Tax INFORM- May 2025

The fifty-second 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:

• Wealth tax exemption in respect of urban vacant land applies only to fully constructed buildings, not buildings under construction: Madras HC.
• Notice under Section 153C is invalid in absence of incriminating material relating to the relevant AY: Delhi HC.
• Deduction under Section 54F cannot be denied for owning multiple floors of a single house: Delhi High Court.
• Delhi HC rules that entertainment tax subsidy received for multiplex development constitutes a capital receipt.
• Tribunal erred by quashing reopening solely on CBDT instruction: Calcutta HC.

Notifications/ Circulars:

• Circular No. 5/2025, dated March 28, 2025.
• Notification No. 38/2025, dated April 23, 2025.

Indirect Tax: 

Goods & Services Tax

Case Laws:

• Fraudulent availment of ITC from non-existent suppliers justifies invocation of Section 74 of the CGST Act; writ not maintainable when alternative statutory remedy exists: Allahabad HC.
• Section 75(12) cannot be invoked where self-assessed tax has already been included in the return filed under Section 39; show cause notice is mandatory: Calcutta HC.
• Bail should ordinarily be granted in GST offence cases triable by Magistrate where charge-sheet is filed and sentence is limited: Supreme Court.
• Financial bid exceeding the prescribed cap is liable to rejection; GST is not part of minimum wages for tender evaluation: Madhya Pradesh HC.
• Bombay HC reaffirms that support services rendered under a principal-to-principal contract do not qualify as ‘intermediary services’, allows refund for export of services.

Notifications/ Circulars:

• Circular No. 14/2025-Customs, dated April 21, 2025.
• Notification No. 29/2025-Customs, dated May 9, 2025 .