Derivatives are financial instruments whose value is derived from an underlying asset, rate, or index—such as commodities, currencies, interest rates, equities, or market indices. They do not have an independent value of their own and exist only because of the underlying. Derivatives are typically settled at a future date and are widely used for risk management (hedging), price discovery, and, in some cases, speculation.

Table of Contents

1. Derivatives – Definition
2. Key Economic Functions of Derivatives
3. Derivative Products
4. Growth Drivers of Derivatives

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1. Derivatives – Definition

Derivative is something that is derived from another called the underlying. The underlying is independent, and the derivative is dependent on and derived from the underlying. The derivative cannot exist without the underlying. This is the general definition of derivative. For example, wheat farmers may wish to sell their harvest at a future date to eliminate the risk of a change in prices by that date. Such a transaction is an example of a derivative. The price of this derivative is driven by the spot price of wheat which is the “underlying”.

However, accounting standards like FAS 133 (in the US), IAS 39 (in the EU) and AS 30 (in India) impose more qualifications for derivatives. For example, IAS 39 and AS 30 require the following three criteria to be satisfied for financial derivatives.

1. Value of derivative is linked to the value of underlying
2. Trade settled on a “future” date
3. On trade date, there should be no full cash outlay

FAS 133 requires an additional qualification:

4. Trade must settle (or capable of being settled) on net basis and not on gross basis.

The first requirement implies that the price of derivatives is determined by the price of underlying, and not by the demand-supply for derivative. The underlying is the raw material and derivative is the finished product. If the underlying price goes up (or down), the derivative price will go up (or down) regardless of demand-supply for derivative.

The “future” date in the second requirement means that the settlement of the derivative must be later than that for underlying. For example, if the underlying settles on two business days after trade date (T+2), the derivative on that underlying must settle later than T+2; if the underlying settles in T+5, the derivative on that underlying must settle later than T+5; and so on.

The third requirement provides “leverage” – ability to buy the underlying without fully paying for it immediately or sell it without delivering it immediately.

Derivatives are classified into five asset classes – interest rate, credit, equity, forex and commodity. In each asset class, there are four generic products – forward, futures, swap and option.

Derivative products initially emerged as hedging devices against fluctuations in commodity prices, and commodity linked derivatives remained the sole form of such products for almost three hundred years. Financial derivatives came into spotlight in the post 1970 period due to growing instability in the financial markets. However, since their emergence, these products have become very popular and by 1990s, they accounted for about two thirds of total transactions in derivative products. In recent years, the market for financial derivatives has grown tremendously in terms of variety of instruments available, their complexity and also turnover.

Derivatives are tools to manage price risk. How you manage risk depends on your approach to risk. If you want to take risk, you will trade in derivatives which is called speculation. When you want to avoid risk, you manage it one of the three ways – elimination (called hedging); insurance and minimisation (called diversification). The following table summarises the approaches to market risk management.

The following table summarises the approaches to risk management.

Approach	Explanation
Speculation	Taking risk (more formally called “trading”) It results in the possibility of a positive return (i.e. profit) or a negative return (i.e. loss) in future
Hedging	You are already exposed to risk and hedging substantially reduces that risk and locks in the future return at a known level.
Insurance	You are already exposed to risk and insurance selectively eliminates the negative return but retains the positive return. It has an explicit upfront cost, and requires a particular derivative called option to implement it.
Diversification	It reduces both return and risk but in such a way that risk is reduced more than return so that risk is minimised per unit return (or, alternately, return is maximised per unit risk).

2. Key Economic Functions of Derivatives

While the primary function of derivatives is risk management, the derivatives market also performs the following functions:

• Hedging Risk Exposure – Since the value of the derivatives is linked to the value of the underlying asset, the contracts are primarily used for hedging risks. For example, an investor may purchase a derivative contract whose value moves in the opposite direction to the value of an asset the investor owns. In this way, profits in the derivative contract may offset losses in the underlying asset.
• Price Discovery – Derivative market serves as an important source of information about prices. Prices of derivative instruments such as futures and forwards can be used to determine what the market expects future spot prices to be. In most cases, the information is accurate and reliable. Thus, the futures and forwards markets are especially helpful in price discovery mechanism.
• Market Efficiency – It is considered that derivatives increase the efficiency of financial markets. By using derivative contracts, one can replicate the payoff of the assets. Therefore, the prices of the underlying asset and the associated derivative tend to be in equilibrium to avoid arbitrage opportunities.
• Access to Unavailable Assets or Markets – Derivatives can help organisations get access to otherwise unavailable assets or markets. By employing interest rate swaps, a company may obtain a more favorable interest rate relative to interest rates available from direct borrowing.
• Price Stability – It has been seen that central banks of many countries use derivatives for stabilising the currency prices. In India, RBI also intervenes in the forex market through derivatives for INR stability.
• Derivatives, due to their inherent nature, are linked to the underlying cash markets. With the introduction of derivatives, the underlying market witnesses higher trading volumes because of participation by more players who would not otherwise participate for lack of an arrangement to transfer risk.
• Speculation – This is not the only use, and probably not the most important use, of financial derivatives. Financial derivatives are considered to be risky. If not used properly, these can lead to financial destruction in an organisation. However, these derivatives act as a powerful instrument for knowledgeable traders to expose them to calculated and well understood risks in search of a reward, that is, profit.
• Derivatives market helps shift of speculative trades from unorganised market to organised market. Risk management mechanisms and surveillance of activities of various participants in organised space provide stability to the financial system.

Market Participants must understand that derivatives, being leveraged instruments, have risks like counterparty risk (default by counterparty), price risk (loss on position because of price move), leverage risk (magnifying the gain and losses), liquidity risk (inability to exit from a position), legal or regulatory risk (enforceability of contracts), operational risk (fraud, inadequate documentation, improper execution, etc.) and may not be an appropriate avenue for someone of limited resources, less trading experience and low risk tolerance. A market participant should therefore carefully consider whether such trading is suitable for him/her based on these parameters. Market participants who trade in derivatives are advised to carefully read the Risk Disclosure Document, given by the broker to his clients at the time of signing agreement.

3. Derivative Products

As specified earlier, derivatives can be classified into five asset classes – interest rate, credit, equity, forex (currency) and commodity. In each asset class, there are four generic products – forward, futures, swap and option. We will examine this product with currency as asset class. A foreign exchange derivative (currency derivative) is a financial derivative whose payoff depends on the exchange rates of two (or more) currencies. In Indian context “Foreign exchange derivative contract”¹ means a financial contract which derives its value from the change in the exchange rate of two currencies at least one of which is not Indian Rupee, or which derives its value from the change in the interest rate of a foreign currency and which is for settlement at a future date, i.e. any date later than the spot settlement date, provided that contracts involving currencies of Nepal and Bhutan shall not qualify under this definition.

“Exchange traded currency derivatives’” means a standardised foreign exchange derivative contract traded on a recognised stock exchange to buy or sell one currency against another on a specified future date, at a price specified on the date of the contract.

3.1 Forwards

It is a contractual agreement between two parties to buy/sell an underlying asset at a certain future date for a particular price that is predetermined on the date of contract. Both the contracting parties are committed and are obliged to honour the transaction irrespective of the price of the underlying asset at the time of delivery. Since forwards are negotiated between two parties, the terms and conditions of contracts are customised.

These are Over-the-counter (OTC) contracts. Contracts are mainly settled by delivery. However, in certain cases, they are settled in cash on the expiration date. Generally, no initial margin or mark-to-market margin is collected for such contracts.

Foreign exchange forward’ means an OTC derivative involving the exchange of two currencies on a specified date in the future (more than two business days later) at a rate agreed on the date of the contract.

For e.g. – “XYZ” has exported cashews to the US and the total value of the shipment is $5,000,000 (Dollar 5 million) which is due after 3 months. The current rate (spot rate) for exchange is 1 USD = INR 75.10. “XYZ” enters into forward agreement with the bank to realise the proceeds after 3 months at the rate of INR 75.80 per dollar. Agreed rate of 1USD=INR 75.80 shall be the forward rate for the particular transaction.

How does this type of forward cover benefit XYZ?

• Assurance that company will realise inflow of Rs. 37.90 Crs. (5,000,000×75.80)
• If the rupee appreciates to Rs. 74.50/USD or remain same at Rs. 75.10/USD, does not have much to worry because they have already locked in the exchange forward rate of Rs. 75.80/USD
• Businesses generally have payables against their receivable. Company confident that the inflow will take care of the payable with minimum risk of cash flow uncertainty
• Notional loss in case rupee weakens beyond Rs. 75.80/USD.

3.2 Futures

A futures contract is similar to a forward, except that the deal is made through an organised and regulated exchange rather than being negotiated directly between two parties. Indeed, we may say futures are standardised exchange-traded forward contracts. The futures contracts are standardised in terms of lot size, underlying, expiry date etc. Contracts are mainly settled in cash; however, in certain cases they are settled physically on the expiration date. Margins and mark to market are applicable for such contracts. Settlement guarantee is provided by the clearing corporation of the Exchanges.

Currency Futures means a standardised foreign exchange derivative contract traded on a recognised stock exchange to buy or sell one currency against another on a specified future date, at a price specified on the date of contract, but does not include a forward contract.

3.3 Options

An Option is a contract that gives the right, but not an obligation, to buy or sell the underlying on or before a stated date and at a stated price. While the buyer of an option pays the premium and buys the right, the writer/seller of the option receives the premium with the obligation to sell/buy the underlying asset, if the buyer exercises his right. A call option gives the buyer the call the right to buy the asset and a put option gives the buyer of the put the right to sell the asset. In case of futures/forwards it is an obligation for both buyer as well as seller to settle the contract, however in an option contract, the option buyer has the right but not the obligation to buy/sell the underlying asset.

‘Foreign exchange option (Currency Option)’ is an option that gives the buyer the right, but not the obligation, to buy or sell an agreed amount of a certain currency with another currency at a specified exchange rate on or before a specified date in the future.

3.4 Swaps

A swap is an agreement made between two parties, to exchange cash flows in the future, according to a prearranged formula. Swaps are, broadly speaking, a series of forward contracts. Swaps help market participants to manage the risk associated with volatile interest rates, currency exchange rates, commodity prices etc. Most swaps involve cash flows based on a notional principal amount such as a loan or bond, although the instrument can be almost anything. One cash flow is generally fixed (can be floating), while the other is variable and based on a benchmark interest rate, floating currency exchange rate, or index price etc.

Interest rate swap is a derivative contract that involves exchange of a stream of agreed interest payments on a `notional principal’ amount during a specified period. Such contracts generally involve exchange of a `fixed to floating’ or `floating to floating’ rates of interest. On each payment date that occurs during the swap period, cash payments based on fixed/floating and floating rates, are made by the parties to one another.

In forex market there are two kinds of swaps namely, foreign exchange swap and currency swap. The two are basically the same but there are slight differences.

• ‘Foreign exchange swap’ means an OTC derivative involving the actual exchange of two currencies (principal amount only) on a specified date (the short leg) and a reverse exchange of the same two currencies at a date further in the future (the long leg), at rates agreed at the time of the contract.

A Pays $ National   A Receives INR Notional	–> $ 1000000 <– INR 73000000	B Receives $ National   B Pay INR Notional	Initial Notional Exchange @ Spot Rate
A Receives $ Notional A Pays INR Notional	<– $ 1000000 INR 73500000	B Pays $ Notional   B Receives INR Notional	Final Notional Exchange @ Forward Rate

In the example given above, the spot rate for the short leg is Rs. 73 while the rate agreed upon for the long leg is Rs. 73.50.

• ‘Currency swap’ (also known as cross currency swap) means an OTC derivative which commits two counterparties to exchange streams of interest payments and/or principal amounts in different currencies on specified dates over the duration of the swap at a pre-agreed exchange rate. The rate is based on a prevailing spot or predetermined forward rate (for forward start swaps) and agreed upon at the time of the transaction. For example, a customer in India with a long-term USD borrowing is typically exposed to exchange rate risk between the USD and the INR as well as USD interest rate risk. The company can eliminate the risk by entering into a USD/INR currency swap with a bank at the spot exchange rate of Rs. 74. The customer receives from the bank USD floating interest rate payments and USD principal amortisations. Simultaneously, the customer pays the bank fixed interest rate in INR and the equivalent INR principal amortisations at an exchange rate based on a spot rate (or forward rate) prevailing at the time of the transaction and locked in for the entire tenure of the swap. At the start, initial principal is exchanged, though not obligatory.

No Initial Exchange of Principal Amount
Corporate Receives $     Corporate Pays INR	<– 6-month LIBOR+100 on $ 50mn –> 6% on INR 370 Crs	Banks Pays $       Bank Receives INR	Continuing Interest Payment during SWAP period
Corporate Receives $ Notional Corporate Pays INR Notional	<–> $ 50 mn –> INR 370 Crs/INR 400 Crs	Banks Pays $ Notional Banks Receives INR National	Final Notional Exchange @ Initial Spot Rate/Forward Rate

The following table summarises the key feature of four generic types of derivatives.

Generic Derivative	Key Feature	Market
Forward	To buy or sell the underlying asset with cash for settlement on a future date. Customised contract.	OTC
Futures	To buy or sell the underlying asset with cash for settlement on a future date. Standardised contract.	Exchange
Swap	To buy or sell returns from the underlying asset with returns from other underlying asset/cash over a period	Mainly OTC
Option	A right to buy or sell on underlying with cash for settlement on a future date	OTC and Exchange

Different kind of derivatives based on underlying

Underlying	Derivatives
	Forward	Futures	Swap	Option
Interest Rate & Interest Rate Instrument	Forward Rate Agreement and Bond forward	Interest rate & Bond futures	Interest rate swap	Interest rate and Bond option
Equity & Equity Indices	Equity forward	Equity futures	Equity swap	Equity option
Currency Pairs	FX forward/Currency forward	FX futures/Currency futures	FX swap and Currency swap	FX option/Currency option
Commodity	Commodity forward	Commodity futures	Commodity swap	Commodity option

Additionally, “Credit” risk as underlying, Credit Default Swaps (CDS) are also very popular in the financial market. One counterparty in the CDS contract (the “buyer of protection”) makes a regular periodic payment to the other counterparty (the “seller of protection”); in exchange the protection seller agrees to pay the protection buyer any loss in value on the specified reference obligation if a “credit event” (e.g., default) were to occur during the life of the CDS contract.

4. Growth Drivers of Derivatives

Over the last three decades, the derivatives market has seen a phenomenal growth. A large variety of derivative contracts have been launched at exchanges across the world. Some of the factors driving the growth of financial derivatives are:

1. Increased volatility in asset prices in financial markets,
2. Increased integration of national financial markets with the international financial markets,
3. A significant growth of derivative instruments has been driven by technological breakthroughs. Advances in this area include the development of high-speed processors, network systems and improved methods of data entry.
4. Development of more sophisticated risk management tools, providing a wider choice of risk management strategies, and
5. Innovations in the derivatives markets, which optimally combine the risks and returns over a large number of financial assets, leading to higher returns, reduced risk and lower transactions costs as compared to individual financial assets.

Currency derivatives are one of the most important among all derivatives, as shown in the following tables of notional outstanding amount:

Notional Amount Outstanding (USD Billion) in OTC Derivative Products as of June 2023

Foreign exchange contracts	120250
Interest rate contracts	573697
Equity-linked contracts	7838
Commodity contracts	2244
Credit derivatives (including Credit default swaps)	10122
Other derivatives	593
Total	714744

Source – Bank for International Settlement

---

1. Foreign Exchange Management (Foreign exchange derivative contracts) Regulations, 2000.

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Case Details: Smt. Bolla Malathi vs. B. Suguna - [2025] 181 taxmann.com 299 (SC)

Judiciary and Counsel Details

• Sanjay Karol & Nongmeikapam Kotiswar Singh, JJ.
• Hari Vishnu, Likhi Chand, Advs. & Venkita Subramoniam T.R., AOR for the Petitioner.
• A. Selvin Raja, Mukesh Kumar Maroria, AORs, Brijender Chahar, Jagdish Chandra, Bhakti Vardhan Singh & Ms Gayatri Mishra, Advs. for the Respondent.

Facts of the Case

In the instant case, the Deceased was employed in the Defence Accounts Department. At the time of joining service in 2000, he nominated his mother (respondent no. 1) for General Provident Fund (GPF), Central Government Employees Insurance Scheme (CGEIS), and Death-Cum Retirement Gratuity (DCRG).

After marrying appellant in 2003, he nominated appellant for CGEIS and DCRG but did not alter the GPF nomination. He died in service in 2021. When the appellant applied for the release of accumulated GPF, authorities refused, citing a subsisting GPF nomination in favour of the mother.

The appellant approached the Central Administrative Tribunal, which held that the initial GPF nomination in favour of the mother became invalid upon the deceased acquiring a family and, no valid nomination subsisting at death, directed the release of the GPF in equal shares to the appellant and respondent no. 1.

The High Court set aside the Tribunal’s order, proceeded on the basis that the mother continued as a valid sole nominee for GPF, and directed that the GPF amount be paid to her. Thereafter, an appeal was made before the Supreme Court.

Supreme Court Held

The Supreme Court noted that since nomination in favour of respondent no.1 was made with a stipulation that it would become invalid upon subscriber acquiring a family (marriage or otherwise), as such, by function thereof, it became invalid.

The Supreme Court held that, since the deceased had not altered the nomination to comply therewith, the earlier nomination could not be held valid. Therefore, the GPF of the deceased was to be distributed between the appellant and respondent no. 1.

List of Cases Reviewed

• Order of High Court of Judicature at Bombay in Writ Petition No. 5756 of 2024, dated 11-02-2025 (para 10) set aside

List of Cases Referred to

• Sarbati Devi v. Usha Devi [1984] 17 Taxman 1 (SC) (para 9)
• Shakti Yezdani v. Jayanand Jayant Salgaonkar [2023] 157 taxmann.com 364/[2024]182 SCL 158 (SC) (para 9)
• Shipra Sengupta v. Mridul Sengupta 2009 taxmann.com 2095 (SC) (para 9).

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Case Details: Bahadur Islam vs. Union of India - [2025] 181 taxmann.com 481 (Gauhati)

Judiciary and Counsel Details

• Pranjal Das, J.
• S.C. Biswas, B.D. Das & F.A. Hassan for the Petitioner.
• S C Keyal, Ld. Standing Counsel for the Respondent.

Facts of the Case

The petitioner was arrested for his alleged involvement in GST fraud using fake registrations and invoices to pass on Rs. 8.59 crore bogus input tax credit. He was arrested under Section 132 of the CGST Act. The case diary and statements indicated the petitioner’s participation, receipt of illegal remuneration, evasive disclosure on bank accounts, and assistance in fraudulent registrations.

High Court Held

The High Court held that the safeguards for arrest were held applicable to GST arrests as well. Notices of grounds and authorisation were examined. Investigation materials, if accepted at face value, showed conscious participation and illegal benefit. The network appeared organised across states, and the probe remained active. Given gravity, ongoing investigation, and punishment up to five years, bail at this stage was declined.

List of Cases Reviewed

• Radhika Agarwal v. UOI [2025] 171 taxmann.com 832/95 GSTL 225/(2025) 6 SCC 545 (para 10) followed

List of Cases Referred to

• Radhika Agarwal v. UOI [2025] 171 taxmann.com 832/95 GSTL 225 (SC) (para 10).

The post Bail Denied in Cross-State Fake GST ITC Racket Due to Gravity and Ongoing Probe | HC appeared first on Taxmann Blog.

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Case Details: A.G. Biotech Laboratories (India) Ltd. vs. Income-tax Officer - [2025] 180 taxmann.com 850 (Telangana)

Judiciary and Counsel Details

• P. Sam Koshy & Narsingh Rao Nandikonda, JJ.
• A.V.A. Siva Kartikeya, Ld. Counsel Appearing & A.V. Krishna Koundinya, Ld. Sr. Counsel for the Appellant.
• Ms Bokaro Sapna Reddy & J.V. Prasad, Ld. Sr. Counsels for the Respondent.

Facts of the Case

The assessee was engaged in the business of micro-propagation of plants through tissue culture technology. It earned income from the sale of tissue-cultured plants and claimed that it should be treated as agricultural income exempt from tax under section 10(1).

The Assessing Officer (AO) rejected the assessee’s claim. AO treated the income as business income subject to taxation. The CIT(A) upheld the order of the AO.

On further appeal, the Tribunal held that the majority of the activities were performed in a laboratory under sterile conditions, using sophisticated scientific equipment and research methods. In contrast, the land was used only incidentally to grow mother plants from which tissues were extracted. Thus, the plants were not a direct result of basic agricultural operations on land but rather the outcome of advanced scientific methods.

The matter reached before the High Court.

High Court Held

The High Court held that the fundamental question was whether the employment of advanced scientific techniques and laboratory-based processes necessarily transforms what is essentially an agricultural activity into a commercial or business operation.

The essence of the assessee’s activity remains rooted in agriculture: the cultivation of mother plants on land through basic agricultural operations, i.e., tilling, planting, nurturing, and harvesting, followed by the multiplication and propagation of plant material through tissue culture technology. The fact that sophisticated scientific methods are employed to enhance efficiency and productivity does not alter the agricultural character of the underlying operation.

The legislature, in defining agricultural income, did not intend to freeze the concept of agriculture in a time warp or to restrict it to primitive cultivation methods. Agriculture, like all human endeavours, evolves with technological advancement, and the introduction of tissue culture technology serves the same purpose as traditional agricultural methods, the production of plant material for cultivation, but achieves this objective with greater efficiency, uniformity, and disease-free quality.

Therefore, income earned by the assessee from the sale of tissue-cultured plants constituted agricultural income within the meaning of section 2(1A) and was exempt from tax under section 10(1).

List of Cases Reviewed

• I.T.A. No.1172 &1173/Hyd/2006, dated 28-9-2007 [Par 29] set aside
• CIT v. Soundarya Nursery [2002] 123 Taxman 372/[2000] 241 ITR 530 (Madras) (para 21)
• CIT v. Raja Benoy Kumar Sahas Roy [1957] 32 ITR 466 (SC) (para 22)
• Puransingh M. Verma v. CIT [2015] 56 taxmann.com 218/230 Taxman 470 (Gujarat) (para 23)
• CIT v. Prabhat Agri-Biotech Ltd. [ITT Appeal No. 88 of 2014, dated 21-2-2014] (para 24)
• Pr. CIT v. Nuziveedu Seeds Ltd. [2025] 178 taxmann.com 486 (Telangana) (para 27) Followed.

List of Cases Referred to

• Puransingh M. Verma v. CIT [2015] 56 taxmann.com 218/230 Taxman 470 (Gujarat) (para 10)
• CIT v. Soundarya Nursery [2002] 123 Taxman 372/[2000] 241 ITR 530 (Madras) (para 11)
• CIT v. Raja Benoy Kumar Sahas Roy [1957] 32 ITR 466 (SC) (para 22)
• CIT v. Prabhat Agri-Biotech Ltd. [ITT Appeal No. 88 of 2014, dated 21-2-2014] (para 24)
• Pr. CIT v. Nuziveedu Seeds Ltd. [2025] 178 taxmann.com 486 (Telangana) (para 27).

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Case Details: DGAP vs. Dange Enterprise - [2025] 181 taxmann.com 491 (GSTAT-NEW DELHI)

Judiciary and Counsel Details

• Dr. Sanjaya Kumar Mishra, President

Facts of the Case

The Directorate General of Anti-Profiteering (DGAP) conducted an investigation and issued the first report to the New Delhi GST Appellate Authority. The report alleged that the respondent had profiteered an amount of Rs. 28,74,577, including GST on the base profiteered amount. The matter was remanded to the DGAP for further investigation. In the subsequent report, the DGAP quantified the profiteered amount to be Rs. 4,57,683. The respondent admitted the amount profiteered but disputed the liability to pay any penalty and interests thereon.

GSTAT Held

The Delhi GST Appellate Authority held that the enabling provision for interest under Rule 133(3)(c) was inserted in 2020 after the last date of the alleged profiteering. Thus, no interest was leviable for the period before the amendment. The relevant penal provision was introduced only in 2020. Therefore, no penalty could be imposed on the respondent. Further, the report submitted by the DGAP was accepted to the extent that the respondent profiteered an amount of Rs. 4,57,683 only from recipients who are faceless. The respondent was directed to deposit the profiteered amount in the Consumer Welfare Fund created by the Centre and States equally.

List of Cases Referred to

• DGAP v. Proctor and Gamble Group [2025] 178 taxmann.com 564 (GSTAT – NEW DELHI) (para 5).

The post No Retrospective Interest on Profiteering Before 1st April 2020 | GSTAT appeared first on Taxmann Blog.

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International Business Environment refers to the set of internal and external factors—such as political, legal, economic, cultural, technological, social, and global forces—that influence how businesses operate, compete, and make decisions across national boundaries. It determines the opportunities, risks, regulations, and conditions under which firms conduct cross-border trade, investment, and international operations.

Table of Contents

1. Introduction – International Business Environment – Concept & Relevance
2. Components of International Business Environment

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Opening Case Starbucks’ Entry into China When Starbucks arrived in China in 1999, scepticism about its prospects abounded. In a place where tea was the dominant drink and the Western café culture was largely unknown to consumers, the company seemed at a disadvantage. But Starbucks did its cultural homework—and customised market moves to match local consumers. The company chose bigger store sizes to fit in more people—an environment that adapted to China’s group-oriented society. It also launched locally flavored drinks like the green tea frappuccino and adjusted its pricing to target the emerging middle class. At the same time, Starbucks managed the complex political and legal regime in China, that included obtaining key licenses, complying with regulations governing foreign investment, and creating joint ventures with local partners because of the restrictive rules on foreign ownership.

Today, there are thousands of Starbucks stores across China, making it one of the company’s largest international markets. This case demonstrates the political, legal, cultural, and economical considerations that influence foreign business opportunities and stability.

1. Introduction – International Business Environment – Concept & Relevance

The global business environment includes both external and internal factors which affect the operation of a business and determine its performance and decisions within the global market. This ecosystem is encircled by a number of forces – political, legal, cultural, economic, social, and technological – each of which helps to shape the map of world trade and investment.

1.1 Why Do We Need to Understand the International Business Environment?

Knowledge of the international business environment is important for firms doing business in foreign countries as it helps anticipate opportunities and manage risk, and construct a competitive strategy. Some of the reasons are:

1. Risk Assessment and Management – Countries vary significantly in their political, regulatory, and economic environments. Considering these factors, companies can prevent themselves from potential challenges, for example, political instability, trade limitations, or currency volatilities. Coca-Cola, for example, was forced to withdraw from Venezuela following hyperinflation and political fallout which made running its business unsustainable.
2. Identification of Opportunities – A comprehensive investigation of various international geographies enables firms to find new markets, develop new segments of customers, beneficial trade regulations and countries suitable for investment. One of such examples is Netflix’s foray into India, where there is a huge demand for digital content on-the-go due to a large number of young tech-savvy populace.
3. Strategic Decision-Making – It is important for companies to have knowledge of cultural, legal and economic contexts when they are choosing an entry mode (e.g., joint venture, licensing, subsidiary) and crafting a marketing strategy. For instance, IKEA chose joint ventures in China, given that local laws did not allow foreign control of the total retail outlet.
4. Compliance with Laws and Regulations – Every country has its own laws regarding taxation, labor, consumers rights and intellectual property. Knowing these laws makes life easier and keeps you clear of legal ramifications. Such as, company like Google has already adjusted the way it operates in the European Union to comply with that region’s data protection laws under the General Data Protection Regulation (GDPR).
5. Adaptation to Cultural Differences – Cultural sensitivity reduces conflicts in negotiation, human resources management and marketing communication, and thus promotes acceptance to foreign markets. A good one of these is the McAloo Tikki – McDonald’s serves in India, to respect territory of vegetarian eaters and culture character.
6. Competitive Advantage – Businesses that understand the trends and environments internationally will be able to innovate, localise their products and respond quicker than the competitors. Samsung is an excellent example of this; by investing substantially in research and development to tailor its smartphone technology to evolving global customer demands, it responds frequently faster than their peers are able to do.
7. Sustainable Growth – Knowing the various economic indicators, policies and being aware of issues can be used to place company in a good position for expansion in international markets. Tesla’s entry into Norway is a prime example of this; the Norwegian government has been heavily active in offering financial incentives for those buying electric vehicles, and hence, the market is ripe for sustainable expansion.

In short, studying the international business environment allows businesses to navigate risks, seize opportunities, comply with diverse systems, and achieve global success.

2. Components of International Business Environment

International business operates in a highly complex environment influenced by a wide range of factors that have a direct impact on the way in which companies work in cross-border markets. These forces may be divided into internal (micro) and external (macro) forces. Internal (or micro) factors are factors internal to the organisation that it can control such as, its resources, management practices, capabilities, organisational culture, and the nature of relationships with suppliers and partners. On the other hand, some factors are beyond the firm’s control, and referred to as external, or macro factors, such as economy, political and/legal processes, socio-cultural changes, technology improvements, environmental impacts, and global developments. Knowledge of these internal and external factors is the foundation to identifying opportunities, controlling threats, and developing adequate strategies for the international sector.

2.1 Political Environment

Political environment refers to the framework, philosophy, policies, and functions of a country’s government and its system. Political considerations play a critical role in international trade, investments and business operations. Key factors to the political environment are:

• Political System
• Stability of Government
• Foreign Trade Policy & Tariff Structure
• Diplomatic Relations Between Countries
• The Influence of Political Parties and Ideologies
• Government Inducements and Restrictions on the Inflow of Foreign Capital

India’s “Make in India” scheme is a classic case in point, where foreign giants like Apple and Samsung have been wooed through huge incentives to set up plants in the country.

2.2 Legal Environment

It is a complete structure of laws, judiciary systems, and rules that can be used to govern business establishments. As each country has its own set of rules, firms have to adjust to this. The main components of legal system composition are:

• Corporate Laws, Labor Laws
• Proprietary Rights (Patents and Copyrights and Trademarks)
• Foreign Investment Laws and FDI Regulation
• International Trade Treaties and Arbitration Systems

For example, Microsoft devotes enormous resources in order to protect the legal status of its software in global markets where piracy and intellectual property protection are issues.

2.3 Economic Environment

The economic environment encompasses economic system, decision-making process, policies, rules, and regulations, and existing conditions that influence foreign trade and investment. The salient features of the economic environment are:

• Nature of the Economy (Capitalist, Socialist, Mixed)
• Economic Indicators – (Including GDP, Inflation, Unemployment, and Exchange rates)
• Trade Balance and Foreign Exchange Reserves
• The Economics Policies (Fiscal, Monetary, Industrial, Trade Policies etc.,)

For instance, high growth of India’s economy and the consequent rise of income levels of its middle class, drawing in itself the attention of many US multinational companies—Amazon, Walmart and IKEA.

2.4 Cultural Environment

A culture is a way of life of a group of people—the behaviors, beliefs, values, and symbols that they accept, generally without thinking about them, and that are passed along by communication and imitation from one generation to the next. It has a substantial impact on both consumer behavior and management policies.

In other words, it is a collective character or values of the society, which people inherit from their ancestors or are given to societal members by the society itself. Key components are:

• Mother tongue, religion, values and culture
• Society, social norms, manners, and consumerism
• Hofstede’s cultural differences (e.g., power distance, collectivism, uncertainty avoidance)

For example, KFC adapted its breakfast menu in China toward the congee (rice porridge) by local food catering and habits.

2.5 Technological Environment

Technology also defines the means through which organisations manufacture, deliver and market their products and services to customers. Technological innovation has transformed patterns of international trade and investment. The specific characteristics of technological environment are:

Innovation and R&D

• Digitalisation, e-commerce, and automation
• The media (which includes the internet, mobile phones and AI)
• Questions of technology transfer and intellectual property rights

Amazon, for instance, uses AI-based recommendation engines at the global scale but tailors them to the regional shopping dynamics and tastes.

2.6 Demographic and Social Environment

Population size, age profiles, education levels, lifestyle preferences and the extent of urbanisation are all important social characteristics that affect international business strategies. The major components in this field include:

• Rates and composition of population growth
• Migration/mobility of labor force
• Rates of literacy and levels of education
• Changes in lifestyle and urbanisation

For example, a large millennial population in India that led global giants like Spotify, Netflix, Instagram, etc. to focus on building digital entertainment platforms and content for young people as they are dominating the current share of population.

2.7 Global Environment

It includes the foreign institutions and foreign sector influences that shape a business’s opportunities and decisions in an increasingly global marketplace. The basic elements of the global environment are:

• Impact of such agencies like WTO, IMF, World Bank, UN etc.
• International treaties related to trade, environmental protection, and labor standards
• Currents of globalisation, climate change, and the digital economy
• Geopolitical adversities, conflicts, and interruptions in global logistics chains

The COVID-19 pandemic, for instance, caused a major disruption in the global supply chain, which forced firms such as Toyota and Apple to rethink their sourcing and logistics plans in light of new conditions in the area of international trade.

2.8 Competitive Environment

This refers to the presence of competitors in international markets and the strategies they adopt. Companies must monitor global competition to remain relevant. Key elements of competitive environment are:

• Local and global competitors
• Industry standards and benchmarks
• Pricing strategies and innovation levels
• Mergers, acquisitions, and alliances

For example, Pepsi and Coca-Cola continuously adapt their marketing and pricing strategies worldwide to outperform each other in beverages.

2.2.1 Political Environment and International Business

Political environment includes the structure of the government and government policies, regulations, and stability of the country, which affects the business and economy. Political choices, as a critical feature of the external environment, can promote or discourage trade and foreign investment. Political factors influence business operation in following ways:

• Government Type – A democratic, authoritarian, or monarchical form of political organisation is an important indication of policy consistency and predictability.
• Political Stability – A stable government provides a level of predictability in policies and rule enforcement, whereas an unstable one creates uncertainty that may adversely affect investment or business conduct.
• Regulatory Cliff – The business framework is heavily influenced by the nature of trade policies, foreign investment regulations, and taxation laws, labor laws and industry-specific regulations.
• Corruption and Red Tape – Corruption and level of bureaucracy have a direct bearing on extent to which doing business is easy, defining the operating environment as well as competitive environment.
• International Relations – Diplomatic relations, trade agreements, sanctions and other geopolitics are very important when it comes to cross-border operations, and they construct the environment in which enterprises must operate.

Significance of Political Environment to International Business

The political environment significantly influences the way in which firms in international markets carry on business. It sets the basic rules to be followed, describes the risks and opportunities behind international market entry, and affects strategic actions such as access to information and foresight to make informed decisions. The business’s level of information and insight in political context helps to determine potential challenges, compliance and investment. These are the key areas from which the importance of the political landscape emanates.

1. Determining Market Access – Markets are not open equally to foreign companies as it depends on political policies. The FTAs, as well as protectionist initiatives, may shape a firm’s international operations to a large extent. For example, the trade war between the United States and China along with import tariffs, has forced companies like Apple and Boeing to reconsider and reconfigure their supply chain and sourcing strategies. On the other hand, the regulatory body of the European Union (EU) promotes free trade among its member countries which is good for companies like BMW or Nestlé as they operate beyond borders within Europe.
2. Assessing Political Risk – Political risks such as instability, regime changes and unrest can present serious problems for foreign investors. Firms should do a comprehensive risk assessment before expanding into new markets such as Vodafone in India, where retrospective taxation proved to be huge challenges and has had a negative impact on its business as well as investment plans.
3. Influencing Regulatory Compliance – Businesses have to respect domestic laws about labor, the environment, taxes, and industry. Non-compliance can result in costly penalties, business disruptions, and negative publicity. For Example, Google or Facebook both had to adapt their behavior to the European General Data Protection Regulation (GDPR) on data privacy and that has affected their overall data management strategy around the globe.
4. Shaping Investment Decisions and Incentives – Governments often provide incentives, such as tax holidays, subsidies, and the like, to bring in foreign investment. On the other hand, some restrictions can act as barriers to entry. For example, Tesla’s Giga factory in Shanghai benefited from Chinese government incentives such as large tax cuts and fast-track approval. Foreign companies may be hesitant to invest in countries with high expropriation risk or heavy foreign ownership regulations (e.g. some of the Middle Eastern countries).
5. Effects on Strategic Planning and Longer-term Operations – The broader political climate is “hugely important” when it comes to key business decisions around supply chain management, pricing strategy, marketing approach and risk hedging. Firms must closely monitor political events if they want to remain competitive. Such as Coca-Cola and Unilever monitor political climates in markets like Nigeria and Venezuela, for example, and can adjust production, pricing and sourcing as needed.
6. Global Relations and Trade Policies – International political relations, sanctions, and trade agreements can determine the feasibility of entering or continuing operations in certain markets. As NAFTA (now USMCA) reshaped trade rules in North America, affecting manufacturing and supply chain decisions for companies like Ford and General Motors.

In conclusion, the political environment is one of the key drivers in international business, influencing entry to new markets, investment in countries, and operational risk, regulatory compliance and longer-term strategic decisions. Firms that thoughtfully analyse and respond to the political landscape will be able to capitalise, manage, and compete in the international markets.

2.2.2 Legal Environment and International Business

The legal environment is the complex system of rules, regulations, and legal institutions that directly or indirectly influence, restrain, and protect various aspects of (domestic and/or international) business. It is comprised by, more than the formal rules set by legislatures, and includes case laws, administrative regulations, and international agreements as a whole that regulate business. There are multiple legal factors that impacting important business considerations, such as:

• Business and Commercial Laws – This encompasses the contract law, company law, the competition law, and the corporate governance, all of which dictate how businesses are structured and run.
• Labor and Employment Laws – Laws related to salary, working hours, employee rights and the role of trade unions are essential to safeguard the workforce.
• Intellectual Property – This zone protects ideas and labels by developing patents, copyrights, trademarks and trade secrets.
• Tax and Financial Laws – These laws include income taxation, customs duties, and tariffs, and accounting regulations, which are paramount for financial compliance and planning.
• Environmental Regulations – Regulations on pollution prevention and management and sustainable use are ever-more relevant as businesses are challenged to reduce their environmental impact.
• Consumer Protection Laws – The focus of these laws is the safety and quality of products and promoting fair trade practices that encourage the protection of consumers.
• International Law Framework – This is the rule-based system, which incorporates trade agreements, export-import orders, and global accords, like the WTO rules.

Thus, the legal environment establishes the “rules of the game” for firms in terms of what activities are permitted and what are not, and allows for resolving conflicts between firms through the court system.

Importance of Legal Environment in International Business

1. Ensures Compliance with Laws – Businesses are bound by laws, both national and international, in order to keep their business running legally. Non-compliance can lead to heavy fines, lawsuits, and even to the business being shut down. For example, Uber and Airbnb are facing substantial legal battles in many countries where regulation of transportation and rental is supervised by a stringent law.
2. Protects Business Interests – Strong laws are indispensable to protect contracts, intellectual property and investments, to ensure a safe climate for overseas businesses. For example, Apple actively works to protect its patents and trademarks all around the world and puts up a fierce fight against counterfeiters.
3. Reduces Operational Risks – Knowing the law helps businesses predict the risks posed by taxation, labor laws, environmental regulations, and trade constraints. For example, pharmaceutical firms like Pfizer are required to follow strict rules pertaining to drugs and patent laws within each country to avoid legal issues.
4. Facilitates Trade and Investment – Legal systems that are transparent and congruent create an environment that is conducive to FDI (foreign direct investment) and international trade. Singapore, for example, and its well-regulated legal environment make it as a preferred regional hub of many MNCs in Asia.
5. Supports Ethical and Social Responsibility – Legislation on labor rights, environmental concerns and consumer safety pushes firms to pursue responsible and sustainable business practices. Companies like Unilever comply with environmental and labor laws globally to maintain their brand and ensure marketplace access.

In closing, the legal environment is an integral part of the world of international business. It sets ground rules, safeguards commercial concerns, limits the risk and encourages ethical practices. Companies that excel in deciphering and complying with legal necessities are more likely to succeed in foreign business, whereas those ignoring legal compliance are at risk of financial costs, setbacks and reputational damage.

2.2.3 Cultural Environment and International Business

The cultural environment includes a set of core values, beliefs, norms, traditions, customs, habits, and ways of doing things that are widely accepted in a society and that affect the ways in which people carry out daily activities, including communication and conducting business. In the field of international business, it is necessary to have a good grasp of cultural environment because it will affect consumer behavior, operation of company, and management policies. There are a number of key factors of cultural environment in which businesses operate:

1. Language – It serves as the dominant form of expression, spoken and written, within a given society. In advertising, sales, labelling products, and customer service it is highly important. Mistranslations, interpretations and misunderstandings can drive quite big marketing failures. One illustrative instance is that of the American car company Chevrolet’s experience with its car name “Nova” when sold in Germany, where the car is positioned as “No go” – indicating a lack of functionality by implication. Despite the fact that “Nova” carries a positive connotation in Spanish—new—the negative meaning to speakers of other languages hurt sales. It just shows how deeply linguistic differences, along with idioms and meanings, can affect how a product is perceived, emphasising the importance of well-thought-out localisation strategies.
2. Religion and Beliefs include the spiritual and moral values to which the people adhere and the role they sustain within a society. Such beliefs may have a real impact on food consumption, holiday celebrations, and ethical requirements. Companies are treading those religious sensitivities carefully so as not to offend consumers. For example, McDonald’s India offers vegetarian options on its India menu and doesn’t serve beef in India, in line with Hindu dietary restrictions.
3. Values and Attitudes are core principles and outlooks that guide behavior, such as individualism vs. collectivism, or risk tolerance. These affect consumer preferences, leadership styles, and employee behavior. In Japan, collective decision-making is valued, whereas in the U.S., individual initiative is often rewarded.

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1. Introduction

Treasury shares represent an entity’s own equity instruments that are re-acquired and held either directly by the entity or indirectly through a subsidiary or any other entity under its control. Ind AS 32, Financial Instruments: Presentation sets out clear guidance for the accounting and presentation of treasury shares, yet these guidanceis frequently misunderstood in practice. One of the most commonly observed non-compliances relating to treasury shares pertains to their incorrect presentation in the financial statements. Here we have explained the non-compliance with the help of case scenario.

2. Facts

Radiant Limited hereinafter referred to as “the company” is engaged in the business of manufacturing of electronic equipment. The company operates through two divisions, namely the hardware division and the software division. Considering the adverse financial affects, the company decided to go for demerger. Thus, under the scheme of demerger approved by the “High Court”, the company transferred its software division to an independent trust. It is hereby important to note that, the company retained a beneficial interest in the trust.

The assets transferred to the trust comprised investments in equity shares of the company, investments in associate companies and other unlisted companies, along with the related borrowings and liabilities of the software division. Despite the shares of the company legally held by the independent trust, the company continues to have rights over the economic benefits arising from the sale of such shares.

The company’s shares held by the trust are intended to be sold and the proceeds thereof are to be realised for the benefit of the company. Thus, the company is of opinion that the beneficial interest held by the company in the trust shall be treated as financial assets.

3. Relevant Provision of Ind AS 32

Para 33 of Ind AS 32

If an entity reacquires its own equity instruments, those instruments (treasury shares) shall be deducted from equity. No gain or loss shall be recognised in profit or loss on the purchase, sale and cancellation of an entity’s own equity instruments. Such treasury shares may be acquired and held by the entity or by other members of the consolidated group. Consideration paid or received shall be recognised directly in equity.

Para AG 36 of Ind AS 32

An entity’s own equity instruments are not recognised as a financial asset regardless of the reason for which they are reacquired. Paragraph 33 requires an entity that reacquires its own equity instruments to deduct those equity instruments from equity. However, when an entity holds it sown equity on behalf of others, eg a financial institution holding its own equity on behalf of a client, there is an agency relationship and as a result those holdings are not included in the entity’s balance sheet.

Click Here To Read The Full Story

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Circular No. HO/17/11/24(1)2025-DDHS-POD1/I/491/2025, Dated: 18.12.2025

1. Regulatory Background

SEBI had earlier amended the framework governing the issuance of debt securities and non-convertible redeemable preference shares (NCRPS) to permit issuance at a reduced face value of ₹10,000, primarily to enhance market accessibility and liquidity.

Building on this reform, SEBI has now further liberalised the issuance conditions under the Non-Convertible Securities (NCS) Master Circular.

2. Permission to Issue Zero-Coupon Debt Securities

Under the revised framework:

Issuers are now permitted to issue zero-coupon debt securities:

• With a fixed maturity, and
• Without any structured obligations

This is in addition to the already permitted:

• Interest-bearing debt securities, and
• Dividend-bearing non-convertible redeemable preference shares

The inclusion of zero-coupon instruments expands the range of permissible debt structures under the reduced face-value regime.

3. Conditions and Safeguards

The relaxation applies only where the zero-coupon debt securities:

• Have a fixed and clearly defined maturity, and
• Do not involve structured or complex payout obligations

This ensures that reduced face-value issuances remain plain-vanilla and transparent, limiting risk for investors.

4. Applicability and Scope

• The revised norms apply only to private placement issues of debt securities.
• All other provisions of the NCS Master Circular remain unchanged.
• The circular applies to all private placement issues of debt securities that are proposed to be listed, from the date of issuance of the circular.

Public issue norms are unaffected by this amendment.

5. Regulatory Intent

SEBI’s move aims to:

• Broaden the range of debt instruments available at lower face value
• Improve accessibility for investors, including smaller institutional and sophisticated investors
• Enhance flexibility for issuers in structuring debt instruments
• Maintain simplicity and transparency by disallowing structured obligations

The reform aligns with SEBI’s broader objective of deepening the corporate bond market while preserving investor protection.

6. Implications for Issuers and Market Participants

6.1 For Issuers

• Greater flexibility to issue zero-coupon instruments under private placement
• Ability to tailor funding strategies without recurring interest obligations
• Opportunity to attract a wider investor base through reduced denomination

6.2 For Investors

• Access to a broader mix of fixed-income products
• Clear visibility on maturity and redemption value
• Continued regulatory safeguards against complex structures

6.3 For Intermediaries

• Need to update structuring, disclosure, and listing documentation
• Ensure compliance with eligibility conditions under the NCS Master Circular

7. Key Takeaway

SEBI’s amendment enables issuance of zero-coupon debt securities at a reduced face value of ₹10,000 under private placement, while keeping the broader NCS framework intact. The change enhances market flexibility without compromising on simplicity or investor protection.

Click Here To Read The Full Circular

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Circular No. RBI/2025-26/155 FIDD.CO.LBS.BC.No.09/02.08.001/2025-26; dated: 18.12.2025

1. Background – Creation of a New District

The Government of Gujarat, through Gazette Notification No. GHM/2025/210/M/RD/RCO/e-file/15/2025/5360/L1 dated September 24, 2025, formally notified the creation of a new district named Vav-Tharad.

The formation of the new district necessitated corresponding administrative and banking arrangements, including the assignment of Lead Bank responsibility under the Lead Bank Scheme.

2. RBI’s Decision on Lead Bank Assignment

Following the creation of the new district, the Reserve Bank of India (RBI) has assigned Bank of Baroda as the Lead Bank for the newly formed Vav-Tharad district

This designation entrusts Bank of Baroda with the responsibility of coordinating banking and credit-related initiatives in the district.

3. Role of the Lead Bank

As the Lead Bank for Vav-Tharad district, Bank of Baroda will be responsible for:

• Coordinating implementation of government-sponsored schemes
• Promoting financial inclusion initiatives
• Facilitating district-level credit planning
• Convening and supporting District Consultative Committee (DCC) and related meetings
• Acting as the nodal bank for interaction with district administration and other banks

4. No Change for Other Districts in Gujarat

The RBI has also clarified explicitly that:

• There is no change in the Lead Bank responsibilities for any other districts in the State of Gujarat
• Existing Lead Bank arrangements for all other districts continue unchanged

This clarification ensures continuity and avoids operational ambiguity for banks operating in the state.

5. Regulatory Intent

The assignment seeks to:

• Ensure smooth banking administration in the newly created district
• Maintain alignment between administrative reorganisation and banking infrastructure
• Support credit delivery, financial inclusion, and local economic development in Vav-Tharad
• Provide clarity to banks and stakeholders under the Lead Bank Scheme

6. Key Takeaways

• Vav-Tharad is a newly created district in Gujarat
• Bank of Baroda is designated as the Lead Bank for the district
• No changes have been made to Lead Bank assignments in other districts of Gujarat
• Banks should update internal jurisdictional and coordination records accordingly

Click Here To Read The Full Circular

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Case Details: Infodesk India (P.) Ltd. vs. Union of India - [2025] 181 taxmann.com 395 (Gujarat)

Judiciary and Counsel Details

• A.S. Supehia & Pranav Trivedi, JJ.
• Anand Nainawati for the Petitioner.
• Deepak N Khanchandani & Param V Shah for the Respondent.

Facts of the Case

The petitioner was a wholly owned Indian subsidiary of a US company established exclusively to provide services fulfilling the parent company’s technical requirements by assisting it in carrying on the business of software development and related consultancy. It managed IT infrastructure, editorial and content creation activities, customer support, and raised tax invoices for providing software consultancy services directly to the parent company. It was submitted that the services were provided in an independent capacity and not as an agent or intermediary. The matter was accordingly placed before the High Court.

High Court Held

The High Court held that the petitioner was required to assist the parent company in carrying on its software consultancy business. The Court observed that the petitioner was to perform the services on its own account with payment based on actual costs plus an 8 per cent markup, thereby earning a profit. It found that the petitioner could not be regarded as an intermediary or agent and that the services were zero-rated exports. The Court directed the jurisdictional officer under GST to process the refund claim for unutilised input tax credit in accordance with Section 16 of the IGST Act and Section 54 of the CGST Act.

List of Cases Referred to

• Chromotolab and Biotech Solutions v. Union of India [2022] 143 taxmann.com 374/[2022] 67 GSTL 160/[2023] 95 GST 199 (Gujarat) (para 9)
• Genpact India (P.) Ltd. v. Union of India [2021] 130 taxmann.com 145/88 GST 285 (Punjab & Haryana) (para 12)
• OHMI Industries Asia (P.) Ltd. v. Asstt. Commissioner, CGST [2023] 150 taxmann.com 497/98 GST 435/74 GSTL 421 (Delhi) (para 12)
• Ernst & Young Ltd. v. Additional Commissioner, Central GST Appeals [2023] 148 taxmann.com 461/73 GSTL 161/97 GST 820 (Delhi) (para 12).

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