Weekly Round-up on Tax and Corporate Laws | 10th November to 15th November 2025

This weekly newsletter analytically summarises the key stories reported at taxmann.com during the previous week from Nov 10^th to Nov 15^th 2025, namely:

1. CBDT notifies provisions of the protocol amending the DTAA between India and Belgium;
2. RBI releases Trade Relief Measures Directions, 2025;
3. HC directs segregation of pre and post-GST works; VAT/service tax to apply for pre-GST portion;
4. Interest liability under section 50 not attracted from tax deposit date to GSTR-3B filing as liability discharged by deposit: HC; and
5. Revenue recognition based on transfer of control under Ind AS 115.

1. CBDT notifies provisions of the protocol amending the DTAA between India and Belgium

The Central Board of Direct Taxes (CBDT) has notified the Protocol amending the Agreement and the Protocol between the Government of the Republic of India and the Government of the Kingdom of Belgium for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income. The following changes are introduced in the DTAA:

a) Broader definition of “Competent Authority”

The Protocol amends Article 3(1)(d) by expanding the definition of Belgium’s “competent authority.” Earlier, Belgium’s competent authority was limited to the federal Minister of Finance or an authorised representative. The term now includes the Minister of Finance of the Federal Government as well as any Regional or Community Government, or their authorised representative.

b) Introduction of a new definition – “Criminal Tax Matters”

A new clause, Article 3(1)(k), has been inserted to define the term “criminal tax matters.” It covers tax matters involving intentional conduct that is liable for prosecution under the criminal or tax laws of the requesting country, irrespective of whether such conduct occurred before or after entry into force of the Protocol.

c) Exchange of Information

The original Article 26 has been deleted and substituted with a wider information-exchange framework. Under the new Article 26, information can be exchanged if it is reasonably foreseeable to be relevant to the administration or enforcement of the DTAA or domestic tax laws. The scope is no longer restricted to income tax alone but extends to taxes of every kind levied by central, state or local authorities. The Protocol also eliminates banking secrecy as a ground for refusal: information cannot be withheld merely because it is held by a bank, nominee, fiduciary or financial institution.

d) Assistance in Tax Collection

The earlier provision on recovery of taxes has been replaced with Article 27 titled “Assistance in the Collection of Taxes.”

The new Article obligates both countries to assist each other in collecting “revenue claims,” a term that now covers taxes of every kind, along with interest, penalties and collection costs. If a tax claim is legally enforceable in one country and the taxpayer cannot prevent its recovery there, the other country must collect it as if it were its own tax debt.

The new Article retains key safeguards, allowing assistance to be refused if it conflicts with domestic laws, breaches public policy, or if the requesting State has not first taken reasonable steps to recover the tax itself.

Read the Notification

2. RBI releases Trade Relief Measures Directions, 2025

 In a move aimed at providing relief to exporters facing debt servicing challenges arising from global trade disruptions, the RBI released the Trade Relief Measures Directions, 2025, on November 14, 2025, effective immediately. These directions apply to Commercial Banks, Primary (Urban) Cooperative Banks, State and Central Cooperative Banks, NBFCs, All India Financial Institutions and Credit Information Companies (collectively as Regulated Entities). The measures include a moratorium for eligible borrowers, an extension of export credit tenor, relaxation in asset classification norms and strengthened disclosure requirements. Further, the RBI has notified a list of 20 eligible sectors, including fisheries, chemicals, plastics and rubber, footwear, iron and steel, vehicles, furniture and nuclear reactors.

a) Various Trade Relief Measures Available to Exporters

The various trade relief measures provided by REs to exporters are as follows:

• Loan moratorium with simple interest accrual
  Regulated Entities (REs) may grant a moratorium to eligible exporters on payment of all loan instalments (principal and/or interest) falling due between September 1, 2025 and December 31, 2025. This period is referred to as the ‘effective period’.

During the moratorium period, interest will continue to accrue on outstanding amounts. However, such an interest must be charged only on a simple interest basis without compounding effect, i.e., there must be no interest on interest.

The total interest accumulated during the moratorium/deferment period may be converted into a funded interest term loan, which must be repayable in one or more instalments any time after March 31, 2026, but not later than September 30, 2026.

A loan moratorium is a temporary suspension or deferment of loan repayment obligations, providing borrowers with relief during periods of financial stress or extraordinary circumstances.

• Maximum export credit period extended to 450 days

The RBI has announced a relaxation in the repayment of export credit by extending the maximum credit period from one year to 450 days for pre-shipment and post-shipment export credit disbursed until March 31, 2026.

For packing credit facilities already availed by exporters on or before August 31, 2025, where the dispatch of goods could not take place, REs may allow liquidation of such facilities from any legitimate alternate sources. These sources may include (a) domestic sale proceeds of such goods or (b) substitution of the export contract with proceeds of another export order.

• Asset Classification and Provisioning

For loan accounts of eligible exporters, where a moratorium is granted, the moratorium period must not be included when calculating the number of days past due for asset classification purposes under the applicable Income Recognition, Asset Classification, and Provisioning (IRACP) norms. In simple terms, the loan will not be treated as overdue during the moratorium period.

The RBI has clarified that a grant of moratorium or deferment of instalments and recalculation of the ‘drawing power’ will not be treated as ‘loan restructuring’. Further, Credit Information Companies (CICs) must ensure that these relief measures do not adversely impact the credit history of borrowers.

Additionally, for loan accounts that were in default but classified as ‘standard’ as on August 31, 2025, and where relief measures have been extended, REs must create a general provision of not less than 5% of the total outstanding amount. This provision must be made by December 31, 2025.

• Disclosure Requirements

REs must create a proper Management Information System (MIS) to track relief measures provided to exporters. The system must clearly indicate which exporter received what type of relief and provide the details of each credit facility.

In addition, REs must submit a fortnightly report (as of the 15^th and at the end of each month) in a format to be hosted by the RBI on its DAKSH platform. This platform is used as an online portal where banks and REs submit various regulatory reports, including payment fraud information and other compliance data.

b) Eligibility Criteria for exporters to avail trade relief measures

REs must prepare a clear policy for providing relief measures, including objective criteria for granting relief, and the policy must be disclosed in the public domain.

Only exporters (borrowers) who meet all of the following conditions will be eligible for trade relief measures:

• The borrower is engaged in exports in one of the specified eligible sectors.
• The borrower had an outstanding export credit facility from a Regulated Entity (RE) as of August 31, 2025
• The loan accounts of borrowers with all REs were classified as ‘Standard’ as on August 31, 2025.

c) Conclusion

The trade relief measures aim to provide timely support to exporters facing repayment and liquidity pressures due to global trade disruptions. By allowing moratoriums, extending export credit periods, easing asset classification norms and strengthening reporting requirements, these measures help exporters manage debt, continue operations and maintain financial stability.

Read the Circular

3. HC directs segregation of pre and post-GST works; VAT/service tax to apply for pre-GST portion

The High Court held that works contracts spanning pre- and post-GST periods must be segregated so that VAT/service tax applies only to the pre-GST portion, with GST leviable solely on the post-GST component. The Court reasoned that taxing statutes cannot be applied retrospectively. This was held in Mycon Construction Ltd. vs. State of Karnataka.

Facts of the case

The petitioner, engaged in executing works contracts for construction projects. It was contended that certain works contracts executed by it spanned both pre-GST and post-GST periods. It was argued that post-GST agreements incorrectly applied pre-GST service tax, leading to a miscalculation of tax liability. Segregation of pre-GST and post-GST works, adjustment of Karnataka Value Added Tax (KVAT)/service tax for pre-GST works, application of GST with ITC offset for post-GST works, and reimbursement of differential tax for pre-GST works paid were sought after the implementation of GST. The matter was accordingly placed before the High Court.

Held

The petitioner, engaged in executing works contracts for construction projects. It was contended that certain works contracts executed by it spanned both pre-GST and post-GST periods. It was argued that post-GST agreements incorrectly applied pre-GST service tax, leading to a miscalculation of tax liability. Segregation of pre-GST and post-GST works, adjustment of Karnataka Value Added Tax (KVAT)/service tax for pre-GST works, application of GST with ITC offset for post-GST works, and reimbursement of differential tax for pre-GST works paid were sought after the implementation of GST. The matter was accordingly placed before the High Court.

Read the Ruling

4. Interest liability u/s 50 not attracted from tax deposit date to GSTR-3B filing as liability discharged by deposit: HC

The High Court held that once tax is deposited through DRC-03 and credited to the electronic cash ledger, the liability stands discharged from the date of such deposit, and interest cannot be levied for the period up to the filing of GSTR-3B. This was held in Symphony Ltd. vs. Union of India.

Facts the case

Symphony Ltd., a GST-registered assessee with multiple registrations, deposited tax amounts by generating DRC-03 (credited to its electronic cash ledger) on 19.09.2017, but filed the corresponding GSTR-3B returns much later. The tax department nevertheless computed interest up to the date of return filing and issued communications threatening recovery under Section 79. The assessee challenged demands for interest on the ground that the tax had been paid (credited to Government account) on the deposit date and that any subsequent debit from the cash ledger at return-filing was a mere accounting adjustment.

Gujarat High Court Held

The Gujarat High Court allowed the writ petitions and quashed the impugned recovery communications. The Court held that an undisputed deposit credited to the Government/exchequer via the electronic cash-ledger (DRC-03) constitutes an advance payment appropriated to the Government, and the assessee’s tax liability stands discharged from the date of such deposit. A later debit entry at the time of filing GSTR-3B is only an accounting adjustment; interest under Section 50 cannot be charged for the interval between deposit and return filing. The Court relied on the scheme of Sections 39, 49, 50, 79 and Rule 88B, and followed precedents (notably Arya Cotton Industries), concluding that recovery of interest for the period after deposit was unsustainable. The communications were quashed.

Read the Ruling 

5. Revenue recognition based on transfer of control under Ind AS 115

Ind AS 115, Revenue from Contracts with Customers, introduces a control-based model for revenue recognition, replacing the earlier “risk-and-reward” approach. Under the standard, revenue is recognized only when an entity transfers control of a promised good or service to the customer. Control refers to the customer’s ability to direct the use of the asset and obtain substantially all of its remaining benefits, including the ability to prevent others from doing so.

To support this assessment, Ind AS 115 provides key indicators such as the entity’s present right to payment, customer’s legal title, transfer of physical possession, transfer of significant risks and rewards, and customer acceptance. These indicators must be evaluated collectively, based on the terms of the contract and the specific facts of each arrangement.

In case of a license of intellectual property with a right of use, control is deemed to transfer only when the customer begins using the licensed asset and starts deriving benefits from it. For example, where a company grants a two-year software license but the customer starts using it at a later date, revenue is recognized only when the customer commences actual use, regardless of when the activation key was delivered.

For bill-and-hold arrangements, Ind AS 115 requires all of the following conditions to be met for control to transfer before physical delivery:

• the arrangement must have a substantive reason;
• the product must be separately identified as belonging to the customer;
• the product must be ready for physical transfer; and
• the entity must not have the ability to use or redirect the product.

When all these criteria are satisfied, as in the case of a custom-built machine billed and held at the customer’s request, revenue is recognized even while physical possession remains with the seller.

The shift to a control-based model under Ind AS 115 enhances the accuracy of revenue reporting by focusing on the customer’s ability to benefit from the goods or services. Entities must carefully evaluate contract terms, indicators of control, and the specific circumstances of each arrangement to determine the precise point of revenue recognition.

Read the Story