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RBI Proposes Mandatory FX Transaction Cost Disclosure for Retail Users

RBI FX transaction cost disclosure

PR no. 2025-2026/1666; Dated: 09.12.2025

1. Regulatory Context

The Reserve Bank of India (RBI) has released a draft circular proposing enhanced disclosure requirements on transaction costs associated with foreign exchange (FX) transactions undertaken by retail users. The proposal is part of RBI’s ongoing efforts to improve transparency, pricing clarity and consumer protection in India’s retail FX market.

2. Previous Disclosure Framework (January 2024)

In January 2024, RBI mandated that Authorised Dealers (ADs) must:

  • Provide mid-market mark/bid and ask price for:

    1. Foreign exchange derivative contracts, and
    2. Foreign currency interest rate derivative contracts
  • Communicate this information to retail users before execution, and
  • Include the same in the deal confirmation or term sheet

This ensured that retail market participants were able to view reference pricing benchmarks, helping them understand spreads and pricing outcomes more transparently.

3. Proposed Disclosure of Transaction Cost Components

Taking the transparency initiative further, the draft circular proposes that Authorised Dealers must mandatorily disclose all transaction cost elements for:

  • Foreign exchange cash transactions, and
  • Foreign exchange spot contracts,

offered to retail users

Transaction cost elements may include:

  • Remittance fees
  • Currency conversion charges
  • Foreign exchange rate applied
  • Margin or spread components
  • Any additional charges or deductions embedded in the exchange rate or settlement amount

The requirement is aimed at enabling retail users to understand the true cost of transacting, rather than relying solely on headline conversion rates.

4. Scope and Target Users

The disclosure framework applies to retail market participants, including individuals and small enterprises, who often lack visibility into embedded spreads or cross-border remittance charges.

The obligation is placed on Authorised Dealers, i.e., banks and other RBI-permitted entities dealing in FX.

5. Market Consultation

RBI has sought public and industry feedback on the draft proposal.

  • Comments are invited from banks and market participants
  • Last date for submission – January 9, 2026

Stakeholder feedback will assist RBI in refining the disclosure design, operational format and system readiness expectations.

6. Regulatory Intent

The proposal aims to:

  • Improve pricing transparency and fairness for retail FX customers
  • Increase competitive market pricing and informed decision-making
  • Reduce disputes and misunderstandings associated with hidden fees or spreads
  • Strengthen trust in market conduct and supervisory oversight

The initiative also aligns with global regulatory practices that emphasise clear disclosure of FX transaction costs to non-institutional consumers.

7. Compliance Considerations for Authorised Dealers

ADs would be required to:

  • Build system logic and display standards for transaction cost disclosures
  • Provide pre-execution visibility of all fees and embedded charges
  • Incorporate cost details into confirmations or payment summaries
  • Train client-facing staff on communication protocols and disclosure norms
  • Update documentation, product notes and platform interfaces

Failure to comply could lead to supervisory findings, customer disputes or disclosure breach penalties once implemented.

Click Here To Read The Full Press Release

The post RBI Proposes Mandatory FX Transaction Cost Disclosure for Retail Users appeared first on Taxmann Blog.

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No Minimum Wages or Bonus When Reinstatement Order Gives No Consequential Benefits | HC

reinstatement without consequential benefits

Case Details: Pravin Valya Malavkar vs. Srini Link [2025] 181 taxmann.com 142 (HC-Gujarat)

Judiciary and Counsel Details

  • Mrs M.K. Thakker, J.
  • Thakkar & Pahwa, Advs. for the Petitioner.
  • Dipak R. Dave for the Respondent.

Facts of the Case

In the instant case, the petitioner-workman was terminated from service. The Labour Court passed an award directing the employer to reinstate the petitioner with continuity of service and 100 per cent back wages. On the employer’s challenge, the High Court modified the award to the extent of 50 per cent back wages.

The employer reinstated the petitioner and paid 50 per cent back wages calculated on the last drawn wages, which the petitioner accepted. The petitioner filed an application under Section 33C of the Industrial Disputes Act, 1947, seeking computation and recovery of back wages at Minimum Wages Act rates.

The Labour Court rejected the application on the ground that back wages had been paid as per the last drawn wages and, in the absence of any specific direction in the award to pay at Minimum Wages Act rates, such relief could not be granted under Section 33C of the Act.

It was noted that while granting relief of reinstatement, the Labour Court had not directed to give consequential benefits, nor had it specified that back wages were to be paid as per the Minimum Wages Act, the Labour Court was justified in declining the claim of the petitioner for minimum wages.

High Court Held

The High Court held that the leave encashment as well as bonus, even if said relief was to be given, would be granted at the time of retirement, but not by interpreting the award in terms of continuity of service, as the Reference Court granted no relief of consequential benefit.

Thus, the Labour Court was justified in denying relief, which the petitioner prayed for in the application under section 33C(2), and, therefore, the petition was to be dismissed.

List of Cases Referred to

  • Dena Bank v. Kiritkumar T. Patel 1998 AIR SC 511 (para 7).

The post No Minimum Wages or Bonus When Reinstatement Order Gives No Consequential Benefits | HC appeared first on Taxmann Blog.

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No Virtual Service PE Under India–Singapore DTAA | HC

virtual service under India–Singapore DTAA

Case Details: Commissioner of Income-tax, International Taxation vs. Clifford Chance Pte Ltd [2025] 181 taxmann.com 254 (Delhi)

Judiciary and Counsel Details

  • V. Kameswar Rao & Vinod Kumar, JJ.
  • Puneet Rai, SSC, Ashvini Kr., Rishabh Nangia & Gibran, JSC for the Appellant.
  • Ajay Vohra, Sr. Adv., Kunal Pandey, Tanmay & Adityya Vohra, Advs. for the Respondent.

Facts of the Case

The assessee was a non-resident company incorporated in Singapore. It engaged in legal advisory services. It provided legal advisory to Indian clients, partly rendered remotely from outside India and partly by two of its employees who visited India to render such services.

The Assessing Officer (AO) passed draft assessment orders proposing additions, as the assessee constituted a permanent service establishment in India due to the physical presence of its employees in India for 120 days. AO also contended that the assessee constituted a virtual service permanent establishment in India. The Dispute Resolution Panel (DRP) dismissed the assessee’s objections. AO passed final assessment orders under section 143(3) read with section 144C(13), and the assessee filed an appeal to the Delhi Tribunal.

The Tribunal deleted the additions made by the AO, holding that a service PE requires actual performance of services in India by employees physically present there. Since the assessee rendered services for only 44 days after excluding vacation, business development, and standard days the 90-day threshold for a service PE in AY 2020-21 was not satisfied.

High Court Held

The matter reached the Delhi High Court. The High Court held that Article 5(6) of the DTAA contemplates that an enterprise shall be deemed to have a permanent establishment in the contracting state through its employees or other personnel only if the activities within the contracting state continue for a period aggregating to 90 days in any fiscal year. The words “within a Contracting State” and “through employees or other personnel” contemplate rendition of services in India by the employees of the non-resident enterprise, while mandating a fixed nexus, a physical footprint within India.

The term ‘within’ has a specific territorial connotation, and in the absence of personnel physically performing services in India, there can be no furnishing of services ‘within’ India. It is such a rendition of services by employees present within the country that would constitute a service permanent establishment. AO’s view that, as a result of rapid digitalisation, services, including consultancy services, can be provided virtually without the physical presence of employees in the contracting state, cannot be accepted. It is found that the DTAA contemplates no such eventuality. The concept of a virtual service permanent establishment is not mentioned anywhere in the DTAA.

In the absence of any such provision, the revenue’s argument would be at variance with the express provisions of the DTAA, as interpreted above. It is not for courts to read in concepts which are not expressly provided for by the treaty. The guiding principle here is that language which is not explicitly included in treaty provisions cannot be artificially read into such provisions by way of judicial fiction.

Accordingly, the AO’s contention that a virtual service permanent establishment existed for the relevant assessment years was rejected.

List of Cases Reviewed

List of Cases Referred to

The post No Virtual Service PE Under India–Singapore DTAA | HC appeared first on Taxmann Blog.

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SEBI–IEPFA Hold Niveshak Shivir to Resolve Unclaimed Dividend and Share Claims

SEBI IEPFA Niveshak Shivir

PR No. 81/2025; Dated: 09.12.2025

1. Objective of the Initiative

The Securities and Exchange Board of India (SEBI) and the Investor Education and Protection Fund Authority (IEPFA) jointly conducted the fourth “Niveshak Shivir” in Jaipur. The programme is part of a nationwide outreach initiative aimed at:

  • Reducing the stock of unclaimed assets, unpaid dividends, and unclaimed shares, and
  • Facilitating timely resolution of pending investor claims

The event underscores SEBI’s and IEPFA’s commitment to improving investor protection, financial inclusion, and grievance redressal efficiency.

2. Facilitation for Long-Pending Claims

The Shivir specifically catered to:

  • Unpaid dividend claims
  • Unclaimed shares and securities
  • Claims that have been pending for six to seven years or more, due to incomplete documentation or procedural delays

A dedicated facilitation setup allowed participants to directly submit documentation, clarify procedural requirements, and obtain on-site support to expedite processing.

3. On-the-Spot KYC and Nomination Updates

To minimise future investor grievance and settlement hurdles, the programme also provided:

  • Instant KYC updation
  • Nomination updates for demat and folio accounts
  • Support for correction of personal details or record discrepancies

These on-the-spot services helped investors regularise account information, a key prerequisite for settlement of unclaimed dividends and shares.

4. Resolution of IEPFA Claim Issues

Investor participants received assistance with:

  • IEPFA Form submission
  • Reconciliation of multiple claim filings
  • Clarification of documentation sufficiency
  • Support for signature, affidavit or indemnity requirements
  • Process guidance for dematerialisation or transmission-related claims

This structured support addressed systemic bottlenecks and improved claim turnaround time.

5. Participation and Outreach Impact

The day-long Shivir witnessed strong investor engagement, with more than 301 investors and claimants participating from Jaipur and nearby regions. The scale of participation reflects:

  • High demand for simplified claim resolution
  • Awareness of investor grievance mechanisms
  • Greater confidence in collaborative facilitation between SEBI, IEPFA, RTAs and market intermediaries

6. Broader Policy Significance

The Niveshak Shivir initiative is expected to:

  • Help reduce the growing pool of unclaimed financial assets
  • Strengthen investor education and documentation discipline
  • Encourage timely KYC updates and nomination filings
  • Build digital and procedural access to financial entitlements
  • Improve the efficiency of IEPFA claim processing and record validation

Together, these efforts enhance investor protection and capital market trust, especially among retail investors and heirs pursuing legacy claims.

Click Here To Read The Full Press Release

The post SEBI–IEPFA Hold Niveshak Shivir to Resolve Unclaimed Dividend and Share Claims appeared first on Taxmann Blog.

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Refund for Export of Services Cannot Be Denied When eBRC/FIRC Submitted | HC

refund on export of services

Case Details: Mavenir Systems (P.) Ltd. vs. Union of India [2025] 181 taxmann.com 197 (Karnataka)

Judiciary and Counsel Details

  • S.R. Krishna Kumar, J.
  • Rohan Shah, Senior Counsel, Mohammed Anajwalla & Sandeep Huilgol, Advs. for the Petitioner.
  • Aravind V. Chavan, Adv. & H. Shanthi Bhushan, ASGI for the Respondent.

Facts of the Case

The petitioner exported services without payment of tax and filed refund claims of unutilised ITC under Section 54 of the CGST Act/Karnataka GST Act. The jurisdictional authority sanctioned the refund. In replies to the SCNs issued during departmental review, the petitioner submitted eBRCs (electronic bank realisation certificates) and FIRCs (foreign inward remittance certificates) with particulars; however, the appellate authority set aside the sanctions and rejected the refund on the ground of alleged non-production of these documents. Parallel recovery proceedings culminated in an adjudication order and issuance of DRC-07. The matter was accordingly placed before the High Court.

High Court Held

The High Court held that the finding of the appellate authority that eBRCs/FIRCs were not produced was factually incorrect because the petitioner’s replies on record enclosed such documents. The court further held that details of foreign remittances were available with the departmental authorities, and alleged non-production could not defeat a refund claim for export of services under Section 54 of the CGST Act/Karnataka GST Act, Section 16 of the IGST Act, and Rule 89 of the CGST Rules/Karnataka GST Rules. The court held that the impugned appellate orders, SCN, adjudication order, and recovery notices were unsustainable. It accordingly directed the departmental authorities to grant the refund as originally sanctioned along with applicable interest.

List of Cases Reviewed

List of Cases Referred to

The post Refund for Export of Services Cannot Be Denied When eBRC/FIRC Submitted | HC appeared first on Taxmann Blog.

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SEBI Allows AIFs to Launch or Convert to AI-Only and LVF Schemes

SEBI AI-only and LVF AIF schemes

CIRCULAR HO/19/34/11(5)2025-AFD-POD1/I/188/2025’; Dated: 08.12.2025

1. Regulatory Context

SEBI has allowed Alternative Investment Funds (AIFs) to either:

  1. Launch new schemes exclusively for accredited investors or Large Value Funds (LVFs), or
  2. Convert existing schemes into such AI-only or LVF structures.

The revised framework provides regulatory relaxations to funds catering to these investor segments, acknowledging their sophistication, risk appetite, and ability to evaluate complex fund strategies.

2. Mandatory Naming Requirement

Any scheme that operates exclusively for:

  • Accredited investors, or
  • Large Value Funds (LVFs)

must explicitly include in its scheme name:

  • “AI only fund”, or
  • “LVF”

This mandatory nomenclature fosters transparency, clarity for investors, and system-level standardisation for intermediaries and market infrastructure institutions.

3. Migration of Existing Schemes

Existing AIF schemes may migrate into AI-only or LVF structures, provided:

  • Positive consent is obtained from 100% of existing investors
  • Migration cannot be executed through a deemed consent or negative option mechanism
  • The migration will only take effect after receipt of explicit affirmative consent from all unit holders

This ensures investor protection, clear disclosure, and alignment with revised risk–return expectations.

4. Post-Conversion Compliance

Once an existing scheme is successfully converted:

  • Fund managers must update the scheme name to reflect its new status as an “AI only fund” or “LVF”
  • Managers must intimate SEBI and the depositories within 15 days of conversion
  • Depositories and market intermediaries will then carry out system-level updates, ensuring:
    1. Correct classification in reporting and fund databases,
    2. Accurate identifiers for filings, transactions, and holdings

5. Regulatory Intent

SEBI’s modification seeks to:

  • Promote innovation and product flexibility within AIF structures
  • Allow sophisticated investors to access specialised, high-risk strategies with fewer regulatory constraints
  • Simplify compliance for funds serving investors who do not require extensive regulatory micromanagement
  • Encourage market depth and product variety in India’s alternative investment ecosystem

6. Compliance Considerations for Fund Managers

AIFs and investment managers must:

  • Review investor eligibility criteria before scheme launch or conversion
  • Ensure disclosures, consents, and scheme documentation comply with SEBI’s directives
  • Plan system, reporting, and operational updates in advance for seamless conversion
  • Maintain clear communication with SEBI, depositories, and distribution platforms

Non-compliance may lead to regulatory scrutiny, reporting issues, or operational delays.

Click Here To Read The Full Circular

The post SEBI Allows AIFs to Launch or Convert to AI-Only and LVF Schemes appeared first on Taxmann Blog.

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Ind AS 115 | Principal vs Agent in High Sea Sale Transactions

principal vs agent under Ind AS 115

1. Question

India Tech Industries Limited hereinafter referred to as “the company” is engaged in the business of importing and distributing machinery components. The company entered into CIF agreement with Aussie Tech Inc., an Australian manufacturer of specialised automotive parts for supply of transmission modules. As per the agreement, the Aussie Tech dispatched a consignment of transmission modules from the port of Sydney on 12th April 2025, with the shipment expected to arrive at the port of Chennai later that month.

While the goods were still in transit and had not yet entered Indian territorial waters, the company negotiated a high sea sale with Meta Drive Engineering Limited, an Indian manufacturing company. The company executed a high sea sale agreement in favour of Meta Drive and endorsed the bill of lading, thereby transferring title and risk to Meta Drive during the voyage itself. Thus, after such high-sea sales Meta Drive has got full responsibility for customs clearance and post-arrival obligations.

Despite transferring the goods in transit, the company remained contractually bound to pay Aussie Tech under the original purchase contract, even if Meta Drive defaulted. This obligation exposed the company to credit risk, as its liability to the supplier continued irrespective of Meta Drive’s payment timing. Further, the company faced a form of inventory risk during the transit period because, until the high sea sale agreement was executed and accepted by Meta Drive, the company bear the commercial risk associated with identifying an alternative buyer. The company also asserts that it had complete discretion to determine the resale price in the high sea sale to Meta Drive and hence it earned a trading margin rather than a commission.

However, the management of the company is of belief that the company acted as an agent in the aforesaid transaction as it did not handle logistics, insurance, or customs obligations, all of which were passed on directly to Meta Drive. Moreover, the company never took physical possession of the goods. Thus, the company’s role was merely of arranging procurement rather than fulfilling a substantive performance obligation.

Based on the commercial substance of the transaction and the extent of inventory risk, credit risk, control over goods, and pricing discretion, whether the company should be treated as a principal or an agent for revenue recognition purposes under Ind AS 115?

2. Relevant Provision

Ind AS 115 – Revenue from Contracts with Customers

Para B34 of Ind AS 115

When another party is involved in providing goods or services to a customer, the entity shall determine whether the nature of its promise is a performance obligation to provide the specified goods or services itself (ie the entity is a principal) or to arrange for those goods or services to be provided by the other party (ie the entity is an agent).

Para B35 of Ind AS 115

An entity is a principal if it controls the specified good or service before that good or service is transferred to a customer. However, an entity does not necessarily control a specified good if the entity obtains legal title to that good only momentarily before legal title is transferred to a customer…..

Para B36 of Ind AS 115

An entity is an agent, if the entity’s performance obligation is to arrange for the provision of the specified good or service by another party. An entity that is an agent does not control the specified good or service provided by another party before that good or service is transferred to the customer. When (or as) an entity that is an agent satisfies a performance obligation, the entity recognises revenue in the amount of any fee or commission to which it expects to be entitled in exchange for arranging for the specified goods or services to be provided by the other party. An entity’s fee or commission might be the net amount of consideration that the entity retains after paying the other party the consideration received in exchange for the goods or services to be provided by that party.

Para B37 of Ind AS 115

Indicators that an entity controls the specified good or service before it is transferred to the customer (and is therefore a principal) include, but are not limited to, the following:

(a) the entity is primarily responsible for fulfilling the promise to provide the specified good or service. This typically includes responsibility for the acceptability of the specified good or service…

(b) the entity has inventory risk before the specified good or service has been transferred to a customer or after transfer of control to the customer…

(c) the entity has discretion in establishing the price for the specified good or service. Establishing the price that the customer pays for the specified good or service may indicate that the entity has the ability to direct the use of that good or service and obtain substantially all of the remaining benefits…

Click Here To Read The Full Story

The post Ind AS 115 | Principal vs Agent in High Sea Sale Transactions appeared first on Taxmann Blog.

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Govt Notifies 15th Dec. 2025 for Banking Laws Amendment Enforcement

Banking Laws Amendment Act enforcement

Notification no. S.O. 5659(E); Dated: 08.12.2025

1. Commencement Timeline

The Central Government has notified 15 December 2025 as the date on which the following provisions of the Banking Amendment Act, 2025 shall come into force:

  • Section 2
  • Section 6
  • Section 7
  • Section 8
  • Section 9
  • Section 14

These amendments formally operationalise changes to certain statutory computation methods, reporting cycles, and compliance timelines under banking law.

2. Acts Amended

The notified provisions amend, among others:

  • The Reserve Bank of India Act, 1934
  • The Banking Regulation Act, 1949

Both statutes are foundational to the measurement and supervision of liquidity, reserves, and regulatory reporting in India’s banking system.

3. Substitution of “Alternate Fridays”

A key harmonisation measure in the amendments is the replacement of statutory references to “alternate Fridays” with more conventional calendar references such as:

  • Last day of the fortnight
  • Last day of the month
  • Last day of the quarter

3.1 Rationale

This substitution:

  • Aligns statutory compliance schedules with standard accounting periods
  • Reduces interpretational ambiguity
  • Enhances consistency in supervisory reporting, reconciliation, and audit review

4. Rationalisation of Compliance Timelines

The amendments streamline timelines relating to:

  • Cash Reserve Ratio (CRR)
  • Statutory Liquidity Ratio (SLR)
  • Regulatory returns submitted to RBI
  • Assessment of penalties for delay or non-compliance

4.1 Regulatory Intent

The changes aim to:

  • Simplify regulatory computation requirements for banks
  • Improve operational clarity for treasury, finance, and compliance teams
  • Reduce administrative friction associated with legacy fortnight-based obligations
  • Support uniform supervisory oversight and predictability

5. Impact on Banks and Supervision

From 15 December 2025, banks must:

  • Align CRR/SLR calculations and reserve tracking with the last-day cycle
  • Integrate revised timelines into internal MIS, liquidity monitoring, and core banking modules
  • Adjust reporting calendars for returns, reconciliation, attestation, and supervisory disclosures
  • Ensure penalty calculations reflect the new statutory periods

The amendments also streamline RBI’s supervisory analytics, improving comparability across entities and enhancing systemic liquidity visibility.

6. Compliance Considerations

Banks and financial institutions should:

  • Update internal manuals, SOPs, and calendar controls
  • Reconfigure automation logic in treasury systems
  • Reassess cut-off workflows for reserve averaging, shortfalls, and remedial funding
  • Train operational teams on the new statutory cadence

Failure to integrate revised schedules may result in computational errors, delayed reporting, or supervisory findings.

Click Here To Read The Full Notification

The post Govt Notifies 15th Dec. 2025 for Banking Laws Amendment Enforcement appeared first on Taxmann Blog.

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Joint Ownership in Residential Property Doesn’t Bar Section 54F Exemption | ITAT

joint ownership section 54F relief

Case Details: Kusum Sahgal vs. ACIT - [2025] 180 taxmann.com 720 (Delhi-Trib.)

Judiciary and Counsel Details

  • Vimal Kumar, Judicial Member & S Rifaur Rahman, Accountant Member
  • Sanjay Kumar Jain, CA & Saurav Jain, Adv. for the Appellant.
  • Kailash Dan Ratnoo, CIT (DR) for the Respondent.

Facts of the Case

The assessee sold shares of a company and invested the sale proceeds in purchasing a residential property. She claimed a deduction under section 54F for the investment in the residential house.

During the assessment proceedings, the Assessing Officer (AO) observed that the assessee held a 50% share in a residential property along with her husband. Therefore, she owned more than one residential property. Consequently, the AO denied the deduction under section 54F. On appeal, the CIT(A) upheld the additions made by the AO.

The matter reached the Delhi Tribunal.

ITAT Held

The Tribunal noted that the assessee had claimed a deduction under section 54F(1) for the investment made in a residential unit, which was part of an ongoing construction project by DLF. The record further showed that the assessee owned a commercial flat and also had a property in Mehrauli, which was agricultural land governed by the DLR Act, 1954, and she did not hold ownership rights despite being in possession. Therefore, this land was classified as agricultural, not residential. The Noida flat, in which the assessee held a 50% share, was the only residential property she owned at the time of selling the original asset.

In light of these material facts, and following the judicial precedents relied upon, the Tribunal held that joint ownership of a residential property at the time of sale of the original asset does not disentitle the assessee from claiming a deduction under section 54F. Accordingly, the orders of the Assessing Officer and the Commissioner (Appeals) were set aside.

List of Cases Reviewed

  • ITO v. Sheriar Phirojsha Irani [IT Appeal No. 2835/Mum./2024, dated 27-09-2024] (para 9) Followed.

List of Cases Referred to

  • ITO v. Sheriar Phirojsha Irani [IT Appeal No. 2835/Mum./2024, dated 27-09-2024] (para 9).

The post Joint Ownership in Residential Property Doesn’t Bar Section 54F Exemption | ITAT appeared first on Taxmann Blog.

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Govt Clarifies Existing IDA Tribunals Will Continue Under IRC Transition

continuity of tribunals under Industrial Relations Code

Notification no. S.O. 5683(E); Dated: 08-12-2025

1. Background

Following the enforcement of the Industrial Relations Code, 2020 (IRC, 2020), certain implementation challenges emerged regarding continuity of adjudication and dispute settlement mechanisms. These challenges arose because the new tribunals envisaged under the Code were yet to be constituted, while existing dispute resolution bodies continued to function under the Industrial Disputes Act, 1947 (IDA, 1947).

To address this transitional ambiguity and ensure uninterrupted adjudication, the Government has notified the Industrial Relations Code (Removal of Difficulties) Order, 2025.

2. Clarification Issued Under the Order

The Order clarifies and legally confirms that:

  • Labour Courts, Industrial Tribunals and National Industrial Tribunals constituted under the Industrial Disputes Act, 1947
  • Shall continue to adjudicate both:
    1. Pending cases already before them, and
    2. Fresh cases filed after commencement of the IRC, 2020

This continuity remains in force until the corresponding courts or tribunals are constituted under the Industrial Relations Code, 2020.

3. Purpose and Regulatory Intent

The Order has been issued to:

  • Avoid jurisdictional uncertainty or procedural delays during the transition to the new Code
  • Ensure that dispute adjudication, conciliation, and finality of labour disputes continue without disruption
  • Provide legal confidence to employers, workers, trade unions and adjudicating forums
  • Prevent administrative vacuum until new bodies are formed under the updated statutory architecture

The clarification ensures that no industrial dispute remains stalled due to structural transition or statutory ambiguity.

4. Significance for Stakeholders

For Industrial Dispute Resolution

  • Ensures continuity and timely disposal of industrial disputes
  • Avoids multiplicity of proceedings or contest on maintainability

For Employers and Workers

  • Provides clear certainty on where disputes must be initiated, heard, or transferred
  • Avoids operational paralysis in labour dispute management

For Tribunals

  • Confirms that existing judicial and quasi-judicial bodies retain full authority
    until alternative institutions under the IRC are formally notified and operationalised

5. Transitional Framework

Until new tribunals are constituted under the IRC:

  • All matters in existing labour courts and tribunals shall continue without transfer or re-filing
  • Jurisdiction, procedural powers and adjudication pathways remain unchanged under the IDA framework
  • New cases can be registered, adjudicated, and concluded under existing tribunals

This prevents legal uncertainty and preserves continuity of adjudication, enforcement and labour justice.

Click Here To Read The Full Notification

The post Govt Clarifies Existing IDA Tribunals Will Continue Under IRC Transition appeared first on Taxmann Blog.

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