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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, via an advisory on the TRACES portal, has alerted deductors /collectors and other Stakeholders that any correction statements for FY 2018-19 (Q4), FY 2019-20 to 2022-23 (all quarters), and FY 2023-24 (Q1-Q3) must be filed by 31st March 2026. Beyond this date, filing will be time-barred and not permissible under the law.
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CBDT issued Corrigendum to Income Tax Act, 2025 to rectify certain grammatical and terminology errors to ensure accuracy, clarity, and consistency with the existing income tax law.
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CBDT provides recognition to “Tamil Nadu Electricity Regulatory Commission” (PAN: AAAGT0048J)”, a commission constituted under “The Electricity Act, 2003” for tax exemption u/s 10(46A)(b) of the Income tax Act.
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CBDT has further extended the due date for filing ITRs for AY 2025-26 for Non-Audit Assessees. The original deadline i.e. 31st July 2025 was extended to 15th September 2025, which was further extended by one day to 16th September 2025.
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CBDT provides recognition to “Ghaziabad Development Authority (PAN: AAALG0072C)”, an authority constituted under the Uttar Pradesh Urban Planning and Development Act, 1973 for tax exemption u/s 10(46A)(b) of the Income tax Act.
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CBDT announces waiver of interest levied u/s 220(2) on demand raised on account of disallowance of rebate u/s 87A against special-rate income for FY 2023-24, provided the demand is paid by 31st December 2025. Interest shall be charged if payment is made beyond this date.
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| Goods And Services Tax |
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Circular 251/08/2025: Key Insights on Post-Sale Discounts
In the 56th GST Council meeting, it was decided to align the treatment of post-sale (secondary) discounts with commercial reality. To implement this, CBIC has issued Circular No. 251/08/2025-GST (12 Sept 2025). The circular clarifies that financial/commercial credit notes will not require ITC reversal by recipients since GST liability remains unchanged. Similarly, ordinary trade discounts and turnover rebates are considered pure price reductions and do not constitute “consideration” for onward supply, ensuring no additional GST liability in such cases.
However, CBIC has distinguished scenarios where discounts are linked to end-customer schemes or tied to specific promotional obligations of dealers. If a manufacturer routes discounts to ensure reduced customer pricing, or if a dealer is contractually required to undertake promotional activities (like advertising or branding), such benefits will be treated as “consideration” for supply of services and attract GST. This clarification rescinds the earlier Circular 212/6/2024 and provides much-needed certainty for businesses on the treatment of post-sale discounts.
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Important Update on MRP Revision due to GST Change
The Ministry of Consumer Affairs has allowed manufacturers, packers, and importers to revise the MRP on unsold stock manufactured/packed/imported before GST rate changes. Such revision, permitted only to the extent of actual GST variation, can be declared through stickers, stamps, or online print without overwriting the original price, and must be completed by 31st Dec 2025 or until stocks are exhausted. Companies are also required to publish two newspaper notices, inform dealers and legal metrology authorities, and may continue using old packaging material until the same date, provided corrected MRPs are displayed.
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Supreme Court Upholds Retrospective Relief on Inverted Duty Refunds
The Supreme Court, in Tirth Agro Technology Pvt. Ltd., has upheld the Gujarat High Court’s view that the amendment to Rule 89(5) of the CGST Rules (via Notification No. 14/2022 dated 05 July 2022) is clarificatory and curative in nature, thereby applying retrospectively. The amendment, which included input services in the refund formula for inverted duty structure, was challenged by Revenue as being prospective only. However, the Court dismissed the Revenue’s SLP, affirming that refund/rectification applications filed within the two-year period under Section 54(1) are eligible for recalculation on the basis of the amended formula.
This ruling provides significant relief to taxpayers facing accumulation of unutilised ITC due to higher GST rates on inputs. It confirms that refund claims made within the statutory limitation can validly include ITC on input services, ensuring a broader scope of refund entitlement under the inverted duty structure. By treating the 2022 amendment as clarificatory, the Court has aligned the law with legislative intent, removing earlier ambiguities created by CBIC’s prospective interpretation.
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GST Revision – Compliance Relaxations for Manufacturers, Packers & Importers
In continuation of the 09.09.2025 advisory, the Central Govt. (Circular dated 18.09.2025) has eased compliance under the Legal Metrology (Packaged Commodities) Rules, 2011. Revised stickers on old stock (pre-22.09.2025) are now optional, newspaper ads for revised MRPs are no longer mandatory, and old packaging material can be used till 31.03.2026. Revised price declarations are voluntary, not compulsory. This translates to reduced compliance burden, flexibility in clearing oldstock, and a smoother GST transitionmanufacturers/packers/importers only need to circulate GST pricedetails to dealers/retailers via internal communication.
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GST Rate Overhaul – 56th GST Council Meeting Implemented
Following the PIB release on the 56th GST Council Meeting, CBIC has issued Notifications 09 to 17/2025-CTR (all effective 22nd Sept 2025) to give legal effect to the revised GST framework. These cover sweeping rate changes on goods (reductions on essentials, textiles, medicines, renewable energy, etc., and hikes on luxury/sin goods), exemptions for food, education and life-saving medicines, rationalisation of valuation rules, and uniformity in construction materials. Notifications also address handicraft concessions, service rate restructuring, insurance exemptions, and ECO liability clarifications. In essence, the notifications translate Council recommendations into law, ensuring clarity, compliance, and smoother transition under the new GST regime.
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GST Annual Return – Compliance Revamp (FY 2024-25 onwards)
CBIC (NN 13 & 15/2025-CT, dated 17.09.2025) has overhauled GSTR-9/9C compliance as per the 56th GST Council recommendations. New disclosures include Table 6A(1) (ITC reversed in earlier FY & reclaimed), Table 6B (comprehensive ITC trail), Table 6H (ITC reclaimed in current year), and Table 8H (import IGST availed in subsequent FY). Earlier merged heads have been bifurcated – e.g., Rule 37A & Rule 38 reversals now separately disclosed in Table 7, and Table 8B introduced for cleaner reconciliation with GSTR-2B. In GSTR-9C, disclosures expanded for e-commerce operator supplies (Sec 9(5)) and a new Table 17 created for late fee. Importantly, additional liability arising in GSTR-9C can now be discharged through the Electronic Credit Ledger. Small taxpayers (≤ ₹2 crore turnover) continue to enjoy exemption from GSTR-9 filing.
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