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Dear Reader,
Greetings for the day!!!
We are pleased to share the recent Tax notification and circulars.
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Direct Tax
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CBDT has notified “Inbar Holding RSC Limited, (PAN: AAGCI2029C)”, as a specified pension fund u/s 10(23FE) of the Act w.e.f. 05th January 2026 to 31st March 2030, thereby granting tax exemption on eligible investments made in India subject to certain specific conditions.
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CBDT provides recognition to “Joint Electricity Regulatory Commission (for The State of Goa and Union Territories except Delhi) (PAN: AAAJJ0668D)”, for tax exemption u/s 10(46A) (b) of the Income tax Act.
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CBDT provides recognition to “Mussoorie Dehradun Development Authority, (PAN: AAAAM4651Q)”, for tax exemption u/s 10(46A) (b) of the Income tax Act.
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CBDT provides recognition to “Kota Development Authority (PAN: AAAJK2043D)”, for tax exemption u/s 10(46A) (b) of the Income tax Act.
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CBDT provides recognition to “Gorakhpur Industrial Development Authority (PAN: AAALG1185A)”, for tax exemption u/s 10(46A) (b) of the Income tax Act.
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CBDT has notified the “Core Settlement Guarantee Fund, (PAN: AAAJA3150B)”, set up by AMC Repo Clearing Limited, as an eligible fund u/s 10(23EE) for exemption of specified income for AY 2024-25 onwards.
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| Goods And Services Tax |
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GST Council May Revisit GST Rate on Air & Water Purifiers
The GST Council is likely to examine a proposal to reduce GST on air purifiers and water purifiers in an upcoming meeting, amid rising public health concerns related to air pollution and drinking water safety. Currently taxed at 18% and treated as non-essential goods, these products may be reclassified as essential health-related appliances, with a reduced rate of around 5% under consideration, which could improve affordability and adoption. Any change will take effect only after a formal notification is issued following the Council’s recommendation.
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Tripura HC: Bona Fide Buyers Cannot Be Denied ITC for Supplier’s Default
The Tripura High Court in M/s Sahil Enterprises v. Union of India (06.01.2026) held that Section 16(2)(c) of the CGST Act cannot be applied to deny Input Tax Credit to a bona fide purchaser merely because the supplier failed to deposit tax with the Government. Reading down the provision, the Court ruled that ITC denial is justified only in cases of fraud or collusion, not genuine transactions where tax has been paid to the supplier.
Setting aside a ₹1.11 crore demand, the Court relied on On Quest Merchandising and Arise India (SC-approved), reiterating that imposing an impossible compliance burden on buyers defeats the ITC mechanism and results in double taxation; recovery must be pursued from the defaulting supplier, not the honest recipient.
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GST Exemption on Health Insurance: Structure Beats Substance
When GST exemption on health insurance was announced, many assumed it would automatically extend to all health covers, including those for retired bank employees. That assumption was lazy. The exemption was never about health—it was about policy structure. In E.P. Gopakumar & Ors. v. Union of India (Kerala HC, 08.01.2026), the Court held that GST exemption applies only to individual health insurance policies. Post-retirement medical covers provided by banks operate through group insurance contracts, negotiated institutionally under a master policy, and individual payment of premium does not change their legal character.
The Court refused to stretch tax exemptions on equitable or sympathetic grounds, upheld levy of 18% GST on group health insurance, and dismissed all writ petitions. Bottom line: If it’s a group policy, the exemption is simply not available.
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