Tax Changes: new capital gains regime and standard deduction alongside corporate rate extension and electronic assessment amendment.
The Budget tables major sectoral allocations across agriculture, health, rural livelihood and infrastructure while committing to a specified fiscal deficit trajectory and a disinvestment and public insurance consolidation programme. On taxation and regulation it introduces a Long Term Capital Gain tax with transitional share purchase exemptions, extends reduced corporate tax treatment to companies under a turnover threshold, retains personal slab rates, provides a Standard Deduction for salaried taxpayers, raises senior citizen medical deductions, grants 100% deduction to farmer producer companies, and proposes an amendment to enable electronic assessments. (AI Summary)

Name reservation reform: online RUN service and shortened reservation period for proposed new companies under amended rules.
Section 4 restricts company names for similarity, illegality, undesirability and government implication. The Amendment Act shortened the reservation validity for names applied by proposed new companies while retaining the longer period for name changes by existing companies. The Companies (Incorporation) Rules replaced Form INC 1 with the online Reserve Unique Name (RUN) service: a post login single name application that accepts attachments, requires regulator approvals where applicable, is processed by the Central Registration Centre under non STP review, and issues system generated digitally signed approval or rejection communications. (AI Summary)

GST on net retained feedstock clarified: levy confined to quantity manufacturers retain, not total supply.
The GST Council clarified that where refineries supply polybutylene feedstock and liquefied petroleum gas through pipelines and manufacturers return excess, the refinery's GST liability is measured on the value of the net quantity retained by the manufacturer, not on the total quantity supplied. (AI Summary)

Depreciation rate reduction undermines incentives and erodes new companies' tax benefit under Section 115BA regime.
The uniform reduction of varied higher depreciation rates to 40% is unjustified because those rates served distinct incentivising purposes; the proportional and unexplained cuts are irrational. The amendment also erodes incentives under Section 115BA for newly formed companies by reducing depreciation benefits contemporaneously or in the immediately following year, and the notification's timing raises effective date and fiscal stability concerns. (AI Summary)

Cash credit treatment of cheque receipts questioned; honoured cheques evidence lawful source and resist being treated as unexplained credits.
When a payee receives an a/c payee cheque, presents it in due course and the drawee bank honours it, the cheque and the bank's payment serve as proof of source: the holder is a holder in due course and the payment is a payment in due course, so the sum credited in the payee's books is legitimately sourced by cheque realisation and should not be treated as an unexplained cash credit under the cash credit provision without reconsidering Negotiable Instruments Act presumptions. (AI Summary)

Time of supply under GST clarified for JDA: supply arises on transfer of possession or right by conveyance.
Determination of the time of supply for construction services under a JDA was uncertain because builders do not issue invoices or receive payment from landowners and landowner recognition of units is indeterminate. A tax notification clarified that the time of supply arises when the builder transfers possession or the right in the constructed property to the person supplying development rights by execution of a conveyance deed or similar instrument, aligning the GST rule with prior practice and resolving the supplier's timing uncertainty. (AI Summary)

E-way Bill requirement: electronic pre-notification for movements above threshold, with transporter duties and verification powers.
An e-way bill must be generated electronically before movement of goods above the prescribed value threshold for supplies, non-supply movements, or inward supplies from unregistered persons; Part A of FORM GST EWB-01 is to be furnished by the consignor/registered person, Part B completed when goods are handed to a transporter, and transporters may generate or consolidate e-way bills on the portal if consignor/consignee do not. Transporters and persons-in-charge must carry prescribed documents or the e-way bill (physically or via RFID), cancellations are time-limited, validity is distance-based, and authorised officers may intercept and inspect consignments with inspection reports recorded in FORM GST EWB-03. (AI Summary)

Compounding of FEMA contraventions: voluntary penalty settlement in lieu of prosecution, allocated between banking and enforcement authorities.
Compounding under the Foreign Exchange Management framework is a voluntary settlement mechanism allowing payment of a penalty in lieu of prosecution for most contraventions, excluding non quantifiable contraventions. Jurisdiction is allocated between the central banking authority and the enforcement agency according to seriousness and intent; the banking authority classifies contraventions and delegates powers to regional offices for certain reporting and transactional breaches. Applications must follow prescribed rules, include the prescribed fee and mode of payment, and are subject to procedural timelines and possible late submission fees. (AI Summary)

GST Council constraints limit indirect tax changes, focusing Budget reform on direct taxes and revenue risks.
Budget 2018 commentary explains that the implementation of GST limits central authority over indirect taxes because the GST Council controls decisions, concentrating legislative space in Part B on direct taxes; indirect changes will largely be confined to basic customs duties outside GST. The piece warns that lower GST collections pose fiscal consolidation risks and anticipates targeted direct-tax amendments and non-specific signals about GST in the Budget speech. (AI Summary)

Input tax credit restrictions limit builders' ability to claim GST credit on construction, requiring attribution and reversals.
Restrictions deny builders full entitlement to input tax credit where works contract services or goods/services are received for construction of immovable property on the builder's own account; credit is allowed only for the portion attributable to taxable construction services, common inputs must be attributed between taxable and exempt supplies, and a statutory time limit for claiming credit plus required reversals after completion/occupation constrain availment and may force cash discharge for previously availed credit. (AI Summary)

Actual payment requirement: an unpresented or cancelled cheque does not amount to payment for deemed dividend purposes.
The statutory fiction of Section 2(22)(e) applies only after fulfilment of its precondition of an actual payment; mere issuance of a cheque that was not presented, was returned and cancelled, or mere accounting entries do not constitute a payment. Bank reconciliation and reversal of incorrect entries are the proper remedies where cheques were not realised, and Revenue must demonstrate actual flow of funds before invoking the deemed dividend provision. (AI Summary)

Goods and Services Tax compliance: courts stress procedural fairness in seizures, penalties and electronic consignment controls.
Goods and Services Tax compliance and litigation have emerged as significant operational challenges since GST's implementation, with interpretational difficulties, administrative disruptions, and increased writ petitions. Recent judicial pronouncements stress procedural fairness: seizure and penalty actions were deemed unsustainable where detaining authorities did not form or record an intention to evade tax; detention orders were set aside when assessees were denied opportunity to explain alleged invoice discrepancies or absence of transit documentation; and challenges to electronic movement controls were directed to engage with notified administrative processes before pursuing writ relief. (AI Summary)

Consumer protection authority empowered to investigate unfair trade practices and order recalls, refunds and penalties
The Bill creates a Central Consumer Protection Authority empowered to investigate unfair trade practices and misleading advertisements, initiate suo motu or complaint-based inquiries through a Director General or District Collectors, issue safety notices, mandate recalls and reimbursements, direct modification or withdrawal of advertisements, impose penalties and prohibit endorsers, compound offences with court leave, and have its orders appealed to the National Commission; rules and regulations will govern appointments, procedure, and investigatory and administrative details. (AI Summary)

Interim compensation for cheque dishonour permits courts to mandate provisional payment; appellate deposit secures payment during appeal.
The Bill authorizes courts to order interim compensation from a drawer in cheque dishonour prosecutions-payable within court-directed time limits, recoverable as a fine, refundable with bank-rate interest on acquittal, and deductible from any final fine or compensation. It also permits appellate courts to require an appellant to deposit a portion of the trial award as payment pending appeal, additional to interim payments, payable within specified periods, releasable to the complainant during appeal, and repayable with interest if the appellant is acquitted. (AI Summary)

Right to information on arrest under GST requires written grounds and timely judicial production with protective custody procedures.
Arrest under the GST framework is subject to statutory and constitutional safeguards requiring written grounds of arrest, production before a magistrate within the prescribed time, conformity with Code of Criminal Procedure arrest provisions, and eligibility for bail by designated revenue officers for non cognizable or bailable offences. Arrest memos must record facts, identity, gist of evidence, statutory provisions, explained grounds, nominated contact details and timing, with separate memos for each arrestee. Custodial safeguards include right to legal counsel, prompt notification of a nominated person, gender sensitive procedures, medical examination, and custodial duty of care. (AI Summary)

Grievance redressal in GST portal enables taxpayers to submit complaints and obtain a trackable grievance number online.
The GST portal's grievance redressal mechanism enables taxpayers to submit complaints through Services > User Services > Grievance/Complaints by completing mandatory fields (grievance type, category, State, business details, email, grievance description, sub-category, complainant name and mobile) and optional fields (previous grievance number, supporting documents in PDF/JPEG within size limits). On submission the system issues a Grievance Number communicated by email/SMS and the status can be tracked via Enquire Status using that number. (AI Summary)

Health care exemption: supplies to admitted patients treated as composite healthcare services, including ancillary hospital charges.
The GST Council clarified that all supplies of goods or services to admitted patients are to be regarded as healthcare services for exemption: services by doctors/consultants/technicians engaged by hospitals are exempt; the entire amount charged by hospitals, including retention money and payments to doctors, is for healthcare services and exempt; and food supplied to inpatients on medical advice is part of the composite healthcare supply and not separately taxable, while food to non admitted persons is taxable. (AI Summary)

GST rate rationalization and conditional cess removal reshape tax treatment for specified goods and services.
Recommendations emphasize GST rate rationalization with specified reductions and select nil ratings for listed goods, conditional cess removals for certain vehicles and margin taxed used vehicles (contingent on non availment of prior input tax credit), and harmonization of IGST treatment for specialized export oriented scientific and space equipment. They further expand service exemptions and lower rates for defined services, adjust rates for specified construction and leisure services, and prescribe conditions for input tax credit refundability and valuation consistency. (AI Summary)

GST rate revisions and return simplification advance reduced compliance burden and enable invoice matching for businesses.
The GST Council recommended rate adjustments across goods and services, reduced late fees and eased registration cancellation; initiated a phased nationwide e-way bill rollout; clarified exemptions for healthcare and education, aligned leasing and rental taxation and proposed sector-specific rate and valuation changes including works contracts, real estate, petroleum-related services and financial/insurance treatments. It endorsed retaining a simplified summary return (GSTR-3B) supplemented by supplier invoice uploads for invoice matching, while deferring final decisions on petroleum and real estate inclusion in GST. (AI Summary)

Supply on approval: delivery challan allows movement without prior tax invoice; inter state approval supplies attract integrated tax.
Supply on approval arrangements are treated by reference to transfer of title and possession; where title is deferred but possession moves, such transactions are supply of goods. Section 142(12) provides transitional relief for goods returned within a specified period, shifting tax liability to the returnee if returned after that period and to the sender if not returned. Rule 55 permits transportation on a delivery challan with invoice issuance on delivery, and inter state movement for approval supplies attracts integrated tax. (AI Summary)