Monthly Tax Bulletin: March 2026

Key highlights:

Direct taxes:

• The SC disposes of a batch of appeals on the Faceless Assessment Officer vs Jurisdictional Assessment Officer issue.
• The CBDT publishes draft Income-tax Rules, 2026, and Forms for Income-tax Act, 2025.
• The OECD publishes the Manual on Effective Mutual Agreement Procedures (MEMAP) 2026 edition.

Transfer pricing:

• The HC held that without any deliberate or conscious concealment, the penalty for under-reporting or misreporting cannot be invoked.
• The HC quashes the final assessment passed without issuing a draft order, traces the procedural lapse arising after the PCIT’s Section 263 revision.
• The ITAT upholds the CIT(A)’s treatment of amortisation of goodwill as a non-operating expense.

FEMA:

• The RBI issues the Foreign Exchange Management (Borrowing and Lending) (First Amendment) Regulations, 2026.

Indirect taxes:

• The ITC on leasehold rights not restricted under Section 17(5)(d) in absence of construction – Gujarat HC.
• The Gujarat HC cautions against reliance on unverified AI-generated case citations in GST adjudication.
• Hookah served in restaurants not eligible for concessional 5% GST as ‘restaurant service’ – West Bengal AAR.
• The U.S. Supreme Court strikes down Trump’s reciprocal tariffs.
• The U.S. imposes a temporary 15% import surcharge after the withdrawal of reciprocal tariffs.
• The RBI notifies the Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026, effective from 1 October 2026.
• RoDTEP benefits reduced to 50% following the Budget allocation cut; agriculture exports excluded.

Monthly Tax Bulletin - March 2026

Grant Thornton Bharat is pleased to present the March 2026 edition of the Tax Bulletin, which captures a phase of significant regulatory evolution as India continues to refine its tax and foreign exchange framework in pursuit of transparency, efficiency, and economic competitiveness.

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