by the qualitative characteristics of useful financial information and the cost constraint.

Ind AS may further explain how a selected measurement basis is to be applied, including estimation techniques, simplified approaches, and any necessary modifications, such as excluding own credit risk when measuring fulfilment value. In essence, measurement is like choosing a lens, where each basis offers a different perspective depending on the context.

Financial statements use different measurement bases to determine the value of assets, liabilities, income, and expenses. The two main categories are historical cost and current value, each providing different types of information.

1.1 Historical Cost

Historical cost measures assets, liabilities, and related income and expenses using the price of the transaction or event that gave rise to them. It reflects the actual amount paid or received at the time of acquisition or incurrence, adjusted only for impairment, depreciation, amortisation, or similar changes.

For assets, historical cost includes the purchase price along with transaction costs, while for liabilities, it includes the consideration received minus transaction costs.

Over time, historical cost is updated to reflect depreciation or amortisation, representing the consumption of the asset; payments received or made; impairment losses when the carrying amount is no longer recoverable; and interest where a financing component exists.

In the case of liabilities, historical cost is further adjusted for the settlement of obligations and for onerous liabilities where the cost becomes insufficient to fulfil the obligation.

For example, if machinery is purchased for ₹10 lakh, it will continue to be reported at that cost (less depreciation), even if its market value changes over time. Historical cost is simple, verifiable, and based on actual transactions, but it does not reflect current market conditions.

In essence, it answers the question: “What did it cost at the time of purchase?”

1.2 Current Value

Current value measures assets and liabilities based on conditions at the measurement date, using updated estimates rather than the original transaction price, thereby providing a more current view of their worth. It includes measures such as fair value, value in use or fulfilment value, and current cost.

It is forward-looking and typically involves estimation and judgment, yet it enhances decision-making relevance in changing economic conditions. The current value reflects up-to-date information by capturing changes in cash flow estimates, market conditions, and other economic factors.

In essence, current value answers the question of “what an asset or liability is worth at present.”

(a) Fair Value

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. It is determined based on the assumptions of market participants and reflects current market conditions.

Fair value may be directly observed from quoted market prices or estimated using appropriate valuation techniques when active markets do not exist. In determining fair value, factors such as expected future cash flows, uncertainty and risk, including risk premiums, the time value of money, and liquidity and credit risk are considered.

For example, listed shares are measured at their current market price, which reflects their real-time value.

However, fair value has certain limitations, as it may introduce volatility in financial statements due to frequent market fluctuations and often requires significant estimation when observable market data is unavailable.

(b) Value in Use and Fulfilment Value

Value in use represents the present value of future cash inflows expected from the use and eventual disposal of an asset, while fulfilment value represents the present value of future cash outflows required to settle a liability. These are entity-specific measures based on expected future cash flows and internal assumptions rather than market data.

Value in use, applicable to assets, reflects the present value of cash inflows generated from using and disposing of the asset, whereas fulfilment value, applicable to liabilities, reflects the present value of cash outflows needed to fulfil the obligation.

These measures are based on the entity’s own assumptions rather than market participant views, include expected disposal or settlement costs, and are calculated using discounted cash flow techniques. For example, an asset may have a low market value but high internal usefulness, resulting in a higher value in use.

(c) Current Cost

Current cost represents the amount that would currently be required to acquire an equivalent asset or incur an equivalent liability, including transaction costs, and reflects present conditions rather than past transaction prices. It focuses on the replacement value of an asset or liability and may be adjusted to account for the age and condition of the existing asset.

Current cost includes the current purchase price and related transaction costs, with appropriate adjustments where necessary for factors such as wear and tear or obsolescence. It is an entry value, similar in nature to historical cost, but it differs in that it reflects current economic conditions instead of the original transaction price.

Thus, different measurement bases can lead to significantly different financial outcomes. Historical cost provides stability and verifiability, while current value approaches offer relevance and reflect economic reality. The choice of measurement basis, therefore, directly influences reported assets, liabilities, and profit, shaping an entity’s overall financial picture.

2. How does Measurement Affect Financial Statements under Ind AS?

The choice of measurement basis does not merely change numerical values; it significantly influences how financial performance and position are interpreted. As illustrated in the Conceptual Framework, different bases affect both the balance sheet and profit and loss in distinct ways.

For instance, under historical cost, gains are recognised only when realised. Under fair value, gains and losses are recognised as market values change, while value in use reflects estimates of future cash flows. Consequently, two entities holding identical assets may report very different financial results depending on the measurement basis applied.

Thus, when selecting a measurement basis, it is important to consider the nature of information it produces in both the balance sheet and the statement of profit and loss. Different bases provide different types of decision-useful information.

2.1 Historical Cost

Historical cost provides information derived from the original transaction price or event that gave rise to the asset or liability. This makes it relevant and reliable, particularly when transactions occur on market terms.

It assumes that the cost incurred is generally recoverable through future economic benefits. As a result, assets are carried at cost adjusted for consumption and impairment, while liabilities are increased when they become onerous.

Under this approach, consumption or disposal of assets results in expenses based on their original cost, and related income recognition helps determine margins. Similarly, settlement of liabilities generates income based on consideration received. This allows users to assess margins, predict future cash flows, and evaluate management efficiency.

2.2 Fair Value

Fair value reflects current market expectations regarding the amount, timing, and uncertainty of future cash flows. It is based on market participant assumptions and incorporates risk preferences.

Changes in fair value arise from various market factors and may be separately analysed to provide more meaningful information. In many cases, transactions at fair value result in minimal gains or losses at the point of sale or transfer, as carrying amounts already reflect market conditions.

Fair value information has both predictive and confirmatory value, as it reflects current expectations and provides feedback on past estimates.

2.3 Value in Use and Fulfilment Value

Value in use represents the present value of future cash flows expected from an asset, while fulfilment value represents the present value of cash outflows required to settle a liability.

Both measures are entity-specific and based on internal assumptions. They are particularly useful for predicting future net cash flows and assessing the economic benefits or obligations associated with assets and liabilities. Updated estimates also provide feedback on previous expectations, thereby enhancing decision usefulness.

2.4 Current Cost

Current cost reflects the amount required to acquire or replace an equivalent asset or settle an equivalent liability at the measurement date.

Unlike historical cost, it incorporates current price levels, making it more relevant in periods of significant price changes. It helps in determining current margins and improving predictions of future margins. However, it requires separating changes arising from consumption or fulfilment from those arising due to price movements, often referred to as holding gains or losses.

Thus, different measurement bases provide different perspectives on the same economic reality. Historical cost emphasises reliability and transaction evidence, fair value focuses on market conditions, while value in use and current cost highlight future economic benefits and replacement considerations. As a result, measurement choices directly shape reported profits, asset values, and overall financial interpretation.

Click Here To Read The Full Article

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Subham Agarwal – [2026] 185 taxmann.com 778 (Article)

Typically, trusts are created to manage wealth, protect assets from creditors, and ensure smooth succession planning for intended beneficiaries. Trust is a legally secure framework for managing family property, providing for dependents, maintaining confidentiality, and achieving tax efficiency.

1. Meaning of a Trust

A trust is a legal agreement whereby one person, known as the settlor (also known as the author or creator of the trust), transfers ownership of property or assets to another person known as the Trustee, in order to manage and hold for the benefit of a third person or group of people known as Beneficiaries.

The concept of private trusts in India is governed by the Indian Trusts Act, 1882, while the taxation is governed by the Income Tax Act, 1961 (Income Tax Act, 2025).

Three important constituents of a Private Trust are as follows:

(a) Settlor (Author or Creator of the Trust) – The person who creates the trust by transferring property to the Trustee. The settlor defines the terms & conditions and objective of the trust through a Trust Deed or through a Will (known as a Testamentary Trust).

(b) Trustee – The Person or entity to whom the property or assets are vested and who holds the legal title of the trust property. A trustee is bound by fiduciary obligations to manage the trust property in accordance with the trust deed and for the benefit of the beneficiaries. Under the Income Tax Act, the trustee is treated as a Representative Assessee under Section 303(1)(d) of the Income Tax Act, 2025 [corresponding to Section 160(1)(iv) of the Income Tax Act, 1961].

(c) Beneficiaries – Person or group of people for whose benefit the trust property is held and managed. They hold the equitable or beneficial interest in the trust property. Their entitlements may be fixed and determinate, or they may be left to the discretion of the Trustee, as mentioned in the Trust Deed.

2. Types of Private Trust

Private trusts are created for the benefit of identifiable individuals or a defined group of people. They broadly fall into 2 categories, namely:

(a) Specific Trust (also known as Determinate Trust) – Where the beneficiaries are clearly identified, and their respective shares in the trust income or corpus are determinate or known.The trust deed specifies the proportion of income or capital each beneficiary is entitled to receive. Here, the income is assessed individually in the hands of the beneficiary, in proportion to their respective shares and taxed at the rates applicable to each beneficiary. The taxation of a specific trust is governed by Section 304 of the ITA 2025 [corresponding to Section 161 of ITA 1961], which provides that the representative assessee (trustee) shall be assessed in like manner and to the same extent as the beneficiary.

(b) Discretionary Trust (also known as Indeterminate Trust) – Where the Trustee holds the power to decide the group of beneficiaries who can receive either capital or income from the trust, entirely at the trustee’s discretion. In other words, the distribution of all capital and income is completely at the discretion of the Trustee. In these kinds of trusts, not only are the beneficiaries’ identities unknown or indeterminate, but the beneficiaries’ shares are as well. This stand has been accepted and followed by several judicial precedents.

3. Taxability of Private Discretionary Trusts at the Maximum Marginal Rate

The taxation of Private Discretionary Trusts is governed by Section 307 of the ITA 2025 [corresponding to Section 164 of the ITA 1961].

Section 164(1) of the repealed ITA 1961 states that:

“Subject to the provisions of sub-sections (2) and (3), where any income in respect of which the persons mentioned in clauses (iii) and (iv) of sub-section (1) of section 160 are liable as representative assessees or any part thereof is not specifically receivable on behalf or for the benefit of any one person or where the individual shares of the persons on whose behalf or for whose benefit such income or such part thereof is receivable are indeterminate or unknown, tax shall be charged on the relevant income or part of relevant income at the maximum marginal rate.

Provided that in a case where—

(i) none of the beneficiaries has any other income chargeable under this Act exceeding the maximum amount not chargeable to tax in the case of an association of persons or is a beneficiary under any other trust; or

(ii) ….

(iii) …..

(iv) …..

tax shall be charged on the relevant income or part of relevant income as if it were the total income of an association of persons.”

Further, in relation to clause (i) of Section 164(1) of the ITA 1961, the CBDT vide Circular No. 281, dated 22-09-1980, clarified that for a trust to be covered in the first proviso, both conditions stipulated under clause (i) of the proviso must be cumulatively satisfied. The relevant extract of the circular is reproduced below:

30.3….

2. …. With a view to ensuring that the provision is not misused in this manner, the Finance Act has amended the relevant provision to provide that a discretionary trust would be liable to tax at the maximum marginal rate unless none of the beneficiaries had any other income chargeable to tax nor is he a beneficiary under any other private trust. It has also been clarified that, in this context, income chargeable to tax would mean total income above the exemption limit for the relevant year. As a result, the income of a discretionary trust will be chargeable to tax at the maximum marginal rate in cases where any of the beneficiaries has any other taxable income exceeding the exemption limit or if any of the beneficiaries is a beneficiary under any other private trust.

In essence, trusts created for the benefit of individuals will typically be taxed at the maximum marginal rate where income earned by that individual exceeds the basic exemption limit.

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The Goods and Services Tax Network (GSTN) has introduced an Excel-based IMS (Invoice Management System) Offline Tool on the GST portal to enhance taxpayer convenience and compliance efficiency.

1. Objective of the Tool

The tool aims to:

• Simplify invoice-level actions
• Enable bulk processing of data
• Improve accuracy and ease of compliance

2. Key Functionalities

2.1 Invoice Actions (Individual & Bulk)

Recipient taxpayers can:

• Accept invoices
• Reject invoices
• Mark invoices as Pending
• Take No Action

Applicable to invoices filed through:

• GSTR-1
• GSTR-1A
• Invoice Furnishing Facility (IFF)

2.2 Offline Processing Capability

Taxpayers can:

• Download IMS data in JSON format
• Process and validate data offline using Excel tool
• Re-upload processed data to the GST portal

2.3 Validation & Business Rule Consistency

• The tool follows same validations and business rules as the IMS dashboard
• Ensures:

1. 1. Uniform treatment of records
   2. Accuracy in invoice status classification

2.4 Error Identification & Correction

Enables:

• Detection of errors before submission
• Efficient correction in bulk datasets

3. Benefits to Taxpayers

• Reduces dependency on real-time portal interaction
• Facilitates large-scale invoice reconciliation
• Improves efficiency and accuracy in GST compliance

4. Conclusion

The IMS Offline Tool is a practical compliance enhancement, allowing taxpayers to manage invoices offline with precision and flexibility, while ensuring seamless integration with GST system validations.

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