No Service Tax Under RCM On Railway Space Licence Fees For Ads: CESTAT Hyderabad

On 3 June, the Hyderabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that service tax cannot be demanded under the reverse charge mechanism (RCM) from Prakash Arts Pvt. Ltd. for licence fees paid to Railways for use of space to display advertisements, as the arrangement amounted to renting of immovable property and not “support service”. Technical Member A.K. Jyotishi and Judicial Member Angad Prasad dismissed the Revenue's appeal and upheld the...

Demurrage Paid To Foreign Vessel Owners Not Taxable As Port Service: CESTAT Hyderabad

On 3 June, the Hyderabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that demurrage charges paid by Rashtriya Ispat Nigam Ltd. (RINL) to foreign vessel owners for delays in loading or unloading cargo cannot attract service tax because such charges are contractual payments connected with transportation of goods and not consideration for any taxable service. Technical Member A.K. Jyotishi and Judicial Member Angad Prasad allowed RINL's appeals and set aside the...

No Relief For Reimbursement Claims Made To Foreign Parent Without Expense Break-Up: Madras High Court

The Madras High Court has recently dismissed appeals filed by Cairn India Limited, now Vedanta Limited, and upheld tax demands over its failure to deduct tax at source (TDS) on payments remitted to its Australian parent company. While dismissing Cairn's plea, the court made it clear that a taxpayer cannot obtain relief merely by describing a lump-sum payment as a reimbursement. If the claim is that the payment represents reimbursement of expenses, the taxpayer must disclose what those expenses...

FIIs, BIS Get Income Tax Exemption On Government Securities Under New Income Tax Ordinance

Foreign Institutional Investors (FIIs) and the Bank for International Settlements (BIS) will be exempt from income tax on interest earned from government securities and capital gains arising from their sale, exchange, or transfer under amendments introduced by the Centre through the Income-tax (Amendment) Ordinance, 2026. The ordinance, published in the Gazette on June 5, amends Schedule IV of the Income-tax Act, 2025 and is deemed to have come into force from April 1, 2026. The exemption is...

Closure Of Non-Fraud GST Proceedings Does Not Bar Fraud-Related Proceedings By Central Authorities: Delhi HC

The Delhi High Court has held that the closure of proceedings by State GST authorities under Section 73 of the Central Goods and Services Tax Act, 2017 does not, by itself, prevent Central GST authorities from proceeding under Section 74 of the Act, observing that the two provisions operate on "altogether different considerations."Section 73 applies to cases involving tax not paid, short paid, erroneously refunded, or input tax credit wrongly availed or utilised without allegations of fraud,...

Supreme Court Holds Appeals On Excisability Of Goods Lie Before It, Not High Courts

The Supreme Court has recently held that disputes over whether goods are excisable fall within the exclusive appellate jurisdiction of the Supreme Court and cannot be decided by High Courts.Setting aside a Karnataka High Court judgment, the Court observed, "The provisions of Sections 35G and Section 35L, read together, always pointed to one and only one conclusion: that the question of excisability fell within the exclusive appellate jurisdiction of the Supreme Court." A Bench of Justice J.B....

New Delhi CESTAT Bars Reclassification Of Product To Zarda After Years Of Acceptance As Chewing Tobacco

The New Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) on 2 June held that the Department cannot reclassify a product after consistently accepting its classification for several years through departmental orders, and consequently set aside an excise duty demand arising from such reclassification. President Justice Dilip Gupta and Technical Member Hemambika R. Priya allowed appeals filed by Rajasthan-based manufacturer Rajan Jhiriwal and its partners, and set...

60% Tax Rate Under Section 115BBE Cannot Apply To Pre-1 April 2017 Income: Rajasthan High Court

The Rajasthan High Court on 27 May held that the enhanced tax rate of 60% introduced under Section 115BBE of the Income-tax Act through the Taxation Laws (Second Amendment) Act, 2016, cannot be applied retrospectively to income pertaining to Financial Year 2016–17, as the amendment was expressly made effective from 1 April 2017. The Division Bench of Justices Arun Monga and Sunil Beniwal held that the higher rate could operate only prospectively and could not govern income earned prior to its...

CESTAT New Delhi Rejects CENVAT Credit Denial For Invoice Defects, Allows Jayaswal NECO Appeal

On 2 June, the New Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that authorities cannot deny CENVAT credit merely on the basis of procedural defects in invoices when the recipient has actually received and used the services in its business operations. President Justice Dilip Gupta and Technical Member Hemambika R. Priya allowed the appeal filed by Jayaswal NECO Industries Ltd. and set aside the denial of CENVAT credit of Rs. 53.94 lakh. The Tribunal also...

Transfer Of Toll Collection Rights By NHAI Taxable As Service, Not Sovereign Function: CESTAT Hyderabad

On 2 June, the Hyderabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that consideration received by the National Highways Authority of India (NHAI) from contractors for transferring toll collection rights constitutes a taxable service and does not qualify as a sovereign function. Judicial Member Angad Prasad and Technical Member A.K. Jyotishi dismissed three appeals filed by NHAI challenging service tax demands, interest, and penalties arising from agreements...

Registered Sale Deed Triggers Capital Gains Tax Even If Payment Is Delayed: ITAT Ahmedabad

The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) on 27 June held that execution and registration of a sale deed complete “transfer” for capital gains taxation purposes, and that delayed payment or dishonour of cheques does not postpone taxability unless the transaction itself is cancelled. Vice President Dr. B.R.R. Kumar and Judicial Member T.R. Senthil Kumar passed the order in an appeal filed by Mehboob Jabir Patel. The Bench, however, directed the Assessing Officer to grant...

CESTAT Mumbai Upholds Duty Exemption On Edible-Grade Oils Imported For Cosmetic, Pharmaceutical Use

The Mumbai Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has dismissed a Revenue appeal challenging customs duty exemption granted to Pioma Chemicals on imports of refined peanut oil, sunflower oil, walnut oil, almond oil and macadamia nut oil. The tribunal held that the benefit could not be denied on the ground that the oils were intended for use in cosmetic and pharmaceutical products. A bench of Judicial Member Dr. Suvendu Kumar Pati and Technical Member M.M....