Monthly Tax Bulletin: October 2026

Key highlights:

Direct taxes:

• The OECD has published an updated GIR, incorporating clarifications based on stakeholder feedback.
• The SC dismisses the Revenue’s appeal; holds that the AO cannot reopen an assessment concluded by the ITSC.
• The SC dismisses the taxpayers’ appeals; holds that the CBDT’s circulars cannot override statute, and upholds the revision u/s 263.

Transfer pricing:

• The ITAT holds that the receivables adjustment requires invoice-level analysis; transfer pricing provisions cannot create taxable income absent treaty chargeability.
• The ITAT’s ad hoc FAR-based revenue allocation cannot substitute for arm’s length benchmarking without objective economic support.
• The Karnataka HC reiterates statutory discipline in ALP determination and comparable selection.

FEMA:

• The Reserve Bank of India issues amendments to the Export and Import of Goods and Services Regulations, 2026.

Indirect taxes:

• The 57th GST Council recommends wide-ranging reforms to enhance the ITC availability, simplify compliance, and reduce litigation.
• GSTN enables the filing of appeals against nil/zero demand orders.
• The Gujarat HC held that the assignment of GIDC leasehold rights is not liable to GST.
• The CBIC simplifies enrolment requirements under the EMI scheme.
• Haryana extends the timeline under the One-Time Settlement Scheme, 2026.
• The US notifies zero-rate Section 232 tariff treatment for specified speciality pharmaceutical products from India.
• The SC sets aside the Customs penalty order over reliance on AI-generated precedents.

Monthly Tax Bulletin: October 2026

The tax and regulatory environment continues to evolve rapidly, with significant developments on both judicial and legislative fronts. To keep you ahead of these developments, we present the October 2026 edition of the Grant Thornton Bharat Monthly Tax Bulletin. This edition provides a concise summary of key developments in direct taxes, FEMA, transfer pricing and indirect taxes for September 2026.

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