GST Update: Weekly Goods and Service Tax latest News – January 2026

GST WEEKLY UPDATE : 42/2025-26 (19.01.2026)

1.HSNS Cess on Pan Masala Manufacturers from 1 February 2026:

Applicability of HSNS Cess

• HSNS Cess is levied on machines/processes used for pan masala manufacture.

• Every taxable person engaged in such activity must:

  • Register under HSNS

  • Pay monthly cess

  • File declarations and returns electronically

Step-by-Step Compliance Framework

1. Mandatory Registration

Form: HSNS REG-01

• Registration is mandatory for all pan masala manufacturers.

• Process:

  • Visit cbic-gst.gov.in

  • Click on “New User” under the HSNS Cess tab

  • Enroll using Name, PAN, Email and Mobile to receive Enrollment Reference Number (ERN)

  • Use ERN to file Form HSNS REG-01

  • On approval, receive Temporary Registration Number (TRN) for initial payment

2. Monthly Cess Payment

Form: HSNS PMT-01

• Cess must be paid electronically by the 7th day of every month.

  • Example: Liability for February 2026 must be paid by 7th February 2026.

• Payment Procedure:

  • Login to Taxpayer Dashboard

  • Select e-Payment under the Menu tab

  • Complete payment through online mode

3. Cess Declaration

Form: HSNS DEC-01

• Declaration must be filed within 7 days from the date of grant of registration.

• Filing Method:

  • Login to Taxpayer Dashboard

  • Click on Declaration under the Menu tab

  • Submit required details of machines/processes

4. Monthly Return Filing

Form: HSNS RET-01

• Monthly return to be filed by the 20th day of the succeeding month.

  • Example: Return for February 2026 to be filed by 20th March 2026.

• Filing Procedure:

  • Login to Taxpayer Dashboard

  • Click on Return under the Menu tab

  • File HSNS RET-01 electronically

Key Compliance Timeline at a Glance:

Compliance	Form	Due Date
Registration	HSNS REG-01	Before commencement
Initial Declaration	HSNS DEC-01	Within 7 days of registration
Monthly Payment	HSNS PMT-01	By 7th of the month
Monthly Return	HSNS RET-01	By 20th of next month

 Read Also: GST Revamp on the Horizon: What Businesses and Consumers Should Know

2. CBIC Enables Electronic Claim of Export Incentives Through Postal Route: Circular No. 01/2026-Customs dated 15 January 2026:

1. End-to-End Automation

The Amendment Regulations, 2026 aim to:

• Automate the entire postal export procedure,

• Digitally link DNK Portal with ICES, and

• Enable electronic processing of export incentives.

Amendments in Circular No. 25/2022-Customs

To operationalise the new system, CBIC has amended specific procedural links and processes:

Updated Links

• Link in Para 4(i), First Paragraph:

Old: https://dnk.cept.gov.in/customers.web

New: https://app.indiapost.gov.in/customer-self-service/login

• Link in Para 4(i), Second Paragraph:

Old: https://ips.cept.gov.in/customs.web/login.aspx

New: https://app.indiapost.gov.in/ips/home

Revised Procedure for Export Incentive Claim

(Point (vi) of Para 4 substituted)

a) ICEGATE Registration Mandatory

Exporters intending to claim:

• Drawback

• RoDTEP

• RoSCTL

through postal exports must:

• Register on ICEGATE, and

• Update their bank account details on ICEGATE corresponding to the DNK portal.

b) Electronic Filing of PBE-III and PBE-IV

• Exporters claiming electronic drawback must file PBE-III or PBE-IV on the DNK portal.

• These forms now contain additional tables for:

  • Drawback, RoDTEP or RoSCTL details,

  • Parcel-wise export information.

To claim drawback electronically, exporters must follow Rules 13 and 14 of the Customs and Central Excise Duties Drawback Rules, 2017 (as amended).

c) Non-Electronic Drawback Unchanged

• Non-electronic drawback claims will continue as per Rule 12 of the Drawback Rules, 2017.

d) Electronic RoDTEP and RoSCTL Claims Enabled

Exporters using postal route can now electronically claim:

• RoDTEP – as per Notification No. 24/2023-Customs (N.T.) dated 01.04.2023 (as amended),

• RoSCTL – as per Notification No. 25/2023-Customs (N.T.) dated 01.04.2023 (as amended).

e) Mandatory Upload on e-Sanchit

For every Postal Bill of Export where incentives are claimed electronically:

• Supporting documents must be uploaded on the e-Sanchit/ICEGATE portal.

Changes in PBE Forms

To enable the new process, CBIC has amended:

• Form PBE-III and

• Form PBE-IV

vide Notification No. 07/2026-Customs (N.T.) dated 15.01.2026, incorporating additional fields for export incentive claims.

Read Also: GSTAT: Centre Notifies New Rules For GST Appellate Tribunal

3. CBIC Alerts Taxpayers on Fake GST Notices and Fraudulent Summons: Advisory Issued on 09 January 2026:

Nature of the Fraud

According to CBIC:

• Fraudsters are issuing fake GST notices and summons.

• They impersonate GST officers and contact businesses through calls, messages or emails.

• Fake documents often contain:

  • CGST/GST logos,

  • Official-looking language,

  • Fabricated or invalid DIN numbers.

The objective is to intimidate taxpayers and extract money or sensitive information under the guise of official GST proceedings.

CBIC’s Advisory to Taxpayers

CBIC has advised all taxpayers to verify every GST communication before acting on it.

Step to Verify DIN

• Every genuine GST communication carries a Document Identification Number (DIN).

• Taxpayers should verify the DIN on the official CBIC portal.

  • If the DIN is valid, the system will confirm its authenticity.

  • If the DIN is not found or invalid, the communication is likely fake.

CBIC’s clear message:

“If it’s real you’ll get a confirmation. If not, report it immediately.”

Importance for Businesses

This alert is significant because:

• Fake notices can cause panic and financial loss.

• Small businesses and new taxpayers are more vulnerable.

• Verification of DIN ensures protection against impersonation and fraud.

4. AAR & Important Judgements:

(i) Telangana High Court Strikes Down Monthly Time Limit for ISD ITC Distribution

    (Applicant – M/s. BirlaNu Ltd.)

 The Court held:

• Section 20 (prior to amendment) only empowered prescription of the “manner” of distribution and was silent on timelines.

• Rule 39(1)(a) introduced a substantive time limit, which could lead to forfeiture of ITC—something not contemplated by the legislature.

• A rule-making authority cannot create a limitation period when the parent Act does not provide one.

• ITC, once lawfully availed, becomes a vested statutory right, and its arbitrary deprivation violates Articles 14 and 300A of the Constitution.

• Audit was completed in undue haste without proper opportunity of hearing, violating natural justice and Para 5.13 of the CBIC GST Audit Manual, 2019.

• Extended limitation under Section 74 was wrongly invoked as all facts were disclosed in returns—no suppression existed.

Writ petition is maintainable when vires of a rule is challenged or there is violation of natural justice.

(ii) AAR On Used Car Dealer Entitled to ITC on Repairs, Spares & Common Expenses:

      (Applicant – GoExotic Plus91 Motors Pvt. Ltd)

1. ITC Allowed on Spares, Repairs & Refurbishment

The AAR held that:

• Rule 32(5) and Notification No. 8/2018-CT (Rate) restrict ITC only on the purchase of used vehicles themselves.

• There is no restriction on ITC for:

  • Spare parts

  • Repairs

  • Refurbishment services

  • Other direct expenses incurred to enhance resale value.

Therefore, ITC on these inputs and input services is fully admissible.

2. ITC Allowed on Common Business Inputs & Capital Goods

The ruling clarified that common business expenses such as:

• Showroom rent

• Telephone and internet charges

• Advertisement and marketing

• Professional fees

and capital goods like:

• Workshop equipment

• Office furniture and infrastructure

• Computer systems

• Demo vehicles

are fully eligible for ITC, as:

• No provision in GST law restricts ITC on these items for second-hand car dealers.

3. Rule 32(5) Only Prescribes Valuation, Not Taxability

The AAR emphasized that:

• Rule 32(5) only provides the method of computing taxable value under the margin scheme.

• It does not decide whether the supply is taxable.

• Supplies of used vehicles remain taxable under Section 9 even when:

  • Margin is nil, or

  • Margin is negative.

4. Notification No. 8/2018 Is Not an Exemption Notification

The AAR observed:

• Notification No. 8/2018-CT (Rate) is not issued under Section 11 (exemption).

• It only leads to a taxable value of zero where margin is nil.

• Such supplies are:

  • Taxable supplies with zero taxable value,

  • Not exempt supplies.

 5. No ITC Reversal Under Rules 42 & 43

Since nil-margin supplies are still taxable and not exempt:

• They do not attract ITC reversal under Rules 42 or 43.

• Common ITC remains fully admissible.

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