Overseas investment regime clarified: new rules streamline permissions, reporting and introduce late submission fee for delays.
The Directions operationalise the new Overseas Investment regime, replacing JV/WOS with the concepts of foreign entity and Indian entity, introducing strategic sector exceptions, and clarifying ODI/OPI definitions. They streamline permissions by widening the automatic route and dispensing with approvals for specified transactions, set procedures and documentation obligations for approval route cases via designated AD banks and online reporting (Form FC/ODI/OPI) with UIN allotment, define aggregation and treatment of financial commitments (including guarantees, pledges and ECB/EEFC/ADR/GDR reckoning), and establish reporting, compliance and Late Submission Fee rules with penalties and restrictions on further remittances until regularisation.

Account Aggregator framework requires Financial Information Providers to share customer financial data only on valid consent artefacts with digital signing.
FIPs in the securities markets must share specified financial information only upon receipt and verification of a valid electronic consent artefact from the customer via an AA, digitally sign and transmit that information in real time, implement interfaces to authenticate consent artefacts, verify digital signatures, maintain logs of sharing requests and adopt published technical specifications and IT safeguards to ensure secure, scalable data flows to AAs.

Block mechanism mandatory for Early Pay-In transactions, requiring depositories and exchanges to implement systems and notify members.
The circular mandates the block mechanism as compulsory for all Early Pay-In transactions effective November 14, 2022, requiring Depositories, Clearing Corporations and Stock Exchanges to put in place systems to ensure compliance and to notify members, amend bye-laws, and report implementation status to SEBI.

Display Assembly imports with only display components ( back support) attract 10% BCD; assemblies with extra parts attract 15% BCD.
Concessional BCD treatment: a Display Assembly comprising touch panel, cover glass, brightness enhancement film, indicator guide light, reflector, LED backlight, polarizers, LCD driver on FPC, FPCs for display, and LCM/OLED module-whether or not fitted with a metal/plastic back support frame only for structural support-qualifies as a Display Assembly attracting a BCD rate of 10%. If the display assembly is imported together with additional functional parts or subassemblies (e.g., mechanics, sim tray, antenna pin, speaker net, keys, battery compartment, or extra FPCs), the whole assembly is classifiable as general parts and attracts a BCD rate of 15%.

Overseas investment eligibility for AIFs/VCFs: new jurisdictional, due diligence and reporting requirements govern permissible investments.
AIFs/VCFs must apply for allocation of an overseas investment limit using the prescribed format and submit trustee/manager undertakings; investments are permitted only in overseas investees incorporated in jurisdictions whose securities regulator is an IOSCO MMoU signatory or has a bilateral MoU, and are prohibited in jurisdictions identified by FATF for strategic AML/CFT deficiencies; transfers may be made only to entities eligible under FEMA/RBI rules, liquidation proceeds are available for reinvestment across funds, and specified reporting of investments and divestments to the regulator is mandatory within prescribed timelines.

Re-export drawback claims require complete documentation, timely deficiency compliance, registration, and verification before customs-duty repayment processing.
Drawback claims on re-export of imported goods require prescribed import and export records, duty-payment evidence, declarations or GST certification where relevant, and a notarised affidavit. Incomplete claims must be returned with a deficiency memo within fifteen days; compliant claims are acknowledged and registered. Failure to rectify deficiencies within the applicable period makes the claim time-barred. Registered claims require verification that no prior refund, pending audit objection, or recoverable confirmed demand exists against the claimant or import entry.

Consistency with Rules of Origin: officers must apply CAROTAR aligned with trade agreement verification and information rules.
Officers must apply CAROTAR consistent with the Rules of Origin in the relevant trade agreement; where conflict exists, the Rules of Origin prevail. Proper officers may request further information if origin criteria are suspect and may proceed to further verification if importers do not provide required information, all subject to the verification standards and procedures of the applicable trade agreement.

Summons under CGST Act require prior approval, judicious use, and restraint against routine calls to senior officials.
Guidelines on issuance of summons under Section 70 of the CGST Act require judicious use of the power and discourage routine summons where requisition of information or online statutory records may suffice. Summons by Superintendents need prior written approval from a Deputy or Assistant Commissioner, with reasons recorded, and file records must note appearance, non-appearance and statements. Senior management should not ordinarily be summoned first, repeated summons without proper service should be avoided, and complaints for non-attendance may follow after reasonable opportunity and due service.

Arrest under GST law must rest on credible reasons, investigation necessity, and clear evidence of tax evasion intent.
Guidelines for arrest and bail under the CGST Act require arrest to be founded on clear and credible reasons to believe, and not made routinely or mechanically. Arrest should be justified by the need for proper investigation, the risk of tampering with evidence or witnesses, the possibility of absconding, and evident intent to evade tax, misuse wrongful input tax credit, obtain fraudulent refund, or fail to pay tax collected. Arrest is discouraged in technical disputes or cases involving only a difference of legal interpretation, especially where the person is cooperating with investigation.

GST classification of electrically operated vehicles clarified; absence of fitted battery does not change classification, reduced rate applies.
Clarifications: electrically operated vehicles remain classifiable under HSN 8703 even if supplied without batteries and attract the concessional five per cent GST; Napa and similar minor polished dimensional stones qualify for the concessional five per cent entry; mango forms under CTH 0804 are distinguished-fresh mangoes exempt, sliced dried concessional, other processed forms including pulp at standard rate; treated sewage water under heading 2201 is exempt; nicotine polacrilex gum for cessation is classifiable under the oral nicotine tariff item at the standard rate; fly ash content condition applies only to aggregates; dal milling by products under heading 2302 attract the concessional rate when used as cattle feed ingredient.

Consideration for tolerating or refraining from an act taxable only where an express or implied contractual supply exists.
GST applies to payments only when they constitute consideration for an independent contractual supply of agreeing to refrain from an act, to tolerate an act or situation, or to do an act. Payments that merely compensate for breach, statutory cancellation compensation without a toleration agreement, penalties for legal violations, cheque dishonour fines and forfeiture of earnest money where nothing is supplied in return are not consideration and are not taxable. Conversely, charges that represent ancillary facilities bundled with a principal supply (late payment acceptance, cancellation fees, early termination or prepayment facilities) are consideration for supply and taxable at the rate of the principal supply.

GST exemptions clarified for various services, specifying applicable rates, reverse charge liabilities and retrospective regularisation where applicable.
Clarifies GST applicability and rates across specific services: ice cream parlours attract 18% with ITC from October 14, 2021 and past 5% payments without ITC are regularised; educational entrance/application and migration fees are exempt as services by educational institutions to students; storage of ginned/baled cotton was exempt prior to July 18, 2022; transit cargo services to and from Nepal and Bhutan are exempt subject to customs/transhipment and tracking rules; renting of vehicles with driver for mineral transport is taxable as rental (heading 9966) and not exempt transport; IVF services are exempt as health care; sale of land (even after basic development) is not taxable.

GST applicability on services clarified across exemptions, rental vehicle taxation, transit cargo and healthcare services.
Clarifications specify GST chargeability and rates across diverse services: ice cream parlours are subject to standard GST with ITC from the revised effective date and past concessional payments are regularised as fully paid; educational institution fees for entrance, eligibility and migration certificates are exempt; storage/warehousing of ginned or baled cotton was covered by the pre amendment raw fibre exemption; transit cargo services to and from Nepal and Bhutan (including return empty containers) are exempt subject to customs/transshipment procedures; renting of vehicles with driver is taxable rental service and corporate recipients may be liable under reverse charge; IVF services qualify as exempt health care services; sale of land (even after development) is outside GST.

Refund of unutilised ITC on export of electricity: filing, documentation and calculation procedure clarified for applicants.
Claimants must file FORM GST RFD-01 under "Any Other" with remark "Export of electricity- without payment of tax (accumulated ITC)", upload Statement 3B (export invoice details, energy exported, tariff per unit), monthly REA statement of scheduled energy from RPC Secretariat and export agreement(s), and Statement 3A showing refund calculation. No initial debit from the electronic credit ledger is required; the proper officer may later request debit via FORM GST DRC-03 before issuing refund and payment orders. Turnover for refund uses REA scheduled energy multiplied by contracted tariff, using the lower of invoice or REA quantities where they differ.

Re-credit in electronic credit ledger enabled via FORM GST PMT-03A after deposit of erroneously sanctioned refunds.
Prescribes re-credit in the electronic credit ledger via FORM GST PMT-03A where a taxpayer deposits an erroneously sanctioned refund by payment through FORM GST DRC-03 from the electronic cash ledger with interest and penalty. Taxpayers must submit the prescribed written request (Annexure-A) to the jurisdictional proper officer; the officer, on satisfaction of full payment, shall re credit an equivalent amount to the electronic credit ledger by order in FORM GST PMT-03A, preferably within 30 days from request receipt or payment.

Arrest for customs offences restricted to exceptional situations with revised value and offence based thresholds.
Arrest powers under the Customs Act are to be exercised only in exceptional situations where specified operational thresholds or offence characteristics are met, including unauthorised baggage importation, smuggling of high value or prohibited goods, wilful mis declaration or concealment in appraisement cases, fraudulent evasion of duty, misuse of drawback or exemptions, and fraudulently obtained instruments; certain categories (counterfeit currency, arms, explosives, antiques, art treasures, protected wildlife and endangered species) fall outside the value thresholds and may warrant arrest based on facts and circumstances. The Board directs circulation of these revised guidelines and reporting of implementation difficulties.

Prosecution thresholds for customs offences updated, altering when high-value smuggling and commercial fraud cases are initiated.
Revised monetary thresholds for initiating prosecution under the Customs Act, 1962 set specific limits for baggage/outright smuggling and appraising/commercial-fraud cases, triggering prosecution where unauthorized importation, wilful mis-declaration, concealment of restricted goods, duty evasion, fraudulent drawback or fraudulent use of instruments meet the prescribed thresholds. Non-declaration of foreign currency by foreign nationals/NRIs at departure exceeding the baggage threshold should not automatically lead to prosecution if lawful acquisition and inadvertent non-declaration are claimed. Sanctions granted after this Circular must follow the new limits and pending unfiled sanctioned cases must be reviewed accordingly.

Health Certificate requirement for imported milk, pork and fish mandates sanitary attestations ensuring food safety before entry.
Imported consignments of milk and milk products, pork and pork products, and fish and fish products must be accompanied by a Health Certificate issued by the exporting country's Competent Authority in the prescribed Annexure-I format, containing product identification, transport and entry details, authorised official attestations of establishment approval, compliance with Indian Food Safety and Standards product, microbiological and additive requirements, hygienic production and HACCP-based controls, absence of prohibited residues beyond prescribed limits, and a ninety-day certificate validity.

Work from Home permission under SEZ rules: formal WFH schemes required, approved if unresponded within prescribed period.
Implementation of Rule 43A requires units to adopt a formal WFH Scheme and notify the Development Commissioner at least fifteen days before implementation, submitting a covering note with employee counts, categories eligible for WFH, duration (up to one year per application), an undertaking to ensure physical attendance consistent with approved percentages, and details of employees when WFH covers half or more of the workforce. An accompanying spreadsheet must list eligible employees, identification details, asset assignments, and individualized WFH durations. Applications are processed within fifteen days and are deemed approved if no response is received.

Export policy amendment makes exports of wheat-flour items subject to IMC recommendation and quality certificate requirement.
Export policy for items under HS Code 1101 remains 'Free' but export is conditioned on recommendation of the Inter-Ministerial Committee (IMC), and IMC-approved shipments require a Quality Certificate from the Export Inspection Council or its authorized agencies. Transitional arrangements under Para 1.05 of the Foreign Trade Policy are excluded, while specified consignments already loaded or registered with Customs during the interim period are permitted to export.