Time limits for responses under benami property procedure extended; provisional attachment decision lengthened and statement referral increased, effective October. Amendments to section 24 fix procedural timelines: benamidar and beneficial owner must file explanations within three months from the end of the month of notice; the Initiating Officer's period to provisionally attach or decide attachment matters is extended to four months from the end of the month of notice; and the period to prepare and refer the statement of the case to the Adjudicating Authority is increased to one month from the end of the month in which the attachment order is passed.
Immunity for benamidars: conditional immunity offered to encourage full disclosure, withdrawable for falsehood or concealment. Insertion of Section 55A permits the Initiating Officer, with previous sanction of the competent authority, to tender conditional immunity from penalty under section 53 to non-beneficial-owner persons involved in benami transactions in exchange for a full and true disclosure; accepted immunity renders them immune from prosecution and penalty to the extent tendered, but the Initiating Officer may record non compliance or falsehood and, with sanction, withdraw immunity, enabling prosecution and imposition of penalties for the offence or related offences.
Proof of origin rules updated to accept diverse trade agreement documentation, including self certification, facilitating trade. The Customs Act amendments permit varied forms of proof of origin, including self certification, to align with trade agreements; empower the Central Government to proscribe specific manufacturing or other operations in warehouses; and expand references from "a class of importers or exporters" to include "any other persons," broadening the scope of certain customs provisions.
Protective duty mechanism removed as the statutory provision requiring Tariff Commission recommendations is omitted, ending that process. Section 6 of the Customs Tariff Act, 1975, authorising levy of protective duties by the Central Government on recommendations of the Tariff Commission is omitted by the Finance (No. 2) Bill, 2024 because the Tariff Commission was wound up by resolution on 1 June 2022; the change is effective from enactment of the Bill.
Increase in tariff rates for plastics, consumer and laboratory chemicals to take immediate provisional effect; additional tariff amendments from October. The Finance (No. 2) Bill, 2024 amends the First Schedule to the Customs Tariff Act, 1975 to implement immediate provisional increases in specified basic customs duties using the Provisional Collection of Taxes Act, 2023 for certain PVC flex films, consumer goods and laboratory chemicals in small packings, and further tariff adjustments to be given effect in the Schedule from October while preserving current BCD levels for other affected goods via notification amendments.
Basic customs duty reductions across sectors to incentivise domestic manufacturing and simplify export-duty treatment. The Finance (No.2) Bill, 2024 revises Basic Customs Duty rates effective 24 July 2024, lowering or nil-rating duties across agricultural inputs, aquaculture, critical minerals, metals, chemicals, IT and electronics, medical equipment, renewable energy inputs and precious metals; it also simplifies and rationalises export duties on hides, skins and leather to streamline export taxation.
Validation of customs notification restores duty exemption for specified oil imports subject to TRQ and bill of lading conditions. The Finance (No. 2) Bill, 2024 validates Notification No. 37/2023 to confirm exemption from basic customs duty and anti-dumping/countervailing duties on imports of crude soybean oil and crude sunflower seed oil, conditional on unutilized TRQ quota and a bill of lading issued on or before 31 March, 2023; it also exempts GST Compensation Cess on imports into SEZs by SEZ units or developers for authorized operations.
New Shipper Review introduced for countervailing duty rules, enabling review of new exporters under amended procedures. Amendment inserts a New Shipper Review provision into the Customs Tariff Rules, 1995 to permit review of new exporters or suppliers within the existing framework for identification, assessment and collection of countervailing duty and for determination of injury; effective from 24.7.2024.
Temporary import time limits extended for aircraft, vessels and warranty exports, enabling longer duty-free re-import and repair periods. The notifications extend temporal reliefs and adjust tariffs: aircraft and vessels imported for maintenance, repair and overhaul may remain imported for one year (further extendable by one year), warranty exports qualify for duty free re import for five years (further extendable by two years), and the India-UAE CEPA tariff notification is amended to revise duty rates on precious metals; changes effective 24 July 2024.
BCD exemption extensions preserve duty-free treatment for specified imports, with targeted scope adjustments for certain inputs. The Finance measure extends conditional Basic Customs Duty (BCD) exemptions for numerous specified goods-inputs, parts, capital goods, and medical supplies-preserving duty-free import treatment subject to existing notification conditions, while narrowing or broadening the scope of certain entries and maintaining targeted provisions for SEZ-related supplies and bona fide exporters; stakeholders must refer to the notification for full descriptive and documentary eligibility requirements.
Customs duty exemptions extended and expiry clauses removed, preserving specified import concessions for listed goods and sectors. Amendments extend Basic Customs Duty (BCD) exemption timelines for specified notifications and remove prescribed end dates for another subset, thereby sustaining concessional import treatment for listed categories such as media content, specialised machinery, castor products, artworks, precious stones on approval basis, copper products, export-jobbing inputs, instructional materials and other sectoral items; notifications remain authoritative for full descriptions.
Customs duty exemptions lapse removing concessional import treatments across multiple sectors and specified notification-based exemptions. Customs duty exemptions and concessional notifications listed in earlier customs instruments are being allowed to lapse, removing specified concessional import treatments. Affected provisions include selected entries of notification No. 50/2017-Customs covering inputs and equipment for sectors such as solar manufacturing, electric vehicles, medical devices, telecommunication equipment, and certain industrial catalysts, and several standalone notifications granting exemptions for gold imports by banks, donated second-hand computers, SAD-related exemptions, SEZ to DTA transfers, and aviation re-imports.
Social Welfare Surcharge exemption for specified minerals and metal inputs removes surcharge on listed imported goods. Amendment to Notification No. 11/2018 exempts a specified list of imported goods from the levy of the Social Welfare Surcharge with effect from 24 July 2024, covering raw minerals, metal ores and concentrates, high purity silicon and silicon products, rare earth metals and compounds, various oxides, hydroxides, salts and carbonates, graphite and a range of unwrought metals, powders, waste and scrap.
Agriculture Infrastructure and Development Cess rate reduction alters customs duty incidence on specified precious metal imports. Amendment revises the Agriculture Infrastructure and Development Cess (AIDC) rates on specified precious metal goods by modifying Notification No. 11/2021 - Customs, effective 24 July 2024, reducing AIDC and altering the effective customs duty incidence on listed tariff entries including gold, silver, platinum group metals, coins of precious metals, and related findings.
Exemption of Clean Environment Cess on stock, subject to GST compensation cess on subsequent supplies. The amendment extends the submission period for the final Mega Power Project certificate under Notification No.12/2012 Central Excise from 120 to 156 months. It also exempts Clean Environment Cess on excisable goods in stock as of 30 June 2017, conditional on payment of applicable GST Compensation Cess on supplies of those goods on or after 1 July 2017. Both changes take effect from the date of enactment of the Finance (No. 2) Bill, 2024.
Limitation on GST demand determination: new unified regime for post-change periods with restructured penalties and appeal pre-deposit rules. Insertion of Section 74A establishes a separate regime for determination of tax not paid, short paid, erroneously refunded or incorrect input tax credit for periods from the Financial Year 2024-25 onwards, prescribes a uniform limitation period for issuing demands and orders for those periods, retains higher penalties where fraud, wilful misstatement or suppression is found, and triggers consequential amendments across assessment, recovery, credit, return-filing and appeal provisions to align procedures and pre-deposit requirements.
Zero rating changes in IGST allow notified classes to claim refunds subject to prescribed conditions and export duty restrictions. The Bill amends IGST to exempt Extra Neutral Alcohol used in making alcoholic liquor from integrated tax; empowers the Government to regularize non levy or short levy arising from established general practice; revises the zero rating regime to allow notification of classes eligible for zero rated supplies and corresponding refunds under Central GST refund rules while barring refunds where export duty applies; and reduces maximum pre deposit amounts required to file appeals before the appellate authority and the Appellate Tribunal.
Tax exemption for extra neutral alcohol removes union territory tax when used to make alcoholic liquor, altering levy scope. Amendment excludes union territory tax on Extra Neutral Alcohol used in manufacture of alcoholic liquor for human consumption, narrowing the UTGST taxable base and requiring suppliers and manufacturers to adjust tax treatment. A newly inserted Section 8A authorizes the government to regularize non-levy or short levy of union territory tax where such shortfall resulted from a general practice, creating a mechanism to validate or correct historical under-collection attributable to systemic practices.
Regularisation of cess shortfalls where non levy arose from general practice allows government to sanction corrective levy. Section 8A empowers the government to regularize cases of non-levy or short-levy of the compensation cess where such under-collection arose from a prevailing general practice, providing an administrative mechanism to treat practice-driven cess shortfalls as regularizable liabilities under the GST compensation framework.
Deduction eligibility for operational hotels affirmed despite administrative delay in star classification, focusing on substantive compliance. The court addressed entitlement to a deduction under Section 35AD(5)(aa) where a hotel began operations and generated income in the relevant year and a timely application for star classification was submitted, but formal certification was delayed due to administrative inspections; the court applied a purposive construction to allow the deduction when substantive operational conditions were satisfied and delay was not the assessee's fault.
Modernising Provident, Superannuation, and Gratuity Fund Regulation and Taxation : SCHEDULE-XI of the Income Tax Bill, 2025 Vs. SCHEDULE 04 (the Fourth Schedule) of the Income-tax Act, 1961
19 July, 2025
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Recognised Provident Fund rules modernised, clarifying recognition conditions, tax treatment of contributions, portability, and trustee obligations. The Schedule modernises the framework governing Recognised Provident Funds, approved superannuation and gratuity funds by restating recognition and ... Summary
Recognised Provident Fund rules modernised, clarifying recognition conditions, tax treatment of contributions, portability, and trustee obligations.
The Schedule modernises the framework governing Recognised Provident Funds, approved superannuation and gratuity funds by restating recognition and approval conditions (employment location, fixed contribution structure, irrevocable trust, permitted assets), procedures for recognition or withdrawal, trustee recordkeeping and appeals, and explicit tax rules: taxable employer contributions above prescribed rates and excess interest, deductibility of employee contributions, exclusion of accumulated balances only upon meeting service-duration or contingency conditions or permitted transfers, retroactive taxation where conditions fail, and mandatory tax deduction at source.
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