Union Budget 2026

GIFT IFSC – Extension of Tax Holiday

‒ This proposal shall take effect from 01 April 2026 and shall accordingly apply from tax year 2026–27 onwards.

Safe Harbour Delight – IT / ITeS / GCC

‒ Proposal to club software development, ITeS, KPO and contract R&D services.

‒ Common safe harbour margin of 15.5%.

‒ Safe harbour threshold to be increased from INR 300 crores to INR 2,000 crores.

‒ Approval through automated rule-driven process – not by way of examination by tax officer.

‒ Safe harbour valid up to 5 years.

Safe Harbour Margins

APA Reforms

Unilateral APA

‒ Unilateral APA to be fast-tracked for IT services - to be concluded within 2 years and can be further extended by 6 months on taxpayer’s request.

Modified return

‒ Under the existing law, only the person who has entered into an Advance Pricing Agreement (APA) with the Board is permitted to file a modified return of income.

‒ There is no enabling provision for filing a modified return by the associated enterprise (AE) whose income and corresponding tax liability are also modified pursuant to such APA.

‒ Budget 2026 proposes to expand the scope of section 169(1) of the ITA, 2025 to address this limitation by permitting the furnishing of a modified return even by the AE.

‒ Such return is required to be furnished within 3 months from the end of the month in which the APA is entered into.

Cloud services / Data Centres / Warehousing

‒ Tax holiday to foreign companies until 2047 providing cloud services to global customers through India-based data centre services

• Services to Indian users shall be routed through an Indian reseller entity

‒ Associated Enterprise providing data center services from India proposed to get a safe harbour of 15% on cost.

‒ Key terms, including “data centre services” and “specified data centre”, have been specifically defined for the purposes of this exemption.

‒ Non-residents providing component warehousing in a bonded warehouse – safe harbour at profit margin of 2% of the invoice value

‒ This proposal shall take effect from 01 April 2026 and shall accordingly apply from tax year 2026–27 onwards.

Exemption for Foreign Companies Supplying Capital Equipment

‒ Budget 2026 proposes to grant a tax exemption to a foreign company in respect of income arising from the supply of capital goods, equipment or tooling to a contract manufacturer.

‒ The tax exemption shall apply, when contract manufacturer:

• is a company resident in India;
• is located in a custom bonded area; and
• Manufactures electronic goods on behalf of foreign company for a consideration.

‒ It is further proposed, while the ownership of such capital goods, equipment or tooling shall continue to remain with the foreign company, the control and direction of such capital goods shall remain with the contract manufacturer.

‒ The proposal seeks to promote domestic manufacturing of electronic goods under the contract manufacturing model and to provide certainty on the tax treatment of supply of capital equipment by foreign companies.

‒ This proposal shall take effect from 01 April 2026 and shall accordingly apply from tax year 2026–27 onwards.

Tax Exemption for Non-Resident Individuals Rendering Services under Notified Government Schemes

‒ Budget 2026 proposes to provide tax certainty to a non-resident individuals visiting India for the purpose of rendering services in connection with a Scheme notified by the Central Government.

‒ It is proposed that foreign sourced income of a non-resident individual shall be exempt from tax in India, subject to the following conditions:

• the individual has been a non-resident for 5 consecutive tax years immediately preceding the tax year of the first visit to India for rendering such services;
• the individual renders services in India in connection with a Scheme notified by the Central Government;
• the exemption shall not be available beyond a maximum period of 5 consecutive tax years commencing from the first tax year during which he visits India in connection with such scheme; and
• such other conditions as may be prescribed.

‒ It is pertinent to note that foreign-sourced income for a non-resident individual is generally taxable in India only when he attains the status of “Resident and Ordinarily Resident”

‒ This proposal shall take effect from 01 April 2026 and shall accordingly apply from tax year 2026–27 onwards.

Buy-Back to be Treated as “Capital Gains” 

‒ Present law: consideration received on buy-back of shares was treated as dividend income. Cost of acquisition of shares bought back allowed as capital loss

‒ Budget 2026 now proposes to restructure the tax scheme

‒ Buy-back proceeds now taxed as capital gains in the hands of shareholders – with differentiated rates for promoter and non-promoter holdings:

‒ Promoters taxed in a higher tax bracket, making it inefficient for them to participate. Foreign investors to consider treaty rate for dividend vs. proposed tax liability as capital gains

Revision in Tax Rates of Securities Transaction Tax

‒ STT – introduced via the Finance (No.2) Act, 2004

‒ Budget 2026 proposes to increase STT rates to minimise speculation in futures and options trading

Capital Gains Exemption on Sovereign Gold Bond (SGBs)

‒ Under the existing law, capital gains tax exemption is provided only on redemption of SGBs issued by the RBI under the SGB Scheme, 2015.

‒ SGBs are issued by RBI across multiple series, each constituting a separate issuance.

‒ It is proposed that:

• Capital gains tax exemption shall apply all such issuance.
• Exemption available only if subscribed at original issue and held continuously until redemption.

‒ This proposal shall take effect from 01 April 2026 and shall accordingly apply from tax year 2026–27 onwards.

Deduction of Interest Against Dividend Income

‒ Under the existing law, interest expenditure up to 20% of the dividend income is allowable as a deduction against such dividend income.

‒ Budget 2026 proposes to withdraw the deduction of interest expenditure against dividend income.

‒ Accordingly, no interest expenditure shall be allowed as a deduction while computing taxable dividend income.

‒ This proposal shall take effect from 01 April 2026 and shall accordingly apply from tax year 2026–27 onwards.

Rationalisation of TCS Rates

‒ The Government’s decision to reduce the TCS rate on outward remittances under the LRS for medical treatment and education from 5% to 2% will ease cash-flow pressures on students and families against the backdrop of rising global healthcare and education costs

Rationalisation of MAT Provisions

‒ Minimum Alternate Tax (MAT) rate is proposed to be reduced from 15% to 14% of book profits.

‒ MAT shall be treated as final tax, and no MAT credit shall be allowed from 01 April 2026 onwards.

‒ Companies opting for new tax regime after 31 March 2026:

• MAT Credit generated up to 31 March 2026 shall be allowed to be set-off, restricted to 25% of tax payable.

‒ No MAT credit shall be allowed upon conversion of a private company or an unlisted public company into a Limited Liability Partnership (LLP).

‒ Foreign companies shall continue to be allowed utilisation of MAT credit in accordance with the existing provisions.

‒ No MAT liability on non-resident opting for presumptive taxation scheme in respect of:

• Operation of cruise ships; and
• Business of providing services or technology for the setting up an electronics manufacturing facility in India)

‒ This proposal shall take effect from 01 April 2026 and shall accordingly apply from tax year 2026–27 onwards.

Settling JAO v/s FAO Controversy

‒ Reassessment proceedings under section 147 are governed under faceless assessment scheme.

‒ Initiation of reassessment is a two-step process:

• Step I: Pre-assessment enquiry under section 148A; and
• Step II: Issuance of reassessment notice under section 148.

‒ Currently, the pre-assessment enquiry is undertaken by the Jurisdictional Assessing Officer (JAO), following which, upon issuance of notice under section 148, the case is transferred to the Faceless Assessing Officer (FAO).

‒ Controversy arose on whether the pre-assessment stage under sections 148A and 148 should also be conducted by the FAO instead of the JAO

‒ Divergent views were expressed by various High Courts, and the issue is pending before the Hon’ble Supreme Court.

‒ Budget 2026 proposes to clarify the legislative intention that, for the purposes of sections 148 and 148A, the term “Assessing Officer” shall mean the JAO and exclude the FAO, notwithstanding any judicial rulings to the contrary.

‒ The amendment is proposed in both the ITA, 1961 (with retrospective effect from 01 April 2021) and the ITA, 2025 (with effect from 01 April 2026).

Settling DIN Controversy in Assessment Orders

‒ Section 292B of ITA, 1961 provides that an assessment shall not be invalid merely due to any mistake, defect or omission, if it is in substance and effect in conformity with the Act.

‒ CBDT Circular No. 19/2019 mandated quoting of a computer-generated Document Identification Number (DIN) on, inter alia, assessment orders

‒ Controversy arose due to judicial precedents annulling assessments on technical grounds (e.g., non-quoting of DIN on every page or in the body of the order), despite lawful generation and reference of DIN in communication accompanying the orders.

‒ Budget 2026 proposes to clarify the legislative intention that no assessment shall be invalid merely due to any mistake, defect or omission relating to DIN, so long as the assessment order is referenced by a computer-generated DIN in any manner, notwithstanding any judicial ruling to the contrary.

‒ The amendment is proposed in both the ITA, 1961 (with retrospective effect from 01 October 2019) and the ITA, 2025 (with effect from 01 April 2026).

Settling Assessment Timeline Controversy in DRP cases

‒ Section 144C prescribes a special assessment procedure for eligible taxpayers (TP cases / non-residents), involving issuance of a draft assessment order.

‒ If variations are accepted, assessment must be completed within 1 month as per section 144C(4), notwithstanding sections 153 / 153B.

‒ If objections are filed before DRP, final assessment must be completed within 1 month from receipt of DRP directions under section 144C(13), notwithstanding sections 153 / 153B.

‒ Judicial precedents have taken divergent views on whether the overall time limits under sections 153 / 153B override section 144C timelines; even the Supreme Court has delivered a split verdict.

‒ Budget 2026 proposes to clarify that sections 153 / 153B govern the draft order stage, while section 144C timelines exclusively govern finalisation of assessments, notwithstanding any judicial ruling to the contrary.

‒ The amendment is proposed in both the ITA, 1961 (with retrospective effect from 01 April 2009 in respect of section 153 and 01 October 2009 in respect of section 153B) and the ITA, 2025 (with effect from 01 April 2026).

Settling Time Limit Controversy for TP Orders

‒ Under the existing law, the Transfer Pricing Officer (TPO) is required to pass the order at least 60 days before the assessment limitation date under sections 153 / 153B.

‒ Courts have taken divergent views on the computation of the 60-day period.

‒ While certain courts have held that the date of assessment limitation should be excluded, others have accepted inclusion of the limitation date. This led to annulment of assessments.

‒ Budget 2026 proposes to clarify the computation of 60 days period as under:

‒ The amendment is proposed in both the ITA, 1961 (with retrospective effect from 01 June 2007) and the ITA, 2025 (with effect from 01 April 2026).

Rationalisation of Return Filing Due Dates

‒ Due date for individuals filing ITR-1 and ITR-2 remains 31 July.

‒ Due date for non-audit categories of taxpayers – extended from 31 July to 31 August

• Taxpayers having income from business / profession
• Partners of firm whose accounts are not required to be audited
• Trust

Revised return

‒ At present, time limit for revised and belated return coincides – consequently person filing belated return unable to revise his return

‒ Time limit for revised return increased from 9 months to 12 months from end of the relevant tax year, along with a payment of a prescribed fee

Updated Return

‒ Current law did not permit filing updated return in cases where updated return is a return of loss for the said tax year

‒ Budget 2026 proposes an amendment to allow filing of updated return where taxpayer reduces the amount of loss compared to the loss claimed in the original return

‒ Updated return can also be filed post initiation of re-assessment proceedings (which was not permitted earlier)

• Budget 2026 permits updated return to be filed where reassessment have been initiated
• Additional income-tax payable shall be increased by a further sum of 10% of aggregate of tax and interest payable on account of furnishing updated return.

Introduction of Penalty – Non / Inaccurate Reporting of Crypto Transaction

‒ The Finance Act, 2025 introduced a new provision –  with an obligation to furnish information on transaction of crypto-asset by the prescribed reporting entity in a prescribed manner

‒ This is replicated in section 509 of the ITA, 2025

‒ To ensure compliance and create a deterrence for non-furnishing of such statement / sharing inaccurate information in such statement – Budget 2026 has introduced a penalty provision

‒ Non-furnishing of such statement: Penalty of INR 200 per day for which such failure continues

‒ Furnishing inaccurate information in such statement and failure to remove the inaccuracy within prescribed time limit / Failure to comply with prescribed due diligence requirement: Penalty of INR 50,000

Rationalisation of Prosecution Proceedings

‒ Intent: Decriminalise and make punishment for offences proportionate to crimes

‒ Key changes for some offences under Chapter XXII (Offences and Prosecution) of the ITA, 2025:

• Nature of punishment altered from rigorous imprisonment to simple imprisonment
• Maximum punishment limited to 2 years (present: 7 years) and for subsequent offences reduced to 3 years (present: 7 years)
• New grading of offences and corresponding punishment prescribed for some offences
• If amount of tax evasion does not exceed INR 10,00,000 – punishment of only fine is prescribed
• Imposition of fine in introduced in lieu of or in addition to imprisonment
• Certain offences are fully decriminalized

Rationalisation of Penalties into Fee

‒ Penalty for technical delays – converted into mandatory fee – this will reduce litigation

‒ Failure to get accounts audited and furnish audit report: penalty converted to a fee

• Proposed graded fee: INR 75,000 for a delay up to one month for which such failure continues and a sum of INR 1,50,000 thereafter

‒ Failure to furnish transfer pricing report from an accountant

• Proposed graded fee: INR 50,000 for a delay up to one month for which such failure continues and a sum of INR 1,00,000 thereafter

Unexplained Credits / Unexplained Investment

‒ Income tax rate in case of income on account of, unexplained credits, unexplained investment, unexplained asset, etc. – rationalised from 60% to 30%

‒ In case under reporting is in consequence of any misreporting – penalty of 200% of the tax payable on under-reported income

‒Immunity from penalty or prosecution extended - to cases where under-reporting of income is in consequence of misreporting, subject to the following:

• Taxpayer to pay additional income tax to the extent of 120% of amount of tax payable on such income in lieu of penalty
• No appeal against the assessment order has been filed

Not-For-Profit Organisation (NPO) Taxation

‒ ITA, 2025 to be amended to align and allow tax neutral merger of registered NPOs having same or similar objects and subject to prescribed conditions for merger

‒ Budget 2026 now permits belated furnishing of return of income by registered NPO

‒ Existing law: NPOs engaged in advancement of objects of general public utility, may risk automatic cancellation if activities viewed as “commercial”, beyond prescribed parameters

• Budget 2026 proposes to reclassify such situation to avoid automatic cancellation of NPO registration

‒ Certain categories of person were not required to register as NPO under the old ITA, 1961 to order to claim prescribed tax benefits

• Similar benefit now extended under the ITA, 2025

Foreign assets of small taxpayers – Disclosure Scheme, 2026 (FAST-DS 2026)

‒ Budget 2026 proposes a one-time opportunity / scheme to eligible taxpayers to disclose specified foreign income and assets either not taxed or not reported in the return of income, with limited immunity from penalty and prosecution provisions

‒ For “undisclosed assets located outside India” or “undisclosed foreign income”, the scheme applies where the aggregate value does not exceed INR 1 crore as on 31 March 2026.

• Tax @ 30% of the value with penalty equal to 100% of such tax

‒ For foreign assets acquired from disclosed income or during status as a non-resident, the value of the asset must not exceed INR 5 crore as on 31 March 2026.

• A flat fee of INR 1 lakh

‒ This scheme will not apply on income or assets representing proceeds of crime under the Prevention of Money Laundering Act, 2002, or to cases where assessment proceedings under the Black Money Act have already been completed.

Small Taxpayer Reforms 

‒ Application for NIL / lower withholding of tax are filed before the Assessing Officer – certificate issued after due verification by AO, which may be time consuming.

• Budget 2026 proposes for small taxpayers to file the application online, with acceptance / rejection based on prescribed conditions – to be effective from 01 April 2026.

‒ Currently individuals / HUFs were required to obtain TAN even in the context of a single transaction of acquiring immovable property from a non-resident seller.

• Budget 2026 relaxes the requirement to obtain TAN for such transactions - to be effective from 01 October 2026.

‒ Investors earning income from multiple units and securities can now directly file a declaration for NIL withholding to depositories instead of filing separate declaration with each issuing companies.

• Applicable only in the context of securities listed on a recognised stock exchange of India  - to be effective from 01 April 2027.

‒ Budget 2026 grants exemption from any income in respect of any award or agreement made on account of compulsory acquisition of land carried out under Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (RFCTLARR Act). This amendment will be effective from 01 April 2026.

Other Tax Proposals

‒ Compensation under Motor Vehicles Act, 1988

• Interest on compensation awarded under Motor Vehicles Act payable to individuals or legal heirs, to be fully exempt.
• Complete exemption from withholding tax on interest on compensation awarded by the Motor Accidents Claims Tribunal.
• This proposal shall take effect from 01 April 2026

‒ Withholding tax (TDS) on supply of manpower

• Present provision under ITA, 2025: ambiguity whether to treat supply of manpower as payment to contractors for carrying out any work or as fee paid for professional or technical services
• Definition of “work” for applying withholding tax on payments to contractors has been expanded to explicitly supply of manpower and provide clarity on withholding tax
• TDS rates – 1% when payment is made to individual / HUF and 2% in other cases

Key Amendments – Customs 

‒ Expansion of territorial applicability and Special Provisions for Fishing Beyond Territorial Waters: The applicability of the Customs Act, 1962 has been extended to fishing and fishing-related activities undertaken by Indian-flagged fishing vessels beyond the territorial waters of India. Consequently, the definition of Indian-flagged fishing vessel has been inserted.

‒ Further, the amendments also propose that the fish harvested by such vessels may be brought into India free of duty and that fish landed at a foreign port may be treated as export of goods, as prescribed.

‒ These amendments clarify and extend the jurisdiction of the Customs Act to such activities carried out outside India, thereby enabling effective regulation and enforcement of customs provisions in respect of fishing operations conducted beyond territorial waters.

‒ Treatment of Penalty as Duty Charge:  For payments made under Section 28 (5) of the Customs Act, 1962, amendment is proposed under sub-section (6) to treat the penalty paid as a charge for non-payment of duty.

‒ The amendment does not affect the existing mechanism for voluntary payment and settlement under sub-section (5), which allows importers or exporters to pay duty, interest, and penalty to conclude proceedings.

‒ Extension of Validity of Advance Rulings: Validity of Advance Rulings under the Customs Act are proposed to extended from three years to five years or until there is a change in law or facts on which the ruling was based, whichever is earlier. For advance rulings already in force, upon request by the applicant, the ruling may be extended to five years from the date of the original ruling. This amendment provides applicants with a longer period of certainty and reduces the need to seek repeated rulings for the same matters.

‒ Simplified Movement of Warehoused Goods: Section 67 is proposed to be substituted to provide that the owner of any warehoused goods may remove them from one warehouse to another, subject to such conditions as may be prescribed. The amendment removes the requirement for prior permission from the proper officer, simplifying the movement of warehoused goods while ensuring compliance with prescribed conditions for their safe and proper transfer.

‒ Custody and Examination of Goods by Post or Courier: Proposal to empower the Board to make regulations for not only the examination, assessment, and clearance of goods imported or to be exported by post or courier, but also for the custody of such goods.

Custom Process - Trade Facilitation and Border Efficiency Reforms

- Duty deferment facility:

• Time period extended for Tier-2 and Tier-3 AEOs from 15 days to 30 days, facilitating enhancement in working capital.
• Extended to eligible manufacturer-importers on par with the benefit currently available to Tier-2 and Tier-3 Authorised Economic Operators (AEOs), with a view to improving cash flow and ease of doing business.

‒ Ease of doing business:

• Recognition of trusted importers with strong compliance track record in risk management system to expedite clearance of consignments
• Transformation of warehousing framework to warehouse operator-centric system with self-declarations, electronic tracking and risk-based audit.
• Customs Integrated System (CIS) to be rolled out over the next two years as a unified platform for all customs processes, alongside phased expansion of non-intrusive scanning using advanced imaging and AI to enable comprehensive risk assessment and scanning of containers at major ports.
• Single window clearance system proposed for cargo clearance

‒ Courier Exports:

• Capping of 10 lakhs for courier proposed to be removed
• This enables global access for SMEs and startups, and fuel e-commerce growth

Key Updates- Overhaul of Baggage Rules 

- New Baggage Rules, 2026 (Baggage Rules):

• To come into effect from 2 February 2026
• Distinction between bonafide personal baggage and commercial goods, reducing penal exposure for honest travellers
• Duty-free allowances rationalized and clearly defined for residents, tourists of Indian origin, and foreign tourists. Passengers eligible under the Baggage Rules are permitted a general duty-free allowance of goods up to INR 75,000, subject to prescribed conditions and exclusions
• Mandatory electronic baggage declaration introduced, including pre-arrival filing and digital processing through Customs systems
• Simplified Green/Red Channel mechanism to minimize checks for compliant passengers
• A more transparent, digital, and passenger-friendly baggage clearance regime focused on trust, ease of compliance, and risk-based enforcement

‒ The import and export of currency by passengers is not governed independently under the Baggage Rules; instead, it is expressly made subject to the Foreign Exchange Management (Export and Import of Currency) Regulations, 2015 and related RBI notifications

Key Customs Impact 

Energy Sector:

‒ BCD exemption granted / extended in respect of the following:

• Specified capital goods imported for manufacturing of Battery Energy Storage Systems (BESS)
• Sodium antimonate used in the manufacture of solar glass
• Specified parts used in the manufacture of microwave ovens
• Parts for the manufacture or maintenance of wind operated electricity generator componenets

‒ Existing BCD exemption on imports of goods required for Nuclear Power Projects extended till 30.09.2035

Civil and Defence Aviation Industry:

‒ BCD exemption granted in respect of the following :

• Components and parts required for the manufacture of civilian, training and other aircrafts
• Raw materials imported for manufacture of parts of aircraft to be used in maintenance, repair, or overhaul (“MRO”) requirements by units in the defence sector

Healthcare :

‒ BCD exemption extended to:

• Seventeen additional cancer drugs
• Import of drugs, medicines, and Food for Special Medical Purposes used in the treatment of an additional seven rare diseases under the National Policy for Rare Diseases (NPRD), 2021.
• Concessional 5% BCD on artificial plasma withdrawn with effect from 02.02.2026, with imports henceforth attracting the applicable tariff rate.

Critical Minerals

‒ BCD on Potassium Hydroxide increased from NIL to 7.5%, with effect from 02.02.2026.

Marine Sector

‒ Higher duty-free input limit for exports: threshold for duty-free imports of specified inputs used in processing seafood for export is increased from 1 % to 3 % of the previous year’s FOB export value to reduce input costs and boost competitiveness.

‒ Simplification and export facilitation: Streamlining customs support aims to strengthen India’s seafood export value chain and improve integration with global markets

Leather Industry

‒ Extended duty-free benefits: Duty-free imports of specified inputs, previously available only for leather or synthetic footwear, are extended to include exports of Shoe Uppers, broadening export support.

‒ Export timeline enhancement: The allowable period to export finished leather products is extended from six months to one year, providing greater operational flexibility for exporters.

Textile Industry 

‒ Export facilitation through extended timelines: Exporters of textile garments gain extended time (from six months to one year) to ship finished products, aligning processing and marketing cycles.

‒ Duty-free import support: Similar to leather, duty-free imports of specified textile inputs are reinforced to help exporters manage raw material costs and enhance global competitiveness.

Key Changes in Exemption

‒ Extension of customs exemptions on import of:

• goods imported for execution of exports orders for jobbing; and
• import of specified processed goods produced from copper anode slime/ copper reverts exported for toll smelting/processing till 31.03.2028.

‒ Lapse of exemption from customs duties on works of art and antiques intended for public exhibition from 31.03.2028

Other Changes 

Key Changes – Central Excise 
‒ Exemption from levy of excise duty:

• High Speed Diesel – exemption extended up to 31^st March 2028
• CNG when blended with Biogas or Compressed Biogas (CBG) – exemption of excise duties beyond 14%. For the purposes of valuation of CNG, exclusion is prescribed for value of CBG contained therein, and taxes paid on CBG.

‒ National Calamity Contingent Duty (“NCDD”)  on Tobacco Products: NCCD on chewing tobacco, jarda scented tobacco and other tobacco products and gutkhas is capped at 25%.

‒ Deferral of additional excise duty on unblended diesel: Implementation of levy of additional excise duty of Rs. 2 per litre on unblended diesel is deferred till 31.03.2028.

‒ Post-sale discounts:

• Finance bill proposes simplified treatment of post-sale discounts by removing the existing conditions that discounts must be pre-agreed.
• Pursuant to amendment, post-supply discounts may be effected through issuance of GST credit notes, subject to reversal of corresponding input tax credit by the recipient.

‒ Provisional refunds in cases involving inverted duty structure:  Refund to an extent of 90% shall now be issued on a provisional basis, providing substantial relief for taxpayers facing accumulation of input tax credit due to an inverted duty structure

‒ Small refunds (lesser than INR 1000):

• Minimum threshold of INR 1000 for seeking refunds has been removed for refund claims relating to goods exported out of India with payment of tax.
• This would enable small and medium enterprises to improve cash flows, who undertake courier and postal exports.

Key Changes – GST

‒ Alternate Appellate forum for conflicting advance rulings:

• Constitution of National Appellate Authority for hearing disputes arising from conflicting advance rulings has remained pending since its conceptualization under Finance Act 2019.
• It is now proposed that the Government will prescribe an alternate forum to hear the said disputes.
• The said amendment is proposed to come into effect from 01^st April 2026. This proposal is not only going to enable companies with PAN India presence to seek certainty in cases of conflicting advance rulings, but will also ease the mounting pressure on the High Courts.

‒ Omission of ‘intermediary’ clause:

• Presently, the location of the supplier of services is deemed to be the place of supply with respect to ‘intermediary services’. This prescription has been a bone of contention in several disputes emanating from rejection of refund claims on account of the said provision. Several High Courts have already held against the Tax Department, holding the invocation of ‘intermediary’ as out of place.
• It is now proposed that the said prescription will be omitted, which is likely to simplify processing of refunds, bring clarity and reduce litigations.