CA Final Indirect Tax Amendments for May 2026 ICAI Exams

CA Final Indirect Tax(IDT) amendments are extremely important from a students exam point of view, as the ICAI is known to test candidates about the latest amendments, circulars, and notifications. Knowledge about amendments would help a candidate answer questions not only theoretically but also in the case study form, which is an added advantage. The irony is that many students ignore this subject, whereas amendments are one of the most scoring topics in CA final IDT exams.

CA Final IDT Amendments May 2026: Latest Updates, Important Changes & Exam Notes

When compared to previous attempts, there are not many amendments in the CA final IDT May 2026 attempt. However, even a few amendments are of great importance since you need to answer questions based on them. Therefore, it is always better to cover these amendments in detail and revise them several times.

As per the CA Final IDT May 2026 attempt, the very first amendment is related to customs provisions from 1st November 2023 to 30th April 2024. In other words, all the amendments within the given period are important for the CA Final IDT May 2026 attempt. It is essential to understand that all amendments that apply to May 2026 should be covered and revised.

Amendment 1 – Valuation of Goods

CBIC issued a circular on 5th Feb 2020 with regard to the valuation of second-hand machinery. The following guidelines shall be followed:

Option-1: Import goods accompanied by an overseas Chartered Engineer (or equivalent) [Report -Form A] --

(a) All imports of second-hand machinery or used capital goods will be ordinarily accompanied by an inspection or appraisement report issued by an overseas Chartered Engineer or equivalent, prepared upon examination of the goods at the place of sale.

(b) The report of the overseas chartered engineer or equivalent should be as per Form A.

Option-2: Post arrival, get inspected by an Indian Chartered Engineer [Report- Form B] and submit a report for seeking customs clearance

(c) In the event of the importer failing to procure an overseas report of inspection or appraisement of the goods, he may have the goods inspected by any one of the chartered Engineers empaneled locally by the respective Custom Houses.

(d) In cases where the report is to be prepared by the Chartered Engineers empaneled by the Customs Houses, the same will be in Form B.

Acceptance/Rejection of declared value by PO —

- First PO shall examine the accuracy/ truthfulness of the declared value by comparing it with the Accountant Report and also with the Depreciated Value as notified in the Circular issued in 1987

- Then, the final decision (as to acceptance/ rejection of declared value) shall be taken by the PO

(e) The value declared by the importer shall be examined in the report of the Chartered Accountant.

Similarly, the declared value shall be examined in relation to the depreciated value of the goods determined in terms of the Circular dated November 19, 1987.

If such a comparison does not create any doubt regarding the declared value of the goods, the same may be appraised (assessed) under rule 3 of the Customs Valuation Rules, 2007.
If significant differences arise from such a comparison, Rule 12 of the Customs Valuation Rules, 2007 requires that the proper officer shall seek an explanation from the importer justifying the declared value.

The proper officer may then evaluate the evidence put forth by the importer and, after giving due consideration to factors such as depreciation, refurbishment,t or reconditioning (if any), and the condition of the goods, determine whether the declared transaction value conforms to Rule 3 of Customs.

Valuation Rules, 2007. Otherwise, the proper officer may proceed to determine the value of the goods, sequentially, in terms of rules 4 to 9.

Amendment 2 – FTP has been extended by 1 more year due to COVID-19.

REWARD SCHEME – As per Circular on 10th Jan 2020, the Social welfare surcharge (SWS) cannot be paid by utilizing MEIS / SEIS Scrip

SWS is levied as per Sec 110 of the FA, 2018. AS per Sec 110, SWS is levied and collected on goods imported into India, as a duty of customs on goods specified in the First Schedule to the Customs Tariff Act, 1975.

The duty credit scrips issued under the Schemes, such as MEIS, SEIS, etc., are granted as rewards/ incentives for exporters under the respective FTP.

As per para 3.03of the FTP 2015-20, these scrips can be used for payment of Basic Customs Duty and Additional Customs Duty specified u/Sec 3(1), (3), and (5) of the Customs Tariff Act, 1975 for the import of inputs or goods. The relevant customs exemption notifications also allow debit of basic customs and additional customs duties in the duty credit script. It is to mention that the debit of SWS through duty credit scrip is not envisaged in the FTP and the exemption notifications.

SWS cannot be paid through MEIS/ SEIS — shall be collected in CASH

It is clarified that SWS is not exempted and has to be levied and collected on the imported goods.

SWS cannot be debited through duty credit scrips and therefore has to be paid by the importer in cash.

Amendment 3 – Export Promotion Scheme

Imports against AA/ EPCG Authorization – Exemption to IGST and GST cases extended to 31st March 2021

Amendment 4 – EU Scheme

Imports by 100% EU – Exemption to IGST and GST cases extended to 31st March 2021

More amendments in the GST part will be shared in the next few days. Keep following us for amendment updates.

Amendment 5 -Input Tax Credit (ITC) Provisions

Limitations on the use of ITC: A limit on the portion of the ITC that can be applied to the payment of production tax may be introduced by an amendment. One restriction could be to use just 80% of the available ITC and require cash payment for the remaining 20%.
Complementing idea: Enhancing the idea of matching, which states that ITC can only be claimed if GSTR-1 of the supplier and GSTR-2B of the recipient include the same information. The purpose of this modification is to guarantee tax compliance and lessen disparities.
Extended ITC reversal period: The 180-day window for an ITC reversal can be extended to 365 days with changes, providing businesses more time to make payments and avoiding unwarranted reversals.

Conclusion

Although there might not be many amendments to the CA final IDT, they are very significant from an examination point of view. Understanding the concept of valuation, ITC, and changes in FTP could be really useful in scoring good marks in the examination.

Try to understand the concepts thoroughly, keep revising amendments, and always update yourself about ICAI notifications.

FAQs

Which amendments are relevant for CA Final IDT exams in May 2026?

The amendments effective till 31st October 2025 are relevant for the CA Final IDT exam in May 2026, including amendments brought in by the Finance Act 2025 and subsequent notifications and circulars.

Is there an importance of amendments for the CA Final IDT exam marks?

Certainly, there is immense importance of amendments in securing marks in CA Final IDT. This is because ICAI always frames theoretical and practical questions based on recent amendments. Mastery over amendments will definitely fetch you easy and high marks.

What is the time frame of Customs and FTP amendments relevant for CA Final IDT exams?

Amendments related to Customs and FTP, to be covered for the CA Final IDT exam in May 2026, will cover amendments announced till the specified cutoff date.

Can any direct questions be asked from the ICAI amendment notes?

Yes, since ICAI directly/indirectly makes questions based on their statutory changes, RTPs, and MTPs; therefore, it is essential to revise amendments effectively.

How many times shall we revise the amendments before the exam?

It is advised that, ideally, students must revise their amendments at least 3-4 times prior to the exam to ensure that they remember and understand all concepts while answering questions.

Is the number of amendments very high for the CA Final IDT May 2026?

As compared to other attempts, amendments have been relatively low in numbers. However, they are highly relevant and important from the exam point of view and must not be overlooked.

How can one make sure that amendment-based questions are scored well?

Since amendments are based on concepts, one must try to focus on concepts, use technical terms properly, and answer amendment questions in a systematic manner.