Tobacco and pan masala tax changes: GST at 40% on RSP, higher excise on tobacco, and new HSNS cess for pan masala.
Effective 1 February 2026, tobacco is taxed as GST + Central Excise Duty + NCCD and pan masala as GST + HSNS Cess; GST taxes these goods at 40% on RSP with Rule 31D for computation and compensation cess abolished. Central Excise moves certain pouch-packed tobaccos to machine-capacity based duty with engineer certification, jurisdictional verification, advance monthly payment, monthly returns, CCTV and abatement limited to 15-day continuous non-operation. HSNS Cess applies to pan masala packed in pouches, tins or containers, is computed per factory on machine-rated speed and pouch weight, requires registration, declarations, advance payment, returns, records, and prescribes notice, interest and penalties. (AI Summary)

Plywood and Wooden flush door shutters: extended compliance period for micro and small enterprises covers both domestic manufacture and imports.
The staggered commencement dates in the Quality Control Order for small and micro enterprises extend to imports as well as domestic manufacture because the statutory definition of person includes both manufacturers and importers and the provisions authorising mandatory Standard Mark and related prohibitions apply without distinction. (AI Summary)

Agency vs principal-to-principal: substance over form determines tax characterisation and consequent tax exposure in transactions.
Characterisation as agency or principal-to-principal hinges on substance: whether property, risk and reward in the goods pass to the reseller who may resell at its price. Contract labels are not conclusive; the whole agreement and surrounding circumstances-return rights, price adjustment clauses, insurance and payment risk-determine if the intermediary creates privity for the principal or remains the contractual seller, thereby affecting tax treatment of commissions, discounts and related liabilities. (AI Summary)

Absorbent coating classification determines duty treatment for clear float glass amid conflicting circular and tribunal views.
Whether clear float glass is classifiable as glass "having an absorbent, reflecting or non-reflecting layer" turns on whether the microscopically thin tin layer resulting from the float manufacturing process constitutes the required coating; an administrative circular treats the tin as not an applied layer and directs classification as other float glass, while tribunal decisions have found the tin side satisfies the definition of an absorbent/reflecting layer, prompting a higher court challenge. (AI Summary)

Input tax credit on mobile towers affirmed as available when towers are movable and used directly in service provision.
The Supreme Court held that mobile towers and prefabricated buildings are not permanently annexed to the earth, remain goods, serve as accessories to antennas and BTS qualifying as capital goods, and are used proximate to the provision of telecom services, therefore constituting inputs for input tax credit purposes; as such, construction-related immovable-property exclusions in the GST restrictions do not ordinarily bar input tax credit on these structures. (AI Summary)

Refund of unutilised input tax credit: exporters may use a general formula or specific provision, but calculation and dispute risks persist.
Exporters of zero rated supplies without payment of tax can claim refund of unutilised input tax credit under the general refund formula or under specific sub rules for exporters who import or procure exempt inputs; Rule 89(4) prescribes a formula and does not by its terms bar such exporters, while the specific sub rule permits refund "to the extent used" but provides no statutory calculation method. Absent a formula, taxpayers must adopt a rational, documented apportionment (for example input output ratios, weighted average input prices and exclusion of exemptly procured inputs) and face potential dispute with tax authorities. (AI Summary)

Export duty exemption: DTA to SEZ supplies fall outside the Customs Act charging provision, barring duty without clear legislative authority.
Export duty under the Customs Act applies only to goods exported beyond India's territorial waters; supplies from DTA units to SEZ units occur within territorial waters and therefore fall outside the Customs Act charging provision. The SEZ Act grants exemptions for goods exported by SEZ units to places outside India and contains no parallel charging section levying export duty on inbound DTA supplies. Delegated rules attempting to impose such duty are constitutionally vulnerable as ultra vires absent clear parliamentary authority under Article 265. (AI Summary)

Duty of customs exemption in SEZ Act may encompass compensation cess on imports, challenging narrow statutory readings.
Section 26(1)(a) of the SEZ Act grants exemption from any duty of customs on goods imported into SEZs, and that exemption should be read to include charges levied on import as duties of customs; Compensation Cess imposed on import is characterized by the taxable event of importation and thus falls within the statutory exemption, a view reinforced by government notifications and the purposive aim of promoting exports under the SEZ regime. (AI Summary)