Tax & Regulatory Insights

Mandatory HSN Code Reporting in GSTR-1/GSTR-1A

• Effective 1st May 2025: Manual HSN code entry disabled
• Predefined dropdown selection on GST portal
• Table 12 split into B2B and B2C supplies
• Initial validation in warning mode

Aadhaar-Based Biometric Authentication in Sikkim

From 1st May 2025, GST applicants in Sikkim must undergo Aadhaar-based biometric authentication and document verification. This aims to prevent fraudulent registrations.

Amendments to Form GSTR-7

Effective from April 2025, TDS deductors must report invoice-wise data in Form GSTR-7. Functionality rollout is pending and taxpayers will be notified via the GST portal.

CBDT Disallows Deduction on Certain Settlements

Under Section 37(1) of the Income-tax Act, expenses incurred in settling proceedings under the following laws are not allowed as business deductions:

• SEBI Act, 1992
• Securities Contracts (Regulation) Act, 1956
• Depositories Act, 1996
• Competition Act, 2002

📌 Businesses must review tax positions and make appropriate disclosures.

Which laws been notified under Section 37 of the IT Act?

Any expenditure incurred to settle proceedings initiated in relation to contravention or defaults under the following laws shall not be deemed to have been incurred for the purpose of business or profession:

• the Securities and Exchange Board of India Act, 1992 (15 of 1992)
• the Securities Contracts (Regulation) Act, 1956 [42 of 1956]
• the Depositories Act, 1996 [22 of 1996]
• the Competition Act, 2002 [12 of 2003]

Amendments to Form 3CD

Form 3CD under the Income-tax Rules, 1962 has been amended to include disclosure of disallowed expenses related to regulatory settlements.