Preferential issue pricing for InvITs now tied to VWAP benchmarks and stricter listing and refund liabilities.
The circular amends preferential issue and institutional placement rules for listed InvITs: units must be listed within two working days post-allotment or monies refunded within four working days with joint and several liability for repayment and interest; pricing for preferential issues is tied to volume-weighted average price benchmarks for frequently traded units and for limited institutional placements; definitions of relevant date, relevant stock exchange and frequently traded units are specified; and sponsors who transacted in the prescribed period are ineligible for preferential allotment except when units are issued as full consideration for asset acquisition.

Associate disclosure requirement: AMCs must publish ISIN-wise holdings and AUM percentage for excluded entities each quarter.
SEBI requires AMCs to disclose, within one month of each quarter-end, ISIN-wise value and percentage of AUM for scheme-wise investments in entities excluded from the revised definition of associate, to be published on the AMC and AMFI websites.

Enhanced disclosure obligations require CRAs to standardize sharp-rating reports, formalize non-cooperation rules and publish machine-readable transparency.
CRAs must treat a downgrade of three or more notches between two consecutive rating actions as a sharp rating action and disclose such events including and excluding non-cooperative issuers; adopt detailed INC policies with three consecutive months of non-submission of No-Default Statements as grounds to tag ratings as INC (to be tagged within seven days) while retaining earlier migration discretion; assign ratings in withdrawal press releases except in limited exceptions; permit withdrawal of perpetual debt ratings subject to continuous rating and undertakings from issuer and other CRAs; publish rating transition matrices both excluding and including withdrawn/INC ratings (with withdrawn proportions) and provide machine-readable disclosures with a ten-year archive and separate cumulative default rates including/excluding INCs.

Section 161 appeals: accept manual appeals when rectification requests are rejected, until online filing arrangement is available.
Where a Proper Officer rejects a rectification or amendment application under the GST rectification regime and the online portal does not permit filing the resultant appeal, appellate authorities are instructed to accept manual appeals until an online filing arrangement is made available.

GST rate classification: multiple service categories clarified, regularising past collections and specifying exemption and reverse charge treatment.
Clarifications addressing GST classification, exemptions and rates for varied services: ice cream parlours' past low rate collections without input tax credit are regularised as fully paid with future supplies subject to the standard rate with input tax credit; educational institution fees for entrance, application, eligibility and migration certificates are exempt as services to students; storage of ginned or baled cotton was within the raw vegetable fibre exemption prior to its withdrawal; transit cargo services to and from Nepal and Bhutan, including return of empty containers, are exempt subject to customs transit regulations and track and trace compliance; renting of vehicles with operators is treated as rental services (not goods transport) and taxed accordingly; sale of developed land is not taxable though development services are; assisted reproductive technology services qualify as exempt health care services; and corporate reverse charge liability applies where vehicles are hired for periods with operational control.

Consideration for contractual obligation: GST applies when payment is for agreeing to do, refrain from, or tolerate an act.
GST attaches only where payment constitutes consideration for a supply - an express or implied agreement by which one party agrees to do, refrain from, or tolerate an act in return for payment. Payments that are merely compensation for breach, statutory or deterrent penalties, cheque dishonour fines, and forfeiture of earnest money or bond recoveries do not constitute consideration for tolerating or refraining and are not taxable. By contrast, charges that are consideration for ancillary facilities bundled with a principal taxable supply (e.g., cancellation fees, late payment charges, early termination or prepayment penalties) are taxable and assessed as part of the principal supply; exempt principal supplies render such ancillary charges non taxable.

Certificate of Origin authorization: Panipat Exporters Association authorized to issue non preferential certificates under FTP policy.
Panipat Exporters Association is authorized under paragraph 2.04 of the Foreign Trade Policy 2015-2020 to issue Certificate of Origin (Non Preferential) and is added at Serial No. 5 (Haryana) of Appendix 2E in the Appendices & Aayat Niryat Forms of the FTP, with agency contact details provided for issuance and correspondence.

Compounding of customs offenses: verification limited to full disclosure and targeted immunity added for specified offense.
The compounding authority's satisfaction is confined to verification that the applicant has made full and true disclosure. The amendment makes the offense under section 135AA compoundable and mandates immunity where that offense alone is involved. Principal Chief/Chief Commissioners must run periodic outreach to increase use of compounding, and the Director General, Data Management must report each Zone's receipt, timely disposal of compounding applications (including disposal within six months) and the sums realized as compounding amounts.

GST classification clarified: key goods including electric vehicles and processed food forms allocated specific GST rates and classifications.
Electrically operated vehicles that run solely on electrical energy are classifiable under HSN 8703 and attract 5% GST even if batteries are not fitted at the time of supply; similarly, Napa and minor-polished calcareous building stones qualify for the concessional rate, fresh mangoes are exempt while non-sliced dried forms including pulp attract the higher rate, treated sewage water is GST exempt under heading 2201, nicotine polacrilex gum for cessation is classifiable under oral nicotine products at 18%, the 90% fly ash content condition applies only to aggregates not bricks, and pulse-milling by-products used as cattle feed attract 5% GST with past periods regularised on an as-is basis.

Bogus Input Tax Credit cases require priority action, updated reporting, and officer accountability under the Enforcement Alert Module.
Input Tax Credit claimed on invoices issued without actual supply of goods is treated as inadmissible, and cases identified through the Enforcement Alert Module are to be acted upon at the divisional level on a priority and time-bound basis. Updated action reports are required for the top 20 cases involving the highest ITC available under the Successive GSTIN Zone Wise menu of the Enforcement Alert Module, with responsibility to be fixed where timely action has not been initiated or completed.

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, tax-credit safeguards, timely deficiency compliance, and verification before processing.
Drawback claims on re-export of imported goods must be supported by prescribed import and export records, duty-payment evidence, a notarised affidavit, and integrated-tax safeguards. Incomplete claims must be returned with a deficiency memo within fifteen days, while complete or rectified claims are acknowledged and registered. Non-compliance with a deficiency memo within the applicable period makes the claim time-barred. Registered claims require verification that no duplicate refund, audit objection, or recovery demand is pending.

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.