Tax and Regulatory: Visakhapatnam Bench of the Goods and Services Tax Appellate Tribunal (“GSTAT”) held that the eligible ITC, which has not been utilised, distributed through the ISD, shall be considered as eligible ITC for claiming a refund for the SEZ unit, when it is related to the SEZ unit’s own zero-rated exports.
The Bench in Maithan Alloys Limited v. Deputy Commissioner considered whether the SEZ unit was entitled to claim refund of accumulated ITC distributed through the ISD or the refund of the ITC could be claimed by the suppliers only. Additionally, there was an allegation that the suppliers had already claimed the refund of the relevant ITC.
The Tribunal stated that the claim for refund cannot be dismissed merely because the Appellant is an SEZ unit and/or due to the interpretation of the provisions of refund for the direct supply to the SEZ. Furthermore, the Bench held that any allegation regarding the refund made by the supplier must be supported by documentary evidence and a reasonable chance for the taxpayer to present its defence.
Income Tax Update: India–Mauritius Tax Treaty Protocol
The notification of the protocol amending the India–Mauritius tax treaty through Income Tax Notification No. 135/2026 dated 13 October 2026 was one of the key developments.
The protocol covers the issue of prevention of Double Taxation and prevention of Fiscal Evasion relating to income as well as capital gains taxes. It also aims to eliminate tax avoidance, such as arrangements involving the avoidance or evasion of tax in the home country, including “treaty shopping” arrangements where the benefit is for residents of the third jurisdiction.
According to the protocol, it will take effect on 10 August 2026. The development is important for investors, multinational companies and companies with a Mauritius presence for investments across international borders through their Mauritius entities. The amended provisions are a good opportunity for companies to check their treaty positions, ownership, commercial substance and supporting documentation. The changes are to be reviewed on a case-by-case basis on the basis of the notified protocol and the relevant text of the treaty.
GST Updates: E-Invoicing Under Reverse Charge Mechanism
The Goods and Services Tax Network (GSTN) has made an amendment in the e-invoicing system to support the self-invoicing of recipients under the Reverse Charge Mechanism (RCM).
For this purpose, two new supply types were added:
- Reverse Charge Mechanism on domestic supplies (RCMDOM).
- RCMIMP: Reverse Charge Mechanism on import of services.
The facility will be available to facilitate an eligible registered taxpayer to generate Invoice Reference Numbers (IRN) for a particular self-invoice transaction about domestic supplies received from an unregistered supplier under the RCM regime and for imports of services from foreign suppliers.
The six authorised Invoice Registration Portals have sandboxed and implemented the functionality in their sandboxes as per the advisory dated 16 October 2026. The target taxpayer group comprises registered business units having more than ₹5 crore of annual turnover.
It is important that businesses stay updated with the official updates of the GSTN for production availability and further information on how to implement the production. They should also take a look at their invoice creation workflows, the accounting systems and documentation involved in the RCM to make sure that the new functionality is leveraged appropriately.
GSTR-9 and GSTR-9C Enabled for FY 2025-26
The annual return forms, GSTR-9 and GSTR-9C, are now accessible on the GST portal on 8 October 2026 for Financial Year 2025-26, thanks to the implementation of the Goods and Services Tax Network (GSTN). To make the portal available, taxpayers must be able to submit their relevant GSTR-1 and GSTR-3B returns for the period 01.04.2025 to 31.03.2026.
Before preparing annual statements, businesses should compare their financial statements with their GST returns, outward supplies, input tax credit claims and GST payments. The taxpayer is also required to keep proper explanations and documents to support the difference between books of account and GST returns. It is possible to identify inconsistencies in reporting earlier by doing some early reconciliation before submitting the annual return.
High Court Ruling on GST Refund Under Inverted Duty Structure
The Punjab and Haryana High Court has considered the denial of a refund of Goods and Services Tax (GST) in the case of Padmavati Ferrous Ltd. v. Union of India, where the tax rate on both the principal input and output supplies was the same.
The Court stated that a refund should not be denied on that basis when there were other inputs in the supply chain with tax rates that were higher. It further noted that a circular was unable to replace the statute to create a restriction that was not provided for by the law. The decision applies to businesses that are applying for refunds under the inverted duty regime. Taxpayers need to consider the full input and output tax profile, the relevant legislation and documentation before making a claim for a refund or objecting to such a claim. The ruling should be interpreted in the light of the facts and the pertinent law.
Central Excise: Revised Special Additional Excise Duty on Fuel Exports
The Special Additional Excise Duty (SAED) for petrol and diesel exports was revised by the Central Excise Notification No. 54/2026 (T) dated 15 October 2026 from 16 October 2026 onwards.
The notification had mentioned that the export of petrol was subject to SAED of ₹2.50 per litre, while export of diesel was subject to SAED of ₹8.50 per litre. The rate of diesel was cut by ₹16 per litre and petrol by ₹0.50 per litre.
Petroleum products exporters and businesses should confirm the appropriate rate for the date of export and ensure that the customs documentation and calculation of customs duties are updated accordingly.
Customs Duty and Import-Export Changes
The week saw a number of customs notifications covering tariff values, duty drawback, import concessions and customs administration.
India–New Zealand Trade Concessions
Customs Notification No. 32/2026 (T) dated 16th October, 2026 granted customs duty and cess concessions on some specific goods imported from New Zealand. The notification is a part of the first step of the tariff concessions under the India – New Zealand Free Trade Agreement.
The agreement’s Customs Tariff Rules of Origin were also notified and were to enter into force on 20 October 2026. These rules determine how goods can be considered as originating products to benefit from preferential duty treatment. Importers must review the coverage, origin documentation and applicable conditions in the product before claiming preferential rates.
Revised Tariff Values
Customs Notification No. 86/2026 (NT) dated 15 October 2026 amended the tariff values of various commodities such as edible oils, brass scrap, areca nuts, gold and silver from 16 October 2026.
USD 1,223 per metric tonne crude palm oil, USD 1,316 per 10 grams (10g) gold and USD 1,907 per kilogram (kg) silver were reported. Importers are advised to ensure that the relevant tariff item and notification are correct prior to the calculation of customs liabilities.
Reduced Duty Drawback on Jewellery
Customs Notification No. 85/2026 (NT) dated 15 October 2026 decreased the All Industry Rates of duty drawback applicable to certain pieces of jewellery articles made of gold and silver.
For instance, the reported price of gold jewellery and parts (HSN 711301) fell from ₹1,851.99 to ₹1,794.11. Some silver jewellery and silver articles also went down. The exporter is advised to recalculate any drawbacks and review applicable tariff classification prior to the export documentation.
DGFT Updates: Export Policies and Import Authorisations
The Directorate General of Foreign Trade has released a few notifications and trade notices impacting the exporters and importers. The export policy for prepared culture media stayed in the “Free” category, while the records of the changes were made clear by an addition that new Shipment Clearance Certificates and new Health Certificates, where applicable, were expressly allowed.
Tax and Regulatory: SEBI Regulatory Developments
The Securities and Exchange Board of India announced changes affecting listed debt securities, REITs, InvITs, Alternative Investment Funds and securities market operations.
The amended Listing Obligations and Disclosure Requirements framework requires entities with non-convertible debt securities listed on or after 14 October 2026 to list subsequent issuances of non-convertible debt securities on recognised stock exchanges.
Changes to the REIT framework addressed common infrastructure, depository receipts, unitholder approvals and exit arrangements for dissenting unitholders in specified situations.
The InvIT amendments introduced a framework for issuing depository receipts on underlying units and revised the voting threshold for certain approvals.
SEBI also amended Alternative Investment Fund regulations, including investor accreditation criteria and dispute resolution arrangements.
Separately, SEBI revised the closing auction session and derivatives settlement methodology. Market participants should review the relevant circulars and update their trading, compliance and operational procedures where necessary.
Proposals concerning SME IPO eligibility and monitoring of issue proceeds were also circulated for stakeholder feedback. These were consultation proposals, not automatically final requirements.
RBI Update: Restrictions on INR Derivatives and Foreign Exchange Risk Reserve
The Reserve Bank of India introduced changes concerning Indian rupee-linked derivatives through Circular No. 293/2026 dated 12 October 2026.
The reported framework restricts the offering of non-deliverable derivative contracts involving the Indian rupee to non-resident users exclusively for hedging purposes.
The RBI also prescribed a Foreign Exchange Risk Reserve of 20% of the INR-equivalent notional amount for specified foreign exchange derivative contracts involving the rupee, entered into by authorised dealers to hedge currency risks arising from their own assets and liabilities.
Banks and other affected market participants should examine the circular’s scope, applicable transactions and operational requirements before changing their derivative arrangements.
Important Supreme Court and NCLAT Decisions
Several judicial decisions during the week addressed commercial and insolvency matters. The Supreme Court reiterated in Smt. Rano Singh v. Gurbax Singh that an agreement to sell does not, by itself, confer ownership of immovable property. The decision highlights the importance of legally effective title documents and the status of registered sale transactions.
In Dhanlaxmi Merchandise Pvt. Ltd. v. State of Madhya Pradesh, the Supreme Court held that the highest bid in a competitive sand-mining auction could not be rejected solely because it was lower than the same bidder’s offer in an earlier auction.
In Arcis Clean Energy Pvt. Ltd. v. Parshva Innovation, the Court considered conflicting contractual references to arbitration venues and jurisdiction. It concluded that Goa was the juridical seat of arbitration based on the agreement read as a whole.
NCLAT decisions also addressed resolution plan implementation, personal guarantor liability and the treatment of assets discovered after insolvency resolution. These decisions underline the importance of complying with approved resolution plans, respecting final liability determinations and properly identifying corporate debtor assets.