Weekly Regulatory Update — YouWe Quest LLP

GST

Direct Tax

MCA

SEBI

ICAI

Actions

GST

Goods & Services Tax

Court

Bombay HC — s.67(2) CGST does not authorise cash seizure. Smurti Waghdhare v. DGGI (2026:BHC-OS:6209-DB) — ejusdem generis applied; ₹1 crore returned with interest.

Portal

GSTN: 'Additional Notices & Orders' merged into 'Notices and Orders'. REG-32 (CGST Rule 14A) withdrawal facility live.

Deadline

31 Mar 2026 — LUT (Form RFD-11) for FY 2026–27 and CMP-02 (Composition opt-in). ITC-03 reversal by 30 May 2026.

Budget

Post-sale discounts — pre-existing agreement condition removed (s.15/s.34 CGST). IGST s.13(8)(b) intermediary place of supply being omitted.

Budget

Refunds: Provisional refunds extended to inverted duty structure. Minimum refund threshold removed for exports.

Direct Tax

Income Tax & Finance Bill

Deadline

15 Mar 2026 — 4th advance tax instalment (100% of FY 2025–26). s.234B/234C interest on shortfall.

Deadline

31 Mar 2026 — Form 67 (Foreign Tax Credit) for FY 2024–25 under Rule 128. Hard deadline.

New Law

Income Tax Act, 2025 effective 01 Apr 2026. New Tax Year concept, revised ITR due dates, ICDS-IndAS merger from TY 2027–28.

Budget

Key changes: Pre-deposit 20%→10%; FAST-DS 2026 disclosure scheme; unexplained income 60%→30%; ITR-U window 24→48 months; startup holiday to 01.04.2030.

Budget

SGB CGT exemption — only at original issue held to maturity. TDS manpower 1%/2%; TAN exemption for NR property (01.10.2026).

MCA

Corporate Affairs

Scheme

MCA Compliance Facilitation Scheme 2026 — Window 15 Apr – 15 Jul 2026. AOC-4/MGT-7 at 10% additional fee; MSC-1 at 50%; STK-2 concessional.

Deadline

31 Mar 2026 — DIR-3-KYC-Web for all directors. Non-compliant DINs deactivated.

Portal

MCA V3 mandatory. Enhanced CSR reporting from 01 Apr 2026.

SEBI

Capital Markets

Live

MFD Incentive Framework from 01 Mar 2026. ₹2,000 per new B-30/women investor from 2bp IEPF corpus. 1-year minimum holding.

NRI

NRI KYC relaxation — Circular HO/38/30/12(1)2025 (10 Dec 2025). Physical presence removed for re-KYC on depository/broker platforms.

IPO

SME IPO — EBITDA ₹1 crore in 2 of last 3 years mandatory for BSE SME / NSE Emerge listing.

Deadline

31 Mar 2026 — Defaulted broker claims via SEBI SCORES. Final deadline, no extension.

ICAI

Professional Standards

Standards

ICAI Handbook on Key Compliances for Private Limited Companies released. EAC opinions on ITA 2025 transition expected from Direct Taxes Committee.

Peer Review

Mandatory peer review extends to statutory audit firms with client turnover > ₹10 crore. Initiate empanelment if not covered.

UDIN

60-day revocation window closes for January 2026 certificates. UDIN mandatory at time of signing — not post-dated.

Deadline

31 Mar 2026 — 20 structured CPE hours for FY 2025–26. May 2026 exam schedule released.

Technical Reference

GST

Goods & Services Tax

A Judicial Pronouncements ▾

Bombay HC — Cash Seizure under s.67(2) CGST impermissible.
Smurti Waghdhare v. DGGI & Ors. 2026:BHC-OS:6209-DB — Division Bench held that s.67(2) CGST authorises search and seizure of "goods, documents, books or things" — cash/currency is excluded by application of the ejusdem generis rule. The preceding specific items (goods, documents, books) are all tangibles with evidentiary or commercial relevance to GST evasion; currency does not share that genus. DGGI was directed to return ₹1 crore seized amount with statutory interest under s.67(6) CGST. This ruling settles a long-standing field-level dispute and limits physical seizure powers of GST authorities.

Practice note: Where cash has been seized in past investigations, review with this ratio. Clients facing similar seizures should immediately apply for return with interest under s.67(6). Cite this judgment at SCN reply stage.

B Portal Updates ▾

Notices tab consolidation: GSTN merged 'Additional Notices & Orders' into the primary 'Notices and Orders' tab. Taxpayers who were monitoring both tabs must now check only one location. Advisory teams should update SOPs accordingly.

REG-32 withdrawal facility live: GSTN has enabled online withdrawal of revocation applications filed under CGST Rule 14A (Form REG-32). This addresses situations where revocation was applied for in error or where the underlying ground for cancellation has changed. The withdrawal must be filed before the application is decided by the proper officer.

C Year-End Compliance Deadlines ▾

LUT (Form RFD-11) for FY 2026–27 — Due: 31 Mar 2026. All registered exporters and SEZ suppliers must file fresh LUT before commencement of FY 2026–27 to continue supplying on zero-rated basis without payment of IGST. Existing LUT expires on 31 March. Late filing means IGST must be paid on export supplies and refund claimed thereafter — cash flow impact.

CMP-02 (Composition Scheme opt-in) — Due: 31 Mar 2026. Taxpayers seeking to opt into the Composition Scheme for FY 2026–27 must file Form CMP-02 by 31 March. Following opt-in, Form ITC-03 for reversal of transitional ITC is due by 30 May 2026 (60 days from start of new FY). Failure to file ITC-03 makes the opted taxpayer ineligible to continue under Composition.

Year-end ITC reconciliation: Final GSTR-3B for March 2026 is the last opportunity to reverse ITC under Rules 42, 43, and 37 for the financial year. Rule 37 reversal (ITC on non-payment to supplier beyond 180 days) must be reported. GSTR-2B vs GSTR-3B mismatch notices are increasingly automated — ensure auto-population figures are reconciled before filing.

GTA forward charge election: Goods Transport Agency taxpayers must collect fresh declarations from GTA clients for FY 2026–27. Ensure invoice series reset from 01 April per Rule 46.

D Budget 2026 — Amendments to CGST/IGST Acts ▾

Post-sale discounts — s.15 and s.34 CGST amended: The pre-existing agreement requirement for deducting post-sale discounts from taxable value and issuing credit notes has been removed. This was a major pain point — particularly in FMCG, pharma, and automobile dealer networks where scheme-based discounts are communicated post-supply. The amendment aligns the law with commercial reality. Effective from the date of enactment of Finance Act 2026.

IGST s.13(8)(b) omission — Intermediary place of supply: The clause that deemed the location of the supplier as the place of supply for intermediary services is being omitted. This removes the anomaly that caused Indian intermediaries serving foreign principals to pay IGST even on exports of services. The amendment follows years of litigation and multiple writ petitions (including the series stemming from Dhruva Advisors and subsequent HC decisions). Once notified, Indian intermediaries providing services to overseas principals should qualify for zero-rating.

Provisional refunds — extended to inverted duty structure: Provisional refund facility (previously available only for zero-rated supplies) now extended to inverted duty structure cases under s.54 CGST. This eases working capital pressure for industries like textiles, footwear, and fertilisers where output tax rate is lower than input tax rate.

Minimum refund threshold removed for exports: The ₹1,000 minimum refund amount restriction no longer applies to export refund applications. Minor amounts which were administratively blocked earlier can now be claimed.

II.

Direct Tax

Income Tax & Finance Bill 2026

A Advance Tax — FY 2025–26 Final Instalment ▾

4th and final advance tax instalment due 15 Mar 2026. Under s.208 ITA, 100% of assessed tax for FY 2025–26 must have been paid by this date cumulatively (i.e., prior three instalments plus this final payment). Shortfall triggers interest under s.234B (1% p.m. on unpaid tax from April 2026) and s.234C (1% p.m. on instalment shortfall). Ensure TDS/TCS already deducted is credited before computing outstanding liability.

Computation reminder: Advance tax = (Estimated total income × applicable rate) − TDS − TCS − relief u/s 87A. For capital gains accruing after the 3rd instalment date, the 4th instalment rule under s.234C(1) proviso applies — no deferral interest on such gains if paid in full by 15 March.

B Form 67 — Foreign Tax Credit (Rule 128) ▾

Deadline: 31 Mar 2026 (AY 2025–26). Form 67 must be filed before the due date of filing the return of income including belated returns. For AY 2025–26, the last date for belated/revised returns is 31 March 2026. A missed Form 67 means the FTC claim is forfeited — the Supreme Court's stance in Brinda Kumari and subsequent CBDT circulars confirm strict compliance. Foreign tax paid must be certified by the overseas tax authority or reflected in overseas tax return.

Currency conversion: Rule 115 requires conversion of foreign taxes paid into INR using the SBI TT Buying Rate as on the last day of the month preceding the month in which the tax was paid or deducted. Maintain computation workings for each foreign payment jurisdiction.

NRI/international practice: Flag all clients with US, Singapore, Canada, UAE, UK, or other foreign source income and confirm Form 67 status. This is a high-exposure item in NRI assessments.

C Income Tax Act, 2025 — Transition from 01 Apr 2026 ▾

ITA 2025 replaces ITA 1961 from Tax Year 2026–27 (01 Apr 2026). Key structural changes: (a) "Assessment Year"/"Previous Year" terminology replaced by unified Tax Year; (b) Chapters reorganised — sections renumbered; (c) Draft IT Rules 2026 published 07 Feb 2026 for public comment; (d) ICDS provisions merged with IndAS treatment effective Tax Year 2027–28 (one-year deferral for corporate taxpayers with IndAS adoption).

ITR due dates revised: Individuals/HUF (non-audit): 31 July → retained. Companies and audit cases: 31 October → retained. New specific due date for transfer pricing reports introduced. Confirm with final rules.

Perquisite thresholds: Several perquisite valuation rules (accommodation, car, ESOP) are being revised under the new Act. Payroll and HR teams need to update tax computation software before FY 2026–27 begins. Coordinate with payroll processors now.

D Finance Bill 2026 — Key Clause-Level Changes ▾

Litigation & Dispute Resolution

Pre-deposit for appeals reduced 20% → 10% under s.249/253. Effective from AY 2026–27 demands. Review all pending demand notices — those with 20% deposits can seek partial refund once amendment is notified. Substantial cash-flow benefit for clients with large disputed demands.

Procedural penalties → Fixed graded fees: Penalties for return filing delays and certain procedural defaults being converted to fixed fee structure (graduated by quantum/period). Removes discretionary quantum — more predictable exposure.

International Tax & Disclosure

FAST-DS 2026 — Foreign Assets Disclosure Scheme 2026. One-time window for NRIs and returning residents to disclose undisclosed foreign assets. Penalty structure substantially lower than Black Money Act prosecution exposure. Assess all NRI clients with foreign bank accounts, properties, trusts. Scheme details and forms awaited from CBDT.

NR expert income exemption: Foreign technical experts working in India — income exemption extended to 5 years from current 3 years. Beneficial for pharma, tech, and manufacturing inbound assignments.

MAT exemption for NR presumptive taxpayers: NR entities taxed under presumptive provisions (ss.44B, 44BB, 44BBA, 44BBB) explicitly exempted from Minimum Alternate Tax. Removes a recurrent dispute issue in shipping/aircraft/oil exploration NR assessments.

TDS / TCS Changes

TCS on overseas tours and LRS: Flat 2% TCS on all LRS remittances and overseas tour packages (removing the ₹7 lakh threshold distinction). Simplification but increased TCS for all travellers irrespective of amount.

TDS on manpower supply: New 1% (individuals/HUF) / 2% (others) TDS on payments for manpower supply/security services. Staffing agencies and HR outsourcing clients need immediate payables process update.

TAN exemption for NR property purchase from 01 Oct 2026. Currently, NR sellers require buyer to obtain TAN for TDS deduction on property consideration — exemption simplifies compliance for NRI property transactions.

Capital Gains & Investments

SGB CGT exemption clarified: Capital gains exemption on Sovereign Gold Bond redemption/transfer applies only to bonds subscribed at original issue price and held to maturity. Secondary market purchasers do not qualify for the exemption effective AY 2027–28. Advise HNI clients holding secondary-market SGBs accordingly.

Startup tax holiday extended: 100% deduction under s.80-IAC extended to eligible startups incorporated up to 01 Apr 2030 (from current 01 Apr 2027 cut-off). Benefit for new-age clients planning to incorporate.

Unexplained income rate reduced 60% → 30%: Tax rate on unexplained cash credits, investments, and expenditure under s.115BBE reduced. Surcharge and penalty provisions unchanged. Still a punitive rate — proactive disclosure (FAST-DS or VDA scheme) preferred.

ITR-U (Updated Return) window extended 24 → 48 months: Taxpayers can now file updated returns up to 4 years from the end of the relevant assessment year. Additional tax for filing in 3rd/4th year will be 70% — but better than prosecution or assessment exposure for unreported income.

III.

MCA

Corporate Affairs

A MCA Compliance Facilitation Scheme 2026 ▾

Circular dated 24 Feb 2026. Window: 15 Apr – 15 Jul 2026. Targeted at companies and LLPs with delayed filings. Key fee concessions:

AOC-4 and MGT-7 (financial statements and annual returns): Normal fees + 10% additional fee (waiver of all remaining additional fees that would otherwise apply).

MSC-1 (Dormant Company application): 50% of normal additional fee.

STK-2 (Strike-off application): Concessional fees for voluntary winding up of non-compliant companies.

Action: Identify all client companies with outstanding AOC-4/MGT-7 arrears. Prepare filings in advance for submission from 15 April. This scheme presents a clean-up window before stricter enforcement resumes from 16 July.

B DIR-3-KYC-Web — 31 March Deadline ▾

Amendment Rules notified 31 Dec 2025 mandating transition from DSC-based DIR-3-KYC to OTP/Aadhaar-based DIR-3-KYC-Web for all directors. Deadline: 31 Mar 2026. Non-compliant DINs will be deactivated from 01 April — deactivation prevents filing of any MCA form by or for the director, effectively blocking board participation.

Process: Director logs into MCA V3 portal, verifies Aadhaar-linked mobile OTP + PAN, and completes the web-based KYC. Unlike earlier years, physical DSC is not needed for this specific compliance.

Firm action: Send written reminder to all client-company directors this week. Allow 3-day buffer (file by 28 March) to account for portal congestion on last working days of March. Deactivated DINs require MCA helpdesk intervention — a slow process.

C MCA V3 & CSR Reporting ▾

MCA V3 portal is now mandatory for all forms including charge forms, director appointments, and ROC communications. V2 portal access has been disabled for most form types. Ensure all DSCs are registered and linked on V3 before March-end filing rush.

Enhanced CSR reporting from 01 Apr 2026: CSR-2 (annual CSR reporting) enhanced to capture project-wise fund utilisation, third-party impact assessment, and beneficiary details. Companies meeting the CSR applicability threshold (s.135 Companies Act) should update their CSR tracking systems before FY 2026–27 begins.

IV.

SEBI

Capital Markets

A MFD Incentive Framework — Live from 01 Mar 2026 ▾

Additional commission of ₹2,000 payable per new investor onboarded in two specific categories: (a) new women individual investor with new PAN — T-30 or B-30 city; (b) new B-30 city investor with new PAN, any gender.

Source of funding: 2 basis points of investor education and awareness corpus (IEPF) — explicitly not charged to scheme TER. No additional cost to investors.

Holding condition: Investor must hold the investment for minimum 1 year for the MFD to retain the incentive. AMC, trustee, and RTA systems must be updated for tracking. Clawback applies on premature redemption.

Advisory note: MFD clients serving B-30 geographies or running women-focused SIP campaigns should document new investor onboarding clearly (new PAN, city classification). Clean data audit trail will be required for incentive claims.

B NRI KYC Relaxation ▾

Circular: HO/38/30/12(1)2025-MIRSD-SEC-FATF dated 10 Dec 2025. Re-KYC process eased for existing NRI investors on depository and broker platforms — physical presence requirement removed where Aadhaar/OTP-based re-verification is available. Particularly relevant for NRI clients who have been unable to complete periodic KYC due to travel restrictions or overseas posting.

SEBI SCORES + ODR framework: Three-tier escalation process (Company level → SEBI SCORES → ODR platform) has been clarified for investor grievance redressal. Timelines at each tier now standardised.

C SME IPO Eligibility — EBITDA Mandate ▾

SEBI now requires EBITDA of ₹1 crore in at least 2 of the last 3 financial years as a mandatory eligibility criterion for listing on BSE SME or NSE Emerge platforms. This replaces the earlier net-worth/profit-based thresholds for certain SME categories.

Rationale: Strengthens IPO quality — reduces penny-stock listings and protects retail investors in the SME segment. Several SME IPOs in 2024–25 had negative or negligible operating cash flows post-listing.

Client advisory: SME clients planning capital raise in FY 2026–27 must check EBITDA track record for FY 2023–24, 2024–25, 2025–26. If threshold is not met in 2 of 3 years, listing is not possible until qualifying financials are established.

ICAI

Professional Standards & Practice

A Standards & Guidance ▾

ICAI Handbook on Private Limited Company Compliances released by the Corporate Laws & Corporate Governance Committee. Covers audit exemptions, board meeting quorum, director appointment timelines, and filing thresholds under the Companies Act 2013. Useful desk reference for company audit engagements — reduces reliance on individual look-up.

EAC opinions on ITA 2025 expected: The Direct Taxes Committee is preparing technical FAQs and EAC opinions addressing ambiguities in the transition to ITA 2025 — particularly on opening balance sheet treatment, section renumbering cross-references, and ICDS-IndAS merger implications. Monitor icai.org for releases before 01 Apr 2026.

ICDS-IndAS merger (Budget 2026): Income Computation and Disclosure Standards will be merged with IndAS treatment from Tax Year 2027–28. A Joint CBDT-MCA Committee has been constituted with ICAI representation. Separate ICDS computation sheets will become redundant for covered entities from that year.

B Peer Review & Quality ▾

Mandatory Peer Review threshold lowered: Firms conducting statutory audits of any entity with turnover above ₹10 crore are now required to hold a valid Peer Review Certificate. Firms not yet in the Peer Review Board's empanelment list should initiate the process immediately — the certificate issuance cycle takes 3–6 months.

QRB year-end file preparation: Quality Review Board typically samples audit files from the preceding year in its annual cycle. March 2026 year-end files are prime review candidates from FY 2026–27 onwards. Ensure: (a) working papers are complete with risk assessment documentation; (b) independence declarations and conflict-of-interest disclosures are signed; (c) engagement letters are signed and on file before work commences.

C UDIN & Digital Compliance ▾

UDIN must be generated at the time of signing — post-dated generation (generating UDIN after the document has been issued) is treated as a disciplinary infraction. All CAs in the firm, including partners and assistants with signing authority, must be briefed.

60-day revocation window: Certificates where a UDIN was generated in January 2026 — the revocation/revision window closes in late March 2026. Review any January 2026 certificates where the underlying figures have subsequently changed (e.g., revised balance sheet, restated accounts). Revoke and regenerate with correct values before the window closes.

Bulk UDIN invalidation by third parties (banks, regulators) for non-compliant certificates is now automated in some institutions. Ensure all certificates issued in the current year have valid, traceable UDINs.

D Practice Relevance & CPE ▾

ESOP/ESPP/RSU technical guide expected: ICAI Direct Taxes Committee is preparing a technical guide on taxation of employee stock options under ITA 2025 — covering perquisite valuation, Form 12BAA reporting, DTAA relief for internationally mobile employees, and ESPP/RSU treatment. Particularly relevant for international tax and NRI advisory practices. Watch for release on icai.org.

CPE compliance — 31 Mar 2026 deadline: All members in practice must complete 20 structured CPE hours for FY 2025–26. Check the ICAI Self-Service Portal (SSP) at ssp.icai.org for your current credit count. ICAI conducts random CPE compliance audits — non-compliant members face practice certificate renewal issues.

CA Final & Intermediate — May 2026 examinations: Schedule released. Plan articled assistant examination leave in advance. Replacements or additional staffing for the April–May period should be arranged now, especially ahead of tax audit and AGM season.

Sorted by deadline · domain as tiebreaker within the same date.

Due Date	Domain	Action Required
15 Mar	Direct Tax	Pay 4th advance tax instalment for FY 2025–26. Reconcile TDS/TCS credits before computing outstanding.
15 Mar	GST	GSTR-3B for Feb 2026 (monthly filers > ₹5 crore). Confirm GST payment position is clean.
28 Mar	MCA	Complete DIR-3-KYC-Web for all client directors — 3-day buffer before 31 Mar DIN deactivation.
31 Mar	Direct Tax	File Form 67 (Foreign Tax Credit) for FY 2024–25. Hard deadline — no extension. All NRI/foreign income clients.
31 Mar	Direct Tax	Review SGB holdings — CGT exemption only for original issue held to maturity. Not secondary market.
31 Mar	GST	File LUT (RFD-11) for FY 2026–27. Essential for all exporters and SEZ suppliers.
31 Mar	GST	File CMP-02 (Composition opt-in) for FY 2026–27. ITC-03 reversal follows by 30 May 2026.
31 Mar	GST	Complete ITC reconciliation: GSTR-2B vs 3B. Apply Rules 42/43/37 reversals in final March 3B.
31 Mar	ICAI	Complete 20 structured CPE hours for FY 2025–26. Verify count on ICAI Self-Service Portal.
31 Mar	ICAI	60-day UDIN revocation window closes for January 2026 certificates — revise before expiry.
31 Mar	MCA	Verify DSC validity and V3 portal registration for all signing directors. Renew if expiring before July 2026.
31 Mar	SEBI	File defaulted broker claims via SEBI SCORES. Final deadline — no extension expected.
1 Apr	Direct Tax	ITA 2025 comes into force. Brief clients on new Act, Tax Year concept, revised ITR due dates.
1 Apr	Direct Tax	Appeal strategy: Pre-deposit drops 20% → 10%. Evaluate all pending dispute cases for filing.
15 Apr–15 Jul	MCA	MCA Compliance Facilitation Scheme opens. Queue AOC-4/MGT-7 filings for 10% additional fee window.
Ongoing	Direct Tax	FAST-DS 2026: Screen NRI and foreign asset clients for undisclosed foreign assets. Advise on applicability.
Ongoing	ICAI	Initiate Peer Review Board empanelment if firm does statutory audits of entities > ₹10 crore turnover.
Ongoing	ICAI	QRB documentation: Ensure working papers, independence declarations, engagement letters complete for March closures.
Ongoing	SEBI	Update MFD clients on new B-30/women investor incentive framework (live from 01.03.2026).
Ongoing	SEBI	Advise SME clients on revised IPO eligibility: EBITDA ₹1 crore in 2 of last 3 years required.

Tax & RegulatoryDigest

Goods & Services Tax

Income Tax & Finance Bill

Corporate Affairs

Capital Markets

Professional Standards

Tax & Regulatory
Digest