Tax INFORM- June 2025

The fifty-third issue of our monthly tax newsletter, Tax Inform, is out. Through these newsletters, we provide a compilation of key tax-related case laws, circulars, notifications, etc. issued by the authorities in the previous month, impacting entities and individuals operating in India.

The highlights of the current issue are:

Direct Tax:

Domestic Tax Rulings:

• Kerala HC declines to intervene in disallowance of Section 10(10C) exemption for voluntary retirement benefits, citing employer scheme’s non-conformity with Rule 2BA.
• SC clarifies that Section 80-IA(9) restricts the allowability—not the computability—of deductions under Chapter VI-A, ensuring aggregate deductions do not exceed profits.
• Gujarat HC holds reassessment beyond four years to be invalid where there was full disclosure and no fresh tangible material.
• Entrance fees paid for club membership are capital receipts, not taxable income: Madras HC.
• No reassessment under Section 153C without incriminating material related to the relevant year: Delhi HC.

Notifications/ Circulars:

• Notification No.49 of 2025, dated May 19, 2025.
• Circular No.6 of 2025, dated May 27, 2025.

Indirect Tax: 

Goods & Services Tax

Case Laws:

• Madras HC sets aside order rejecting rectification application filed under Section 161 of the GST Act for not affording opportunity of being heard.
• Calcutta HC upholds GST levy on PDS kerosene, says negligible price impact not a ground for judicial review.
• Adverse tax orders passed without personal hearing violate Section 75(4) of the CGST Act and principles of natural justice: Madras HC.
• Sikkim HC allows refund of unutilized ITC on business closure; holds that Section 49(6) read with Section 54 supports claim.
• Denial of Input Tax Credit solely based on retrospective cancellation of supplier’s GST registration is unsustainable without inquiry into transaction genuineness: Himachal Pradesh HC.

Notifications/ Circulars:

• Instruction No. 13/2025-Customs, dated June 2, 2025.
• Circular No. 249/06/2025-GST, dated June 9, 2025.