Indirect Tax Amicus, March 2026

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Articles

Verification first, SCN later: Re‑centring FTA origin checks

By Disha Bhandari and Siddhant Indrajit

Customs authorities are increasingly issuing show cause notices to the importers, disputing claims under FTAs, even when Certificates of Origin (‘COO’) have been issued by the designated authority of the exporting country. However, recent judicial interventions reaffirm a simple proposition - once a COO exists, the authorities must first invoke the verification architecture of the FTA, as mirrored in Section 28DA of the Customs Act, 1962 and CAROTAR, 2020, before proceeding against the importer. The first article surveys the treaty text, the domestic legal framework and the emerging case law, and argues for rigorous adherence to the verification‑first sequence. According to the authors, from the Department’s perspective, a dedicated regulatory framework, similar to Pre‑Notice Consultation Regulations, is needed to standardize FTA verification procedures. They also raise few relevant questions which seek clarity. 

Availing GST credit using TR-6 Challan: Navigating the uncertainty

By Asish Philip, Srinidhi Ganeshan, Mahi Vyas, Kratik Patni

The second article in this issue of Indirect Tax Amicus discusses the issue as to whether the TR-6 Challan qualifies as a ‘similar document prescribed’ under Rule 36(1)(d) of the CGST Rules, 2017 for the purpose of availing Input Tax Credit. Discussing various case law, the authors point out that the mere absence of the expression ‘TR-6 Challan’ in Rule 36 and the Circular No. 16/2023-Cus., dated 7 June 2023 mentioning that TR-6 Challan is not a valid document for availing ITC, should not lead to disallowance of an otherwise legal and valid claim. The authors suggest that the GST council should issue a clarification in order to achieve ease of doing business.

Goods and Services Tax (GST)

Notifications and Circulars

• GSTAT Lucknow Bench commences operation

Ratio decidendi

• Transition of cesses to GST regime – Supreme Court issues notice to Department – Supreme Court
• Transfer of ITC in case of amalgamation of companies situated in 2 different States is permissible – Something not present in the statute cannot be incorporated in Form – Gujarat High Court
• ISD – ‘Distribution in a month’ in Rule 39(1)(a) to mean distribution in the month when the registered person becomes entitled to ITC in terms of Section 16(2) – Madras High Court
• Notice under Section 74 is not vitiated just for alleged infirmities in action under Section 67 (search, etc.) – Karnataka High Court
• Transfer of incriminating material collected during enquiry by an officer in another jurisdiction to the competent officer is not wrong – Karnataka High Court
• Blocking of input tax credit ledger – Rule 86A cannot be invoked against assessee for alleged fraudulent availment of ITC by its customer – Karnataka High Court
• Limitation of 2 years for refund under Section 54 is mandatory – Word ‘may’ cannot always be construed directory – High Court can however condone delay exercising power under Article 226 – Karnataka High Court
• Quantum of pre-deposit in second appeal before Tribunal when demand reduced by first appellate authority – Jharkhand High Court
• Exemption on supplies to merchant exporter – Benefit not available if goods supplied to third person for further supply to merchant exporter – Karnataka High Court
• Legal heir of deceased assessee to be mandatorily heard before passing assessment order – Rajasthan High Court
• Exemption for sale of unbranded goods – Use of graphic representation identical to that used for branded goods when not fatal – Madras High Court

Customs and FTP

Notifications and Circulars

• Customs Electronic Cash Ledger – Deposits can be made through payment aggregator
• RoDTEP – Reduction in benefit by 50%, withdrawn
• Courier or postal exports – Value limit per consignment withdrawn from 1 April 2026
• Self-sealing facility granted to eligible exporters has no expiry date
• West Asia conflict – Relief measures by Ministries of Finance and Commerce to help exporters

Ratio decidendi

• Aircraft engine stand is classifiable under Customs TI 8609 00 00 and not under TI 8716 39 00 – Supreme Court
• Supplies from DTA to SEZ are ‘deemed exports’ – Export obligations under EPCG licence fulfilled by such supplies even if BOE absent – Delhi High Court
• Re-export of cosmetics imported without CDSCO licence, thus making them ‘prohibited goods’, is not permissible – Fact of in-bond warehousing and absence of any intention for home clearance is not material – Bombay High Court
• Goods supplied from SEZ to individual customers in DTA for personal use are not covered under TI 9804 90 00 – CESTAT Chennai
• Construction of roads – Exemption when sub-contractor not mentioned in agreement between contractor and govt. – Disposal of goods to contractor/govt. after completion of project is not wrong – CESTAT Bengaluru
• Redemption for home consumption when ‘prohibited’ goods made ‘restricted’ at time of adjudication – CESTAT Chennai
• ‘Bulk drugs’ are ‘drugs’ for levy of IGST @ 5% – Customs AAR

Central Excise, Service Tax and VAT

Ratio decidendi

• Export of services – Assignment of employees ‘on-site’ for foreign group company while being in India – CESTAT Chandigarh
• Ayurvedic Patent or Proprietary medicine – Presence of excipients will not take the goods out of the purview of medicine – CESTAT New Delhi
• Cenvat credit – 20% limit under Rule 6(3)(c) for utilization of credit is not to be calculated on monthly basis – CESTAT Kolkata
• Valuation on MRP basis – ‘Package’ connotes enclosure or containment; strapping is not covered as ‘package’ – CESTAT Chennai