India-UK Free Trade Deal Cuts Tariffs on 64% UK Goods, Slashes Whisky and Auto Import Duties
The India-UK Free Trade Agreement significantly reduces customs duties on UK imports into India, with 64% of UK products becoming duty-free immediately. Tariffs on UK whisky will decrease from 150% to 75% initially and further to 40% over ten years. UK automobiles, including internal combustion engine, electric, and hybrid vehicles, will see tariff reductions from over 100% to 10% under quota. Cosmetic and toiletry products will also benefit from tariff cuts or eliminations. Overall, 90% of tariff lines affecting 92% of UK imports to India will be reduced or removed. The agreement promises customs clearance within 48 hours, along with options for duty deferral and paperless trade, aiming to facilitate smoother import processes. - (AI Summary)

Tax Assessment Orders During Insolvency Moratorium Under IBC Section 14 Are Invalid and Stay Proceedings
An assessment order under the Income Tax Act issued during the moratorium period declared under Section 14 of the Insolvency and Bankruptcy Code, 2016, is invalid. The moratorium prohibits initiation or continuation of any suits or proceedings, including tax assessments, against the corporate debtor. The Delhi High Court and Supreme Court have affirmed that the moratorium overrides inconsistent provisions in other laws, including tax laws, and prevents tax authorities from proceeding with assessments or recovery during insolvency resolution. In a recent case, the Bombay High Court held that tax assessment proceedings initiated during the moratorium were impermissible and quashed such orders, distinguishing prior Supreme Court rulings related to customs law. The tax department may resume proceedings only after the moratorium ends, and no coercive action can be taken during the moratorium period. - (AI Summary)

Penalty under Section 122(1A) CGST Act upheld for fake firms enabling fraudulent input tax credit claims
A writ petition challenging a penalty under Section 122(1A) of the CGST Act for enabling fraudulent input tax credit through fake firms was dismissed by the Delhi High Court. The petitioner, a GST consultant, failed to rebut allegations of involvement in creating multiple fake firms used for fraudulent ITC claims. The Court held that the penalty was valid despite the show cause notice referencing only Section 122(3), as the broader allegations attracted Section 122(1A). The petitioner's failure to respond negated claims of denial of opportunity. The Court emphasized that writ jurisdiction is inappropriate in fact-intensive tax fraud cases where statutory appeal remedies under Section 107 are available, even beyond limitation periods. This decision aligns with precedents affirming the prospective application of Section 122(1A) and the preference for appellate adjudication over writ petitions in complex GST fraud matters. - (AI Summary)

Wilful Possession Requires Knowledge and Control Under NDPS Act Section 54, Mere Receipt Not Enough for Guilt
The Delhi High Court in a narcotics case distinguished between wilful possession and mere possession under the NDPS Act, emphasizing that conscious possession requires knowledge and control over the illicit substance. The accused was found collecting a parcel containing LSD but lacked any direct link to the sender or consignee, and no evidence connected him to drug trafficking. The court held that mere receipt of a package without awareness of its contents does not satisfy the legal threshold for possession under the Act. The presumption of culpability under Section 54 was rebutted due to absence of foundational facts establishing knowledge or control. Prolonged pre-trial detention without trial violated the accused's right to personal liberty under Article 21. The ruling underscores the necessity of proving mens rea for possession offenses and cautions against conflating passive custody with criminal intent, reinforcing protections against unwarranted preventive detention. - (AI Summary)

Notifications extending limitation under Section 168A without GST Council approval are invalid and unsustainable
The Madras High Court ruled that notifications issued under Section 168A of the CGST Act to extend limitation periods without a valid prior recommendation from the GST Council are ultra vires and unsustainable. The Court emphasized strict compliance with force majeure conditions, rejecting reliance on outdated COVID-19 impacts and administrative inefficiencies as force majeure events. It held that the issuance of notifications based on recommendations from bodies other than the GST Council, or ratified post-issuance, violates statutory mandates. The Court declared such notifications arbitrary and remanded related proceedings for fresh consideration, treating prior orders as show cause notices. This decision underscores that extensions under Section 168A must be grounded in proximate force majeure events and preceded by valid GST Council recommendations, preserving legislative intent and federal principles in GST administration. - (AI Summary)

Customs Law Presumes Transaction Value Valid Under Section 14, But Allows Rejection with Strong Evidence
Under Indian Customs Law, the transaction value of imported goods between unrelated parties is presumed valid if the price is the sole consideration and no doubts exist about its accuracy. However, customs authorities may reject the declared value if it is inconsistent with market realities or objective evidence. Undervaluation can lead to reassessment of value, recovery of duties with interest, penalties, and confiscation if fraud or misdeclaration is found. Overvaluation, while not causing revenue loss, is scrutinized for false representation or misuse related to allied laws like FEMA and anti-money laundering statutes, potentially triggering enforcement actions. Courts uphold the presumption of transaction value but require substantial evidence to reject it. Both undervaluation and overvaluation in unrelated party imports are subject to rigorous verification, with legal consequences including reassessment, penalties, and confiscation to ensure compliance with customs valuation rules. - (AI Summary)

Understanding Certificate of Origin Rules under Customs Tariff and CAROTAR, 2020 for Free Trade Agreements
Free Trade Agreements (FTAs) reduce tariffs and barriers between countries, with the Certificate of Origin (COO) serving as the key legal document certifying goods' origin under prescribed Rules of Origin (ROO). There are preferential COOs, enabling concessional duty rates under specific FTAs, and non-preferential COOs, used for general trade without tariff benefits. Compliance with ROO criteria is mandatory for preferential treatment, and failure may lead to denial of benefits. In India, COO issuance follows Customs Tariff Rules and CAROTAR, 2020, which impose due diligence on importers to prevent misuse. Exporters must apply through authorized agencies and substantiate origin claims with documentation. Misuse, such as false declarations or forged COOs, can lead to penalties, duty recovery, and prosecution under the Customs Act. Accurate and valid COOs are essential for lawful trade, and parties must maintain rigorous compliance to avoid legal and financial risks. - (AI Summary)

Eight-Year Delay in GST Appellate Tribunal Operation Raises Litigation Costs and Burdens Taxpayers
The Goods and Services Tax Appellate Tribunal (GSTAT), envisioned as a specialized appellate body to resolve GST disputes, has faced an eight-year delay in becoming operational, forcing taxpayers to directly approach High Courts, resulting in increased litigation costs and judicial burden. Established under Article 323B of the Constitution and Sections 109-112 of the CGST Act, GSTAT aims to provide a three-tier dispute resolution mechanism, including adjudication, first appeal, and second appeal before GSTAT. Delays arose from legal challenges over tribunal composition, exclusion of advocates, and administrative hurdles. Recent procedural rules introduced digital filings, time-bound hearings, and capped pre-deposits to enhance efficiency. Despite the appointment of officials and notified rules, ongoing court cases have stalled full functionality, perpetuating uncertainty and hardship for taxpayers. The tribunal's effective constitution and operation remain critical to ensuring consistent, accessible, and timely GST dispute resolution in India. - (AI Summary)

Misuse of Section 129 CGST Act: Penalties for Minor E-Way Bill Errors Without Tax Evasion Intent Quashed
Section 129 of the CGST Act, 2017, intended to address serious tax evasion during goods transportation, is often misapplied for minor procedural errors, leading to undue penalties. Despite a CBIC circular dated 14/09/2018 prescribing leniency and a maximum penalty of Rs 1,000 for minor errors, tax authorities continue imposing heavy penalties. The Allahabad High Court, in a recent ruling, quashed a penalty imposed for a typographical error in an e-way bill, emphasizing that mens rea for tax evasion is essential for penalty imposition. The Court ordered refund of amounts paid with nominal interest and highlighted the illegality of penalizing minor mistakes without intent to evade tax. The article calls for greater adherence to the CBIC circular by tax officials and suggests the issuance of further guidance to prevent wrongful detention of goods and unnecessary litigation. Taxpayers are advised to ensure accurate documentation during transportation. - (AI Summary)

Entity Agrees to Settlement and Trading Ban Under Securities Rule, Court Orders Payment and Cooperation
An entity under investigation for securities violations applied for a consent order with the securities regulator, offering a settlement payment and agreeing to a trading ban. Although the regulator's advisory committee initially accepted the terms and the payment was made, the regulator later rejected the consent application due to pending court proceedings and objections from other market participants. The entity challenged this rejection in court, which granted interim relief and directed cooperation with adjudication proceedings. Subsequent penalties and trading restrictions were imposed by the regulator. The court ultimately ordered the entity to pay the settlement amount again, after which the regulator would issue the consent order, settling the regulatory proceedings without admitting wrongdoing. The consent order would not affect ongoing civil litigation concerning disputed funds, which would proceed independently. The regulatory penalties would be stayed upon issuance of the consent order, preserving the rights of all parties in related matters. - (AI Summary)

Rules for Certificates of Origin under FTAs: Compliance, Verification, and Penalties Explained
Free Trade Agreements (FTAs) reduce tariffs between countries, requiring a Certificate of Origin (COO) to verify goods' eligibility for preferential treatment. The COO must meet specific Rules of Origin, such as substantial transformation or local content thresholds, and be issued by authorized government agencies or chambers of commerce. Incorrect or expired COOs, misclassification, or insufficient value addition can lead to denial of benefits, penalties, or customs rejection. Importers must submit original COOs and supporting documents, while exporters must accurately self-certify origin and comply with FTA-specific rules. India's CAROTAR 2020 mandates origin verification and documentation retention, with customs empowered to investigate misdeclarations. Utilizing official e-COO portals and maintaining thorough records are strategic best practices to ensure compliance and avoid risks under various FTAs. - (AI Summary)

GST Council Meeting Delayed as Finance Ministry Prepares for Rate Reforms and Simplified Procedures
Parliament's monsoon session beginning July 21, 2025, delays the GST Council meeting, while the Ministry of Finance engages stakeholders to build consensus on GST rate reforms and procedural simplifications. Notices have been issued to gaming industry providers for alleged non-payment of GST on cashbacks, with the industry challenging the 28% rate in court. GST refunds increased significantly in Q1 of 2025-26. The GST Appellate Tribunal (GSTAT) is set to commence, with new member appointments underway. The GSTN portal now allows appeals against waiver order rejections under section 128A of the CGST Act, 2017, with caution advised as appeal withdrawals are not permitted. Security enhancements include notifications for taxpayer consent to data access by Application Suvidha Providers. Advisories address non-editable inter-state supply values in GSTR-3B from July 2025 and clarify erroneous GSTR-3A notices sent to cancelled composition taxpayers, advising affected taxpayers to ignore such notices or file grievances. - (AI Summary)

Importers Must Submit Detailed Questionnaires and Documents for Customs Valuation Under SVB Process
The Special Valuation Branch (SVB) process requires importers to submit a detailed questionnaire and supporting documents to Indian Customs for valuation verification. The questionnaire collects information on the importer, foreign supplier, relationship status, transaction details, pricing methods, and any additional payments or agreements such as royalties or technical fees. Submission must include documents like the importer's IEC, PAN, MOA/AOA, transfer pricing reports, invoices, financial statements, and relevant agreements. Importers must declare the accuracy of the information provided. The process ensures compliance with Customs Valuation Rules, particularly concerning related party transactions and transfer pricing. Tailored guidance is available based on the importer's industry, nature of goods, and business arrangements to facilitate accurate valuation and avoid disputes. - (AI Summary)

Special Valuation Branch Rules: Importers Must Submit Detailed Docs to Prevent Undervaluation Under Customs Law
Assessment under the Special Valuation Branch (SVB) of Indian Customs applies when imported goods involve related parties or transactions that may affect declared values, such as royalty payments or technical fees, to prevent undervaluation or transfer pricing manipulation. Importers must submit detailed documentation including a filled SVB questionnaire, declarations of relationship, agreements, transfer pricing reports, invoices, and financial statements. The documentation must be consistent and reflect arm's length pricing. Importers should declare relationships in import filings, cooperate during inquiries, and maintain records. SVB orders, valid for a specified period, must be referenced in future imports and may impose reporting conditions. The assessment typically takes three to six months, depending on case complexity and documentation completeness. Consulting experts and consolidating transfer pricing studies for multiple related vendors is advisable. - (AI Summary)

GST Rule 90(5) Allows Electronic Withdrawal of Refund Applications Before Sanction or Payment
Under the Central Goods and Services Tax Act and Rules, a registered taxpayer may claim a refund of excess tax or balance in the electronic cash ledger by filing an application electronically. The refund must be processed within 60 days if the application is complete. Previously, taxpayers could not withdraw refund applications once filed, but Rule 90(5) now permits withdrawal before issuance of any refund sanction, payment, or notice orders by submitting a withdrawal application electronically via FORM GST RFD-01W. Withdrawal is allowed only until the refund application receives an acknowledgment. Upon withdrawal, the debited ledger amount is restored, and the taxpayer may file a fresh refund application for the same or different periods. The GST portal provides a detailed procedure for withdrawal, including submission of reasons and supporting documents, and updates the application status to "Refund Application Withdrawn." - (AI Summary)

New GST Appellate Tribunal Rules 2025 Set Procedures for Appeals, Document Handling, and Witness Examination
The Goods and Services Tax Appellate Tribunal (Procedure) Rules, 2025, effective from April 24, 2025, establish procedures for appeals under GST. They govern discovery and production of documents, summoning procedures, and document marking, aligning largely with the Code of Civil Procedure, 1908. The Tribunal can suo motu summon public documents and requires applications for document production to specify relevance and prior attempts to obtain certified copies. Witness examination procedures, including oath administration, examination in camera, and recording of depositions, follow prescribed forms and standards. Witnesses are numbered sequentially, and allowances for travel and daily expenses are regulated. The Tribunal may issue discharge certificates to witnesses, and records necessary for commissions must be furnished to the Commissioner with proper acknowledgment. The Commissioner may also collect specimen handwriting, signatures, or fingerprints from witnesses when required. - (AI Summary)

Direct-to-consumer brands speed customs clearance using pre-uploaded docs, expert codes, and AEO status for faster processing
Certain direct-to-consumer brands expedite customs clearance by pre-uploading all required documents on electronic platforms before shipment arrival, ensuring no delays due to incomplete files. They avoid misclassification by thoroughly researching tariff codes and obtaining expert certifications, minimizing legal risks. These brands obtain Authorised Economic Operator status to benefit from faster clearance, duty deferrals, and priority processing. Maintaining a sufficient and reconciled electronic cash ledger prevents payment-related release issues. Additionally, they closely integrate customs clearing agents into their operations through training and collaboration, reducing errors and last-minute complications. This strategic planning and proactive approach enable significantly faster customs clearance compared to typical delays. - (AI Summary)

Passengers Must Declare Goods Using Customs Channels Under Customs Act, 1962 Section Rules
Passengers returning from abroad must declare goods through designated Customs Channels-Red for dutiable or restricted items, Green for no dutiable goods, and Orange for pre-declared goods-under the Customs Act, 1962 and related rules. Accurate declaration via a Customs Declaration Form, either electronically or manually, is mandatory for dutiable goods, followed by assessment and payment of duties. Non-declaration or false declaration constitutes an offense, attracting penalties including seizure, fines, prosecution, and recovery of duties with interest. Repeat violations may lead to increased scrutiny in future customs clearances. Compliance with these procedures is a legal obligation to avoid severe consequences and ensure smooth customs processing. - (AI Summary)

Understanding GST Structure, Rates, Registration, ITC, Returns, and Audit Requirements for Businesses in India
The article explains the Goods and Services Tax (GST) framework in India, highlighting its role as a unified indirect tax system replacing multiple prior taxes. GST is categorized into CGST, SGST, and IGST, depending on intra- or inter-state transactions. It outlines the four main GST rate slabs and the mandatory registration thresholds based on turnover and business type. The article emphasizes the importance of Input Tax Credit (ITC) for offsetting tax paid on inputs against output tax liabilities. It details the filing requirements for various GST returns and stresses timely compliance to avoid penalties. Businesses with turnovers exceeding Rs. 5 crores must undergo a GST audit to ensure accurate filings. The article advises maintaining proper records, reconciling returns, and staying updated on regulatory changes to optimize tax management and compliance under the GST regime. - (AI Summary)

GST Show Cause Notices Must Be Issued Separately for Each Financial Year Under Section 73
The Madras High Court ruled that under GST law, show cause notices (SCNs) must be issued strictly on a per financial year basis and cannot be clubbed to cover multiple financial years, even in audit cases where the department combines periods for convenience. Issuing a single SCN for more than one financial year is impermissible and such orders are liable to be quashed. The court emphasized that tax authorities must adhere to the statutory framework governing tax periods when issuing SCNs, whether based on monthly or annual returns. This judgment clarifies that taxpayers receiving SCNs spanning multiple financial years have grounds to challenge them through writ petitions, reinforcing compliance requirements for tax administrators and protecting taxpayer rights. - (AI Summary)