Tax INFORM- September 2025

The fifty-sixth 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:

• SC rejects plea against expanded definition of “Sikkimese” under Section 10(26AAA), clarifies it is confined to tax exemption purposes.
• SC quashes prosecution under Section 276C(1) initiated in defiance of CBDT circular, reiterating that circulars issued by Revenue are binding on authorities.
• Chhattisgarh HC restores addition under Section 68 for unexplained share capital and premium, stressing that mere production of documents such as PAN and ITRs does not by itself establish genuineness.
• Telangana HC upholds exemption under Section 10(1) for income from hybrid seed production, noting the assessee company’s active role and indirect involvement in agricultural activity.

Notifications/ Circulars:

• Notification No. 141/2025, dated September 1, 2025.
• Notification No. 145/2025, dated September 2, 2025.

Indirect Tax: 

Goods & Services Tax

Case Laws:

• SC dismisses SLP against disallowance of ITC worth ₹8.59 crore; relegates assessee to avail alternative statutory remedy with extended time to file appeal.
• SC dismisses Revenue’s SLPs and upholds IGST refund on services exported by KC Overseas Education to foreign universities.
• SC declines to exercise discretionary jurisdiction in plea against GST demand for fraudulent ITC, while granting liberty to the petitioner to avail alternative statutory remedies.
• Rajasthan HC declares part of CBIC circular restricting refunds of unutilised ITC on account of inverted duty structure as illegal and violative of Article 14.
• Bombay HC rules that no GST liability arises for the developer under JDA once the property is conveyed; directs refund of ₹7 crore paid under protest.

Customs Duty

Notifications/ Circulars:

• Circular No. 22/2025-Customs, dated September 12, 2025.
• Circular No. 21/2025-Customs, dated September 12, 2025.