Refund of unutilised input tax credit: amended calculation formula and sectoral refund restriction apply prospectively to later applications.
The circular clarifies that the amended refund calculation formula under sub rule (5) of Rule 89 applies prospectively and governs refund applications filed on or after its effective date, while earlier applications remain governed by the pre amendment formula. It also clarifies that the notification denying refunds for specified goods in chapters 15 and 27 where input tax exceeds output tax operates prospectively and applies only to refund applications filed on or after its effective date.

GST classification of electrically operated vehicles: lack of fitted batteries does not change their tax classification, attracting concessional treatment.
Electrically operated vehicles are classifiable under HSN 8703 and attract the concessional GST rate even if batteries are not fitted at supply; absence of batteries does not change the essential character. Napa and similar brittle stones with only minor polishing fall within the reduced-rate entry for non-mirror-polished ready-to-use building stone. Mango products under CTH 0804 are taxed by form (fresh exempt, sliced dried concessional, other dried forms including pulp at the standard rate). Treated sewage water is exempt under heading 2201. Nicotine polacrilex gum for tobacco cessation is classifiable under tariff item 2404 91 00 at the applicable rate. The 90% fly ash content requirement applies only to fly ash aggregate, not bricks, and milling by-products of pulses classifiable under heading 2302 used as cattle feed ingredients attract the concessional rate, with past periods regularized on an as is basis.

REIC-form submission for enforcement cases after FY 2018-19 must follow prescribed thresholds and regular reporting
Enforcement case information to be shared with REIC/CEIB must be submitted in the prescribed REIC-Form-1 through Headquarters for cases booked after FY 2018-19. The instruction reiterates that only cases meeting the prescribed tax-evasion threshold are to be referred, and that all pending particulars, as well as future case information, must be forwarded regularly and without delay in the specified format.

Transitional credit claims via TRAN 1/TRAN 2 may be filed/revised; officers must verify and decide admissibility within 90 days.
Transitional credit may be filed or revised via TRAN 1/TRAN 2 on the reopened common portal within the specified window; jurisdictional state or central tax officers must verify claims (including coordination where both tax components exist), observe natural justice, obtain records, and decide admissibility within 90 days of the window's closure, uploading a reasoned order to credit allowable amounts to the electronic credit ledger; inadmissible excess credit is recoverable with interest and penalty. Annexures set out SGST verification checks and a verification report template.

Sugar export restriction extended; mill wise export quotas allocated and subject to quota, documentation, and compliance requirements.
The Government extended the restriction on export of sugar (raw, refined and white) until 31 October 2023 and allocated a total mill wise export quota for sugar season 2022-23, pro rated among eligible mills based on three year average production. Mills may export only their allocated quota within the prescribed window, may surrender or exchange quota under specified procedures, must support exports with required agreements and invoices, upload daily export details on the departmental portal, and face enforcement under the Essential Commodities Act and the Foreign Trade Act for violations.

Import eligibility change: exclusion of shea nut and shea butter from specified Appendix entry alters pre-import export obligations.
Amendment excludes Shea Nut or Shea Butter from Serial No. 10 of Appendix 4J. Serial No. 10 now applies to import items (except Shea Nut or Shea Butter) as allowed under notified SION or prior fixation of norms by the Norms Committee for export of items under Chapter 7 and Chapter 15 of ITC(HS). Export Obligation Period with pre-import condition is ninety days from date of clearance of each import consignment by Customs Authority.

Hedging of commodity price and freight risk permitted abroad with conditions; banks must ensure due diligence and reporting.
Eligible resident entities (other than individuals) may hedge commodity price risk and freight risk in overseas markets using permitted products; gold hedges are limited to recognised IFSC exchanges. Banks may authorise and remit for such hedges after due diligence on exposure, hedge tenor and quantity, justification for OTC or non identical benchmarks, board approved hedging policy and requisite risk management. OTC contracts must be with regulated counterparties in acceptable jurisdictions, structured products are subject to net worth and listing conditions, all payments must pass through designated special accounts, and banks must maintain records, obtain annual statutory auditor certification, report irregularities and submit quarterly XBRL returns.

Hedging of Commodity Price Risk enabled for overseas markets; banks to facilitate under RBI directions and enclosed master direction.
RBI directs Authorised Dealer Category I banks to facilitate hedging of commodity price risk and freight risk in overseas markets by their customers, within the framework of existing foreign exchange derivative regulations, and encloses a Master Direction detailing operational, eligibility, documentation and reporting modalities; the Directions are issued under statutory powers and are without prejudice to permissions under other laws.

Hedging of gold price risk now permitted on IFSC exchanges for eligible residents, subject to regulatory permissions.
Resident entities are permitted to hedge price risk of gold on exchanges in the International Financial Services Centre (IFSC) recognised by the International Financial Services Centres Authority, subject to eligibility and operational conditions in the Master Direction. The Master Direction Foreign Exchange Management (Hedging of Commodity Price Risk and Freight Risk in Overseas Markets) Directions, 2022 has been issued to implement this change; the directions are issued under statutory authority and remain without prejudice to any other legal permissions required.

Transitional credit procedures: portal filings accepted; officers must verify claims and issue reasoned orders for admissibility.
Taxpayers may file or revise FORM GST TRAN-1/TRAN-2 within the court ordered portal window; jurisdictional tax officers must verify claims via back office systems or self certified copies, adhere to natural justice, check prior filings, adjudications and returns, coordinate with counterpart Central/State officers where claims span both taxes, prepare a detailed verification report specifying admissible and inadmissible amounts with grounds, issue notices and hearings where needed, and pass reasoned orders uploading them to the portal so allowed transitional credit is reflected in the electronic credit ledger; excess credited amounts are recoverable with interest and penalty.

Scheme of Arrangement exclusion for intercompany transfers clarified; draft scheme still to be filed and disclosed.
The earlier circular will not apply to a scheme solely between a debt listed entity and its unlisted wholly owned subsidiary; however, the debt listed entity must file the draft Scheme of Arrangement with the Stock Exchange(s) for disclosure and the Stock Exchange(s) shall disseminate the scheme documents on their websites.

Foreign investor eligibility limits onboarding and suspends further capital drawdowns unless compliance is promptly restored.
At onboarding, AIF managers must ensure foreign investors are residents of jurisdictions whose securities regulator is an IOSCO MMoU signatory or has a bilateral MoU with SEBI, except government or government-related investors approved by the Government of India; investors and underlying contributors of twenty-five percent or more, or those identified by control, must not be on the UN Security Council Sanctions List or residents of jurisdictions in the FATF public statement for strategic AML/CFT deficiencies. If an on-boarded investor later fails these conditions, the manager must not drawdown further capital until compliance is restored.

Postal exports: exporters can file PBE online, deposit parcels locally, and obtain digital customs clearance through the PBE system.
The Regulations create a PBE Automated System enabling exporters to register, file electronic postal export declarations, generate Article Booking IDs and PBE numbers, upload supporting documents, deposit parcels at designated Booking Post Offices for secure transfer to Foreign Post Offices, and obtain digital customs assessment, query handling, and clearance; authorised agents must comply with broker licensing rules and exporters must retain export records for five years.

Certificate of Origin (Non preferential) authorization expanded; additional agency authorized to issue certificates under FTP public notice.
Authorization under paragraph 2.04 of the Foreign Trade Policy 2015 2020 adds an agency to the FTP appendices as an authorized issuer of Certificate of Origin (Non Preferential), enlisting the chamber to issue non preferential Certificates of Origin for its territorial jurisdiction and updating the official list of authorized issuers.

Quota allocation eligibility revised: cooperatives and dairy organisations designated while several CPSEs are excluded from allocation framework.
Para 2.61 of the Hand Book of Procedure 2015-20 now confines quota allocation for milk powder and milk fats to national dairy cooperative organisations and national agricultural cooperative marketing federations; maize quota to national agricultural cooperative marketing federations and State cooperative marketing federations; and crude sunflower/safflower and specified refined rape/colza/canola/mustard oils to national dairy cooperative organisations, national agricultural cooperative marketing federations, the central warehousing corporation and State cooperative marketing and civil supplies corporations. Four central public sector enterprises have been denotified and are no longer eligible for allocation.

State Trading Enterprises list revised, altering eligibility for Tariff Rate Quota import allocations under the foreign trade framework.
The Director General of Foreign Trade notifies a revised Appendix listing State Trading Enterprises recognised for Foreign Trade Policy purposes and eligible for allocation of import quota under the Tariff Rate Quota. The Public Notice updates Appendix 2J by adding and removing entities as STEs and identifies those eligible to receive TRQ import allocations, with one entity's eligibility limited to a specified transitional period.

Tax Deduction from Salaries: employers must deduct income tax at the average rate on estimated salary income, including perquisites.
The circular requires employers/DDOs to deduct income tax under Section 192 at the average rate on estimated salary income for FY 2022 23, including perquisites and profits in lieu of salary, subject to applicable slab rates, surcharge, and health and education cess, and to observe prescribed evidentiary, reporting and filing obligations (PAN/Aadhaar, Forms 12BA/12BB/10E, Form 24Q, Form 16 via TRACES). It sets valuation rules for perquisites, allows employer payment of tax on certain perquisites, explains interaction with Section 115BAC, and prescribes penalties, interest and procedural compliance for deposit and return filing.

TRAN-1 and TRAN-2 verification instructions require physical files, jurisdictional supervision, and timely upload of Eligible ITC entries.
Verification and processing of TRAN-1 and TRAN-2 applications are to follow the Supreme Court's directions permitting re-filing or amendment through the common GST portal. Because the portal did not classify applications jurisdiction-wise or permit redistribution, physical copies are to be prepared, file-wise maintained, and verified under the supervision of the sector-in-charge Deputy Commissioner or Assistant Commissioner. Notices for irregularities are to be issued by the jurisdictional officer, and entries relating to Eligible ITC found admissible are to be uploaded on the portal within the prescribed time.

Transitional Credit verification: filing window allowed, officers must verify claims and issue reasoned orders within prescribed timelines.
The GST common portal is opened to allow filing or revision of TRAN-1/TRAN-2 during the directed two-month window; jurisdictional tax officers must verify claims on the back-office system or on receipt of a self-certified copy, apply principles of natural justice, coordinate with counterpart Central/State officers where claims span both taxes, obtain a counterpart verification report, provide the applicant an opportunity of hearing, and pass a reasoned order uploading it to the portal. All verifications and orders are to be completed within 90 days after the filing window, and operational modalities, checks for each TRAN-1 table, and reporting formats are prescribed in Annexures I and II.

GST on payments depends on whether they are consideration for agreeing to tolerate, refrain from, or perform an act.
GST applies to payments only when there is an express or implied contractual agreement creating a nexus between the payment and an agreed obligation to refrain from, tolerate, or do an act; mere monetary flows arising from breach, statutory cancellation or fines that compensate loss or deter wrongdoing are not consideration for a supply and are not taxable, whereas payments serving as consideration for independent or ancillary agreements to tolerate, refrain or perform are supplies taxable according to the principal supply's treatment.