Weekly Round-up on Tax and Corporate Laws | 27th October to 01st November 2025

This weekly newsletter analytically summarises the key stories reported at taxmann.com during the previous week from Oct 27^th to Nov 01^st 2025, namely:

1. Notifies revised India-Qatar DTAA effective from FY 2026-27
2. SEBI’s push to make bonds friendlier for everyday Indians
3. GSTN introduces new ‘Import of Goods’ section in IMS for BoE tracking and ITC reversal handling
4. CBIC assigns proper officers for action under Sections 74A, 75(2) & 122 of CGST Act: Circular
5. Accounting treatment of GST on lease payments under the Ind AS framework; and
6. ICAI invites comments on the Exposure Draft of the 13th Edition of its Code of Ethics.

1. Notifies revised India-Qatar DTAA effective from FY 2026-27

The Government of India has notified the revised Double Taxation Avoidance Agreement with the Government of the State of Qatar that was signed in February 2025. It replaces the previous agreement signed in April 1999.

The revised DTAA includes significant changes, broadly aligning with international standards such as the Base Erosion and Profit Shifting (BEPS) project and introducing anti-abuse provisions.

The provisions of the revised DTAA shall have effect in India and Qatar in respect of income arising on or after the first day of the fiscal year immediately following the calendar year in which the Agreement enters into force, i.e., 10-09-2025.

The key changes introduced in the revised DTAA of India-Qatar are as follows:

a) Hybrid entities [Article 1]

The revised DTAA includes a specific rule for income derived by or through an entity or arrangement that is wholly fiscally transparent, clarifying that it is considered income of a resident only to the extent it is treated as such for tax purposes by that State.

b) Tie-Breaker rule for non-individuals [Article 4]

The revised DTAA states that if a person (other than an individual) is a dual resident, and the competent authorities cannot determine residence by mutual agreement, such person shall not be entitled to any relief or exemption from tax provided by the Agreement. This introduces a treaty denying treaty benefits.

The previous DTAA stated that if the place of effective management could not be determined, the competent authorities shall settle the question by mutual agreement, but it did not contain the denial of relief clause.

c) Service Permanent Establishment [Article 5]

Article 5 of the revised DTAA introduces a condition that the furnishing of services (including consultancy services) constitutes a PE only where activities continue (for the same or connected project) for a period or periods aggregating more than 90 days within any 12 months.

d) Deduction of hypothetical payments by a PE [Article 7]

Article 7 of the revised DTAA explicitly restricts the deduction of amounts paid by a PE to its head office or other offices (other than reimbursement of actual expenses) by way of:

• Royalties, fees, or other similar payments in return for the use of patents, know-how, or other rights;
• Commission or other charges for specific services or for management; and
• Interest on moneys lent to the PE (except for banking enterprises).

The previous DTAA did not contain these specific prohibitions on the deduction of hypothetical head office charges.

e) Dividends paid to Sovereign Entities [Article 10]

Article 10 of the revised DTAA introduces a provision where dividends paid by a company resident in one State shall be taxable only in the other Contracting State if the beneficial owner is that other State itself, a political subdivision, or a local authority thereof.

f) Definition of interest includes Islamic Finance [Article 11]

Article 11 of the revised DTAA explicitly includes income from arrangements such as Islamic financial instruments where the substance of the underlying contract can be assimilated to a loan, within the definition of “interest”.

This specific reference to Islamic financial instruments was not present in the previous DTAA.

g) States eligible for interest exemption [Protocol to Article 11]

The Protocol to revised DTAA clarifies that the entities eligible for the sovereign interest exemption under Article 11(3) are as follows:

• In India: Reserve Bank of India and Export-Import Bank of India.
• In Qatar: Qatar Investment Authority and Qatar Holding LLC.

h) Capital gains from indirect transfer of immovable property [Article 13]

Article 13 of the revised DTAA permits taxation in the source State of gains from the alienation of shares deriving more than 50% of their value directly or indirectly from immovable property situated in the other Contracting State.

The  50% threshold was not present in the previous DTAA.

i) Students and Apprentices Benefits [Article 20]

Article 20 of the revised DTAA removes the monetary limit on employment remuneration for a student or business apprentice, provided the employment is directly related to studies or maintenance. It mentions that this income is exempt , besides grants, loans, and scholarships. Further, it also introduced an explicit time limit, stating that the benefits shall not be available for more than six consecutive years.

The previous DTAA limited the exemption on remuneration from employment to an amount not exceeding US $1000 or its equivalent amount during any fiscal year.

j) Entitlement to Benefits [Article 28]

The revised DTAA introduces Article 28 (Entitlement to Benefits), a specific anti-abuse provision. This provision, commonly known as the Principal Purpose Test (PPT), denies a treaty benefit if obtaining it was one of the principal purposes of any arrangement or transaction, unless granting the benefit is in accordance with the object and purpose of the relevant provisions.

Read the Notification

2. SEBI’s push to make bonds friendlier for everyday indians

Imagine you are a senior citizen, sitting with your savings, thinking of something safer than the stock market and yet more rewarding than a normal bank deposit. You hear about listed bonds, but honestly, the terms sound complex, and the process feels designed only for big institutions. So, you quietly step back, even though the product might have suited you really well.

That’s exactly the problem today. Retail participation in India’s public debt market has been low, and the numbers speak for themselves. The total amount raised from public debt issues fell sharply from about Rs. 19,168 crore to Rs. 8,149 crore over the last year. Many retail investors simply don’t feel the pull to step in.

SEBI is now making a move that could change the tone of the debt market from intimidating to welcoming. On October 27, 2025, SEBI released a consultation paper to explore whether incentivising certain investor groups can encourage stronger participation in public debt offerings. Comments and suggestions should be submitted by November 17, 2025.

a) Current Legal Restrictions

Regulation 31 of the SEBI (Issue and Listing of Non-Convertible Securities) Regulations, 2021, currently prohibits any person connected with the issue from offering incentives, whether direct or indirect, in cash or kind or services, to any person, for making an application in a public debt issue. Only fees or commission for services rendered in relation to the issue are allowed. This regulation effectively prevents issuers from offering even small benefits to ordinary investors.

b) Proposed Relaxation

SEBI is considering permitting debt issuers to offer incentives in the form of a higher coupon rate or a discount on the issue price to certain categories of investors. The focus is on categories that often invest conservatively:

• Senior citizens
• Women
• Armed forces personnel, including widows of ex-servicemen
• Retail subscribers

Issuers may choose to offer such incentives, and details must be disclosed upfront in the offer document. These benefits would remain available only to the original allottee and would not continue after the transfer of bonds

c) Existing Market Practices

The proposal aligns with the practices already familiar in other financial products. Banks offer higher interest rates on fixed deposits to senior citizens, while NBFCs extend similar benefits to women depositors. Retail investors often receive discounts in OFS transactions. In the non-financial sector, armed forces personnel regularly receive price benefits on travel and services. So, SEBI is not introducing a new concept. It is simply bringing listed debt in line with the benefits that investors already experience elsewhere.

d) Expected Impact

If implemented effectively, this proposal can benefit three key areas. First, it would increase the attractiveness of bonds for everyday savers who want a steady income. Second, it could improve demand for public issuance and reduce reliance on private placements. Third, it would add stability to the debt market by involving long-term, low-risk investors. The move recognises the contribution of senior citizens, women and defence families. It gives retail investors a reason to participate confidently and signals that the debt market is also open to them.

Read the News

3. GSTN introduces new ‘Import of Goods’ section in IMS for BoE tracking and ITC reversal handling

The GSTN issued an advisory introducing a new ‘Import of Goods’ section in the Invoice Management System (IMS) for BoE tracking and ITC reversal handling, effective from the October 2025 tax period. It enables taxpayers to view BoEs, including those from SEZs, and take permitted actions within IMS, with deemed acceptance for inaction and restrictions on rejection or pending status in specific cases. This was stated in GSTN Advisory, Dated 30-10-2025.

About the Update

The GSTN has issued an advisory introducing a dedicated ‘Import of Goods’ section in the Invoice Management System (IMS) on the GST portal, effective from the October 2025 tax period. The IMS was launched from October 2024, allows recipient taxpayers to accept, reject, or keep pending individual records uploaded by suppliers through GSTR-1, GSTR-1A, or IFF. The new section provides access to Bills of Entry (BoE) filed for imports, including those from SEZs, enabling taxpayers to take permitted actions on each BoE directly within IMS.

Under this functionality, the ‘Reject’ action is not allowed for BoEs, and the ‘Pending’ action is restricted for downward value amendments of accepted BoEs with filed GSTR-3B or for ITC reversals due to GSTIN changes. If no action is taken, the BoE is deemed accepted, and the draft GSTR-2B for the recipient will be generated on the 14th of the subsequent month, facilitating timely reporting and ITC management for import-related transactions. The advisory also outlines ITC reversal rules for GSTIN amendments in BoEs.

Read the Advisory

4. CBIC assigns proper officers for action under Sections 74A, 75(2) & 122 of CGST Act: Circular

The CBIC issued a circular assigning proper officers to act under Sections 74A, 75(2), and 122 of the CGST Act and Rule 142(1A) of the CGST Rules. It designates Superintendents, Deputy/Assistant Commissioners, and Additional/Joint Commissioners of Central Tax with monetary limits and prescribes procedures for issuing subsequent statements under Sections 73, 74, and 74A. This was stated in Circular No. 254/11/2025-GST, Dated 27-10-2025.

About the Update

The CBIC has issued a circular assigning proper officers to exercise powers under Sections 74A, 75(2), and 122 of the CGST Act, 2017, and Rule 142(1A) of the CGST Rules, 2017. It designates Superintendents, Deputy/Assistant Commissioners, and Additional/Joint Commissioners of Central Tax to issue show cause notices and pass orders under these provisions. Under Section 75(2), the same officer handling the original adjudication will continue as the proper officer. Monetary limits are prescribed for each officer level.

The circular also clarifies the procedure for issuing subsequent statements under Sections 73, 74, and 74A. The proper officer is determined based on the tax amount demanded, excluding penalties, and any cases exceeding prescribed monetary limits must be transferred to higher authorities via corrigendum. For notices issued by Audit Commissionerates, the jurisdictional officer of the notice will issue the subsequent statements, which will continue to be answerable to the same adjudicating authority.

Read the Circular

5. Accounting treatment of GST on lease payments under the Ind AS framework

Companies entering into lease arrangements often pay Goods and Services Tax (GST) on periodic lease rentals. A common question arises on whether such GST should form part of the lease payments for measuring the Right-of-Use (RoU) asset and lease liability under Ind AS 116, Leases particularly when input tax credit (ITC) is not available due to exempt output supplies.

Under Ind AS 116, lease payments include fixed and variable amounts payable for the right to use an asset but exclude statutory levies collected by the lessor on behalf of the Government. GST, being a consumption-based tax, is not a payment for the right to use the leased asset but a statutory obligation imposed on the lessee. Consequently, GST, whether or not eligible for ITC, does not qualify as part of lease payments for the purpose of measuring the RoU asset and lease liability.

Further, the Expert Advisory Committee has clarified that GST is a statutory levy under Ind AS 37, Provisions, Contingent liabilities and Contingent Assets, and should be recognized as an expense in the Statement of Profit and Loss as and when incurred. Even in cases where input tax credit is unavailable, it cannot be capitalized as part of the RoU asset or included in the lease liability measurement.

For example, in one case, a company had taken office premises on lease for three years at a monthly rent of ₹17.80 lakh plus 18% GST and recognized a Right of Use asset and lease liability by discounting the total lease payments, including the GST component. Since its output services were exempt from GST, no input tax credit was available. However, based on the Expert Advisory Committee’s clarification, GST, being a statutory levy and not consideration for the right to use an asset, was required to be excluded from the measurement of the Right of Use asset and lease liability and instead recognized as an expense in the Statement of Profit and Loss when incurred.

Thus, under the Ind AS framework, GST paid on lease rentals is to be excluded from lease calculations and recognized as an expense when incurred, ensuring that only payments made in exchange for the right to use the asset are capitalized.

Read the Story

6. ICAI invites comments on the Exposure Draft of the 13th Edition of its Code of Ethics

ICAI’s Ethical Standards Board has issued the Exposure Draft of the 13th Edition of the Code of Ethics for public comments, proposing key revisions aligned with the IESBA Code of Ethics (2024 edition) and recent Indian legislative developments. The draft introduces updates such as a new chapter on ethics for sustainability assurance, inclusion of “Honesty” and “Satyameva Jayate” within the integrity principle, expanded NOCLAR applicability, revised provisions on fee dependency and non-assurance services, and updates reflecting amendments under the CA, CS, and CWA (Amendment) Act, 2022. It also proposes new Guidelines on Ethical Issues (2025) replacing the earlier 2008 guidelines, with revised limits on indebtedness, audit assignments, and guidance on minimum fees. ICAI has invited comments and suggestions on the Exposure Draft by November 26, 2025.

Read the News