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Dear Reader,
Greetings for the day!!!
We are pleased to share the recent Tax notification and circulars. |
| Direct Tax |
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CBDT has launched NUDGE initiative for AY 2025-26, urging taxpayers to voluntarily review and correct any ineligible deduction/exemption claims identified through data analytics. Affected taxpayers are being intimated via SMS/email to file revised returns by 31st December 2025 to avoid further scrutiny. However, where claims are genuine and correctly made, no action is required. |
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CBDT provides recognition to “The Christian Medical College Vellore Association (PAN: AAATC1278N),” as a recognized institution for ‘scientific research’ u/s 35(1)(ii) of the Act, from A.Y. 2026-27 to A.Y. 2030-31. |
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CBDT provides recognition to “Indian Institute of Science Education and Research, (PAN: AAAAI1546E),” as a recognized institution for ‘scientific research’ under the category of university, college or other institution u/s 35(1)(ii) of the Act, from A.Y. 2026-27 to A.Y. 2030-31.
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CBDT provides recognition to “Cancer Institute’ (W.I.A), (PAN: AAATC2259F),” as a recognized institution for ‘scientific research’ under the category of university, college or other institution u/s 35(1)(ii) of the Act, from A.Y. 2027-28 to A.Y. 2031-32.
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| Goods And Services Tax |
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RSP-Based Valuation Introduced for Specified Tobacco & Pan Masala Products (Effective 1 February 2026) Vide Notification Nos. 19/2025–Central Tax and 20/2025–Central Tax dated 31 December 2025, the Government has introduced Retail Sale Price (RSP)–based valuation for specified goods under section 15(5) of the CGST Act, 2017, by inserting Rule 31D in the CGST Rules, 2017. The revised valuation applies to goods where RSP is declared on the package, including pan masala, tobacco and tobacco-related products, and nicotine-based inhalation products (excluding bidis and tobacco leaves). Under the new regime, the value of supply shall be determined on the basis of declared RSP net of GST, with tax computed using the prescribed reverse calculation formula, replacing transaction value–based taxation. Further, Rule 86B relaxation has been extended only to non-manufacturers for such goods where tax is paid on an RSP basis. Effective from 1 February 2026, the amendment strengthens valuation certainty and tightens compliance for specified sin goods. |
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Online Opt-In Declaration for “Specified Premises” Enabled (Hospitality Sector)
GSTN has enabled an online Opt-In Declaration on the GST Portal to classify hotel premises as “Specified Premises”, applicable from FY 2026–27 onwards, in terms of Notification No. 05/2025 – Central Tax (Rate) dated 16 January 2025. A premises becomes “specified” if, in the preceding financial year, any room was supplied at a value exceeding ₹7,500 per day, or where the hotel voluntarily opts for such classification. While GST on accommodation continues to be tariff-based, restaurant/food services within specified premises attract 18% GST with ITC, as against 5% without ITC for other locations.
The declaration may be filed by existing (active or suspended) hotel registrants through Annexure VII (between 1 January and 31 March of the preceding year) and by new registration applicants through Annexure VIII (within 15 days of ARN generation). Up to 10 premises can be declared per filing, with separate ARNs for each premise, and once exercised, the option continues automatically for future years. Manual declarations filed for FY 2025–26 must be re-filed online for FY 2026–27, reinforcing a digital, system-driven classification mechanism aimed at reducing GST rate disputes.
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