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1044/29/2016-CX – 26-7-2016


GOVERNMENT OF INDIA MINISTRY OF FINANCE
 DEPARTMENT OF REVENUE TAX RESEARCH UNIT NEW DELHI

CIRCULAR NO 1044/32/2016-CX, Dated: July 26, 2016

Subject: Guidelines for issue of summons, visits, search, seizure, arrest and prosecution regarding manufacturers or principal manufacturers of articles of jewellery or parts of articles of jewellery or both- regarding.

In this year’s Budget, central excise duty of 1% without input and capital goods tax credit or 12.5% with credit was imposed on articles of jewellery falling under heading 7113 of the First Schedule to the Central Excise Tariff 1985. Subsequent to that, the Government had set up a Sub-Committee of the High Level Committee, headed by Dr. Ashok Lahiri to interact with Trade & Industry on issues relating to procedure and compliance relating to excise duty of articles of jewellery. The Sub-Committee has given its report on 23.06.2016, which has been accepted by the Government.

2. In the context of visits, issue of summons, search, seizure, arrest and prosecution in respect of manufacturers or principal manufacturers of articles of jewellery or parts of articles of jewellery or both, falling under heading 7113 of the Central Excise Tariff Act [hereinafter referred to as articles of jewellery] the Sub-Committee has made certain recommendations, which have been accepted by the Government. Accordingly, notwithstanding anything to the contrary provided in any other circular/instructions, the following guidelines for such actions in respect of manufacturers/principal manufacturers of articles of jewellery may be followed scrumptiously,-

i. No transit checks shall be carried out by the excise officials for checking movement of semi-finished or finished articles of jewellery.

ii. Visits, search of the premises of a manufacturer or principal manufacturer of articles of jewellery, issue of summons, seizure, arrest and prosecution may be initiated only when there is a clear reason to believe that there is an act of evasion, formed at the level of Commissioner or an equivalent rank officer.

iii. Visits, search of the premises of a manufacturer or principal manufacturer of articles of jewellery, issue of summons, seizure, arrest and prosecution shall not be undertaken for,-

a) issues relating to procedure or compliance related matters;

b) issues related to documents such as invoices, registers; or

c) issues related to pure matters of legal interpretation.

iv. Instances where visits, search of the premises of a manufacturer or principal manufacturer of articles of jewellery, issue of summons, seizure, arrest and prosecution may be undertaken,-

a) where excise duty is collected but not deposited with the Government; or

b) where there is information to the satisfaction of an officer of the level of Commissioner or equivalent that there has been a substantial evasion of duty.

v. Even if such actions are to be taken, the administration must ensure that it does not result in an unjustified targeting of certain persons. The administration must also ensure that visit or search, when justifiably taken, must not be taken against karigars/artisans and must be taken only in respect of a manufacturer or a principal manufacturer, and should not result in any disruption of business at the place of business or place of residence of such manufacturer or principal manufacturer.

vi. Summons in respect of evasion of excise duty on articles of jewellery may be issued only with the approval Commissioner or an equivalent rank officer.

vii. No visit to the premises of manufacturer of principal manufacturer shall be carried out except on the basis of specific intelligence and with the approval Commissioner or an equivalent rank officer.

viii. In case of seizure, the seized goods must be given back immediately to the manufacturer or principal manufacturer under supratnama. Further, provisional release of the seized goods shall be given within three working days from the date of request seeking provisional release. The amount of security sought for such provisional release should be equal to the duty payable on the seized goods and not their value.

ix. No visit, search and seizure may be resorted to in cases where the expected evasion of duty is less than Rs. 75 lakh. In such cases, the investigation of the case may be done under summons.

x. No arrest or prosecution for manufacturers or principal manufacturers of articles of jewellery shall be resorted to in cases where the duty evaded is less than Rs. 2 crore.

5. Except as herein provided, all existing circulars/instructions relating to issue of summons, visit or search, arrest and prosecution, in central excise, shall apply mutatis mutandis to the manufacturers/principal manufacturers of articles of jewellery or parts of articles of jewellery, as the case may be, falling under heading 7113 of the Central Excise tariff Act.

6. Hindi version will follow. Trade Notice/Public Notice may be issued on the above lines.

7. Difficulties faced, if any, in implementation of this Circular may be brought to the notice of the Board.

F. No.354/25/2016-TRU (Pt.-I)

(Anurag Sehgal)
Under Secretary to the Government of India

Notification No. : 27/2016 Dated:26-07-2016


[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (i)]GOVERNMENT OF INDIA MINISTRY OF FINANCE (DEPARTMENT OF REVENUE) NEW DELHI

NOTIFICATION NO 27/2016-Central Excise, Dated: July 26, 2016

In exercise of the powers conferred by sub-section (1) of section 5A of the Central Excise Act, 1944 (1 of 1944), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts articles of jewellery manufactured,-

(i) from jewellery provided by a retail customer; or

(ii) by mounting of precious stones provided by a retail customer,

from so much of the excise duty leviable thereon, as is in excess of the duty of excise payable on a value which is sum of the cost of additional materials used by the manufacturer or principal manufacturer, as the case may be, for making such article of jewellery and labour charges charged by the manufacturer or principal manufacturer, as the case may be, from the retail customer.

2. For availing the exemption under this notification, the manufacturer or principal manufacturer, as the case may be, shall maintain a proper record containing the following details, namely:-

(i) name and address of the retail customer;

(ii) weight and purity of the jewellery, weight of precious stone provided by the retail customer;

(iii) receipt number and date;

(iv) issue voucher number and date of sending such jewellery or precious stones to a job worker or to the manufacturing premises of the jeweller himself; and

(v) value addition, including cost of additional materials and labour charges, charged by the jeweller, which shall also be mentioned separately in the invoice issued to the retail customer.

Explanation.-1 - For the purposes of this notification, weight refers to weight in grams for precious metals; and in carats for precious stones.

Explanation.-2 - For the removal of doubts, it is hereby clarified that for the purposes of this notification, the expression “jewellery” shall not include precious metal in any form, other than jewellery provided by a retail customer for the manufacture of articles of jewellery to a manufacturer or principal manufacturer, as the case may be.

[F. No. 354/25/2016 –TRU (Pt.-I)]

(Anurag Sehgal)
Under Secretary to the Government of India

1043/29/2016-CX – 26-7-2016


GOVERNMENT OF INDIA MINISTRY OF FINANCE
DEPARTMENT OF REVENUE TAX RESEARCH UNIT NEW DELHI

CIRCULAR NO 1043/31/2016-CX, Dated: July 26, 2016

Subject: General procedures regarding excise duty on articles of jewellery or parts of articles of jewellery or both falling under heading 7113–regarding.

In this year’s Budget, central excise duty of 1% without input and capital goods tax credit or 12.5% with credit was imposed on articles of jewellery falling under heading 7113 of the First Schedule to the Central Excise Tariff 1985. Subsequent to that, the Government had set up a Sub-Committee of the High Level Committee, headed by Dr. Ashok Lahiri to interact with Trade & Industry on issues relating to procedure and compliance relating to excise duty of articles of jewellery. The Sub-Committee has given its report on 23.06.2016, which has been accepted by the Government.

2. In the above context, for manufacturers/principal manufacturers of articles of jewellery or parts of articles of jewellery or both, falling under heading 7113 of the Central Excise Tariff Act [hereinafter referred to as articles of jewellery], the Sub-Committee has made certain recommendations, which have been accepted by the Government and accordingly, it is hereby clarified that:

i. A manufacturer or principal manufacturer of articles of jewellery may also do trading of articles of jewellery from his central excise registered premises.

ii. For a jeweller [above the SSI excise duty exemption limit]:

(a) in case his first sale invoices show excise duty separately, the same will have to be paid to the Government; and

(b) in case his sale invoices do not show separately the excise duty, the value for VAT will be treated as cum excise duty value [that is value for excise duty plus excise duty] and duty payable will have to be determined accordingly.

iii. No excise duty will be payable on the sale of traded articles of jewellery [on which appropriate excise duty, including nil duty, has already been paid].

iv. Records maintained for State VAT and other private records, showing details of inputs, stocks, manufactured goods, sold/exported goods, etc., as per the scheme opted by the jewellery manufacturer [Refer rule 12 of the Articles of Jewellery (Collection of Duty) Rules, 2016], will suffice for central excise purposes also.

v. For articles of jewellery manufactured on job work basis, the procedure as prescribed in the Articles of Jewellery (Collection of Duty) Rules, 2016 is to be followed. Accordingly, the procedure prescribed for job work under notification No. 214/86-CE will not be applicable on manufacture of articles of jewellery on job work basis.

vi. Repairs and alterations, which do not change the identity, character and use of the goods and do not result in a new item, is not “manufacturing” and will not attract excise duty.

3. Hindi version will follow. Trade Notice/Public Notice may be issued on the above lines.

4. Difficulties faced, if any, in implementation of this Circular may be brought to the notice of the Board.

F. No. 354/25/2016 – TRU (Pt.-I)

Anurag Sehgal
Under Secretary to the Government of India

 

1042/29/2016-CX – 26-7-2016


GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF REVENUE TAX RESEARCH UNIT NEW DELHI

CIRCULAR NO 1042/30/2016-CX, Dated: July 26, 2016

Subject: Export related procedural simplifications – excise duty on articles of jewellery falling under heading 7113 – regarding.

In this year’s Budget, central excise duty of 1% without input and capital goods tax credit or 12.5% with credit was imposed on articles of jewellery falling under heading 7113 of the First Schedule to the Central Excise Tariff 1985. Subsequent to that, the Government had set up a Sub-Committee of the High Level Committee, headed by Dr. Ashok Lahiri to interact with Trade & Industry on issues relating to procedure and compliance relating to excise duty of articles of jewellery. The Sub-Committee has given its report on 23.06.2016, which has been accepted by the Government.

  1. In this context, pending finalisation of the procedure for exports, in consultations with the Department of Commerce and trade and industry, -

(i) There shall be no requirement for taking central excise registration by a manufacturer or principal manufacturer or a jeweller, who exports 100% of articles of jewellery manufactured by him or got manufactured by him on job work basis, subject to the following conditions that:

  1. a) the manufacturer or principal manufacturer or a jeweller, as the case may be, gives a bank guarantee for excise duty payable of articles of jewellery [over and above the bank guarantee for customs duty on gold and VAT payable on articles of jewellery] with the nominated agency/authorised bank;
  2. b) in case of default in fulfilment of his export obligation, the manufacturer or principal manufacturer or a jeweller, as the case may be, shall take central excise registration;
  3. c) either the manufacturer or principal manufacturer or a jeweller, as the case may be, shall pay the excise duty on the articles of jewellery sold to the domestic buyers on first sale basis or the nominated agency/bank shall release bank guarantee equal to excise duty payable on the articles of jewellery [provided the customs duty on gold content in the jewellery and VAT payable on such articles of jewellery has been paid by the manufacturer or principal manufacturer or a jeweller or bank guarantee equivalent to that has been released by the nominated agency / authorised bank]; and
  4. d) in case there are no sales to domestic tariff area for subsequent return cycles, such unit will file nil return for such return cycles.

(ii) Exporters may continue to export articles of jewellery, as provided by thecircular no. 1021/9/2016-CX dated 21.03.2016, on self-declaration and submission of Letter of Undertaking [LUT] to customs without the need to get such LUT ratified by the jurisdictional central excise authorities, till the detailed procedures in this regard are put in place.

  1. Hindi version will follow. Trade Notice/Public Notice may be issued on the above lines.
  2. Difficulties faced, if any, in implementation of this Circular may be brought to the notice of the Board.

F.No.354/25/2016–TRU (Pt.-I)

(Anurag Sehgal)
Under Secretary to the Government of India

 

Notification No. : 26/2016 Dated:26-07-2016


[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (i)]

GOVERNMENT OF INDIA
MINISTRY OF FINANCE
(DEPARTMENT OF REVENUE)
NEW DELHI

NOTIFICATION NO

26/2016-Central Excise, Dated: July 26, 2016

In exercise of the powers conferred by sub-section (1) of section 5A of the Central Excise Act, 1944 (1 of 1944), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby makes the following further amendments in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 12/2012-Central Excise, dated the 17th March, 2012, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide G.S.R. 163 (E), dated the 17th March, 2012, namely:-

In the said notification,

(A) in the Table, for serial number 199 and the entries relating thereto, the following shall be substituted, namely:-

(1)
(2)
(3)
(4)
(5)
“199 7113 (I) Articles of jewellery

(II) Parts of articles of jewellery

(II) Articles of silver jewellery, other than those studded with diamond, ruby, emerald or sapphire

1% 16
1% 16
Nil -”;
Explanation. – For the purposes of this exemption,-

An article of jewellery or part of article of jewellery or both, produced or manufactured from an alloy (including a sintered mixture and an inter-metallic compound) containing precious metal may be treated as an article of jewellery or part of article of jewellery or both of a precious metal, if any one precious metal constitutes as much as 2% by weight of the article of jewellery or part of article of jewellery or both (excluding the weight of the precious or semi-precious stones, mounted or set), in accordance to the following:

(i) an article of jewellery or part of article of jewellery or both, containing 2% or more, by weight, of platinum is to be treated as an article of jewellery or part of article of jewellery or both, of platinum;

(ii) an article of jewellery or part of article of jewellery or both, containing 2% or more, by weight, of gold but not platinum, or less than 2% by weight, of platinum, is to be treated as an article of jewellery or part of article of jewellery or both, of gold ;

(iii) other articles of jewellery or parts of articles of jewellery or both, containing 2% or more, by weight, of silver are to be treated as articles of jewellery or parts of articles of jewellery or both, of silver.

[F. No. 354/25/2016 -TRU (Pt.-I)]

(Anurag Sehgal)
Under Secretary to the Government of India

Note:- The principal notification No. 12/2012-Central Excise, dated the 17th March, 2012 was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 163(E), dated the 17th March, 2012 and last amended vide notification No. 23/2016 -Central Excise, dated the 17th May, 2016 published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i)

1041/29/2016-CX – 26-7-2016


 GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF REVENUE
TAX RESEARCH UNIT NEW DELHI

CIRCULAR NO 1041/29/2016-CX, Dated: July 26, 2016

Subject: Guidelines for Excise Audit of Manufacturers / Principal Manufacturers of articles of jewellery or parts of articles of jewellery – regarding.

In this year’s Budget, central excise duty of 1% without input and capital goods tax credit or 12.5% with credit was imposed on articles of jewellery falling under heading 7113 of the First Schedule to the Central Excise Tariff 1985. Subsequent to that, the Government had set up a Sub-Committee of the High Level Committee, headed by Dr. Ashok Lahiri to interact with Trade & Industry on issues relating to procedure and compliance relating to excise duty of articles of jewellery. The Sub-Committee has given its report on 23.06.2016, which has been accepted by the Government.

2. In the context of Excise Audit of manufacturers/principal manufacturers of articles of jewellery or parts of articles of jewellery or both, falling under heading 7113 of the Central Excise Tariff Act [hereinafter referred to as articles of jewellery] the Sub-Committee has made certain recommendations, which have been accepted by the Government. Accordingly, notwithstanding anything to the contrary provided in any other circular/instructions, the following guidelines for conduct of excise audit of manufacturers/principal manufacturers of articles of jewellery or parts of articles of jewellery, falling under heading 7113 may be followed scrumptiously,-

i. No excise audit will be carried out for the first two years for manufacturers/principal manufacturers of articles of jewellery whose duty payment (cash plus credit) is less than Rs. 1 crore. However, after expiry of first two year period,-

a) Manufacturers/principal manufacturers of articles of jewellery paying duty below Rs. 50 lakh [cash plus credit], the proportion of units to be audited every year shall not exceed 5 per cent of total number of registered manufacturers/principal manufacturers of articles of jewellery, and selection of such assessees shall be done with the approval of Commissioner or an equivalent rank officer.

b) Manufacturers/principal manufacturers of articles of jewellery whose duty payment (cash plus credit) is more than Rs. 50 lakh and less than Rs. 1 crore may be audited once in every five years;

ii. Manufacturers/principal manufacturers of articles of jewellery whose duty payment (cash plus credit) is more than Rs. 1 crore and less than Rs. 3 crore may be audited once in every two years;

iii. Manufacturers/principal manufacturers of articles of jewellery whose duty payment (cash plus credit) is above Rs. 3 crore may be audited every year.

iv. Excise audit of manufacturers/principal manufacturers of articles of jewellery will be desk audit that is audit done in the office of jurisdictional central excise audit commissionerate. Moreover, such audit will under no circumstances involve any physical verification of stocks in the premises.

v. Any show cause notice to be issued pursuant to such excise audit, irrespective of the quantum of duty demanded, shall be issued and adjudicated by an officer of the rank of Commissioner.

3. Except as herein provided, all existing circulars/instructions relating to central excise audit may also apply mutatis mutandis to the manufacturers/principal manufacturers of articles of jewellery or parts of articles of jewellery, as the case may be.

4. Hindi version will follow. Trade Notice/Public Notice may be issued on the above lines.

5. Difficulties faced, if any, in implementation of this Circular may be brought to the notice of the Board.

F.No.354/25/2016-TRU (Pt.-I)

(Anurag Sehgal)
Under Secretary to the Government of India

 

1040/27/2016-CX – 26-7-2016


GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF REVENUE TAX RESEARCH UNIT NEW DELHI

CIRCULAR NO 1040/28/2016-CX, Dated: July 26, 2016

Subject: Clarification on computation of exemption and eligibility and exemption limits and other related issues for small scale industries [SSI] exemption under Notification No. 8/2003-CE dated 1st March 2003 in respect manufacturer or principal manufacturer of articles of jewellery or parts of articles of jewellery or both -regarding.

In this year’s Budget, central excise duty of 1% without input and capital goods tax credit or 12.5% with credit was imposed on articles of jewellery falling under heading 7113 of the First Schedule to the Central Excise Tariff 1985. Subsequent to that, the Government had set up a Sub-Committee of the High Level Committee, headed by Dr. Ashok Lahiri to interact with Trade & Industry on issues relating to procedure and compliance relating to excise duty of articles of jewellery. The Sub-Committee has given its report on 23.06.2016, which has been accepted by the Government.

  1. In the context of computation of exemption and eligibility and exemption limits and other related issues for small scale industries [SSI] exemption under Notification no. 8/2003-CE dated 1st March 2003 and other SSI issues, relating to manufacturers/principal manufacturers of articles of jewellery or parts of articles of jewellery or both, falling under heading 7113 of the Central Excise Tariff Act [hereinafter referred to as articles of jewellery] the Sub-Committee has made certain recommendations, which have been accepted by the Government. Accordingly, notwithstanding anything to the contrary provided in any other circular/instructions, in respect of SSI exemption for manufacturers or principal manufacturers of articles of jewellery the following may be followed scrumptiously,-
  2. Computation of Eligibility and Exemption limits for SSI exemption [Notification no. 8/2003-CE dated 1st March 2003] is to be done individually for each manufacturer or principal manufacturer, irrespective of the number of job workers employed by such manufacturer or principal manufacturer or the number of premises from which his job workers operate.
  3. For computation of Eligibility and Exemption limits for SSI exemption the value of articles of jewellery exported [except those exported to Bhutan] will not be counted.

iii. Similarly, for computation of Eligibility and Exemption limits for SSI exemption the value of traded articles of jewellery [on which appropriate excise duty, including nil duty, has already been paid] will not be included.

  1. Further, in respect of jewellery manufactured out of jewellery or precious stones supplied by the individual retail customer, only the value addition [sum of cost of additional material used and labour charges/making charges charged by the manufacturer or principal manufacturer] shall be taken into consideration for computation of such limits.
  2. Multiple manufacturers or principal manufacturers, operating from the same premises and individually registered under State VAT on or before February 29, 2016, may be allowed separate central excise registrations. However, in such cases the value of clearances of all such manufacturers or principal manufacturers shall be clubbed together for determining the eligibility/exemption limits for the purposes of the small scale industries [SSI] excise duty exemption. Thus, if the clubbed together aggregate value of clearances of all such manufacturers or principal manufacturers during the preceding year is more than Rs. 15 crore then none of such manufacturers or principal manufacturers will be eligible for SSI exemption. Similarly, as and when the clubbed together aggregate value of clearances of such manufacturers or principal manufacturers in a financial year crosses Rs. 10 crore, all such manufacturers or principal manufacturers will be liable to pay excise duty on their clearances thereafter.
  3. Hindi version will follow. Trade Notice/Public Notice may be issued on the above lines.
  4. Difficulties faced, if any, in implementation of this Circular may be brought to the notice of the Board.

F.No.354/25/2016-TRU(Pt.-I)

(Anurag Sehgal)
Under Secretary to the Government of India

7th Pay Commission hikes notified, to bring cheers to 1 crore central govt employees and pensioners : 26-07-2016


Clearing the final hurdle towards payout of the 7th Pay Commission hike in salaries, the government has issued notification giving effect to the panel’s recommendations. The notification was issued on Monday.

The notification comes nearly a month after the Union Cabinet on June 29 cleared the Commission’s recommendation on salary hike.

The 7th Pay Commission hike will result in increase in salaries in the range of Rs 7000 to Rs 18,000 per month.

Starting salary of new government employees will be a minimum Rs 18,000 at the lower levels whereas starting salary for Class-1 officers will be Rs 56,100.

The hike has been determined according to a fitment factor of 2.57 applicable for pay revision of all employees. The rate of annual increment has been retained at 3 per ent.

Arrears, which is to be paid from January 1, 2016, will be credited to the government employees within financial year 2016-17.

The recommendations will benefit nearly 1 crore central government employees. This includes 47 lakh existing employees and 53 lakh pensioners. Out of this, nearly 14 lakh employees and 18 lakh pensioners are from defence forces.

While giving clearance to hike in salariees, the Union Cabinet had also decided set up committee headed by the Finance Secretary to look at the 7th Pay Commission recommendation on allowances. The panel will submit its views within 4 months. Till the time the committee provides its views, government employees will continue to get allowances as per existing levels.

The govermment has estimated that the total burden on the exchequer on account of the 7th Pay Commission recommendation would be Rs 1.02 lakh crore in 2016-17. There will be an additional impact of Rs 12,133 crore on arrears and of salary and pension for two months of 2015-16.

Source : PTI

Modi government notifies pay panel report, babus to get fatter salaries from next month : 26-07-2016


There is pay cheer coming up for central government employees next month. The Modi government on Tuesday notified the 7th Pay Commission report, which means babus will get the new pay boost in their August salaries. According to the notification, new pay for government employees will be effective from January, 2016 and the arrears shall be paid during this financial year.

This means close to 4.8 million central government employees and 5.2 million pensioners will get the increased payout.

Here’s a brief snapshot of what this means for government employees.

1. There will be an overall hike of 23.55 per cent in the basic salary and allowances of government employees.

2. The 23.55 per cent overall hike in salaries, allowances and pension would entail an additional annual burden of Rs 1.02 lakh crore, or nearly 0.7 per cent of the GDP, to the exchequer.

3. Entry level pay will be raised to Rs 18,000 a month from the current Rs 7,000.

4. The maximum pay – which is drawn by the Cabinet Secretary, has been fixed at Rs 2.5 lakh a month, up from the current Rs 90,000.

5. This is the lowest pay hike for government employees, in terms of a pay panel report, in the last 70 years.

6. While the Budget for 2016-17 fiscal did not provide an explicit provision for implementation of the 7th Pay Commission, the government had said the once-in-a-decade pay hike for government employees has been built in as an  interim allocation for different ministries.

7. Experts said the higher payout will boost consumption, especially of consumer durables and services.

Source : Economic Times

Will PM Narendra Modi be India’s most travelled PM ever? : 26-07-2016


In a skosh over two years in office, Prime Minister Narendra Modi has travelled 51 times abroad to 42 countries spanning six continents. Supporters of Modi cite New Delhi’s increasing commitments at multilateral forums as the reason behind his packed foreign tour schedule. Some of Modi’s trips are strategic; his bilateral trips to Sri Lanka, Australia, Nepal, Seychelles, UAE, Canada and Fiji were the first by an Indian PM in several years while those to the US, Pakistan and Central Asia was  to repair or forge better relations with those countries and regions.

The PM no doubt cuts an impressive figure abroad, establishing a close rapport with foreign heads of states, especially US President Barack Obama. Modi is likely to keep up the brisk pace of foreign tours for the rest of his government’s term until May 2019. That could make him the most travelled Indian PM ever. ET takes stock of Modi’s foreign trips so far, his possible trips abroad in the next three years and how he fares compared to his global counterparts and predecessors in India.

Source : Economic Times

Notification No. F No 370133/30/2016-TPL 25-7-2016


Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
*******
New Delhi, Dated 25thJuly, 2016

Subject: Draft Rules for prescribing the manner of determination of amount received by the company in respect of share – section 115QA of the Income-tax Act, 1961-reg.

Under section 115QA of the Income-tax Act, 1961 (the Act), additional Income-tax at the rate of 20 percentis levied on the distributed income arising out of buy back of unlisted share by the company. The distributed income was defined to be the consideration paid by the company on buy back of shares as reduced by the amount which was received by the company for issue of such shares.

2. The Finance Act, 2016 amended the definition of “distributed income”, with effect from 01.06.2016, to mean the consideration paid by the company on buy back of shares as reduced by the amount, which was received by the company for issue of such shares, determined in the manner as may be prescribed.

3. Therefore, the methodology for determination of the amount received by the company under different circumstances in which the shares have been issued, is proposed to be provided through the amendments of the Income-tax Rules, 1962. The draft rules, on which comments and suggestion of stakeholders and general public may be sent electronically by 31stJuly, 2016 at the email address, ustpl1@nic.inin this regard, are as under: 

 “(1) Where the share has been issued by a company on its subscription by any person, the paid up amount actually received by the company in respect of such share including any amount actually received by way of premium shall be the amount received by the company for issue of the share. 

(2) Where the company had at any time, prior to the buy-back of the share, returned any sum out of the amount received in respect of such share the amount as reduced by the sum so returned shall be the amount received by the company for issue of the share. 

(3) Where the share has been issued by a company being an amalgamated company, under a scheme of amalgamation, in lieu of the share or shares of an amalgamating company, then, the amount received by the amalgamating company in respect of such share or shares determined in accordance with this rule, shall be deemed to be the amount received by the amalgamated company in respect of the share so issued by it.

(4) The amount received by a company, being a resulting company in respect of shares issued by it under a scheme of demerger shall be the amount which bears to the amount received by the demerged company in respect of the original shares determined in accordance with this rule the same proportion as the net book value of the assets transferred in a demerger bears to the net worth of the demerged company immediately before such demerger. 

(5) The amount received by the demerged company in respect of the original shares in the demerged company shall be deemed to have been reduced by the amount as so arrived at under sub-rule (4). 

(6) Where the share has been issued or allotted, without any consideration, on the basis of existing shareholding in the company, the consideration in respect of such share shall be deemed to be Nil. 

(7) The amount received by a company in respect of any share issued by it on conversion of bond or debenture, debenture-stock or deposit certificate in any form, issued by it shall be that part of the amount received by the company in respect of the instrument as is so converted. 

(8) In any other case the face value of the share shall be deemed to be the amount received by the company for issue of the share.”

GST Model Law – A mixed bag for Software Sector ? : 25-07-2016


By S Sivakumar, LL.B., FCA, FCS, ACSI, MBA, Advocate

WE are repeatedly told by the Government and its officers that the services sector constitutes about 65% of India’s GDP. A significant part of the services sector is constituted by the software services sector (including ITeS/BPO), which exports services worth a staggering Rs 6,00,000 crores (US$ 90 billion). It would therefore be interesting to discuss the overall impact of the model GST law on the software sector.

Consider these…

The software sector is beset with multiple indirect tax levies on the same transaction value. One very good thing that would happen under the GST is that, this levy of multiple taxes on the software sector would vanish. Under the current indirect tax dispensation, licensing of software licenses and products are subjected to a service tax levy of 15% as well as a VAT levy of 5 to 5.5% depending on the State in which the software player is located. VAT is levied on, the transfer of right to use the software products, what are known as packaged software. In the case of a manufacturer and seller of original software licenses, central excise duty of 12.5% is levied and over and above this, VAT at rates between 5 to 5.5% is levied. Thus, there is a clear case of a double levy on licensing of software products. Under the GST regime, this anomaly would get rectified, as the licensing of software being movable goods would be treated as a ‘supply of goods’.

The software products industry also has this issue of multiple levies, in terms of the software maintenance contracts executed by its players, wherein, service tax is charged on 70% of the maintenance value in terms of Rule 2B of the Service Tax (Determination of Value) Rules, 2006, with VAT being levied on 75% of the maintenance value (in Karnataka) and thus, the tax base for levy of service tax/VAT is a hefty 145%. This anomaly is also likely to be rectified under the GST regime.

Insofar as software service is concerned, only service tax is currently levied @ 15%. The overall output tax rate would increase depending on the GST rate to be finalized. Notwithstanding this the software services sector would be able to avail of the credit of the CGST and IGST paid on purchase of inputs and goods, which is not currently allowed, as software services players are not treated as ‘dealers’ under the VAT laws of the States. In fact, the benefit of availment of credit on inputs would be a big boon to the software services sector inasmuch as these players can take credit on a variety of inputs including computer hardware, furniture, play stations, etc. under the GST regime. Under the current VAT laws of most States, input tax credit is disallowed on items such as furniture, etc. (refer to Fifth Schedule to the Karnataka Value Added Tax Act, 2003.

Insofar as licensing of shrink wrapped software by distributors is concerned, some players are only paying VAT at rates of 5 to 5.5% and in these cases, the GST output rate of around 18% could mean a steep increase in the overall tax rates. Also, the buyers of software licenses who are services providers themselves would tremendously benefit from the GST regime, as they can take credit of the SGST paid on these licenses?. Under the current VAT regime, services providers being not ‘dealers’ are not entitled to avail of credit of the VAT paid on purchase of inputs.

Be that as it may…software exporters could suffer on account of issues concerning refund of the input tax under the GST regime. Under the current dispensation, software exporters (or, for that matter, services exporters) are finding it very difficult to obtain refund of unutilized credits from the service tax department due to bureaucratic hurdles. Under the GST regime, these software exporters would also be required to knock the doors of the State Governments for obtaining refunds of the SGST. Despite that the model law does talk of the release of 80% of the input tax credit claimed on an ad-hoc basis, one is not sure of the success of this scheme, given the rather disappointing response of the service tax department to the similar scheme operating under the current service tax law. To this extent, I would presume that software exporters would suffer from the need to seek refunds from both the Central Government and the State Governments.

If both the Central and the State Governments can find a way of ensuring speedier flow of refunds to the software services under the GST regime, this sector can tremendously benefit, given the fact that a significant portion of the output from this sector is exports and consequently, the higher GST rate would affect this sector to a lesser extent.

As regards input tax credit under the GST regime, it would seem that the software players who are already suffering under the current cenvat credit regime on account of the denial of credit on the so called ‘personal’ expenses or usage of the employees, would continue to suffer under the GST regime, as input tax credit is sought to be denied on the non-business use of inputs/input services under the GST regime, as well.

Of course…. the software sector, like any other sector, would also benefit from the broader input tax credit regime under the GST law, as credit would be available on a wide range of input services, inputs and capital goods, as compared to the current dispensation, wherein, CENVAT credit is disallowed on many input services.

Before concluding…

The software players would need to face the cultural shock of getting themselves registered with the State Government, as under the current dispensation, most software services players are not registered under the VAT law.

Given the need to register themselves in each of the States where they have development centres, the medium and large software exporters would have to seek refunds from the respective states as the concept of a centralized service tax registration would not work under the GST regime.

But, in my view, the benefits flowing out of the abolition of multiple taxes and the availability of input tax credit on inputs would immensely benefit the software sector and if only the Government can find a better mechanism for ensuring speedier flow of refunds, the software sector would have a lot to feel good under the GST regime.

India ranks 110th on Sustainable Development index : 25-07-2016


India has ranked a low 110 out of 149 nations assessed on where they stand with regard to achieving the Sustainable Development Goals, according to a new index which is topped by Sweden and shows all countries face major challenges in achieving these ambitious goals.

The Sustainable Development Solutions Network (SDSN) and the Bertelsmann Stiftung launched a new Sustainable Development Goal Index and Dashboard to provide a report card for tracking Sustainable Development Goals (SDG) progress and ensuring accountability.

The index collected available data for 149 countries to assess where each country stands in 2016 with regard to achieving the SDGs.

It ranks countries based on their performance across the 17 global goals, a set of ambitious objectives across the three dimensions of sustainable development – economic development, social inclusion and environmental sustainability, underpinned by good governance.

The index helps countries identify priorities for early actions and shows that every country faces major challenges in achieving the SDGs.

“The Sustainable Development Goals are stretch goals, but they are within reach if countries work towards them with clarity and determination. The SDG Index and Dashboard can help each country to chart out a practical path for achieving the Goals,” said SDSN Director Jeffrey Sachs.

The countries which are closest to fulfilling the goals are not the biggest economies but comparably small, developed countries.

Sweden tops the chart and is followed by Denmark and Norway on the top three performing countries. Germany (6) and the UK(10) are the only G7 countries to be found among the top ten performers. The US ranks 25th on the index, while Russia and China rank 47th and 76th respectively.

India ranks 110th on the list followed by Lesotho on 113th position, Pakistan (115), Myanmar (117), Bangladesh (118) and Afghanistan (139).

Poor and developing countries understandably score lowest on the SDG Index as they often have comparably little resources at their disposal.

The Central African Republic and Liberia are at the bottom of the Index and still have the longest way to go in achieving the SDGs.

A year after world leaders adopted the SDGs, the new index shows that all countries face major challenges in achieving these ambitious goals by 2030.

No country has achieved the SDGs and even top Sweden scores “red” on several goals. The report shows how leaders can deliver on their promise and urges countries not to lose the momentum for important reforms.

In order to achieve the ambitious goals, immediate and comprehensive action is needed in the crucial first years of implementation of the new global agenda, it noted.

The report highlights major challenges per region: Organisation for Economic Co-operation and Development (OECD) countries struggle to meet the goals on inequality, sustainable consumption, climate change and ecosystems, while many developing countries face major difficulties in providing basic social services and infrastructure access to their populations.

East and South Asia outperform many other developing regions but unmet challenges persist in health and education. For Latin America and the Caribbean, high levels of inequality are among the most pressing issues.

In spite of significant progress in recent years in Sub-Saharan Africa, the world’s poorest region faces major challenges across almost all SDGs, with extreme poverty, hunger and health as major areas where substantial improvement is needed.

Source : PTI

Government set to start talks on merging 13 state oil companies to create behemoth : 25-07-2016


The government is set to start consultations for an ambitious plan to merge 13 state oil firms to create a giant corporation whose revenue dwarfs global energy major Chevron which competes with US conglomerate General Electric in the Fortune-500 ranking.

The Cabinet Secretariat has referred the idea of the integrated giant, which would also absorb various institutions related to safety, development and analysis, to the oil ministry, sources familiar with the development told ET.

Following this, the oil ministry has begun the process of evaluating the prospects of creating the conglomerate, which will have a bigger market value than Russian state oil giant Rosneft and India’s Reliance Industries Ltd, sources said. It plans to consult all stakeholders including the state firms that may be combined to create the mega corporation that will be the country’s No. 1 in turnover, net profit, capital expenditure and market capitalisation, they said.

The oil ministry  declined comment for the story.

A similar proposal was considered more than a decade ago. But the government in July 2005 said that the official committee that studied the matter felt that a merger or formation of the holding company “may not be advisable for the present”.

Oil and Natural Gas Corporation (ONGC), the top oil producer and one of the largest companies in the country, leads the pack of 13 state oil companies that are being considered for the merger. Other companies include Indian Oil Corporation, the nation’s largest refiner and fuel retailer, Bharat Petroleum CorporationBSE 1.72 %, Hindustan Petroleum, GAIL, Mangalore Refinery and Petrochemicals (MRPL), Chennai Petroleum, Numaligarh Refinery and Oil India.

A consolidated entity could rival the likes of Russia’s Rosneft ($55 billion in market cap) and UK’s BP Plc ($112 billion) in market value and financial power.

The top six listed Indian state oil firms have a market value of $77 billion. In 2015-16, all state oil firms together reported a profit of Rs 45,500 crore on a revenue of Rs 9,32,000 crore. In the current fiscal year, they have planned a capital expenditure of Rs 87,600 crore.
The government is also evaluating if the consolidated entity can include all non-corporate government bodies in the oil sector such as Oil Industry Development Board (OIDB), Petroleum Planning and Analysis Cell (PPAC) and Petroleum Conservation Research Association.

A powerful integrated company would have the muscle to consider proposals like a significant stake in Rosneft.

Oil minister Dharmendra Pradhan recently said Indian state firms were considering a stake in the company that pumps more oil than Exxon.

The NDA government under AB Vajpayee and the UPA government in its first term had seriously explored the possibility of merging state oil companies or reorganising them in fewer units to give them heft and efficiency that would help them compete globally.

In 2005, the government had also appointed a panel led by V Krishnamurthy, which advised against merging the state oil firms, arguing the dominance of a mega entity may not be good for competition in an energy-starved economy and that there were several examples of smaller specialist firms doing better. It also argued that globally, less than a third mergers succeeded in enhancing shareholder value mainly due to their inability to manage employees.

The option of cutting jobs  to slash costs mostly undertaken by private players after mergers is not easily available to state firms where lay offs have big political fallouts. And it requires greater political will and smart manoeuvring to offset that. Moreover, the competing interests and ambitions of top leaders and diverse cultures at companies also obstruct a smooth merger.

In the last decade since the merger talks were buried, state oil firms have also changed in character, growing in size and pushing for vertical integration. Refiners like Indian Oil, HPCL and BPCL have acquired several exploration and production assets in India and overseas while ONGC has enhanced presence in refinery and petrochemicals.

Source : Economic Times

90 lakh high-value deals without PAN under I-T scrutiny : 23-07-2016


In a bid to crack down on those concealing their spending, the income tax department has identified 90 lakh high-value transactions where the permanent account number (PAN) was not quoted and has decided to send out seven lakh letters seeking details.

Those whose transactions have been identified will be asked to provide PAN in the first stage. Although the tax department did not spell out the future course of action, these transactions are then expected to be mapped against the  returns filed by the entities and in case any gaps are spotted, notices demanding payment could also be issued in future.

The transactions where PAN were not submitted included cash deposits of Rs 10 lakh or more in savings bank accounts or property transactions of Rs 30 lakh or more and have been sourced from Annual Information Returns filed with the department. The statement came as a sur prise given that the banks as well as property registration authorities have insisted on PAN   for the last few years.

The finance ministry said from the entire data, it has managed to group the transactions into seven lakh “high-risk” clusters, involving 14 lakh transactions, which were being scrutinised. The high-value transaction trails were detected following the department’s drive to bring to book maximum amount of black money during the one-time compliance window closing on September 30. In fact, dealing with non-PAN related information is seen as a crucial element of  expanding the tax base.

The 90 lakh transactions are spread over the period starting 2009-10 and extend up to the current financial year.

The government, however, said that those who get the letters need not rush to the tax office. They can provide the response through an e-filing portal, where they can log in by quoting a Unique Transaction Sequence Number provided in the letter. This will help them easily link their transaction with their PAN easily , the finance ministry said.

Source : The Hindu

Companies face action for not bringing back export proceeds : 23-07-2016


In what is being seen as the most significant step aimed at getting funds stashed overseas back into India, the Special Investigation Team (SIT) on black money has asked the Enforcement Directorate to act against hundreds of companies, which have not transferred export proceeds of Rs 100 crore into the country.

In a statement, the finance ministry said the Supreme Court-appointed panel has asked ED to initiate action as per Foreign Exchange Management Act (FEMA) against 216 companies for the period prior to March and another 572 for the period after March. The Directorate of Revenue Intelligence (DRI) has also been asked to check its database to find out how many companies have claimed duty drawback but have failed to bring export proceeds, and act against them.

Reserve Bank of India rules require all exporters to bring back foreign exchange as export proceeds within a year of exports. “Not bringing export proceeds is a violation of FEMA as it amounts to illicitly parking funds abroad,” the statement said.

Duty drawback is a scheme meant to refund taxes and duties that exporters would have paid.

“It is important for DRI also to have this data so that they could cross check the data and see if any exporter who has not brought in export proceeds has claimed duty drawback or not. The country thus loses on two counts – first by not getting proceeds of exports for exports made and secondly wrongful claim of duty drawback,” the official release said.

The move follows a review by SIT, which had asked RBI to share details of exports, where the proceeds have not been used even after a year. RBI had provided data on export outstanding for shipping bills prior to March, 2014 which have been pending for more than a year as well as data on export outstanding for shipping bills from March, 2014, which have also been pending for over a year.

So far, SIT has largely focused on suggesting systemic changes, many of which have been implemented.
Source : Economic Times

 

Aadhaar enrollment to begin in 10 states left out earlier : 23-07-2016


The home ministry has agreed to allow the Unique Identification Authority of India (UIDAI) to do enrolment for Aadhaar in 10 states where the exercise was being solely done by the Registrar General of India (RGI) so far, including the sensitive border states of Jammu & Kashmir (J&K) and West Bengal.

The move follows the Prime Minister Office’s push to give each of the 128 crore Indians an Aadhaar number by March 2017. Under the UPA, states were geographically divided between RGI and UIDAI for enrolment – UIDAI covered 22 states/UTs while RGI was assigned 14 sensitive border or coastal states/UTs. Last year, the Modi government shifted Uttar Pradesh and Bihar from RGI’s ambit to UIDAI. Now, except Assam and Meghalaya, UIDAI has been allowed to initiate enrolment in all states that RGI was working in.

This means big states like Tamil Nadu, West Bengal, Odisha and Jammu & Kashmir will have UIDAI for enrolments. The Aadhaar saturation in these states stands at 83%, 77%, 76% and 62% respectively, while 16 of the 24 states under UIDAI have 100% saturation.

“The home ministry has permitted UIDAI enrolment in states where RGI was earlier doing it, except Assam and Meghalaya. UIDAI is now working with these state governments to ramp up the enrolment,” UIDAI CEO ABP Pandey confirmed to ET. He added that RGI was not mandated toenroll children of 0-5 years of age and UIDAI will now be enrolling them in RGI states – as many as 9.5crore  children in this age group are still to enroll for Aadhaar across India. Around 103 crore out of the estimated 128 crore people in India at present have an Aadhaar number.

 ”The government is in no mood to wait anymore for RGI to pick up speed in the states assigned to it. Except Assam and Meghalaya, where the NPR exercise is happening on SC orders, UIDAI will now enter all states. The so-called security concerns around UIDAI are unfounded,” a senior government official. Pandey said UIDAI will do a final mopup of enrolments for Aadhaar in these states as well as be in charge of updating data in these 10 states.
Source : Business Line

No. F.No 137/08/2013 Dated: 22-7-2016


GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF REVENUE
CENTRAL BOARD OF EXCISE AND CUSTOMS
SERVICE TAX WING, NEW DELHI

Dated: July 22, 2016

INSTRUCTION

Sub: Permission to pay service tax through non electronic modes.

Rule 6(2) of the Service Tax Rules, 1994 stipulate that while every assissee shall pay service tax electronically through internet banking, the jurisdictional Deputy/Assistant Commissioner, may, for reasons to be recorded in writing, allow the assessee to deposit service tax by any other mode.

2. Inspite of these provision, the Department of Posts have informed that in certain jurisdictions, officers are not allowing them permission to pay by cheque. I am directed to inform you that the Board has taken a serious view of such refusals to exercise discretion, even in deserving cases. The Department of Posts has been refused permission by the Controller General of Accounts to open a current account, which would have enabled electronic payment. Under the circumstances they can make a payment by cheque only. The assessee in question is a Government department and the question of jeopardy to revenue cannot exist, Refusing to give them permission amounts to expecting them to comply with the law while simultaneously preventing them from doing so. The purpose of giving discretion in the law gets defeated.

3. Accordingly whether it is the Department of Posts or any other assessee, it is directed that the discretion vested in the jurisdictional Deputy/Assistant Commissioner under rule 6(2) of the Service Tax Rules, 1994, should be exercised judiciously and rationally. The supervisory officers should, from time to time, check such exercises of discretion so that there are no unwarranted refusals.

F.No. 137/08/2013-Service Tax

(Dr. Gaurav Mittal)
Officer on Special Duty
Service Tax Wing, CBEC

No. F.NO.225/193/2016/ITA.II Dated: 22-7-2016


F.No.225/193/2016/ITA.II
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF REVENUE (CBDT)
NEW DELHI

Dated: July 22, 2016

Subject: Issue of Standard Operating Procedure (‘SOP’) for handling AIR transactions without valid PAN – reg.-

Kindly refer to the above subject. Directorate of Systems has processed non-PAN AIR transactions which resulted in identification of around 7 lakh high risk transaction clusters having around 14 lakh non-PAN AIR transactions. These transactions have been assigned priority rating P1 to P3 (P1 being the highest priority) and each non-PAN AIR transaction has been assigned a unique Transaction Sequence Number (TSN) for monitoring purposes.

2. The data has been mapped to the Pr.CIT based on the pincode to Pr.CIT mapping dictionary. The data relating to each Pr.CIT has been disseminated by Systems Directorate to Pr.CsIT using the reports server. The consolidated file for the Pr.CCIT has also been shared to the CIT (Admn. & TPS).

  1. A new functionality on e-filing portal has been developed wherein the transacting party can own up transactions and provide structured response electronically. The template for letter to be written to the transacting party has also been prepared which is enclosed as Annexure. The letter intends to communicate the details of transactions in the cluster to the transacting party requesting them to submit on-line response.
  2. The non-PAN AIR data may be handled as per the following procedure:
  3. Data file shared by Systems should be downloaded by Pr.CsIT and CIT (Admn. & TPS). Email may be sent to efs.support@incometax.gov.in in case assistance is required in accessing data file.
  4. The letter in P1 cases will be sent centrally by the Systems Directorate. Letters to the transacting parties at priority P2 and P3 may be sent to the enclosed template at the level of Pr.CIT. Letters may be written to the parties in a phased manner (P2 being higher priority) depending on the numbers involved. The CIT (Admn. & TPS) may open and maintain a dedicated email address (e.g. for Pr.CCIT Mumbai - campaign.mumbai@incometax.gov.in,, for Pr.CCIT, Chennai - campaign.chennai@incometax.gov.in) for responding to queries in this regard. This dedicated email should be mentioned in the letter template.
  5. Appropriate briefing for the press and media may be provided to create awareness about the exercise and it should be emphasized that the transacting party will not be required to visit Income tax office but only submit response on the e-filing portal.
  6. This SOP may be brought to the notice of all Pr.CsIT and other field offices for necessary action.

Enclosure: Letter Template

(Rohit Garg)
Deputy Secretary to the Government of India

INCOME TAX DEPARTMENT
______________________
______________________

Non-PAN AIR<LetterID>

Date: __/__/____

To,
__________________
__________________
__________________

Bar Code

Subject: Request for linking of large value transaction(s)to a valid PAN

The income Tax Department has received information about large value transactions relating to you under the Annual information Return (AIR) without a valid PAN. The list of such transactions is provided overleaf.

  1. You are requested to submit the on-line response as under:
  2. Login to e-filing portal at https://incometaxindiaefillng.gov.in. If you are not registered with the e-filing portal, use the ‘Register Yourself link to register.
  3. Click on “Non-PAN Transaction” link under “Quick links” or “Compliance” section and search using the Transaction Sequence Number (TSN) communicated to you.

iii. Confirm that the transaction relates to you. By confirming, the transaction will be linked to your PAN and further details will be visible.

  1. Submit online response and keep acknowledgement for record.
  2. Submission of electronic response will be treated as response to this letter. You are not required to visit Income tax office or send any letter or document in response to this letter. In case you make a mistake in submission of response, you may further revise it by login to e-filing portal.
  3. If no response is electronically submitted within 15 days of receipt of this letter, appropriate proceedings under Income Tax Act, 1961 may be initiated.
  4. You may use Departmental helpline to ask questions or send e-mail for clarifications. Please quote your unique transaction sequence number in any email that you may send. Our toll free helpline number is 1800 180 1961 (Option 5) and email address is __________________________________.
This letter has been electronically generated and requires no physical signature.

List of Transaction(s) reported without a valid PAN

Sl. No. Transaction Sequence Number (TSN) F.Y. Information Code Information Description Amount
1. 1000002223 2009-10 AIR-007 Purchase of Immovable Property <XX,XX,XXX>
2. 1000012123 2009-10 AIR-007 Purchase of Immovable Property <XX,XX,XXX>
3. 1000023567 2010-11 AIR-001 Cash Deposit in Bank Account <XX,XX,XXX>
4. 1000007866 2010-11 AIR-001 Sale of Immovable Property <XX,XX,XXX>

For kind information of all

The Government has opened an Income Declaration Scheme from 1st June 2016 to 30th September 2016, under which any undisclosed income can be declared by payment of tax and penalty. Please refer to the websitehttp://www.incometaxindia.gov.in for details.

Automation hurting IT hiring; 4 predictions by NASSCOM : 22-07-2016


Automation of services and pressure to reach margins has led to a trend of less hiring in the IT sector, according to The National Association of Software and Services Companies (NASSCOM). The hirings in the past 2 years have been dreasing with the figures reaching just two lakh additions last year, while NASSCOM predicted that this year too the fall will continue. New hiring numbers are static or declining, and the pace is decreasing even further, said President R Chandrashekhar. The association predicted that the growth in the IT industry has been uniform across the many sectors, even as Wipro and Infosys have put in dismal numbers for their respective first quarters. Infosys, generally doesn’t put in quarterly figures, had made cuts in its annual earnings forecast from 11.8% – 13.8% to 10% – 11.5%. Wipro too said that the IT sales growth will be less than 1 percent. But NASSCOM believes that its prediction of 10-12 % will stand and there will be no cuts, because only big companies like these cannot determine the future foe the whole IT industry. Meanwhile TCS India’s biggest IT services provider put in growth numbers for net profit at 9.9 %. In short, for the next two years, we are still quite optimistic. Our fundamentals are stronger than others (countries). Inspite of the current global economic situation, there is a fairly strong demand for IT.

Here are a few predictions that NASSCOM has made for the Indian IT industry:

1. “Automation has led to less hiring in the IT industry” 
According to NASSCOM, since the last few years, IT industry has been putting a lot of emphasis on automation that has led to a loss in the number of hires. Priority on automation has made the productivity increase but it has also led to the decrease in the number of people. In our country economic levels are different, hence automation has a different impact than it does in other developed countries. Also Chandrashekhar said that off-shored jobs are still coming to India, which impacts the general hiring.

2. “No need of change in annual forecast even after muted 1st quarter numbers”
IT companies like Wipro and Infosys have dismal first quarter numbers, but NASSCOM sees no reaason to cut IT industry’s annual growth forecast that is 10% to 12%. According to them the growth in companies have been uniformly distributed in all verticals and there has been no change in the demand for IT services. While Wipro in its forecast for second quarter said that there would be a growth of leass than 1% in IT services sales. Although big comanies like these constitute just a part of the big IT industry which includes, other large and small companies and startups.

3. “IT industry can can afford to wait and watch for Donald Trump till elections; no need to panic” 
IT industry might get affected if Donald Trump is elected president. His stance on immigration policies might change the outsourcing rules which can have an impact on India, but NASSCOM president assured that it is not a panic situation as Indian IT industry is of value to the US and as it helps create a lot of jobs, hance the industry can afford to wait till policy changes are made.

4. “Brexit might have long term effects in India” 
According to NASSCOM the effects of Britain exiting the EU can be seen only after the Q2 and Q3 reports of the IT companies. UK will not implement the Article 50 which is a formal mechanism to leave the Europen Union, till late this year. After that it will take some time to actually shift. NASSCOM said that the short term reactions are negative from what has been seen and if the UK currency depreciates in the time to come, the contracts need to be negotiated again, else it might incur losses or the gains might get very low. Apart from that Britain leaving the EU will open up more opportunities for Indian IT industry.

Source : PTI

NDB should focus on creating strong project pipeline: FM Arun Jaitley : 22-07-2016


India has called for the New Development Bank (NDB) — set up by the BRICS countries — to develop a strong pipeline of projects, with focus on cost-effective energy generation, transport projects that reduce regional inequality and promote inclusive growth, and urban infrastructure projects.

“As a top-class financial institution, it (NDB) must develop a strong pipeline of projects and respond in a fast and flexible manner to further the aspirations and interests of its members,” finance minister Arun Jaitley said through a statement at the first board of governors meeting of NDB here.

He could not attend the meeting because of the ongoing Parliament session where the government is pushing for the passage of the goods and services tax (GST) bill.

“True to its nomenclature, the ‘New’ Development Bank has to focus on financing demonstrable projects with innovative approaches and instruments for speedy creation of infrastructure,” Jaitley said.

He said the projects should promote inclusive growth, and enhance the livelihood potential and improve the quality of life of the people.

Jaitley said global economy faces many significant challenges — a modest pick-up in some advanced economies, decline in growth in emerging markets and developing economies, increased financial sector volatility, and, in general, lower global growth. “Brexit has further heightened uncertainty, market volatility and riskaverse behaviour,” he said.

Emerging markets and developing economies (EMDEs) continue to face structural impediments to growth while sluggish global trade and low commodity prices have adversely affected commodityexporting EMDEs by aggravating their corporate and economic vulnerabilities.

“Governments, central banks and regulators have to mitigate the pressure of such vulnerabilities through judicious mix of fiscal, monetary and structural policies,” he said.

Source : Business Standard

India’s GDP growth to expand about 8% in next two years: S&P : 22-07-2016


S&P Global Ratings has said the India story is “pretty solid” and praised the government’s “long game” handling of the economy to push up growth potential while giving attention to immediate issues as well.

Its forecast of 8% growth for the current financial year and the next is, however, contingent on the government taking certain measures, including a “wise choice” to head the Reserve Bank of India, the American ratings agency said. Raghuram Rajan’s three-year term as governor ends on September 4.

“That view (8% growth) is predicated on the steady, ongoing structural reform push including GST (goods and services tax) passage, a good monsoon season this year, and a wise choice to head the Reserve Bank,” S&P said in its latest ‘APAC Economic Snapshots’ report released on Thursday.

S&P has reposed more faith in the domestic economy than both International Monetary Fund and Asian Development Bank. IMF has forecast 7.4% growth for this fiscal as well as the next while ADB expects India to grow 7.4% this year and 7.8% in 2017-18. “The macro and structural stories remain pretty solid. Strong consumption growth continues apace, the external accounts look reasonably resilient post-Brexit, and fiscal policy looks prudent,” the report said.

S&P appreciated the government’s attempts to spur growth. “The authorities also clearly have their eye on the ‘long game’ with reforms to boost growth potential getting at least as much attention as short-term stimulus,” the report said while pointing to inflationary pressures. “Inflation has been drifting higher with global commodity prices,” it said. Chief economic adviser Arvind Subramanian had on Monday also said that India could manage 8% growth. “We are already growing at over 7%. Growth of 8% or more is eminently doable, subject to the international environment being cooperative,” he said .

Source : PTI

Notification [F.NO.01/30/2013 CL-V (PT-I)] Dated: 21-07-2016


NATIONAL COMPANY LAW TRIBUNAL RULES, 2016

NOTIFICATION [F.NO.1/30/2013/CL-V]DATED 21-7-2016

In exercise of the powers conferred by section 469 of the Companies Act, 2013 (18 of 2013), the Central Government hereby makes the following rules, namely;-

Short title and Commencement

1. (1) These rules may be called the National Company Law Tribunal Rules, 2016.

(2) They shall come into force on the date of their publication in the Official Gazette.

PART – I

Definitions, forms and etc.

Definitions

2. In these rules, unless the context otherwise requires,

(1) “Act” means the Companies Act, 2013 (18 of 2013);

(2) “address for service** shall mean the address furnished by a party or his authorised representative at which service of summons, notices or other processes may be effected under these rules;

(3) “advocate” means a person who is entitled to practise as such under the Advocates Act, 1961 (25 of 1961);

(4) “applicant” means a petitioner or an appellant or any other person or entity capable of making an application including an interlocutory application or a petition or an appeal under the Act;

(5) “application” means any application, interlocutory application or proceedings filed under the provisions of the Act, including any transferred application or transferred petition as defined under sub-rule (29) ;

(6) “authorised representative” means a person authorised in writing by a party to present his case before the Tribunal as the representative of such party as provided under section 432 of the Act;

(7) “Bench” means a Bench of the Tribunal constituted under section 419 of the Act and includes Circuit Benches constituted by the President with prior approval of the Central Government to sit at such other geographical locations as may be necessary having regard to requirements;

(8) “Central Registry” means the registry in which all the applications or petitions and documents are received by the Registrar for allocation to the concerned Bench of the Tribunal for disposal;

(9) “certified” means in relation to a copy of a document as hereunder;-

(a) certified as provided in section 76 of the Indian Evidence Act, 1872; or
(b) certified as provided in section 6 of Information Technology Act, 2000; or
(c) certified copy issued by the Registrar of Companies under the Act;
(d) copy of document as may be a downloaded from any online portal prescribed under section 398 of the Act or a photo copy of the original pertaining to any company registered with the Office of the Registrar of Companies of the concerned State duly certified by a legal practitioner or a chartered accountant or a cost accountant or a company secretary;

(10) “certified by Tribunal” means in relation to a copy of a document, certified to be a true copy issued by the Registry or of a Bench of the Tribunal under its hand and seal and as provided in section 76 of the Indian Evidence Act, 1872 (1 of 1872);

(11) “creditor” means any person to whom a debt is owed;

(12) “fee” means the amount payable in pursuance of the provisions of the Act and these rules for any petition or application or interlocutory application or a document or for certified copy of document or order of the Tribunal or such other paper as may be specified in Schedule of Fees to these rules and includes any modifications as may be made thereto or any fee as prescribed for filing of documents to the Tribunal by these rules;

(13) “filer” means an authorised representative of that person or any party to the proceedings who files any document with the Tribunal in relation to a case filed under the Act, or any rules thereunder;

(14) “filed” means filed in the office of the Registry of the Tribunal;

(15) “interlocutory application” means an application in any appeal or original petition on proceeding already instituted in the Tribunal, but not being a proceeding for execution of the order or direction of Tribunal;

(16) “party” means a person who prefers an appeal or application or petition before the Tribunal and includes respondent or any person interested in the said appeal or application or petition including the Registrar of Companies or the Regional Director or Central Government or State Government or official liquidator and any person who has a right under the Act, or the Reserve Bank of India Act 1934 (2 of 1934) to make suggestions or submissions or objections or reply;

(17) “petition” means a petition or an application or an appeal or a complaint in pursuance of which any proceeding is commenced before the Tribunal;

(18) “person interested” means a shareholder, creditor, employee, transferee company and other company concerned in relation to the term or context referred to in the relevant provisions of the Act or any person aggrieved by any order or action of any company or its directors;

(19) “pleadings” means and includes application including interlocutory application, petition, appeal, revision, reply, rejoinder, statement, counter claim, additional statement supplementing the original application and reply statement under these rules and as may be permitted by the Tribunal;

(20) “reference” means a reference within the meaning of rule 88 of these rules;

(21) “Registrar” means Registrar of the Tribunal and includes such other officer of the Tribunal or Bench to whom the powers and functions of the Registrar is delegated;

(22) “Registry** means the Registry of the Tribunal or any of its Benches, as the case may be, which keeps records of the applications and documents relating thereto;

(23) “Reserve Bank** means the Reserve Bank of India and includes its branches and agencies as defined in the Reserve Bank of India Act, 1934 (2 of 1934);

(24) “Sealed** means sealed with the seal of the Tribunal;

(25) “Secretary” means Secretary of the Tribunal and in the absence of Secretary, such other officer of the Tribunal to whom the powers and functions of the Secretary are delegated.

(26) “secured creditor” means a creditor in whose favour a security interest is created;

(27) “security interest” means right, title or interest or a claim to property, created in favour of, or provided for a secured creditor by a transaction which secures payment or performance of an obligation and includes mortgage, charge, hypothecation, assignment and encumbrance or any other agreement or arrangement securing payment or performance of any obligation of any person:

Provided that security interest shall not include a performance guarantee.

(28) “section” means a section of the Act;

(29) “transferred application” or “transferred petition” means any proceeding which has been transferred to the Tribunal from the Company Law Board, the High Court, District Court, Board for Industrial and Financial Reconstruction as provided in clause (a), (c) and (d) of sub-section(1) of section 434 of the Act;

(30) words and expressions used herein and not defined but defined in the Act shall have the respective meanings assigned to them in the Act.

Computation of time period

3. Where a period is prescribed by the Act and these rules or under any other law or is fixed by the Tribunal for doing any act, in computing the time, the day from which the said period is to be reckoned shall be excluded, and if the last day expires on a day when the office of the Tribunal is closed, that day and any succeeding days on which the Tribunal remains closed shall also be excluded.

Forms

4. The forms annexed as Annexure ‘A’ to these rules with such modifications or variations as the circumstances of each case may require shall be used for the purpose mentioned therein and where no form is prescribed to cover a contingency, a form as may be approved by the Registrar, shall be used.

Format of order or direction or rule

5. Every rule, direction, order, summons, warrant or other mandatory process shall be issued in the name of the President and shall be signed by the Registrar or any other officer specifically authorised in that behalf by the President, with the day, month and year of signing and shall be sealed with the seal of the Tribunal.

Official seal of the Tribunal

6. The official seal and emblem of the Tribunal shall be such, as the Central Government may from time to time specify and shall be in the custody of the Registrar.

Custody of the records

7. The Registrar shall have the custody of the records of the Tribunal and no record or document filed in any cause or matter shall be allowed to be taken out of the custody of the Tribunal without the leave of the Tribunal:

Provided that the Registrar may allow any other officer of the Tribunal to remove any official paper or record for administrative purposes from the Tribunal.

Sitting of the Tribunal

8. The Tribunal shall hold its sittings either at its headquarter or at such other place falling within its territorial jurisdiction as it may consider convenient.

Sitting hours

9. The sitting hours of the Tribunal shall ordinarily be from 10:30 AM to 1:00 PM and 2:00 P.M. to 4:30 PM, subject to any order made by the President.

Working hours

10. (1) Except on Saturdays, Sundays and other National Holiday, the office of the Tribunal shall remain open on all working days from 09.30 A.M. to 6.00 P.M.

(2) The Filing Counter of the Registry shall be open on all working days from 10.30 AM to 5.00 P.M.

Inherent Powers

11. Nothing in these rules shall be deemed to limit or otherwise affect the inherent powers of the Tribunal to make such orders as may be necessary for meeting the ends of justice or to prevent abuse of the process of the Tribunal.

Calendar

12. The calendar of days of working of Tribunal in a year shall be as decided by the President of the Tribunal.

Listing of cases

13. An urgent matter filed before 12 noon shall be listed before the Tribunal on the following working day, if it is complete in all respects as provided in these rules and in exceptional cases, it may be received after 12 noon but before 3.00 P.M. for listing on the following day, with the specific permission of the Bench.

Power to exempt

14. The Tribunal may on sufficient cause being shown, exempt the parties from compliance with any requirement of these rules and may give such directions in matters of practice and procedure, as it may consider just and expedient on the application moved in this behalf to render substantial justice.

Power to extend time

15. The Tribunal may extend the time appointed by these rules or fixed by any order, for doing any act or taking any proceeding, upon such terms, if any, as the justice of the case may require, and any enlargement may be ordered, although the application therefore is not made until after the expiration of the time appointed or allowed.

PART-II

Power and functions of President, Registrar and Secretary

Functions of the President

16. In addition to the general powers provided in the Act and in these rules the President shall exercise the following powers, namely:-

(a) preside over the consideration of cases by the Tribunal;
(b) direct the Registry in the performance of its functions;
(c) prepare an annual report on the activities of the Tribunal;
(d) transfer any case from one Bench to other Bench when the circumstances so warrant;
(e) to withdraw the work or case from the court of a member.
(f) perform the functions entrusted to the President under these rules and such other powers as my be relevant to carry out his duties as head of the Tribunal while exercising the general superintendence and control over the administrative functions of the Members, Registrar, Secretary and other staff of the Tribunal.

Functions of the Registrar

17. (1) The Registrar shall have the following functions, namely:-

(a) registration of appeals, petitions and applications;
(b) receive applications for amendment of appeal or the petition or application or subsequent proceedings.
(c) receive applications for fresh summons or notices and regarding services thereof;
(d) receive applications for fresh summons or notices and for short date summons and notices;
(e) receive applications for substituted service of summons or notices;
(f) receive applications for seeking orders concerning the admission and inspection of documents;
(g) transmission of a direction or order to the civil court as directed by Tribunal with the prescribed certificates for execution etc., and
(h) such other incidental or matters as the President may direct from time to time.

(2) All adjournments shall normally be sought before the concerned Bench in court and in extraordinary circumstances, the Registrar may, if so directed by the Tribunal in chambers, at any time adjourn any matter and lay the same before the Tribunal in chambers.

Functions of the Secretary

18. (1) There shall be a Secretary at the Principal Bench of the Tribunal, New Delhi.

(2) The Secretary shall, under the general superintendence and control of the President, discharge such duties, functions and exercise such powers as are prescribed under these rules and as assigned by the President from time to time.

(3) Secretary shall -

(a) be in charge of the long term projects and initiatives of the Tribunal;
(b) supervise the divisions and sections of the Human Resources;
(c) prepare, monitor and manage budgetary allocations and financial managements of the Tribunal and the Benches;
(d) provide all necessary support in the day to day operations of the Tribunal;
(e) manage and supervise the facilities and administrative services of the Tribunal;
(f) manage and administer the public grievances mechanism of the Tribunal;
(g) coordinate with authorised representatives and other professionals in the smooth functioning of the Tribunal;
(h) oversee information and communication technology and other technological facilities in the Tribunal;
(i) manage and facilitate communication and services of the Tribunal;
(j) manage, monitor and administer the public affairs and public safety provisions within the premises of the Tribunal; and
(k) supervise library and research wings of the Tribunal.

Delegation of powers by the President

19. The President may assign or delegate to any suitable officer all or some of the functions required by these rules to be exercised by the Registrar.

PART-III

Institution of proceedings, petition, appeals etc.

20. Procedure.-(1) Every appeal or petition or application or caveat petition or objection or counter presented to the Tribunal shall be in English and in case it is in some other Indian language, it shall be accompanied by a copy translated in English and shall be fairly and legibly type written, lithographed or printed in double spacing on one side of standard petition paper with an inner margin of about four centimeter width on top and with a right margin of 2.5. cm, and left margin of 5 cm, duly paginated, indexed and stitched together in paper book form;

(2) The cause title shall state “Before the National Company Law Tribunal” and shall specify the Bench to which it is presented and also set out the proceedings or order of the authority against which it is preferred.

(3) Appeal or petition or application or counter or objections shall be divided into paragraphs and shall be numbered consecutively and each paragraph shall contain as nearly as may be, a separate fact or allegation or point.

(4) Where Saka or other dates are used, corresponding dates of Gregorian Calendar shall also be given.

(5) Full name, parentage, age, description of each party and address and in case a party sues or being sued in a representative character, shall also be set out at the beginning of the appeal or petition or application and need not be repeated in the subsequent proceedings in the same appeal or petition or application.

(6) The names of parties shall be numbered consecutively and a separate line should be allotted to the name and description of each party.

(7) These numbers shall not be changed and in the event of the death of a party during the pendency of the appeal or petition or matter, his legal heirs or representative, as the case may be, if more than one shall be shown by sub-numbers.

(8) Where fresh parties are brought in, they may be numbered consecutively in the particular category, in which they are brought in.

(9) Every proceeding shall state immediately after the cause title the provision of law under which it is preferred.

Particulars to be set out in the address for service

21. The address for service of summons shall be filed with every appeal or petition or application or caveat on behalf of a party and shall as far as possible contain the following items namely:-

(a) the name of the road, street, lane and Municipal Division or Ward, Municipal Door and other number of the house;
(b) the name of the town or village;
(c) the post office, postal district and PIN Code, and
(d) any other particulars necessary to locate and identify the addressee such as fax number, mobile number, valid e-mail address, if any.

Initialling alteration

22. Every interlineations, eraser or correction or deletion in any appeal or petition or application or document shall be initialled by the party or his authorised representative presenting it.

Presentation of petition or appeal

23. (1) Every petition, application, caveat, interlocutory application, documents and appeal shall be presented in triplicate by the appellant or applicant or petitioner or respondent, as the case may be, in person or by his duly authorised representative or by an advocate duly appointed in this behalf in the prescribed form with stipulated fee at the filing counter and non-compliance of this may constitute a valid ground to refuse to entertain the same.

(2) Every petition or application or appeal may be accompanied by documents duly certified by the authorised representative or advocate filing the petition or application or appeal duly verified from the originals.

(3) All the documents filed in the Tribunal shall be accompanied by an index in triplicate containing their details and the amount of fee paid thereon.

(4) Sufficient number of copies of the appeal or petition or application shall also be filed for service on the opposite party as prescribed under these rules.

(5) In the pending matters, all applications shall be presented after serving copies thereof in advance on the opposite side or his authorised representative.

(6) The processing fee prescribed by these rules, with required number of envelopes of sufficient size and notice forms shall be filled alongwith memorandum of appeal.

Number of copies to be filed

24. The appellant or petitioner or applicant or respondent shall file three authenticated copies of appeal or petition or application or counter or objections, as the case may be, and shall deliver one copy to each of the opposite party.

Lodging of caveat

25. (1) Any person may lodge a caveat in triplicate in any appeal or petition or application that may be instituted before this Tribunal by paying the prescribed fee after forwarding a copy by registered post or serving the same on the expected petitioner or appellant and the caveat shall be in the form prescribed and contain such details and particulars or orders or directions, details of authority against whose orders or directions the appeal or petition or application is being instituted by the expected appellant or petitioner or applicant which full address for service on other side, so that the appeal or petition or application could be served before the appeal or petition or interim application is taken up:

Provided, that the Tribunal may pass interim orders in case of urgency.

(2) The caveat shall remain valid for a period of ninety days from the date of its filing.

Endorsement and Verification

26. (1) At the foot of every petition or appeal or pleading there shall appear the name and signature of the authorised representative.

(2) Every petition or appeal shall be signed and verified by the party concerned in the manner provided by these rules.

Translation of document

27.(1) A document other than English language intended to be used in any proceeding before the Tribunal shall be received by the Registry accompanied by a copy in English, which is agreed to by both the parties or certified to be a true translated copy by authorised representative engaged on behalf of parties in the case or by any other advocate or authorised representative whether engaged in the case or not or if the advocate or authorised representative engaged in the case authenticates such certificate or prepared by a translator approved for the purpose by the Registrar on payment of such charges as he may order.

(2) Appeal or petition or other proceeding shall not be set down for hearing until and unless all parties confirm that all the documents filed on which they intend to rely are in English or have been translated into English and required number of copies are filed into Tribunal.

Endorsement and scrutiny of petition or appeal or document.-

28. (1)The person in charge of the filing-counter shall immediately on receipt of petition or appeal or application or document affix the date stamp of Tribunal thereon and also on the additional copies of the index and return the acknowledgement to the party and he shall also affix his initials on the stamp affixed on the first page of the copies and enter the particulars of all such documents in the register after daily filing and assign a diary number which shall be entered below the date stamp and thereafter cause it to be sent for scrutiny.

(2) If, on scrutiny, the appeal or petition or application or document is found to be defective, such document shall, after notice to the party, be returned for compliance and if there is a failure to comply within seven days from the date of return, the same shall be placed before the Registrar who may pass appropriate orders.

(3) The Registrar may for sufficient cause return the said document for rectification or amendment to the party filing the same, and for this purpose may allow to the party concerned such reasonable time as he may consider necessary or extend the time for compliance.

(4) Where the party fails to take any step for the removal of the defect within the time fixed for the same, the Registrar may, for reasons to be recorded in writing, decline to register the pleading or document.

Registration of proceedings admitted

29. On admission of appeal or petition or caveat or application, the same shall be numbered and registered in the appropriate register maintained in this behalf and its number shall be entered therein.

Calling for records

30. On the admission of appeal or petition or application the Registrar shall, if so directed by the Tribunal, call for the records relating to the proceedings from any adjudicating authority and retransmit the same.

Production of authorisation for and on behalf of an association.-

31. Where an appeal or application or petition or other proceeding purported to be instituted by or on behalf of an association, the person or persons who sign (s) or verify (ies) the same shall produce along with such application, for verification by the Registry, a true copy of the resolution of the association empowering such person(s) to do so:

Provided that the Registrar may at any time call upon the party to produce such further materials as he deems fit for satisfying himself about due authorization:

Provided further that it shall set out the list of members for whose benefit the proceedings are instituted.

Interlocutory applications

32. Every Interlocutory application for stay, direction, condonation of delay, exemption from production of copy of order appealed against or extension of time prayed for in pending matters shall be in prescribed form and the requirements prescribed in that behalf shall be complied with by the applicant, besides filing an affidavit supporting the application.

Procedure on production of defaced, torn or damaged documents.

33. When a document produced along with any pleading appears to be defaced, torn, or in any way damaged or otherwise its condition or appearance requires special notice, a mention regarding its condition and appearance shall be made by the party producing the same in the Index of such a pleading and the same shall be verified and initialed by the officer authorized to receive the same.

PART- IV

General procedure

General Procedure

34. (1) In a situation not provided for in these rules, the Tribunal may, for reasons to be recorded in writing, determine the procedure in a particular case in accordance with the principles of natural justice.

(2) The general heading in all proceedings before the Tribunal, in all advertisements and notices shall be in Form No. NCLT. 4.

(3) Every petition or application or reference shall be filed in form as provided in Form No. NCLT. 1 with attachments thereto accompanied by Form No. NCLT.2 and in case of an interlocutory application, the same shall be filed in Form No. NCLT. 1 accompanied by such attachments thereto along with Form No. NCLT. 3.

(4) Every petition or application including interlocutory application shall be verified by an affidavit in Form No. NCLT.6. Notice to be issued by the Tribunal to the opposite party shall be in Form NCLT-5.

Advertisement detailing petition

35. (1) Where any application, petition or reference is required to be advertised, it shall, unless the Tribunal otherwise orders, or these rules otherwise provide, be advertised in Form NCLT-3A, not less than fourteen days before the date fixed for hearing, at least once in a vernacular newspaper in the principal vernacular language of the district in which the registered office of the company is situate, and at least once in English language in an English newspaper circulating in that district.

(2) Every such advertisement shall state;-

(a) the date on which the application, petition or reference was presented;
(b) the name and address of the applicant, petitioner and his authorised representative, if any;
(c) the nature and substance of application, petition or reference;
(d) the date fixed for hearing;
(e) a statement to the effect that any person whose interest is likely to be affected by the proposed petition or who intends either to oppose or support the petition or reference at the hearing shall send a notice of his intention to the concerned Bench and the petitioner or his authorised representative, if any, indicating the nature of interest and grounds of opposition so as to reach him not later than two days previous to the day fixed for hearing.

(3) Where the advertisement is being given by the company, then the same may also be placed on the website of the company, if any.

(4) An affidavit shall be filed to the Tribunal, not less than three days before the date fixed for hearing, stating whether the petition has been advertised in accordance with this rule and whether the notices, if any, have been duly served upon the persons required to be served:

Provided that the affidavit shall be accompanied with such proof of advertisement or of the service, as may be available.

(5) Where the requirements of this rule or the direction of the Tribunal, as regards the advertisement and service of petition, are not complied with, the Tribunal may either dismiss the petition or give such further directions as it thinks fit.

(6) The Tribunal may, if it thinks fit, and upon an application being made by the party, may dispense with any advertisement required to be published under this rule.

Maintenance of Cash Register

36. (1) If any payment has been received by way of Indian postal orders or demand drafts or in cash by the Registry, the transaction shall be entered immediately by the Registration Clerk on their receipt side in a Cash Register kept for the purpose.

(2) On every next working day or the last working day of the week, the payments received during such day or week by way of Indian postal orders or demand drafts shall be transmitted by the Registration Clerk to the concerned official vested with the work pertaining to the Cashier who after scrutiny and verification shall acknowledge the receipt of all moneys in the Cash Register.

(3) The official referred to in sub-rule (2) shall deposit all payments received by way of Indian postal order or demand draft or cash in the Bank account of the Tribunal.

Notice to Opposite Party

37. (1) The Tribunal shall issue notice to the respondent to show cause against the application or petition on a date of hearing to be specified in the Notice. Such notice in Form No. NCLT.5 shall be accompanied by a copy of the application with supporting documents.

(2) If the respondent does not appear on the date specified in the notice in Form No. NCLT.5, the Tribunal, after according reasonable opportunity to the respondent, shall forthwith proceed ex-parte to dispose of the application.

(3) If the respondent contests to the notice received under sub-rule (1), it may, either in person or through an authorised representative, file a reply accompanied with an affidavit and along with copies of such documents on which it relies, with an advance service to the petitioner or applicant, to the Registry before the date of hearing and such reply and copies of documents shall form part of the record.

Service of Notices and processes

38. (1) Any notice or process to be issued by the Tribunal may be served by post or at the e-mail address as provided in the petition or application or in the reply;

(2) The notice or process if to be served physically may be served in any one of the following modes as may be directed by the Tribunal; -

(a) by hand delivery through a process server or respective authorised representative;
(b) by registered post or speed post with acknowledgment due; or
(c) service by the party himself.

(3) Where a notice issued by the Tribunal is served by the party himself by hand delivery, he shall file with the Registrar or such other person duly authorised by the Registrar in this behalf, the acknowledgment together with an affidavit of service and in case of service by registered post or by speed post, file with the Registrar, or such other person duly authorised by the Registrar in this behalf, an affidavit of service of notice alongwith the proof of delivery.

(4) Notwithstanding anything contained in sub-rules (1) and (2), the Tribunal may after taking into account the number of respondents and their place of residence or work or service could not be effected in any manner and other circumstances, direct that notice of the petition or application shall be served upon the respondents in any other manner, including any manner of substituted service, as it appears to the Tribunal just and convenient.

(5) A notice or process may also be served on an authorised representative of the applicant or the respondent, as the case may be, in any proceeding or on any person authorised to accept a notice or a process, and such service on the authorised representative shall be deemed to be a proper service.

(6) Where the Tribunal directs a service under sub-rule (4), such amount of charges, as may be determined by the Tribunal from time to time, but not exceeding the actual charges incurred in effecting the service, shall be deposited with the registry of the Tribunal by the petitioner or applicant.

Production of Evidence by Affidavit

39. (1) The Tribunal may direct the parties to give evidence, if any, by affidavit.

(2) Notwithstanding anything contained in sub-rule (1), where the Tribunal considers it necessary in the interest of natural justice, it may order cross-examination of any deponent on the points of conflict either through information and communication technology facilities such as video conferencing or otherwise as may be decided by the Tribunal, on an application moved by any party.

(3) Every affidavit to be filed before the Tribunal shall be in Form No. NCLT.7.

Production of additional evidence before the Bench.

40. (1) Notwithstanding anything contained in rule 39, the parties to the proceedings shall not be entitled to produce before the Bench additional evidence, either oral or documentary, which was in the possession or knowledge but was not produced before the Inspector, appointed by the Central Government for the purpose of investigating the affairs of the concerned company, during investigation under Chapter XIV of the Act, but if the Bench requires any additional evidence or document to be produced or any witness to be examined or any affidavit to be filed to enable it to pass orders or for any other substantial cause, or if the Inspector so appointed for the said purpose has not given sufficient opportunity to the party to adduce evidence, the Bench, for reasons to be recorded, may allow such document to be produced or witness to be examined or affidavit to be filed or may allow such evidence to be produced.

(2) Such document may be produced or such witness examined or such evidence adduced either before the Bench or before such authority as the Bench may direct.

(3) If the document is directed to be produced or witness examined or evidence adduced before any authority, the party shall comply with the direction of the Bench and after compliance, send the document, the record of the deposition of the witness or the record of the evidence adduced, to the Bench.

(4) Additional evidence or document shall be made available by the Bench to the parties to the proceedings other than the party adducing the evidence and they shall be afforded an opportunity to rebut the contents of the said additional evidence.

Filing of Reply and other Documents by the Respondents

41. (1) Each respondent may File his reply to the petition or the application and copies of the documents, either in person or through an authorised representative, with the registry as specified by the Tribunal.

(2) A copy of the reply or the application and the copies of other documents shall be forthwith served on the applicant by the respondent.

(3) To the reply or documents filed under sub-rule (1), the respondent shall specifically admit, deny or rebut the facts stated by the applicant in his petition or application and state such additional facts as may be found necessary in his reply.

Filing of Rejoinder

42. Where the respondent states such additional facts as may be necessary for the just decision of the case, the Bench may allow the petitioner to file a rejoinder to the reply filed by the respondent, with an advance copy to be served upon the respondent.

Power of the Bench to call for further information or evidence. -

43. (1) The Bench may, before passing orders on the petition or application, require the parties or any one or more of them, to produce such further documentary or other evidence as it may consider necessary:-

(a) for the purpose of satisfying itself as to the truth of the allegations made in the petition or application; or
(b) for ascertaining any information which, in the opinion of the Bench, is necessary for the purpose of enabling it to pass orders in the petition or application.

(2) Without prejudice to sub-rule (1), the Bench may, for the purpose of inquiry or investigation, as the case may be, admit such documentary and other mode of recordings in electronic form including e-mails, books of accounts, book or paper, written communications, statements, contracts, electronic certificates and such other similar mode of transactions as may legally be permitted to take into account of those as admissible as evidence under the relevant laws.

(3) Where any party preferring or contesting a petition of oppression and mismanagement raises the issue of forgery or fabrication of any statutory records, then it shall be at liberty to move an appropriate application for forensic examination and the Bench hearing the matter may, for reasons to be recorded, either allow the application and send the disputed records for opinion of Central Forensic Science Laboratory at the cost of the party alleging fabrication of records, or dismiss such application.

Hearing of petition or applications

44. (1) The Tribunal shall notify to the parties the date and place of hearing of the petition or application in such manner as the President or a Member may, by general or special order, direct.

(2) Where at any stage prior to the hearing of the petition or application, the applicant desires to withdraw his petition or application, he shall make an application to that effect to the Tribunal, and the Tribunal on hearing the applicant and if necessary, such other party arrayed as opposite parties in the petition or the application or otherwise, may permit such withdrawal upon imposing such costs as it may deem fit and proper for the Tribunal in the interests of the justice.

Rights of a party to appear before the Tribunal

45. (1) Every party may appear before a Tribunal in person or through an authorised representative, duly authorised in writing in this behalf.

(2) The authorised representative shall make an appearance through the filing of Vakalatnama or Memorandum of Appearance in Form No. NCLT. 12 representing the respective parties to the proceedings.

(3) The Central Government, the Regional Director or the Registrar of Companies or Official Liquidator may authorise an officer or an Advocate to represent in the proceedings before the Tribunal.

(4) The officer authorised by the Central Government or the Regional Director or the Registrar of Companies or the Official Liquidator shall be an officer not below the rank of Junior Time Scale or company prosecutor.

(5) During any proceedings before the Tribunal, it may for the purpose of its knowledge, call upon the Registrar of Companies to submit information on the affairs of the company on the basis of information available in the MCA21 portal. Reasons for such directions shall be recorded in writing.

(6) There shall be no audio or video recording of the Bench proceedings by the parties or their authorised representatives.

Registration of authorised representative’s interns

46. (1) No intern employed by an authorised representative shall act as such before the Tribunal or be permitted to have access to the records and obtain copies of the orders of a Bench of the Tribunal in which the authorised representative ordinarily appears, unless his name is entered in the register of interns maintained by the Bench.

(2) An authorised representative desirous of registering his intern shall make a petition or an application to the Registrar in Form NCLT 10 and on such application being allowed by the Registrar, his name shall be entered in the register of interns.

Oath to the witness

47. The Bench Officer or the Court Officer, as the case may be, shall administer the following oath to a witness:-

“I do swear in the name of God / solemnly affirm that what I shall state shall be the truth and nothing but the truth. *

Consequence of non-appearance of applicant

48. (1) Where on the date fixed for hearing of the petition or application or on any other date to which such hearing may be adjourned, the applicant does not appear when the petition or the application is called for hearing, the Tribunal may, in its discretion, either dismiss the application for default or hear and decide it on merit.

(2) Where the petition or application has been dismissed for default and the applicant files an application within thirty days from the date of dismissal and satisfies the Tribunal that there was sufficient cause for his non-appearance when the petition or the application was called for hearing, the Tribunal shall make an order restoring the same:

Provided that where the case was disposed of on merits the decision shall not be re-opened.

Ex-parte Hearing and disposal

49. (1) Where on the date fixed for hearing the petition or application or on any other date to which such hearing may be adjourned, the applicant appears and the respondent does not appear when the petition or the application is called for hearing, the Tribunal may adjourn the hearing or hear and decide the petition or the application ex-parte.

(2) Where a petition or an application has been heard ex-parte against a respondent or respondents, such respondent or respondents may apply to the Tribunal for an order to set it aside and if such respondent or respondents satisfies the Tribunal that the notice was not duly served, or that he or they were prevented by any sufficient cause from appearing (when the petition or the application was called) for hearing, the Tribunal may make an order setting aside the ex-parte hearing as against him or them upon such terms as it thinks fit.

Provided that where the ex-parte hearing of the petition or application is of such nature that it cannot be set aside as against one respondent only, it may be set aside as against all or any of the other respondents also.

Registry to send certified copy

50. The Registry shall send a certified copy of final order passed to the parties concerned free of cost and the certified copies may be made available with cost as per Schedule of fees, in all other cases.

Power to regulate the procedure

51. The Tribunal may regulate its own procedure in accordance with the rules of natural justice and equity, for the purpose of discharging its functions under the Act.

Summoning of witnesses and recording Evidence

52. (1) If a petition or an application is presented by any party to the proceedings for summoning of witnesses, the Tribunal shall issue summons for the appearance of such witnesses unless it considers that their appearance is not necessary for the just decision of the case.

(2) Where summons are issued by the Tribunal under sub-rule (1) to any witness to give evidence or to produce any document, the person so summoned shall be entitled to such travelling and daily allowance sufficient to defray the travelling and other expenses as may be determined by the Registrar which shall be deposited by the party as decided by the Registrar.

Substitution of legal representatives

53. (1) Where a party to a proceeding pending before a Bench dies or is adjudged insolvent or, in the case of a company, being wound up, the proceeding shall not abate and may be continued by or against the executor, administrator or other legal representative of the parties or by or against the assignee, receiver or liquidator, as the case may be.

(2) In the case of death of a party during the pendency of the proceedings before the Tribunal, the legal representative of the deceased party may apply within ninety days of the date of such death for being brought on record.

(3) Where no petition or application is received from the legal representatives within the period specified in sub-rule (2), the proceedings shall abate:

Provided that for good and sufficient reasons shown, the Tribunal may allow substitution of the legal representatives of the deceased at any time before disposing the petition on merits.

Assessors or valuers

54. (1) In any enquiry into a claim, the Tribunal may call in the aid of assessor or valuer, not exceeding two in number, who possess any technical or special knowledge with respect to any matter before the Tribunal for the purpose of assisting the Tribunal.

(2) An assessor or valuer shall perform such functions as the Tribunal may direct.

(3) The remuneration, if any, to be paid to an assessor or valuer shall in every case be determined by the Tribunal and be paid by it in the manner as may be specified by the Tribunal.

Pleadings before the Tribunal

55. No pleadings, subsequent to the reply, shall be presented except by the leave of the Tribunal upon such terms as the Tribunal may think fit.

Application for execution

56. For execution of order passed by the Tribunal, the holder of an order shall make an application to the Tribunal in Form NCLT.8.

Issue of process of execution

57. (1) On receipt of an application under rule 56 the Tribunal shall issue a process for execution of its order in such Form as provided in the Code of Civil Procedure, 1908 (5 of 1908).

(2) The Tribunal shall consider objection, if any, raised by the respondent and make such order as it may deem fit and shall issue attachment or recovery warrant in such form as provided in the Code of Civil Procedure, 1908 (5 of 1908), as the case may be.

Effect of non-compliance

58. Failure to comply with any requirement of these rules shall not invalidate any proceeding, merely by reason of such failure, unless the Tribunal is of the view that such failure has resulted in miscarriage of justice.

59. Procedure for imposition of penalty under the Act.- (1)

Notwithstanding anything to the contrary contained in any rules or regulations framed under the Act, no order or direction imposing a penalty under the Act shall be made unless the person or the company or a party to the proceeding, during proceedings of the Bench, has been given a show cause notice and reasonable opportunity to represent his or her or its case before the Bench or any officer authorised in this behalf.

(2) In case the Bench decides to issue show cause notice to any person or company or a party to the proceedings, as the case may be, under sub-rule (1), the Registrar shall issue a show cause notice giving not less than fifteen days asking for submission of the explanation in writing within the period stipulated in the notice.

(3) The Bench shall, on receipt of the explanation, and after oral hearing if granted, proceed to decide the matter of imposition of penalty on the facts and circumstances of the case.

PART-V

Issuance of Orders and Disposal of Cases

Matters relating to the Judgments or Orders of the Tribunal

60. (1) Once the final text of the judgment has been approved and adopted, the judgment shall be signed and dated by the President or the concerned Members or Member and the Registrar, and shall contain the names of the Members who have taken part in the decision.

(2) Any Member differing as to the grounds upon which the judgment was based or some of its conclusions, or dissenting from the judgment, may append a separate or dissenting opinion.

(3) In case the members who have heard the case are equally divided in passing the order or judgment, then the President shall constitute a Bench as referred in sub-section (5) of section 419 of the Act.

Amicus Curiae

61. (1) The Tribunal may, as its discretion, permit any person or persons, including the professionals and professional bodies to render or to communicate views to the Tribunal as amicus curiae on any point or points or legal issues as the case may be as assigned to such amicus curiae.

(2) The Tribunal may permit amicus curiae to have access to the pleadings of the parties and the Tribunal shall enable the parties to submit timely observations on brief provided by the amicus curiae.

(3) The Tribunal shall be at liberty to direct either of the parties or both the parties to the proceedings involving a point on which the opinion of the amicus curiae has been sought, to bear such expenses or fee as may be ordered by the Tribunal.

(4) The judgment and any appended opinions shall be transmitted to the parties and to amicus curiae.

Recusal

62. (1) For the purpose of maintaining the high standards and integrity of the Tribunal, the President or a Member of the Tribunal shall recuse himself: -

(a) in any cases involving persons with whom the President or the Member has or had a personal, familial or professional relationship;
(b) in any cases concerning which the President or the Member has previously been called upon in another capacity, including as advisor, representative, expert or witness; or
(c) if there exists other circumstances such as to make the President or the Member’s participation seem inappropriate

(2) The President or any Member recusing himself may record reasons for recusal:

Provided that no party to the proceedings or any other person shall have a right to know the reasons for recusal by the President or the Member in the case.

PART-VI

Other Procedures

63. Presentation and scrutiny of petitions or applications.- In case of the scrutiny of the petitions or applications as provided in Part III and elsewhere in these rules, if any person is aggrieved of the decision of the Registrar or such other officer officiating as the Registrar of the Benches, an appeal against the order of the Registrar shall be made within fifteen days of the making of such order to the President of the Principal Bench and at other places to any Member of the Bench designated by the President, and whose decision thereon shall be final.

PART- VII

Procedures in respect of matters earlier dealt by other quasi-judicial bodies, courts and tribunals

Matter earlier dealt by Company Law Board

64. (1) Notwithstanding anything contained in any other law for the time being in force, an original civil action or case arising out of the Act, or any other corresponding provision of the Companies Act, 1956 or Reserve Bank of India Act, 1934 is filed or pending before the Company Law Board on the date on which the Tribunal is constituted, and the relevant provisions of the Act dealing with the Tribunal have been given effect, or the Company Law Board has been dissolved in pursuance of the provisions of the Act, then all the cases on such date pending with the Company Law Board or such Benches shall stand transferred to the respective Benches of the Tribunal exercising corresponding territorial jurisdiction as if the case had been originally filed in the Tribunal or its Bench to which it is transferred on the date upon which it was actually filed in the Company Law Board or its Bench from which it was transferred:

Provided that the Tribunal shall consider any action taken under the regulations of the Company Law Board as deemed to have been taken or done under the corresponding provisions of these rules and the provisions of the Act, and shall thereupon continue the proceedings, except in a case where the order is reserved by the Company Law Board or its Bench and in such a case, the Tribunal shall reopen the matter and rehear the case as if the hearing had not taken place:

Provided further that the Tribunal is at liberty to call upon the parties in a case to produce further evidence or such other information or document or paper or adduce or record further depositions or evidence as may deem fit and proper in the interest of justice.

(2) It shall be lawful for the President or such Member to whom the powers are so delegated, to provide that matters falling under all other sections of the Act, shall be dealt with by such Benches consisting of one or more members as may be constituted in exercising of such power as enshrined in the Act:

Provided that matters pending before the Principal Bench of the Company Law Board as on the date of constitution of Tribunal shall continue and be disposed of by a bench consisting of not less than two Members of the Tribunal having territorial jurisdiction.

(3) It shall be lawful for the Tribunal to dispose of any case transferred to it wherever the Tribunal decides that further continuance of such application or petition transferred before the Tribunal shall be an unnecessary proceeding on account of changes which have taken place in the Act either upon an application filed by either of the parties to the proceedings or suo motu.

(4) A fresh petition or an application may also be filed in Form NCLT 1 corresponding to those provisions of the Act, if both the parties thereto so consent with the approval of the Tribunal while withdrawing the proceedings as already continued before the Company Law Board and serve a copy of the petition on the parties thereto including the Central Government, Regional Director, Registrar of Companies, Official Liquidator or Serious Fraud Investigation Office, as the case may be, as provided in the Act, in the manner as provided under Part III.

(5) Upon an application to the Tribunal if the permission is granted to file a petition or an application in physical form, then the same shall be filed accompanied with the documents or papers to be attached thereto as required to prove the case subject to the provisions of the Act, and rules hereto.

(6) The same procedure shall also apply to other parties to application or petition for filing reply or counter thereto.

(7) Notwithstanding the above and subject to section 434 of the Act, the Tribunal may prescribe the rules relating to numbering of cases and other procedures to be followed in the case of transfer of such matters, proceedings or cases.

Petition or Application under sub-section (2) of section 45QA of the Reserve Bank of India Act, 1934 (2 of 1934)

65. Provisions of these rules shall apply, mutatis mutandis, to the application or petition made under sub section (2) of section 45QA of the Reserve Bank of India Act, 1934 (2 of 1934) or under such other analogous provision of the other Act(s).

PART- VIII

Special Procedure

Application under sub- section (7) of section 7

66. (1). An application under sub-section (7) of section 7 of the Act shall be filed to the Tribunal in Form NCLT-1 and shall be accompanied by such documents as are mentioned in Annexure -B.

(2) Every application filed under sub rule (1) shall also set out the following particulars, namely: -

(a) Name of the company and other details including date of incorporation, name and address of the subscribers, promoters and first directors; and
(b) details of false or incorrect information or representation or material facts or information suppressed.
(c) details of such documents in or declaration filed or made for incorporating such company,
(d) involvement of promoters, subscribers and first directors in committing fraud during the course of incorporation;

(3) Subject to the provisions contained in Proviso to sub-section (7) of Section 7, the Tribunal may pass such orders, as it may think fit in accordance with clauses (a) to (e) of said sub-section (7).

Petition under sub-section (41) of section 2

67. The Petition under the sub-section (41) of Section 2 be filed to the Tribunal in Form NCLT-1 and shall be accompanied by such documents as are mentioned in Annexure -B.

Petition under section 14

68. (1) A petition under the second provision to sub-section (1) of section 14 of the Act for the conversion of a public company into a private company, shall, not less than three months from the date of passing of special resolution, be filed to the Tribunal in Form No. NCLT. 1 and shall be accompanied by such documents as are mentioned in Annexure B.

(2) Every petition filed under sub-rule (1) shall set out the following particulars:

(a) the date of the Board meeting at which the proposal for alteration of Articles was approved;
(b) the date of the general meeting at which the proposed alteration was approved;
(c) State at which the registered office of the company was situated;
(d) number of members in the company, number of members attended the meeting and number of members of voted for and against;
(e) reason for conversion into a private company, effect of such conversion on shareholders, creditors, debenture holders and other related parties.
(f) listed or unlisted public company;
(g) the nature of the company, that is, a company limited by shares, a company limited by guarantee (having share capital or not having share capital) and unlimited company;
(h) details as to whether a company registered under section 8 of the Act.

(3) There shall be attached to the application, a list of creditors and debenture holders, drawn up to the latest practicable date preceding the date of filing of petition by not more than two months, setting forth the following details, namely:-

(a) the names and address of every creditor and debenture holder of the company;
(b) the nature and respective amounts due to them in respect of debts, claims or liabilities;
(c) in respect of any contingent or unascertained debt or any such claim admissible to proof in winding up of the company, the value, so far as can be justly estimated of such debt or claim:

Provided that the petitioner company shall file an affidavit, signed by the company secretary of the company, if any, and not less than two directors of the company, one of whom shall be a managing director, where there is one, to the effect that they have made a full enquiry into the affairs of the company and, having done so, have formed an opinion that the list of creditors is correct, and that the estimated value as given in the list of the debts or claims payable on a contingency or not ascertained are proper estimates of the values of such debts and claims and that there are no other debts of , or claims against, the company to their knowledge.

(4) A duly authenticated copy of the list of creditors shall be kept at the registered office of the company and any person desirous of inspecting the same may, at any time during the ordinary hours of business, inspect and take extracts from the same on payment of the sum of rupees ten per page to the company.

(5) The company shall at least fourteen days before the date of hearing; -

(a) advertise the petition in accordance with rule 35;
(b) serve, by registered post with acknowledgement due, individual notice in Form NCLT. No. 3B to the effect set out in sub-rule (a) on each debenture-holder and creditor of the company; and
(c) serve, by registered post with acknowledgement due, a notice together with the copy of the petition to the Central Government, Registrar of Companies and to the Securities and Exchange Board of India, in the case of listed companies and to the regulatory body, if the company is regulated under any other Act.

(6) Where any objection of any person whose interest is likely to be affected by the proposed petition has been received by the petitioner, it shall serve a copy thereof to the Registraron or before the date of hearing.

(7) While passing an order, the Tribunal may, if it is satisfied, having regard to all the circumstances of the case, that the conversion would not be in the interest of the company or is being made with a view to contravene or to avoid complying with the provisions of the Act, disallow the conversion with reasons to be recorded in writing.

Petition under sub-section (3) of section 55

69. (1) The petition under sub-section (3) of section 55 of the Act shall be in Form No. NCLT. 1 and shall be accompanied by documents mentioned in Annexure B and setting out:

(a) particulars of registration
(b) capital structure, the different classes of shares into which the share capital of the company is divided;
(c) the provisions of the memorandum or articles authorizing the issue of preference shares;
(d) total number of preference shares issued;
(e) details of such preference shares that are not redeemed or unable to pay dividend;
(f) terms and conditions of issue of such existing preference shares;
(g) total number of such preference shares (unredeemed) and number of holders consented for with value of such preference shares and percentage of holders who have consented for; and
(h) date or dates on which the consent was given or the resolution was passed.

(2) On petition under sub-section (1), the Tribunal, after hearing the petitioner and any other person as appears to it to be interested in the petition, may, if it is satisfied, having regard to all the circumstances of the case, approve for issue of further redeemable preference shares equal to the amount due, including the dividend thereon, in respect of unredeemable preference shares:

Provided that the Tribunal shall, while giving approval, order the redemption forthwith of preference shares held by such persons who have not consented to the issue of further redeemable preference shares:

Provided further that the Tribunal may, at its discretion, make such orders as to costs as it thinks fit.

(3) The decision of the Tribunal on the petition shall be final.

Appeal under sections 58 and 59

70. (1) The appeals against the refusal for registration of transfer or transmission of securities under section 58 or for rectification of register of members under section 59 shall be made to the Tribunal by way of a petition inForm No. NCLT. 1 and shall be accompanied by such documents as are mentioned in Annexure B:

Provided that a copy of the appeal shall be served on the concerned company at its registered office immediately after filing of the petition with the Tribunal.

(2) The petitioner shall at least fourteen days before the date of hearing advertise the petition in accordance with rule 35.

(3) Where any objection of any person whose interest is likely to be affected by the proposed petition has been received by the petitioner, it shall serve a copy thereof to the Registrar on or before the date of hearing:

(4) The Tribunal may, while dealing with a petition under section 58 or 59, at its discretion, make-

(a) order or any interim order, including any orders as to injunction or stay, as it may deem fit and just;
(b) such orders as to costs as it thinks fit; and
(c) incidental or consequential orders regarding payment of dividend or the allotment of bonus or rights shares.

(5) On any petition under section 59, the Tribunal may-

(a) decide any question relating to the title of any person who is a party to the petition to have his name entered in, or omitted from, the register;
(b) generally decide any question which is necessary or expedient to decide in connection with the application for rectification.

(6) the decision of the Tribunal on any such petition shall be final.

Application under proviso to clause (b) of sub-section (1) of section 61.

71. (1)An application for obtaining the approval of the Tribunal for the consolidation and division of all or any of the share capital into shares of a larger amount than its existing shares which results in changes in the voting percentage of shareholders shall be filed in Form No. NCLT. 1 and shall be accompanied by such documents as are mentioned in Annexure B.

(2) The application shall, inter alia, set forth the following: -

(a) provision of articles authorising such consolidation or division;
(b) existing capital structure of the company;
(c) new capital structure of the company after the consolidation or division;
(d) class of shares being consolidated or divided;
(e) face value of shares pre and post consolidation or division;
(f) justification for such consolidation or division;

(3) The company shall at least fourteen days before the date of hearing

(a) advertise the petition in accordance with rule 35; and
(b) serve, by registered post with acknowledgement due, a notice together with the copy of the application to the Central Government, Registrar of Companies and to the Securities and Exchange Board of India, in the case of listed companies and to the regulatory body, if the company is regulated under any other Act.

(4) Where any objection of any person whose interest is likely to be affected by the proposed application has been received by the applicant, it shall serve a copy thereof to the Central Government, Registrar of Companies and the Securities Exchange Board of India, in the case of listed companies and to any regulator, if the company is regulated under any other Act on or before the date of hearing.

(5) Upon hearing the application or any adjourned hearing thereof, the Tribunal may pass such order, subject to such terms and conditions, as it thinks Fit.

Appeal against the order of the Government under Section 62(4)

72. (1) Where any Government by virtue of provisions of sub-section (4) of section 62, in public interest, converts the debentures or loan or any part thereof into shares in the company on such terms and conditions as appear to the Government to be reasonable in the circumstances of the case even in terms of the issue of such debentures or the raising of such loans do not include a term for providing for an option for such conversion.

(2) If such terms and conditions of conversion are not acceptable to the company, it may, within sixty days from the date of communication of such order, appeal to the Tribunal, in Form – NCLT-9, which shall after hearing the company and the Government, pass such order as it deems fit.

Application under sections 71(9), 71(10), section 73(4) or section 74(2) and 76(2)

73. (1)Where a company fails to redeem the debentures or repay the deposits or any part thereof or any interest thereon, an application under sub-section (10) of section 71 or under sub-section (4) of section 73 of the Act or section 45QA of the Reserve Bank of India Act, 1934 (2 of 1934), shall be filed to the Tribunal, in Form No. NCLT. 11 in duplicate and shall be accompanied by such documents as are mentioned in Annexure B, by-

(a) in case of debentures, all or any of the debenture holders concerned, or debenture trustee; or
(b) in case of deposits, all or any of the depositors concerned, or where the deposits are secured, by the deposit trustee.

(2) There shall be attached to the application, a list of depositors or debenture holders, as the case may be, setting forth the following details in respect of every such depositor or debenture holder:-

(a) full name, age, father’s/ mother’s/ spouse’s name, occupation and full residential address;
(b) fixed deposit receipt number or debenture certificate number, as the case may be;
(c) date of maturity;
(d) amount due to the person by the company;
(e) amount already paid by the company, if any;
(f) total amount due as on the date on the application:

Provided that where the company is the applicant, it shall file an affidavit stating that the list of depositors or debenture holders, as the case may be, is correct, and that the estimated values as given in the list of the amount payable to such depositors or debenture holders are proper estimates of the values of such debts and claims.

(3) The Tribunal shall pass an appropriate order within a period of sixty days from the date of receipt of application under sub-rule (1):

Provided that the Tribunal shall, before making any order under this rule, give a reasonable opportunity of being heard to the company and any other person interested in the matter.

(4) The Tribunal may, if it is satisfied, on the application filed under sub-rule (1), that it is necessary so to do, to safeguard the interests of the company, the debenture holders or the depositors, as the case may be, or in the public interest, direct, by order, the company to make repayment of such deposit or debenture or part thereof forthwith or within such time and subject to such conditions as may be specified in the order:

Provided that while passing the order, the Tribunal shall consider the financial condition of the company, the amount or deposit or debenture or part thereof and the interest payable thereon.

(5) The application under sub-section (2) of section 74 and sub-section (2) of section 76 read with section 74(2) shall be in Form NCLT-1 and shall accompanied with the documents as per Annexure B.

(6) A copy of application under sub-section (2) of section 76 and under sub section (2) of section 74 shall be served on the Regional Director and the Registrar of Companies before the date of hearing.

(7) The Registrar of Companies in consultation with Regional Director shall submit before the Tribunal, the report on the affairs of the company within thirty days from the date of the receipt of the application and Tribunal may consider any observation made by the Registrar of Companies before passing an order.

Application for calling or obtaining a direction to call annual general meeting

74. (1) An application under section 97 for calling or obtaining a direction to call the annual general meeting of the company shall be made by any member of the company in Form No. NCLT. 1 and shall be accompanied by the documents specified in Annexure B.

(2) A copy of the application shall be served on the Registrar of Companies on or before the date of hearing.

Application for obtaining an order for calling of general meeting (other than Annual General Meeting)

75. (1) An application under section 98 for obtaining an order for calling of a general meeting (other than Annual General Meeting) shall be made by any director or member of the company in Form No. NCLT. 1 and shall be accompanied by the documents specified in Annexure B.

(2) A copy of the application shall be served on the Registrar of Companies on or before the date of hearing.

Inspection of minute-books of general meeting

76. Where any member has requested the company for inspection of minute-book of general meeting on payment of requisite fee and the company refused to give such inspection, he may apply to the Tribunal in Form No NCLT-9 for direction to the company for inspection of minute-book of general meeting.

Application under section 131

77. (1) Where it appears to the directors of a company that the financial statement of the company or the report of the Board do not comply with the provisions of section 129 or section 134, the application shall be filed in Form No. NCLT-1 within fourteen days of the decision taken by the Board.

(2) In case the majority of the directors of company or the auditor of the company has been changed immediately before the decision is taken to apply under section 131, the company shall disclose such facts in the application.

(3) The application shall, inter alia, set forth the following particulars, namely’-

(a) Financial year or period to which such accounts relates;
(b) the name and contact details of the Managing Director, Chief Financial Officer, directors, Company Secretary and officer of the company responsible for making and maintaining such books of accounts and financial statement;
(c) where such accounts are audited, the name and contact details of the auditor or any former auditor who audited such accounts;
(d) copy of the Board resolution passed by the Board of Directors;
(e) grounds for seeking revision of financial statement or Board’s Report.

(4) The company shall at least fourteen days before the date of hearing advertise the application in accordance with rule 35.

(5) The Tribunal shall issue notice and hear the auditor of the original financial statement, if present auditor is different and after considering the application and hearing the auditor and any other person as the Tribunal may deem fit, may pass appropriate order in the matter.

(6) A certified copy of the order of the Tribunal shall be filed with the Registrar of Companies within thirty days of the date of receipt of the certified copy..

(7) On receipt of approval from Tribunal a general meeting may be called and notice of such general meeting along with reasons for change in financial statements may be published in newspaper in English and in vernacular language.

(8) In the general meeting, the revised financial statements, statement of directors and the statement of auditors may be put up for consideration before a decision is taken on adoption of the revised financial statements.

(9) On approval of the general meeting, the revised financial statements along with the statement of auditors or revised report of the Board, as the case may be, shall be filed with the Registrar of Companies within thirty days of the date of approval by the general meeting.

Application under Section 140

78. (1) An application may be filed by the director on behalf of the company or the aggrieved auditor to the Tribunal in Form NCLT-1 and shall be accompanied by such documents as are mentioned in Annexure “B”.

(2) Where the Tribunal is satisfied on an application of the company or the aggrieved person that the rights conferred by the provisions of section 140 are being abused by the auditor, then, the copy of the representation need not be sent and the representation need not be read out at the meeting.

(3) If the application is made by the Central Government and the Tribunal is satisfied that any change of the auditor is required, it shall within fifteen days of receipt of such application make an order that the auditor shall not function as an auditor and the Central Government may appoint another auditor in his place.

Application under section 169

79. The Company or any other person who claims to be aggrieved may make an application to the Tribunal inForm NCLT-1 and shall be accompanied with such documents as are mentioned in Annexure B.

Application under section 213 for investigation

80. An application under section 213 may be made in Form NCLT-1 and shall be accompanied with such documents as are mentioned in Annexure B.

Application under section 241

81. (1) An Application under clause (a) or clause (b) of sub-section (1) of section 241 of the Act, shall be filed in the Form NCLT-1 and shall be accompanied with such documents as are mentioned in Annexure B.

(2) Where an application is presented under section 241 on behalf of any members of a company entitled to apply under sub-section (1) of the said section, by any one or more of them, the letter of consent signed by the rest of the members so entitled authorising the applicant or the applicants to present the petition on their behalf, shall be annexed to the application, and the names and addresses of all the members on whose behalf the application is presented shall be set out in a schedule to the application, and where the company has a share capital, the application shall state whether the applicants have paid all calls and other sums due on their respective shares.

(3) A copy of every application made under this rule shall be served on the company, other respondents and all such persons as the Tribunal may direct.

Withdrawal of Application filed under section 241

82. (1) An application under clause (a) or clause (b) of sub-section (1) of section 241 of the Act, shall not be withdrawn without the leave of the Tribunal.

(2) An Application for withdrawal under sub-rule (1) shall be filed in the Form NCLT-9.

Application under section 243

83. (1) An application under clause (b) of sub-section (1) of section 243 of the Act for leave to any of the persons mentioned therein to be appointed or to act as the managing director or other director or manager of the company, shall be filed as per the appropriate Form NCLT-1 and shall be accompanied with such documents as are mentioned in Annexure B.

(2) An application under sub – rule (1) shall state whether a notice of intention to apply for such leave, as required under the proviso to sub-section (1) of section 243 of the Act, has been given to the Central Government and such application shall also be accompanied by a copy of such notice.

(3) The notice of the date of hearing of the application together with a copy of the application shall be served on the Central Government not less than fifteen days before the date fixed for the hearing.

Right to apply under section 245

84. (1) An application under sub-section

(1) of section 245, read with sub-section (3) of section 245 of the Act, shall be filled in Form NCLT-9.
(2) A copy of every application under sub-rule (1) shall be served on the company, other respondents and all such persons as the Tribunal may direct.

Conducting a class action suit

85. (1) Without prejudice to the generality of the provisions of sub-section (4) of section 245 of the Act, the Tribunal may, while considering the admissibility of an application under the said section, in addition to the grounds specified therein, take into account the following:

(a) whether the class has so many members that joining them individually would be impractical, making a class action desirable;
(b) whether there are questions of law or fact common to the class;
(c) whether the claims or defences of the representative parties are typical of the claims or defences of the class;
(d) whether the representative parties will fairly and adequately protect the interests of the class.

(2) For the purposes of clause (c) of sub-section (4) of section 245, while considering the desirability of an individual or separate action as opposed to a class action, the Tribunal may take into account, in particular, whether admitting separate actions by member or members or depositor or depositors would create a risk of:-

(a) inconsistent or varying adjudications in such separate actions; or
(b) adjudications that, as a practical matter, would be dispositive of the interests of the other members;
(c) adjudications which would substantially impair or impede the ability of other members of the class to protect their interests.

Rule of opt-out

86. (1) A member of a class action under section 245 of the Act is entitled to opt-out of the proceedings at any time after the institution of the class action, with the permission of the Tribunal, as per Form No. NCLT- 1.

(2) For the purposes of this rule, a class member who receives a notice under clause (a) of sub section (5) of section 245 of the Act shall be deemed to be the member of a class, unless he expressly opts out of the proceedings, as per the requirements of the notice issued by the Tribunal in accordance with rule 38.

(3) A class member opting out shall not be precluded from pursuing a claim against the company on an individual basis under any other law, where a remedy may be available, subject to any conditions imposed by the Tribunal.

Publication of notice

87. (1) For the purposes of clause (a) of sub section (5) of section 245 of the Act, on the admission of an application filed under sub-section (1) of section 245 of the Act, a public notice shall be issued by the Tribunal as per Form No. NCLT-13 to all the members of the class by-

(a) publishing the same within seven days of admission of the Application by the Tribunal at least once in a vernacular newspaper in the principal vernacular language of the State in which the registered office of the company is situated and at least once in English in an English newspaper that is in circulation in that State;
(b) requiring the company to place the public notice on the website of such company, if any, in addition to publication of such public notice in newspaper under sub-clause (a):

Provided that such notice shall also be placed on the websites of the Tribunal and the Ministry of Corporate Affairs, the concerned Registrar of Companies and in respect of a listed company on the website of the concerned stock exchange where the company has any of its securities listed, until the application is disposed of by the Tribunal.

(2) The date of issue of the newspaper in which such notice appears shall be considered as the date of serving the public notice to all the members of the class.

(3) The public notice shall, inter alia, contain the following-

(a) name of the lead applicant;
(b) brief particulars of the grounds of application;
(c) relief sought by such application;
(d) statement to the effect that application has been made by the requisite number of members/depositors;
(e) statement to the effect that the application has been admitted by the Tribunal after considering the matters stated under sub-section (4) of section 245 and these rules and it is satisfied that the application may be admitted;
(f) date and time of the hearing of the said application;
(g) time within which any representation may be filed with the Tribunal on the application;
(h) the details of the admission of the application and the date by which the form of opt out has to be completed and sent as per Form NCLT-1 and shall be accompanied with such documents as are mentioned in Annexure “B”, and such other particulars as the Tribunal thinks fit.

(4) The cost or expenses connected with the publication of the public notice under this rule shall be borne by the applicant and shall be defrayed by the company or any other person responsible for any oppressive act in case order is passed in favour of the applicant.

Reference to the Tribunal

88. Any reference to the Tribunal by the Registrar of Companies under section 441 of the Act, or any reference to the Tribunal by the Central Government under proviso to sub-section (5) of section 140, 221, sub-section (2) of section 224, sub-section (5) of section 224, sub-section (2) of section 241 of the Act, or reference under sub-section (2) of section 75 or any complaint by any person under sub-section (1) of section 222, or any reference by a company under clause (c) of sub-section (4) of section 22A of the Securities Contracts (Regulations) Act, 1956 shall be made by way of a petition or application in Form No. NCLT- 9 in Annexure A and shall be accompanied by documents mentioned in Annexure-B.

PART IX

CAUSE LIST

Preparation and publication of daily cause list

89. (1) The Registry shall prepare and publish on the notice board of the Registry before the closing of working hours on each working day the cause list for the next working day and subject to the directions of the President, listing of cases in the daily cause list shall be in the following order of priority, unless otherwise ordered by the concerned Bench; namely;-

(a) cases for pronouncement of orders;
(b) cases for clarification;
(c) cases for admission;
(d) cases for orders or directions;
(e) part-heard cases, latest part-heard having precedence; and
(f) cases posted as per numerical order or as directed by the Bench;

(2) The title of the daily cause list shall consist of the number of the appeal or petition, the day, date and time of the court sitting, court hall number and the coram indicating the names of the President, Judicial Member and Technical Member constituting the Bench.

(3) Against the number of each case listed in the daily cause list, the following shall be shown, namely;-

(a) names of the legal practitioners appearing for both sides and setting out in brackets the rank of the parties whom they represent;
(b) names of the parties, if unrepresented, with their ranks in brackets.

(4) The objections and special directions, if any, of the Registry shall be briefly indicated in the daily cause list in remarks column, whenever compliance is required.

Carry forward of cause list and adjournment of cases on account of non-sitting of a Bench

90. (1) If by reason of declaration of holiday or for any other unforeseen reason, the Bench does not function for the day, the daily cause list for that day shall, unless otherwise directed, be treated as the daily cause list for the next working day in addition to the cases already posted for that day.

(2) When the sitting of a particular Bench is cancelled for the reason of inability of a Member of the Bench, the Registrar shall, unless otherwise directed, adjourn the cases posted before that Bench to a convenient date and the adjournment or posting or directions shall be notified on the notice board of the Registry.

PART X

RECORD OF PROCEEDINGS

Diaries

91. (1) Diaries shall be kept by the clerk-in-charge in such form as may be specified in each appeal or petition or application and they shall be written legibly.

(2) The diary in the main file shall contain a concise history of the appeal or petition or application, the substance of the order passed thereon and in execution proceedings, it shall contain a complete record of all proceedings in execution of order or direction or rule and shall be checked by the Deputy Registrar and initialed once in a fortnight.

Order sheet

92. (1) The Court Master of the Bench shall maintain order sheet in every proceedings and shall contain all orders passed by the Tribunal from time to time .

(2) All orders passed by the Tribunal shall be in English and the same shall be signed by the Members of the Tribunal constituting the Bench:

Provided that the routine orders, such as call for of the records, put up with records, adjourned and any other order as may be directed by the Member of the Tribunal shall be signed by the Court Master of the Bench.

(3) The order sheet shall also contain the reference number of the appeal or petition or application, date of order and all incidental details including short cause title thereof.

Maintenance of court diary

93. (1) The Court Master of the Bench shall maintain legibly a Court Diary, wherein he shall record the proceedings of the court for each sitting with respect to the applications or petitions or appeals listed in the daily cause list.

(2) The matters to be recorded in the court Diary shall include details as to whether the case is adjourned, or part-heard or heard and disposed of or heard and orders reserved, as the case may be, along with dates of next sitting wherever applicable.

Statutes or citations for reference

94. The parties or legal practitioners shall, before the commencement of the proceedings for the day, furnish to the Court Master a list of law journals, reports, statutes and other citations, which may be needed for reference or photocopy of full text thereof.

Calling of cases in court

95. Subject to the orders of the Bench, the Court Master shall call the cases listed in the cause list in the serial order.

Regulation of court work

96. (1) When the Tribunal is holding a sitting, the Deputy Registrar shall ensure -

(a) that no inconvenience or wastage of time is caused to the Bench in making available the services of Court Master or stenographer or peon or attender;
(b) the Court Master shall ensure that perfect silence is maintained in and around the Court Hall and no disturbance whatsoever is caused to the functioning of the Bench and that proper care is taken to maintain dignity and decorum of the court.

(2) When the Bench passes order or issues directions, the Court Master shall ensure that the records of the case along with proceedings or orders of the Bench are transmitted immediately to the Registry and the Registry shall verify the case records received from the Court Master with reference to the cause list and take immediate steps to communicate the directions or orders of the Bench.

PART XI

MAINTENANCE OF REGISTERS

Registers to be maintained

97. The following Registers shall be maintained and posted on a day to day basis by the Registry of the Tribunal by such ministerial officer or officers as the Registrar may, subject to any order of the President, direct -

(a) register of petitions;
(b) register of unnumbered petitions or appeals;
(c) register of caveats lodged; and
(d) register of interlocutory applications;

Arrangement of records in pending matters

98. The record of appeal or petition shall be divided into the following four parts and shall be collated and maintained -

(a) main file : (Petition being kept separately);
(b) miscellaneous application file;
(c) process file; and
(d) execution file

Contents of main file

99. The main file shall be kept in the following order and it shall be maintained as permanent record till ordered to be destroyed under the rules -

(a) index;
(b) order sheet;
(c) final order or judgment;
(d) memo of appeal or petition, as the case may be, together with any schedule annexed thereto;
(e) counter or reply or objection, if any;
(f) (i) oral evidence or proof of affidavit;
(ii) evidence taken on commission; and
(iii) documentary evidence;
(g) written arguments.

Contents of process file

100. The process file shall contain the following items; namely -

(a) index;
(b) power of attorney or vakalatnama;
(c) summons and other processes and affidavits relating thereof;
(d) applications for summoning witness;
(e) letters calling records; and
(f) all other miscellaneous papers such as postal acknowledgements.

Execution file

101. The execution file shall contain the following items, namely-

(a) index;
(b) the order sheet;
(c) the execution application;
(d) all processes and other papers connected with such execution proceedings;
(e) transmission of order to civil court, if ordered; and
(f) result of execution;

File for miscellaneous applications

102. For all miscellaneous applications there may be only one file with a title page prefixed to it and immediately after the title page, the diary, the miscellaneous applications, supporting affidavit, the order sheet and all other documents shall be filed.

Preservation of Record

103. (1) All necessary documents and records relating to petitions or applications dealt with by the Tribunal shall be stored or maintained as provided in these rules and other physical records kept in a record room shall be preserved for a period of five years after the passing of the final order.

(2) Notwithstanding anything contained in sub-rule (1) the record of the petitions or applications dealt with by the Tribunal including the orders and directions passed by the Tribunal, shall be maintained by the Registry of the Tribunal for a period of fifteen years after the passing of the final order.

Retention, Preservation and Destruction of Records

104. (1) The Record Keeper or any other officer so designated shall be responsible for the records consigned to the Record Room. He shall scrutinize the records received by him within three days and prepare an index.

(2) On the expiry of the period for preservation of the records specified under rule 103, the Registrar shall weed out the record.

PART XII

Service of Process / Appearance Of Respondents And Objections

Issue of notice

105. (1) Where notice of an appeal or petition for caveat or interlocutory application is issued by the Tribunal, copies of the same, the affidavit in support thereof and if so ordered by the Tribunal, the copy of other documents filed therewith, if any, shall be served along with the notice on the other side.

(2) The aforesaid copies shall show the date of presentation of the appeal or petition for caveat or interlocutory application and the name of the authorised representative, if any, of such party with his full address for service and the interim order, if any, made thereon.

(3) The Tribunal may order for issuing notice in appropriate cases and also permit the party concerned for service of the said notice on the other side by Dasti and in such case, deliver the notice to such party and it is for such party to file affidavit of service with proof.

(4) Acknowledgement under sub-rule (3) shall be filed by the party with the Registry before the date fixed for return of notice.

Summons

106. Whenever summons or notice is ordered by private service, the appellant or applicant or petitioner, as the case may be, unless already served on the other side in advance, shall arrange to serve the copy of all appeals or petition or application by registered post or courier service and file affidavit of service with its proof of acknowledgement before the date fixed for hearing.

Steps for issue of fresh notice

107. (1) If any notice issued under rule 105 is returned unserved, that fact and the reason thereof shall be notified immediately on the notice board of the Registry.

(2) The applicant or petitioner or his authorised representative shall within seven days from the date of the notification, take steps to serve the notice afresh.

Consequence of failure to take steps for issue of fresh notice.

108. Where, after a summon has been issued to the other side, and returned unserved, and the applicant or petitioner or appellant, as the case may be, fails to take necessary steps within a period as ordered by the Tribunal from the date of return of the notice on the respondent, the Registrar shall post the case before the Bench for further directions or for dismissal for non-prosecution.

Entries regarding service of notice or process

109. The judicial branch of the Registry shall record in the column in the order sheet TMotes of the Registry’, the details regarding completion of service of notice on the respondents, such as date of issue of notice, date of service, date of return of notice, if unserved, steps taken for issuing fresh notice and date of completion of services, etc.

Default of appearance of respondent and consequences

110. Where the respondent, despite effective service of summons or notice on him does not appear before the date fixed for hearing, the Tribunal may proceed to hear the appeal or application or petition ex-parte and pass final order on merits:

Provided that it is open to the Tribunal to seek the assistance of any counsel as it deems fit in case the matter involves intricate and substantial questions of law having wide ramifications.

Piling of objections by respondent, form and consequences

111. (1) The respondent, if so directed, shall file objections or counter within the time allowed by the Tribunal.

(2) The objections or counter shall be verified as an appeal or petition and wherever new facts are sought to be introduced with the leave of the Tribunal for the first time, the same shall be affirmed by a supporting affidavit.

(3) The respondent, if permitted to file objections or counter in any proceeding shall also file three copies thereof after serving copies of the same on the appellant or petitioner or their Counsel on record or authorised representative, as the case may be.

PART XIII

Fee on Petition or Appeal, Process Fee And Award Of Costs

112. Fees.- (1) In respect of the several matters mentioned in the Annexures, there shall be paid fees as prescribed in the Schedule of Fees appended to these rules;

Provided that no fee shall be payable or shall be liable to be collected on a petition or application filed or reference made by the Registrar of Companies, Regional Director or by any officer on behalf of the Central Government.

(2) In respect of every interlocutory application, there shall be paid fees as prescribed in Schedule of Fees of these rules:

Provided that no fee shall be payable or shall be liable to be collected on an application filed by the Registrar of Companies, Regional Director or by an officer on behalf of the Central Government.

(3) In respect of a petition or appeal or application filed or references made before the Principal Bench or the Bench of the Tribunal, fees referred to in this Part shall be paid by means of a bank draft drawn in favour of the Pay and Accounts Officer, Ministry of Corporate Affairs, New Delhi/Kolkata/Chennai /Mumbai, as the case may be or as decided by the President.

Award of costs in the proceedings

113. (1) Whenever the Tribunal deems fit, it may award cost for meeting the legal expenses of the respondent of defaulting party.

(2) The Tribunal may in suitable cases direct appellant or respondent to bear the cost of litigation of the other side, and in case of abuse of process of court, impose exemplary costs on defaulting party.

PART XIV

INSPECTION OF RECORD

Inspection of the records

114. (1) The parties to any case or their authorised representative may be allowed to inspect the record of the case by making an application in writing to the Registrar and by paying the fee prescribed thereof.

(2) Subject to such terms and conditions as may be directed by the President by a general or special order, a person who is not a party to the proceeding, may also be allowed to inspect the proceedings after obtaining the permission of the Registrar in writing.

Grant of inspection

115. Inspection of records of a pending or decided case before the Tribunal shall be allowed only on the order of the Registrar.

Application for grant of inspection

116. (1) Application for inspection of record under sub- rule (1) and (2) of rule 114, shall be presented at Registry between 10.30 AM and 3.00 PM on any working day and two days before the date on which inspection is sought, unless otherwise permitted by the Registrar.

(2) The Registry shall submit the application with its remarks before the Registrar, who shall, on consideration of the same, pass appropriate orders.

(3) Inspection of records of a pending case shall not ordinarily be permitted on the date fixed for hearing of the case or on the preceding day.

Mode of inspection

117. (1) On grant of permission for inspection of the records, the Deputy Registrar shall arrange to procure the records of the case and allow inspection of such records on the date and time fixed by the Registrar between 10.30 AM and 12.30 PM and between 2.30 PM and 4.30 PM in the immediate presence of an officer authorised in that behalf by the Registrar.

(2) The person inspecting the records shall not in any manner cause dislocation, mutilation, tampering or damage to the records in the course of inspection.

(3) The person inspecting the records shall not make any marking on any record or paper so inspected and taking notes, if any, of the documents or records inspected may be done only in pencil.

(4) The person supervising the inspection, may at any time prohibit further inspection, if in his opinion, any of the records are likely to be damaged in the process of inspection or the person inspecting the records has violated or attempted to violate the provisions of these rules and shall immediately make a report about the matter to the Registrar and seek further orders from the Registrar and such notes shall be made in the Inspection Register.

Maintenance of register of inspection

118. The Deputy Registrar shall cause to maintain a Register for the purpose of inspection of documents or records and shall obtain therein the signature of the person making such inspection on the Register as well as on the application on the conclusion of inspection.

PART XV

Appearance of authorised representative

Appearance of authorised representative

119. Subject to as hereinafter provided, no legal practitioner or authorised representative shall be entitled to appear and act, in any proceeding before the Tribunal unless he files into Tribunal vakalatnama or Memorandum of Appearance as the case may, duly executed by or on behalf of the party for whom he appears.

Consent for engaging another legal practitioner

120. A legal practitioner proposing to file a Vakalatnama or Memorandum of Appearance as the case may be, in any pending case or proceeding before the Tribunal in which there is already a legal practitioner or authorised representative on record, shall do so only with the written consent of the legal practitioner or the authorised representative on record or when such consent is refused, with the permission of the Tribunal after revocation of Vakalatnama or Memorandum of Appearance as the case may be, on an application filed in this behalf, which shall receive consideration only after service of such application on the counsel already on record.

Restrictions on appearance

121. A legal practitioner or the authorised representative as the case may be, who has tendered advice in connection with the institution of any case or other proceeding before the Tribunal or has drawn pleadings in connection with any such matter or has during the progress of any such matter acted for a party, shall not, appear in such case or proceeding or other matter arising therefrom or in any matter connected therewith for any person whose interest is opposed to that of his former client, except with the prior permission of the Tribunal.

Restriction on party’s right to be heard

122. The party who has engaged a legal practitioner or authorised representative to appear for him before the Tribunal may be restricted by the Tribunal in making presentation before it.

Empanelment of special authorised representatives by the Tribunal

123. (1) The Tribunal may draw up a panel of authorised representatives or valuers or such other experts as may be required by the Tribunal to assist in proceedings before the Tribunal.

(2) The President may call upon any of the persons from panel under sub-rule (1) for assistance in the proceedings before the Bench, if so required.

(3) The remuneration payable and other allowances and compensation admissible to such persons shall be specified in consultation with the Tribunal.

Professional dress for the authorised representatives

124. While appearing before the Tribunal, the authorised representatives shall wear the same professional dress as prescribed in their Code of Conduct.

PART XVI

AFFIDAVITS

Title of affidavits

125. Every affidavit shall be titled as ‘Before the National Company Law Tribunal.’ followed by the cause title of the appeal or application or other proceeding in which the affidavit is sought to be used.

Form and contents of the affidavit

126. The affidavit shall conform to the requirements of order XIX, rule 3 of Civil Procedure Code, 1908 (5 of 1908).

Persons authorised to attest

127. Affidavits shall be sworn or affirmed before an advocate or notary, who shall affix his official seal.

Affidavits of illiterate, visually challenged persons

128. Where an affidavit is sworn or affirmed by any person who appears to be illiterate, visually challenged or unacquainted with the language in which the affidavit is written, the attester shall certify that the affidavit was read, explained or translated by him or in his presence to the deponent and that he seemed to understand it, and made his signature or mark in the presence of the attester in Form NCLT-14.

Identification of deponent

129. If the deponent is not known to the attester, his identity shall be testified by a person known to him and the person identifying shall affix his signature in token thereof.

Annexures to the affidavit

130. (1) Document accompanying an affidavit shall be referred to therein as Annexure number and the attester shall make the endorsement thereon that this is the document marked putting the Annexure number in the affidavit.

(2) The attester shall sign therein and shall mention the name and his designation.

PART XVII

DISCOVERY, PRODUCTION AND RETURN OF DOCUMENTS

Application for production of documents, form of summons.-(1)

131. Except otherwise provided hereunder, discovery or production and return of documents shall be regulated by the provisions of the Code of Civil Procedure, 1908 (5 of 1908).

(2) An application for summons to produce documents shall be on plain paper setting out the document the production of which is sought, the relevancy of the document and in case where the production of a certified copy would serve the purpose, whether application was made to the proper officer and the result thereof.

(3) A summons for production of documents in the custody of a public officer other than a court shall be in Form NCLT-15 and shall be addressed to the concerned Head of the Department or such other authority as may be specified by the Tribunal.

Suo motu summoning of documents

132. Notwithstanding anything contained in these rules, the Tribunal may, suo motu, issue summons for production of public document or other documents in the custody of a public officer.

Marking of documents

133. (1)The documents when produced shall be marked as follows :

(a) If relied upon by the appellant’s or petitioner’s side, they shall be numbered as ‘A’ series.
(b) If relied upon by the respondent’s side, they shall be marked as T3′ series.
(c) The Tribunal exhibits shall be marked as ‘C series.

(2) The Tribunal may direct the applicant to deposit with the Tribunal by way of Demand Draft or Indian Postal Order drawn in favour of the Pay and Accounts Officer, Ministry of Corporate Affairs, New Delhi, a sum sufficient to defray the expenses for transmission of the records before the summons is issued.

Return and transmission of documents

134. (1) An application for return of the documents produced shall be numbered and no such application shall be entertained after the destruction of the records.

(2) The Tribunal may, at any time, direct return of documents produced subject to such conditions as it deems fit.

PART XVIII

EXAMINATION OF WITNESSES AND ISSUE OF COMMISSIONS

Procedure for examination of witnesses, issue of Commissions

135. The provisions of the Orders XVI and XXVI of the Code of Civil Procedure, 1908 (5 of 1908), shall mutatis mutandis apply in the matter of summoning and enforcing attendance of any person and examining him on oath and issuing commission for the examination of witnesses or for production of documents.

Examination in camera

136. The Tribunal may in its discretion examine any witness in camera.

Form of oath or affirmation to witness

137. Oath shall be administered to a witness in the following form :

* I do swear in the name of God/solemnly affirm that what I shall state shall be truth, the whole truth and nothing but the truth”.

Form of oath or affirmation to interpreter

138. Oath or solemn affirmation shall be administered to the interpreter in the following form before the Bench Officer or the Court Officer as the case may be, as taken for examining a witness:

“I do swear in the name of God/solemnly affirm that I will faithfully and truly interpret and explain all questions put to and evidence given by witness and translate correctly and accurately all documents given to me for translation.”

Officer to administer oath

139. The oath or affirmation shall be administered by the Court Master.

Form recording of deposition

140. (1) The Deposition of a witness shall be recorded in Form NCLT-16.

(2) Each page of the deposition shall be initialed by the Members constituting the Bench.

(3) Corrections, if any, pointed out by the witness may, if the Bench is satisfied, be carried out and duly initialled. If not satisfied, a note to the effect be appended at the bottom of the deposition.

Numbering of witnesses

141. The witnesses called by the applicant or petitioner shall be numbered consecutively as PWs and those by the respondents as RWs.

Grant of discharge certificate

142. Witness discharged by the Tribunal may be granted a certificate in Form NCLT-17 by the Registrar.

Witness allowance payable

143. (1) Where the Tribunal issues summons to a Government servant to give evidence or to produce documents, the person so summoned may draw from the Government travelling and daily allowances admissible to him as per rules.

(2) Where there is no provision for payment of Travelling Allowances and Daily Allowance by the employer to the person summoned to give evidence or to produce documents, he shall be entitled to be paid as allowance, (a sum in the opinion of the Registrar sufficient to defray the travelling and other expenses}, having regard to the status and position of the witness.

(3) The party applying for the summons shall deposit with the Registrar the amount of allowance as estimated by the Registrar well before the summons is issued.

(4) If the witness is summoned as a court witness, the amount estimated by the Registrar shall be paid as per the directions of the Tribunal.

(5) The aforesaid provisions would govern the payment of batta to the interpreter as well.

Records to be furnished to the Commissioner

144. (1) The Commissioner shall be furnished by the Tribunal with such of the records of the case as the Tribunal considers necessary for executing the Commission.

(2) Original documents shall be furnished only if a copy does not serve the purpose or cannot be obtained without unreasonable expense or delay and delivery and return of records shall be made under proper acknowledgement.

Taking of specimen handwriting, signature etc

145. The Commissioner may, if necessary, take specimen of the handwriting, signature or fingerprint of any witness examined before him.

PART XIX

DISPOSAL OF CASES AND PRONOUNCEMENT OF ORDERS

Disposal of Cases

146. On receipt of an application, petition, appeal etc, the Tribunal, after giving the parties a reasonable opportunity of being heard, pass such orders thereon as it thinks fit:

Provided that the Tribunal, after considering an appeal, may summarily dismiss the same, for reasons to be recorded, if the Tribunal is of opinion that there are no sufficient grounds for proceedings therewith.

Operative portion of the order

147. All orders or directions of the Bench shall be stated in clear and precise terms in the last paragraph of the order.

Corrections

148. Every Member of the Bench who has prepared the order shall initial all corrections and affix his initials at the bottom of each page.

Power to impose Costs

149. The Tribunal may, in its discretion, pass such order in respect of imposing costs on the defaulting party as it may deem fit.

Pronouncement of Order

150. (1) The Tribunal, after hearing the applicant and respondent, shall make and pronounce an order either at once or, as soon as thereafter as may be practicable but not later than thirty days from the final hearing.

(2) Every order of the Tribunal shall be in writing and shall be signed and dated by the President or Member or Members constituting the Bench which heard the case and pronounced the order.

(3) A certified copy of every order passed by the Tribunal shall be given to the parties.

(4) The Tribunal, may transmit order made by it to any court for enforcement, on application made by either of the parties to the order or suo motu.

(5) Every order or judgment or notice shall bear the seal of the Tribunal.

Pronouncement of order by any one member of the Bench.-

151. Any Member of the Bench may pronounce the order for and on behalf of the Bench. (2) When an order is pronounced under this rule, the Court Master shall make a note in the order sheet, that the order of the Bench consisting of President and Members was pronounced in open court on behalf of the Bench.

Authorising any member to pronounce order

152. (1) If the Members of the Bench who heard the case are not readily available or have ceased to be Members of the Tribunal, the President may authorise any other Member to pronounce the order on his behalf after being satisfied that the order has been duly prepared and signed by all the Members who heard the case.

(2) The order pronounced by the Member so authorised shall be deemed to be duly pronounced.

(3) The Member so authorised for pronouncement of the order shall affix his signature in the order sheet of the case stating that he has pronounced the order as provided in this rule.

(3) If the order cannot be signed by reason of death, retirement or resignation or for any other reason by any one of the Members of the Bench who heard the case, it shall be deemed to have been released from part-heard and listed afresh for hearing.

Enlargement of time

153. Where any period is fixed by or under these rules, or granted by Tribunal for the doing of any act, or filing of any document or representation, the Tribunal may, in its discretion from time to time in the interest of justice and for reasons to be recorded, enlarge such period, even

though the period fixed by or under these rules or granted by the Tribunal may have expired.

Rectification of Order

154. (1) Any clerical or arithmetical mistakes in any order of the Tribunal or error therein arising from any accidental slip or omission may, at any time, be corrected by the Tribunal on its own motion or on application of any party by way of rectification.

(2) An application under sub-Rule (1) may be made in Form No. NCLT. 9 within two years from the date of the final order for rectification of the final order not being an interlocutory order.

General power to amend

155. The Tribunal may, within a period of thirty days from the date of completion of pleadings, and on such terms as to costs or otherwise, as it may think fit, amend any defect or error in any proceeding before it; and all necessary amendments shall be made for the purpose of determining the real question or issue raised by or depending on such proceeding.

Making of entries by Court Master

156. Immediately on pronouncement of an order by the Bench, the Court Master shall make necessary endorsement on the case file regarding the date of such pronouncement, the nature of disposal and the constitution of the Bench pronouncing the order and he shall also make necessary entries in the court diary maintained by him.

Transmission of order by the Court Master

157. (1) The Court Master shall immediately on pronouncement of order, transmit the order with the case file to the Deputy Registrar.

(2) On receipt of the order from the Court Master, the Deputy Registrar shall after due scrutiny, satisfy himself that the provisions of these rules have been duly compiled with and in token thereof affix his initials with date on the outer cover of the order.

(3) The Deputy Registrar shall thereafter cause to transmit the case file and the order to the Registry for taking steps to prepare copies and their communication to the parties.

Format of order

158. (1) All orders shall be neatly and fairly typewritten in double space on one side only on durable foolscap folio paper of metric A-4 size (30.5 cm long and 21.5 cm wide) with left side margin of 5 cm and right side margin of 2.5 cm. Corrections, if any, in the order shall be carried out neatly and sufficient space may be left both at the bottom and at the top of each page of the order to make its appearance elegant.

(2) Members constituting the Bench shall affix their signatures in the order of their seniority from right to left.

Indexing of case files after disposal

159. After communication of the order to the parties or legal practitioners, the official concerned shall arrange the records with pagination and prepare in the Index Sheet in Form no. to be prescribed by the Tribunal. He shall affix initials and then transmit the records with the Index initials to the records room.

Transmission of files or records or orders

160. Transmission of files or records of the cases or orders shall be made only after obtaining acknowledgement in the movement register maintained at different sections or levels as per the directions of the Registrar.

Filing of Order of the Tribunal with the Registrar of Companies

161. The certified copy of the order passed by the Tribunal shall be filed by the company in form INC-28 alongwith fee of Rupees five hundred with the Registrar of Companies within the time specified in the Act or specified by the Tribunal. Where no time limit is prescribed by the Tribunal, such order shall be filed within thirty days from the date of receipt of certified copy of the order.

Copies of orders in library

162. (1) The officer in charge of the Registry shall send copies of every final order to the library of the Tribunal.

(2) Copies of all orders received in each month shall be kept at the library in a separate folder, arranged in the order of date of pronouncement, duly indexed and stitched.

(3) At the end of every year, a consolidated index shall also be prepared and kept in a separate file in the library.

(4) The order folders and the indices may be made available for reference in the library to the legal practitioners.

PART XX

National Company Law Tribunal Orders

Register of Appeals, Petitions, etc.

163. (1) A Register in Form NCLT-18 shall be maintained in regard to appeals, petitions, etc., against the orders of the Tribunal to the National Company Law Appellate Tribunal and necessary entries therein be promptly made by the judicial branch.

(2) The register shall be placed for scrutiny by the President in the first week of every month.

Placing of National Company Law Appellate Tribunal orders before Tribunal

164. Whenever an interim or final order passed by the National Company Law Appellate Tribunal in an appeal or other proceeding preferred against a decision of the Tribunal is received, the same shall forthwith be placed before the President and Members for information and kept in the relevant case file and immediate attention of the Registrar shall be drawn to the directions requiring compliance.

Registrar to ensure compliance of National Company Law Appellate Tribunal orders

165. It shall be the duty of the Registrar to take expeditious steps to comply with the directions of the National Company Law Appellate Tribunal.

SCHEDULE OF FEES
S.No. Section of the Companies Act, 2013 Nature of application / petition Fees
1. Sec. 2 (41) Application for change in financial year 5,000/-
2. Sec. 7 (7) Application to Tribunal where company has been incorporated by furnishing false or incorrect info or by any fraudulent action. 5,000/-
3. Sec. 14 (1) Conversion of public company into a private company. 5,000/-
4. Sec. 55 (3) Application for issue of further redeemable preference shares. 5,000/-
5. Sec. 58 (3) Appeal against refusal of registration of shares. 1,000/-
6. Sec. 59 Appeal for rectification of register of member. 1,000/-
7. Sec. 62 (4) Appeal against order of Govt, fixing terms and conditions for conversion of debentures and shares. 5,000/-
8. Sec. 71 (9) Petition by Debenture-trustees. 2,000/-
9. Sec. 71 (10) Application in the event of failure of redeeming of debentures. 1,000/
10. Sec. 73 (4) Application by deposition for repayment of deposit or interest. 500/-
11. Sec. 74 (2) Application to allow further time as considered reasonable to the company to repay deposits. 5,000/-
12. Sec. 97 (1) Application for calling of Annual General meeting. 1,000/-
13. Sec. 98 (1) Application for calling of general meeting of company other than annual general meeting 1,000/-
14. Sec. 119 (4) Petition to pass an order directing immediate inspection of minute’s books or directing a copy thereof be sent forthwith to person requiring it. 500/-
15. Sec. 130 (1) Application for re-opening of books of account, if made by any person other than Central Government, Income Tax authorities, SEBI or any other statutory regulatory body or authority. 5,000/-
16. Sec. 131 (1) Application by company for voluntary revision of financial statement on Board’s report. 5,000/-
17. Sec. 140 (4) Application for not sending the copy of representation of auditor to the members. 1,000/-
18. Sec. 140 (5) Application by any other person concerned for change of auditors. 2,000/-
19. Sec. 169 (4) Application for not sending copies of representation 1,000/-
20. Sec. 213 Application to Tribunal for investigation into company affairs. 5,000/-
21. Sec. 218(1) Application for approval for action proposed against employee. 1,000/-
22. Sec. 222 (1) Application for imposition of restrictions on securities. 2,500/-
23. Sec. 241 (1) Application in cases of oppression and mismanagement. 10,000/-
24. Sec. 242 (4) Application for regulating the conduct of company. 2,500/-
25. Sec. 243(1) (b) Application for appointment as Managing Director 5,000/-
26. Sec. 244 (1) Application for waiver of requirement specified in clause (a) or (b) of Sec. 244 (1) 2,500/-
27. Sec 245 Class action suits 5000/-
28. Sec. 441 Application for compounding of certain offences. 1,000/-
29. Section 421 Appeals to NCLAT 5,000/-
30. Application under any other provisions specifically not above mentioned herein 1,000/-
31. Fee for obtaining passed to certified true copy of final order other than the concerned parties parties under Rule 50 5/- per page.

ANNEXURE – A

(See rule 4)

FORM NO. NCLT. 1
[see rules 34, 64, 66, 67, 68, 69, 70, 71, 73, 74, 75, 77, 78, 79, 80, 81, 83, 86 and 87]
[HEADING AS IN FORM NCLT. 4]
(Specify below the relief(s) sought explaining the ground for relieffs) and the legal provisions (if any) relied upon)vi. Particulars of Bank draft evidencing payment of fee for the petition or application made:

Branch of the Bank on which drawn:

Name of the issuing branch:

Demand Draft No . . . . . . . . . . . .

Date . . . . . . . . . .

Amount Rs . . . . . . . . . .

(Signature/Signature of Authorised signatory)
Date:
Place:

FORM NO. NCLT. 2

[See rule 34]

BEFORE THE NATIONAL COMPANY LAW TRIBUNAL

. . . . . . . . . . . BENCH : . . . . . . .

NOTICE OF ADMISSION

Date: . . . . . . . . . . . . . . . . . . . . . .

From: . . . . . . . . . . . . . . . . . . . . . . (Insert name of party filing the Admission)

To : The Registrar,

NCLT ( . . . . . . . . . . . . . . . . . . . . . . Bench).

… Applicant.

- Vs-

… Respondent.

The Party named above requests that the Tribunal grant the following relief:

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(Insert the relief or order sought)

In terms of . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (Insert the section of the Act, or the Rules/Regulation, that provides for the order or relief sought)

For the following reasons:

(Insert a concise statement of the circumstances, and the particulars of the request) 

In support of this Application, the applicant has attached an affidavit setting out the facts on which the Applicant relies.

Name and Title of person signing on behalf of Applicant:

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Authorised Signature and Address:

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Tel No. Fax No.
e-mail:
This form is prescribed under Rule under . . . . . . . NCLT Rules, 2016.
For rehabilitation : Rehab. Petition No.
Transfer Petition
For Transferred.
(CLB/BIFR/AIFp/HHC) No (CP.No.OR . . . . . . . . . . . . . . )
Matters from the :
CLB/BIFR/AIFR/HHC
For Other matters : Company Petition No.

FORM NO. NCLT. 3

[See rule 34]

BEFORE THE NATIONAL COMPANY LAW TRIBUNAL BENCH AT:

NOTICE OF MOTION

Date: . . . . . . . . . . . . .

From : . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (Insert name of party filing the Motion)

To : The National Company Law Tribunal

Concerning:

(Name and file number of matter being considered by the National Company Law Tribunal)

Name : . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .File No. :: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The Party named above requests that the Tribunal grant the following relief:

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(Insert the relief or order sought)

In terms of . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(Insert the section of the Act, or the Rules/Regulation, that provides for the order or relief sought)

For the following reasons:

(Inert a concise statement of the circumstances, and the particulars of the request. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . .

In support of this Application, the applicant has attached an affidavit setting out the facts on which the Application relies

Name and Title of person signing on behalf of Applicant

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Authorised Signature and Address:

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Tel No.

Fax No.

e-mail:

This form is prescribed under Rule 4 under NCLT Rules, 2016.

For rehabilitation Rehab. Petition No.
: Transfer Petition
For Transferred.
(CLB/BIFR/AIFp/HHC) No
Matters from the CLB/BIFR/AIFR/HHC : (CP.No.OR . . . . . . . . . . . . . . . . . . )
For Other matters : : Company Petition No.

FORM NO. NCLT. 3A

Advertisement detailing petition

[see rule 35]

Company Petition/Application/Reference No. . . . . . . . . . . . . . of . . . . Notice of petition

A petition/application/reference under section . . . . . . . . . . . . . . .of the Companies Act, 2013, for. . . . . . . . . . . . . . . was presented by. . . . . . . . . . . . on the . . . . . . . . . . . . . . .day of 20 … , and the said petition is fixed for hearing before bench of National Company Law Tribunal on 20 … Any person desirous of supporting or opposing the said petition/application/reference should send to the petitioner’s advocate, notice of his intention, signed by him or his advocate, with his name and address, so as to reach the petitioner’s advocate not later than ‘two days before the date fixed for the hearing of the petition/application/reference. Where he seeks to oppose the petition/application/reference, the grounds of opposition or a copy of his affidavit shall be furnished with such notice. A copy of the petition/application/reference will be furnished by the undersigned to any person requiring the same on payment of the prescribed charges for the same.

Dated …..

(Sd) …..

(Name)v

(Advocate for petitioner)

Address:

FORM NO. NCLT. 3B

Individual Notice of petition/ application to creditors, members, etc.

[see rule 68]

To

. . . . . . . . . . . . . .

. . . . . . . . . . . . . .

(sub: Notice of petition/ application filed under section of Companies Act, 2013)

Take notice that a petition/ application under section . . . . . . . . . . .of the Companies Act, 2013 dated . . . . . . . . . . . . . . . . . was presented by . . . . . . . . . . . (name of the company) before . . . . . . . . . . . .Bench, National Company Law Tribunal, for . . . . . . . . . . . . . (state the purpose of the petition).

The said petition/ application has been accepted and is fixed for hearing before the Bench on . . . . . . . . . . .

If you desire to support or oppose the petition at the hearing, you should give notice thereof in writing to the undersigned so as to reach him/ it not later than . . . . . . . . . . . . . .days before the date fixed for the hearing of the petition, and appear at the hearing in person or by your authorised representative.

Where such person seeks to oppose the petition/ application, the grounds of opposition or a copy of the affidavit shall be furnished with such notice.

A copy of the petition/ application will be furnished by the undersigned to any person requiring the same on payment of the prescribed charges for the same.

Signature:

Name of the petitioner/ applicant

(& his authorised representative, if any)

Date:

Place:

FORM NO.NCLT. 4

[See rule 34]

General Heading for Proceedings

Before the National Company Law Tribunal, Bench, at . . . . . . . . . .

In the mater of the Companies Act, 2013

And

In the matter of . . . . . . . . . Ltd: (Give the name of the Company)

*Notes: (1) Where the company is being wound-up, the words ‘in liquidat should be inserted in brackets after the name of the company.

(2) If the application or petition or appeal is under relevant Act which shall be set out in the cause title along with the Companies Act, 2013.

FORM NO. NCLT. 5

[See rule 34 and 37] [HEADING AS IN FORM NCLT.4]

Company Application No . . . . . . . . . . . . . . . . . . . . . . . . . . . .of 20 . . .

‘in Company Petition No . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . of 20 . . . .

*I.A. No. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . of.20. . . . . . . . . .

Name and Description..

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Applicant(s).

versus

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Respondents].

Notice

[Under : . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

Let all parties concerned attend the sitting Member (s) in Tribunal Room No. . . . . . . . or Chamber of HonourableMr/Mrs/Ms. . . . . . . . . . . . on . . . . . (day), the . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . day of . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . , at . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . o’clock in the . . . . . . noon on the hearing of an application by the applicant(s) above-named, for an order that:

(Here set out the relief sought)

Dated this . . . . . . .day 01. . . . . . 20 . . . .Registrar/ Authorised Representative or the Applicants s) .

This Notice was taken out by Shri . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Authorised Representative for the applicant(s) and will be supported by the affidavit(s) of . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

To Respondent(s)/ Opposite Party

[Here insert the section of the Act or other provision of law under which the application is made.]

*Omit if not applicable

FORM NO. NCLT. 6

(GENERAL)

[See rule 34] [HEADING AS IN FORM NCLT. 4]

Company Petition No. . . . . . . of 20. . . . .

General Affidavit Verifying Petition

I, . . . . . . . . . . . , son of . . . . . . . . , aged residing at. . . , do solemnly affirm and say as foliows:-

1. I am a director/secretary/ . . . . . . . . . . . . . . . . . /of… Ltd., the petitioner in the above matter [' and am duly authorised by the said petitioner to make this affidavit on its behalf.]

Note: This paragraph is to be included in cases where the petitioner is the Company.

2. The statements made in paragraphs . . . . . . . . . of the petition herein now shown to me are true to my knowledge, and the statements made in paragraphs . . . . . . . . are based on information, and I believe them to be true.

Solemnly affirmed, etc.

sd/-

VERIFICATION

‘Note: l.To be included when the affidavit is sworn to by any person other than a director, agent or secretary or other officer of the company.

**Note:- 2. This form can be used for any other general application moved before the Tribunal with such alteration or modification in the title and the content.

FORM NO. NCLT. 7

[See rule 39] [HEADING AS IN FORM NCLT. 4]

Company Petition No . . . . . . . . . of 20 .

Affidavit by way of evidence

I, A.B., son of . . . . . . . . . . , aged . . . . . . . residing at… , do solemnly affirm and say as foliows:-

1. I am a director/secretary/. . . . . . . . /of. . . . . . Ltd., the petitioner in the above matter [' and am duly authorised by the said petitioner to make this affidavit on its behalf.]

Note: This paragraph is to be included in cases where the petitioner is the Company.

2. The statements made in deposition in forthcoming paragraphs herein now are true to my knowledge, and believe them to be true.

Solemnly affirmed, etc.

‘Note: To be included when the affidavit is sworn to by any person other than a director, agent or secretary or other officer of the company.

FORM NO.NCLT 8

[See rule 56]

[HEADING AS IN FORM NCLT. 4]

Company Petition No of . . . . . . . . .20 . . . . . . . . . . . .

Application for Execution of Order under clause (3) of section 424 of the Act with reference to a Decree (Order 21, R. 11.)

I . . . . . . . . . . . . . , holder of an order passed by the National Company Law Tribunal, hereby apply for execution of the order under the

Order 21 Rule 11 of the Code
of Civil Procedure, 1908
read with clause (3)
of section 424 of the
Act herein below set
forth : No. of Company
Application/Company Petition/
Company Appeal/Misc.
Company Application
Names of
Parties
Date of Order Whether any appeal
preferred from order
Payment or adjustment
made, if any
Previous application,
if any, with
date and result
Amount with interest due upon
the order or other relief granted
thereby together with particulars
of any cross order/de cree.
Amount of costs, if any, awarded
Amount of costs,
if any, awarded
Against whom
to be executed
1 2 3 4 5 6 7 8 9
of 20…. A.B. Applicant/ Petitioner/Appellant CD. Respondant Month. , 20. . . . No None Application No dated 20. . . .  Result: Rs.. . . . . . principal interest at per cent per annum, from the date of decree till payment Rs.. . . . As awarded in Order No. subsequently Incurred Against the defendant CD.

Mode in which the assistance of the Tribunal is required:

When attachment as sale of movable property is sought: I pray that the total amount of Rs. . . . . (together with interest on the principal sum up to date of payment) and the costs of taking out this execution, be realised by attachment and sale of defendant’s movable property as per annexed list and paid to me. When attachment and sale of immovable property is sought: I pray that the total amount of Rs…. (together with interest on the principal sum up to date of payment) and the costs of taking out this execution be realised by the attachment and sale of defendant’s immovable property specified at the foot of this application and paid to me.

I . . . . . . . . . declare that what is stated herein is true to the best of my knowledge and belief.

Signed, Order /decree-holder.

Dated the . . . . . . . . day of . . . . . . . 20 . . . . . . .

[When attachment and sale of immovable property is sought.] Description and Specification of Property

The undivided one-third share of the judgment-debtor in a house situated in the village of, value . . . . . . . , and bounded as follows: —

East by G’s house; west by H’s house; south by public road; north by private lane and J’s house.

I . . . . . . . . . . . . . . declare that what is stated in the above description is true to the best of my knowledge and belief, and so far as I have been able to ascertain the interest of the defendant in the property therein specified.

Signed, Order/ decree-holder.

****(Note: The similar form may also be used for transfer of order to any other Tribunal having territorial jurisdiction to entertain the order of the tribunal as a decree under Code of Civil Procedure, 1908 read with section 424 of the Act)

FORM NO.NCLT. 9

[see rule 72, 76, 82, 84, 88 and 154 and also General Form for all purposes if no specific form is prescribed under these rules and Forms]

[HEADING AS IN FORM NCLT. 4]

Company Petition No . . . . . . . of 20 ….

Details of Application/ Petition:

Particulars of the applicant/ petitioner/ appellant:

i. Name of the applicant/ petitioner/ appellant
ii. Address of registered office of the applicant/ petitioner/ appellant
iii. Address of service of all notices
iv. Telephone/Fax Number and e-mail address, if any
Particulars of the respondent(s):
v. Name of the respondent(s).
vi. Office address of the respondent(s).
vii. Address of respondent(s) for service of all notices.
viii. Telephone/Fax Number and e-mail address, if any.

Application /Petition/ Appeal in the form of affidavit under Section of the Act for . . . . . . . . .

I, . . . . . . . . solemnly affirm and say as follows:

1. I am the Managing Director or Chairman of the Board of Directors/a director/ . . . . . . . . . . Of the above named company, and I have been a . . . . . . . . . . . . of the company since . . . . . . . . . 201 . . . . . . . . [the capacity in which the deponent swears to the affidavit should be set out.]

2. I have read the petition now shown to me and state that the statements made in paragraph 1 to thereof are correct and true to my knowledge.

4. Facts of the order against which appeal or review is filed:

5. The facts of the case are given below: (give here a concise statement of facts and other grounds in a chronological order, each paragraph containing as neatly as possible as separate issue, fact or otherwise).

6. Jurisdiction of the Tribunal: The applicant/ petitioner/ appellant declares that the matter of application/petition/ appeal falls within the jurisdiction of the Tribunal.

7. Limitation.- The applicant/ petitioner/ appellant further declares that the application/petition/ appeal is within the limitation as prescribed in the provision of section read with section 433 of the Act.

8. Matter not pending with any other Tribunal etc. - The applicant/ petitioner/ appellant further declares that the matter regarding with this application/ petition/ appeal has been made is not pending before any Tribunal of law or any other authority or any other Tribunal.

9. Particulars in respect of the fee paid in terms of the Schedule of Fees of these rules.-

1. Amount of fees

2. Name of the Bank on which Demand Draft is drawn or Online Payment is made

3. Demand draft number

10. Details of Index.- An index containing the details of the documents to be relied upon is enclosed.

11. List of enclosures.-

12. It is therefore prayed that directions may please be given:

1. Reliefs) sought.- In view of the facts mentioned in paragraph 5 above, the applicant/ petitioner/ appellantprays for the following reliefs) (Specify below the relief(s) sought explained the grounds for relief(s) and the legal provisions, if any, relied upon).

2. Interim order, if prayed for.- Pending final decision of application/ petition/ appeal, the applicant/ petitioner/ appellant prays for the following interim relief: (Give here the nature of the interim relief prayed for with reasons)

Dated this . . . . . . . day of . . . . . . . . 20

(Signature of the applicant/ petitioner/ appellant)

Solemnly affirmed before me at . . . . . . . . . . . . . . . on this (month) … day of …. 20 . . . . . . .

(signature)

FORM NO.NCLT.10

(see rule 46)

APPLICATION FOR THE REGISTRATION OF A INTERN OF AUTHORISED REPRESENTATIVE UNDER THE RULES

1. Name of Authorised Representative referred under these rules on whose behalf the intern is to be registered.

2. Particulars of the intern to be registered

(i) Full name (in capitals)
(ii) Address with contact no. and valid email address:
(iii) Father’s name
(iv) Age and date of birth
(v) Place of birth
(vi) Nationality
(vii) Educational qualifications
(viii) Particulars of previous employment, if any
(ix) Proof of Identity

I,. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (intern above named), do hereby affirm that the particulars relating to me are true.

3. Whether the authorised Representative has a intern already registered on his behalf and whether the intern sought to be registered is in lieu of or in addition to the intern already registered.

4. Whether the intern sought to be registered is already registered as a intern of any other Authorised Representative and if so the name of such practitioner

I, . . . . . . . . . . . . . (Authorised Representative) and Practicing as . . . . . . . . . Bearing Registration No . . . . . . . . . on the rolls of . . . . . . . . . At . . . . . . . . . , having office at (address with contact no and valid email) . . . . . . . . . and residing at . . . . . . . . . certify that the particulars given above are true to the best of my information and belief and that I am aware of any facts that any unethical and immoral attitude or behavior or character of the above intern if found would lead to cancellation of the registration of the said …. (name) as a intern without any notice.

Date:

Place:

Signature of Authorised Representative

To

The Registrar of the Tribunal

. . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . .

FORM NO.NCLT. 11

(See rule 73)

APPLICATION BY DEPOSITOR UNDER SECTION 73 (4) OR 76(2) OR BY COMPANY U/S 74(2) OR BY DEBENTURE HOLDER OR DEBENTURE TRUSTEE UNDER SECTION 71 (10) OF THE ACT OR SECTION 45QA OF THE RESERVE BANK OF INDIA ACT, 1934 (*delete whichever is not applicable)

[HEADING AS IN FORM NO. 4] Company Petition No of 20 ….

IN THE MATTER OF THE SECTION 73 (4) OR 76 (2) OR 74(2) OR SECTION 71 (10) OF THE ACT OR SECTION 45QA OF THE RESERVE BANK OF INDIA ACT, 1934

AND

IN THE MATTER OF (State the name of the Depositor or Company or Debenture Holder or Debenture Trustee-applicant)

AND

IN THE MATTER OF . . . . . . . . . . LIMITED (State the name of the company)

(i) Name and address of the Depositor/ Debenture holder-applicant:
(ii) Name of the company and address of its Registered Office:
(iii) Name(s) of Depositor (s)/ company Debenture holder/ Debenture Trustee (s) with full address:
(iv) Amount of Deposits \:
(v) Fixed Deposit / Debenture Receipt No. & date (Photostat copy to be enclosed):
(vi) Terms and Conditions of Deposit/ Debenture as also date of Maturity of Deposit:
(vii) Details of payment made, by the company, if any:
(viii) Actual amount due as on date of application (Principal/interest)
(ix) Details of correspondence, if any, made between the company and the Depositor (copy of correspondence to be enclosed):
(x) Any other particular (s) as may be considered relevant.

The Depositor/ Company/Debenture holder/Debenture Trustee -applicant, therefore, prays:-

(i) that the company, above named be directed to make repayment of the aforesaid Deposit(s)/ Debenture (s) along with interest due thereon in accordance with the Terms and Conditions of the Deposit/ Debenture;
(ii) that such further orders be passed as the Tribunal deem fit in the circumstances of the case.

(Signature of the Depositor/ Company/Debenture holder/Debenture trustee-applicant

Place: . . . . . . . . . .

Date: . . . . . . . . . .

Which ever not applicable may be deleted.

FORM NO. NCLT. 12

(see rule 45)

Memorandum of appearance

To

The Registrar,

National Company Law Tribunal . . . . . . . . . . Bench,

In the matter of . . . . . . . . . . Petitioner.

V.

. . . . . . . . . . Respondent

(C.P. NO . . . . . . . . . . of 20 . . . . . . . . . . )

Sir,

Please take notice that I, AB, Company Secretary in practice/ practising Chartered Accountant/ practising Cost Accountant, duly authorised to enter appearance, and do hereby enter appearance, on behalf of . . . . . . . . . . petitioner/ opposite party/ Registrar/ Regional Director/ Government of . . . . . . . . . . in the above-mentioned petition.

*A copy of the resolution passed by the Board of Directors authorising me to enter appearance and to act for every purpose connected with the proceedings for the said party is enclosed, duly signed by me for identification.

Yours sincerely,

Dated . . . . . . . . . . day of . . . . . . . . . . Address:

Enclosure: as aforesaid                                 Tele No.:

FORM NO. NCLT-13

[see rule 87]

Public Notice of petition under Section 245.

Take notice that a class action petition under section 245 of the Companies Act, 2013 dated . . . . . . . . . . was presented by . . . . . . . . . . before . . . . . . . . . . Bench, National Company Law Tribunal. The lead applicant in the said petition is . . . . . . . . . . The respondents in that petition are

The said petition/ satisfies the admission related conditions stipulated in section 245 and has been admitted. It is fixed for hearing before the Bench on . . . . . . . . . .

The petition has been filed on the following grounds . . . . . . . . . .

The petition seeks the following relief. . . . . . . . . . .

The members of the class for the purpose of this class action petition shall mean . . . . . . . . . . If you belong to the class in relation to which this Application has been filed, you will be bound by the outcome of this Application, unless you decide to opt-out from the proceedings by submitting the relevant form to the following address , . . . . . . . . . . subject to the Tribunal’s permission.

Signature:

(Registrar, National Company Law Tribunal, . . . . . . . . . . Bench)

Date:

Place:

FORM NCLT-14

BEFORE THE NATIONAL COMPANY LAW TRIBUNAL

[See Rule 128]

Certification when deponent is unacquainted with the language of the affidavit or is blind or illiterate.

Contents of the affidavit were truly and audibly read over/translated into. . . . . . . . . . language known to the deponent and he seems to have understood the same and affixed his LTI/Signature/Mark,

(Signature)

Name and designation with date.

Form NCLT-15

[See Rule 131]

BEFORE THE NATIONAL COMPANY LAW TRIBUNAL

New Delhi

Case No . . . . . . . . . …. OF 20 . . . . . . . . . . .
Between Appellant/ Petitioner
. . . . . . . .    . . . . . . . . .
(By Legal Representative Shri . . . . . . . )
and Respondent/s
. . . . . . . . . (By Legal Representative Shri . . . . . . . . . )

Under Section 424 of the Companies Act, 2013 r/w corresponding power vested under C.P.C.

Whereas the Tribunal suo motu or on consideration of the request made by Shri/ Smt/M/s . . . . . . . . . . ( Appellant) having been satisfied that production of the following documents or records under your control or custody is necessary for proper decision of the above case, you are hereby directed to cause production of the said documents/records before this Tribunal /forward duly authenticated copies thereof on or before the day of. . . . . . . 20 . . . . . . .

(Enter description of documents requisitioned)

“By Order of Tribunal *

Registrar

Date :

FORM NCLT-16

[See Rule 140]

BEFORE THE NATIONAL COMPANY LAW TRIBUNAL

NEW DELHI

Petition No . . . . . . . . . . of 20 . . . . . . . . . . .

Deposition of PW/RW

1. Name : :
2. Father’s/Mother’s/Husband’s Name :
3. Age :
4. Occupation :
5. Place of Residence and address :
6. Name of the Officer administering the Oath / affirmation :
7. Name of the Interpreter if any, duly Sworn/ solemnly affirmed Duly sworn/ solemnly/ affirmed Examination-in-chief: By :
Date:

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Cross examination: By

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Re-examination, if any:

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(Signature of the witness on each page)

Statement of witness as recorded was read over/translated to the witness, who admitted it to be correct.

Signature of the Member of the Tribunal with date

FORM NCLT-17

[See Rule 142]

CERTIFICATE OF DISCHARGE

Certified that . . . . . . . . . . appeared before this Tribunal as a witness/in/ No . . . . . . . . . . of 20 . . . . . . . . . . , on behalf of the appellant or respondent as Court witness on this day of ….20 and that he was relieved at . . . . . . . . . . on . . . . . . . . . . He was paid/not paid any T.A. and D.A. or allowance of Rs

Date : Signature of the Registrar
(Seal of theTribunal)

FORM NCLT -18

[See Rule 163]

BEFORE THE NATIONAL COMPANY LAW TRIBUNAL

REGIST EROP SLPs/
APPEALS COURT SI. No
No. of SLP/appeal
Before the NCLAT
No. of the case
appealed against
Name of theApplicant 1Respondent Date of dispatch
Of record a to NCLAT
Date of receipt
of records from NCLAT
Appeal dismissed
allowed with date
Interim Direction
If any, with date
Final order
In the appeal
with date
Direction If any,
for compliance
by the Tribunal
Steps Taken
for compllance
Remarks

ANNEXURE – B

LIST OF DOCUMENTS TO BE ATTACHED WITH A PETITION OR

APPLICATION

S.No. Section of the Act Nature of Petition Enclosures to the Petition
1. Sec. 2 (41) Application for change in financial year 1 .Copy of the memorandum and articles of association.2. Copy of balance sheet o: companies.

3. Affidavit verifying the petition.

4. Bank draft evidencing payment of application fee.

5. Memorandum of appearance with copy of the Board Resolution or the executed Vakalatnama, as the case may be.

2. Sec. 7(7) Application to Tribunal where company has been incorporated by furnishing false or incorrect info or by any fraudulent action. 1. Copy of the memorandum and articles of association.2. Document in proof of false or incorrect information or fraudulent action.

3. Affidavit verifying the petition.

4. Bank draft evidencing payment of application fee.

5. Memorandum of appearance with copy of the Board Resolution or the executed Vakalatnama, as the case may be.

3. Sec. 14 (1) Conversion of public company into a private company. 1. Copy of the memorandum and articles of association.2. Copy of the documents showing that the company ceased to become a public company.

3. Affidavit verifying the petition.

4. Bank draft evidencing payment of application fee.

5. Memorandum of appearance with copy of the Board Resolution or the executed Vakalatnama, as the case may be.

4. Sec. 55(3) Application for issue further redeemable preference shares. 1. Copy of the memorandum and articles of association.2. Documents showing the terms of issue of the existing preference shares.

3. Copy of the Board Resolution and resolution of general meeting for issue of further redeemable preference shares.

4. Copy of the latest audited balance sheet with the profit and loss account of the company with auditor’s report and director’s report.

5. Affidavit verifying the petition.

6. Bank draft evidencing payment of application fee.

7. Memorandum of appearance with copy of the Board Resolution or the executed Vakalatnama, as the case may be.

5. Sec. 58 (3) or 59 Appeal against refusal of registration of shares;or

Appeal for rectification of register of member.

Where the company is the petitioner.1. Copy of the memorandum and articles of association

2. Latest audited balance-sheet and profit and loss account, auditor’s report and director’s report.

3.Authenticated copy 01 the extract of the Register of Members.

4. Copy of the resolution of the Board or Committee of Directors (where applicable)

5. Any other relevant documents.

6. Affidavit verifying the petition.

7. Bank draft evidencing payment of application fee.

8. Memorandum of appearance with copy of the Board Resolution or the executed Vakalatnama, as the case may be.

9. Two extra copies of the petition.

Where the petition is made by any other person.

1. Documentary evidence in support of the statements made in the petition including the copy of the letter written by the petitioner to the company for purpose of registering the transfer of, or the transmission of the right to, any share, or interest in, or debentures as also a copy of the letter of refusal of the company.

2. Copies of the documents returned by the company.

3. Any other relevant document.

4. Affidavit verifying the petition.

5. Bank draft evidencing payment of application fee.

6. Memorandum of appearance with copy of the Board’s Resolution or the executed Vakalatnama, as the case may be.

7. Two extra copies of the petition

6. Sec. 61(1) Application to Tribunal for consolidation and division of share capital. 1. Copies of memorandum and articles of association;2. Copies of audited balance sheets for past 3 years;

3. Resolution for allowing such consolidation or division and providing justification for the same;

4. Documents in proof of new capital structure and class of shares being consolidated or divided;

5. Affidavit verifying the petition.

6. Bank draft evidencing payment of application fee.

7. Memorandum of appearance with copy of the Board’s Resolution or the executed Vakalatnama, as the case may be.

8. Two extra copies of the application

9. Any other relevant documents.

7. Sec. 73 (4) Application by deposition for repayment of deposit or interest. 1. Copy of the deposit receipt2. Copy of the correspondence exchanged with the company.

3. Bank draft evidencing payment of application fee.

4. Any other relevant document.

8. Sec. 74 (2) Application to allow further time as considered reasonable to the company to repay deposits. 1. Names and addresses of the officers of the company.2. Full details of small depositors such as names, addresses, amount of deposits, rate of interest, dates of maturity and other terms and conditions of deposits.

3. Reasons for nonpayment or late payment.

4. Annual Reports for the last three years.

5. Projection and cash flow statement for the next three financial years duly certified by Statutory Auditors of the company.

6. Any other relevant document

9. Sec. 97 (1) Application for calling of Annual General meeting. 1. Affidavit verifying the petition.2. Bank draft evidencing payment of application fee.

3. Any other relevant document.

10. Sec. 98 (1) Application for calling of general meeting of company other than annual general meeting 1. Documentary evidence in proof of status of the applicant.2. Affidavit verifying the petition.

3. Bank draft evidencing payment of application fee.

4. Memorandum of appearance with copy of the Board’s Resolution or the executed Vakalatnama, as the case may be.

5. Any other relevant document

11. Sec. 119(4) Petition to pass an order directing immediate inspection of minutes books or directing a copy thereof be sent forthwith to person requiring it. 1. Documentary evidence, if any, showing the refusal of the company to give inspection to the petitioner.2. Affidavit verifying the petition.

3. Bank draft evidencing payment of application fee.

4. Memorandum of appearance with copy of the Board’s Resolution or the executed Vakalatnama, as the case may be.

5. Any other relevant document.

12. Sec. 131 (1) Application by company for voluntary revision of financial statement on Board’s report. 1. Audited Financial statements of relevant period;2. Copies of memorandum and articles of association.

3. The details of the Managing Director, Chief Financial Officer, directors, Company Secretary and officer of the company responsible for making and maintaining such books of accounts and financial statement.

3. Where such accounts are audited, documents in proof of the name and contact details of the auditor or any former auditor who audited such accounts.

4. Copy of the Board resolution passed by the Board of Directors.

5. Affidavit verifying the petition.

6. Bank draft evidencing payment of application fee.

7. Memorandum of appearance with copy of the Board’s Resolution or the executed Vakalatnama, as the case may be.

8. Any other relevant document.

 

1039/27/2016-CX – 26-7-2016


GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF REVENUE
CENTRAL BOARD OF EXCISE AND CUSTOMS
NEW DELHI

CIRCULAR NO

1039/27/2016-CX, Dated: July 21, 2016

Sub: Classification of Micronutrients, Multi-micronutrients, Plant Growth Regulators and Fertilizers-clarification regarding classification of Glyphosates-reg.

Kind attention is invited to Board Circular No. 1022/10/2016-CX dated 06.04.2016 on the above subject. Representations have been received from the members of the trade requesting clarification regarding Glyphosate Isopropyl amine (Glyphosate 360 Acid) which was placed under the category of Plant Growth Retardant in the annexure to the circular at Table 1 in the opinion received from IARI.

2. To bring clarity on the issue, opinion was again sought from Indian Agricultural Research Institute (IARI). The relevant portion of the opinion received is produced below:

”….Glyphosate is a broad-spectrum non-selective, systemic herbicide. Glyphosate is registered as herbicide in more than 160 countries including India, with more than 1.4 billion pounds applied every year on many food and non-food field crops as well as non-crop areas where total vegetation control is desired. Major me of Glyphosate has been exclusively grouped under Herbicide category by CIBRC, Ministry of Agriculture, Govt. of India.

Glyphosate is among the most widely used herbicide by volume. Worldwide, more than 8,00,000 tonnes of glyphosate products are used, value of which is perhaps more than the value of all other herbicides combined. The herbicide is used to kill weeds by inhibiting a plant enzyme involved in the synthesis of three aromatic amino acids; tyrosine, tryptophan, and phenylalanine.

When applied at lower rates, glyphosate acts as plant growth regulator similar to 2, 4-D, a synthetic form of auxin. Latter like glyphosate is one of the oldest and most widely available herbicides in the world, commercially available worldwide since 1945…”

3. In view of the above, it is directed that the classification of Glyphosate may be done in accordance with the aforesaid clarification provided by IARI i.e. depending upon its usage. Difficulty faced, if any, in implementing the circular should be brought to the notice of the Board. Hindi version will follow.

F.No.106/03/2013-CX.3

(Rohan)
Under Secretary to the Govt. of India

Notification No. 62/2016 21-7-2016


MINISTRY OF FINANCE

(Department of Revenue)

NOTIFICATION

New Delhi, the 21st July, 2016

S.O. 2488(E).—Whereas, an Agreement between the Government of the Republic of India and the Government of Saint Kitts and Nevis was signed at New York on the 11th November, 2014 (hereinafter referred to as the said Agreement);

And whereas, the date for the entry into force of the said Agreement is the 2nd day of February, 2016 being the date of the later of the notifications of the completion of the procedures as required by the respective laws for entry into force of the said Agreement, in accordance with the provisions of article 13 of the said Agreement.

And whereas, paragraph 2 of the article 13 of the said Agreement provides that the provisions of the said Agreement shall have effect forthwith from the date for the entry into force;

Now, therefore, in exercise of the powers conferred by section 90 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby notifies that all the provisions of the Agreement between the Government of the Republic of India and the Government of Saint Kitts and Nevis for the Exchange of Information relating to taxes, as set out in the said agreement, appended as Annexure hereto, shall be given effect to in the Union of India with effect from the 2nd day of February, 2016

[Notification No. 62/2016 F. No. 503/09/2009-FTD-I]

PRAGYA S. SAKSENA, Jt. Secy.

AGREEMENT

BETWEEN

THE GOVERNMENT OF THE REPUBLIC OF INDIA

AND

THE GOVERNMENT OF SAINT KITTS AND NEVIS

FOR

THE EXCHANGE OF INFORMATION RELATING TO TAXES

The Government of the Republic of India and the Government of Saint Kitts and Nevis, desiring to facilitate the exchange of information with respect to taxes, have agreed as follows:

Article 1 Object and Scope of the Agreement

The competent authorities of the Contracting Parties shall provide assistance through exchange of information that is foreseeably relevant to the administration and enforcement of the domestic laws of the Contracting Parties concerning taxes covered by this Agreement. Such information shall include information that is foreseeably relevant to the determination, assessment and collection of such taxes, the recovery and enforcement of tax claims, or the investigation or prosecution of tax matters. Information shall be exchanged in accordance with the provisions of this Agreement and shall be treated as confidential in the manner provided in Article 8. The rights and safeguards secured to persons by the laws or administrative practice of the requested Party remain applicable to the extent that they do not unduly prevent or delay effective exchange of information.

Article 2 Jurisdiction

Information shall be exchanged in accordance with this Agreement without regard to whether the person to whom the information relates is, or whether the information is held by, a resident of a Contracting Party. However, a Requested Party is not obliged to provide information which is neither held by its authorities nor is in the possession or control of persons who are within its territorial jurisdiction.

Article 3 Taxes Covered

1. The taxes which are the subject of this Agreement are:

a) in India, taxes of every kind and description imposed by the Central Government or the Governments of political subdivisions or local authorities, irrespective of the manner in which they are levied;

b) in Saint Kitts and Nevis,taxes of every kind and description imposed by the Central /Federal Government or the Governments of political subdivisions or local authorities, irrespective of the manner in which they are levied.

2. This Agreement shall also apply to any identical or substantially similar taxes imposed after the date of signature of this Agreement in addition to, or in place of, the existing taxes. The competent authorities of the Contracting Parties shall notify each other of any substantial changes to the taxation and related information gathering measures which may affect the obligations of that Party pursuant to this Agreement.

Article 4 Definitions

1. For the purposes of this Agreement, unless otherwise defined:

a) the term “India” means the territory of India and includes the territorial sea and airspace above it, as well as any other maritime zone in which India has sovereign rights, other rights and jurisdiction, according to the Indian law and in accordance with international law, including the U.N. Convention on the Law of the Sea;

b) the term “Saint Kitts and Nevis” means the twin island Federation of Saint Kitts (Saint Christopher and Nevis) and when used in a geographical sense, means the territory or territories of Saint Kitts and Nevis;

c) the term “Contracting Party” means India or Saint Kitts and Nevisas the context requires;

d) the term “competent authority” means

i) in the case of India, the Finance Minister, Government of India, or its authorized representative;

ii) in the case of Saint Kitts and Nevis, the Ministry of Finance, the Government of Saint Kitts and Nevis or its authorised representative;

e) the term “person” includes an individual, a company, a body of persons and any other entity which is treated as a taxable unit under the taxation laws in force in the respective Contracting Parties;

f) the term “company” means anybody corporate or any entity that is treated as a body corporate for tax purposes;

g) the term “publicly traded company” means any company whose principal class of shares is listed on a recognised stock exchange provided its listed shares can be readily purchased or sold by the public. Shares can be purchased or sold “by the public” if the purchase or sale of shares is not implicitly or explicitly restricted to a limited group of investors;

h) the term “principal class of shares” means the class or classes of shares representing a majority of the voting power and value of the company;

i) the term “tax” means any tax to which this Agreement applies;

j) the term “recognised stock exchange” means

(i) in India, the National Stock Exchange, the Bombay Stock Exchange, and any other stock exchange recognised by the Securities and Exchange Board of India;

(ii) in Saint Kitts and Nevis, the Eastern Caribbean Securities Exchange and any other stock exchange recognised by the Eastern Caribbean Securities Commission; and

(iii) any other stock exchange which the competent authorities agree to recognise for the purposes of this Agreement;

k) the term “collective investment fund or scheme” means any pooled investment vehicle, irrespective of legal form;

l) the term “public collective investment fund or scheme” means any collective investment fund or scheme provided the units, shares or other interests in the fund or scheme can be readily purchased, sold or redeemed by the public. Units, shares or other interests in the fund or scheme can be readily purchased, sold or redeemed “by the public” if the purchase, sale or redemption is not implicitly or explicitly restricted to a limited group of investors;

m) the term “requesting Party” means the Contracting Party submitting a request for information to, or having received information from, the requested Party;

n) the term “requested Party” means the Contracting Party which is requested to provide information or which has provided information;

o) the term “information gathering measures” means laws and administrative or judicial procedures that enable a Contracting Party to obtain and provide the requested information;

p) the term “information” means any fact, statement, document or record in whatever form.

2. As regards the application of this Agreement at any time by a Contracting Party, any term not defined therein shall, unless the context otherwise requires or the competent authorities agree to a common meaning pursuant to the provisions of Article 11 of this Agreement, have the meaning that it has at that time under the law of that Party, any meaning under the applicable tax laws of that Party prevailing over a meaning given to the term under other laws of that Party.

Article 5 Exchange of Information Upon Request

1. The competent authority of the requested Party shall provide upon request information for the purposes referred to in Article 1. Such information shall be exchanged without regard to whether the requested Party needs such information for its own tax purposes or whether the conduct being investigated would constitute a crime under the laws of the requested Party if such conduct occurred in the requested Party.

2. If the information in the possession of the competent authority of the requested Party is not sufficient to enable it to comply with the request for information, that Party shall use all relevant information gathering measures to provide the requesting Party with the information requested, notwithstanding that the requested Party may not need such information for its own tax purposes.

3. If specifically requested by the competent authority of the requesting Party, the competent authority of the requested Party shall provide information under this Article, to the extent allowable under its domestic laws, in the form of depositions of witnesses and authenticated copies of original records.

4. Each Contracting Party shall ensure that its competent authority, for the purposes of this Agreement, has the authority to obtain and provide upon request:

a) information held by banks, other financial institutions, and any person, including nominees and trustees, acting in an agency or fiduciary capacity;

b) information regarding the legal and beneficial ownership of companies, partnerships, collective investment funds or schemes, trusts, foundations, “Anstalten” and other persons, including, within the constraints of Article 2, ownership information on all such persons in an ownership chain; in the case of collective investment funds or schemes, information on shares, units and other interests; in the case of trusts, information on settlors, trustees and beneficiaries; in the case of foundations, information on founders, members of the foundation council and beneficiaries; and equivalent information in case of entities that are neither trusts nor foundations.

5. This Agreement does not create an obligation on the Contracting Parties to obtain or provide ownership information with respect to publicly traded companies or public collective investment funds or schemes unless such information can be obtained without giving rise to disproportionate difficulties.

6. The competent authority of the requesting Party shall provide the following information to the competent authority of the requested Party when making a request for information under the Agreement to demonstrate the foreseeable relevance of the information to the request:

(a) the identity of the person under examination or investigation;

(b) the period for which information is requested;

(c) the nature of the information requested and the form in which the requesting Party would prefer to receive it ;

(d) the tax purpose for which the information is sought;

(e) grounds for believing that the information requested is present in the requested Party or is in the possession or control of a person within the jurisdiction of the requested Party;

(f) to the extent known, the name and address of any person believed to be in possession or control of the requested information;

(g) a statement that the request is in conformity with the laws and administrative practices of the requesting Party, that if the requested information was within the jurisdiction of the requesting Party then the competent authority of the requesting Party would be able to obtain the information under the laws of the requesting Party or in the normal course of administrative practice and that it is in conformity with this Agreement;

(h) a statement that the requesting Party has pursued all means available in its own territory to obtain the information, except those that would give rise to disproportionate difficulties.

7. The competent authority of the requested Party shall forward the requested information as promptly as possible to the requesting Party. To ensure a prompt response, the competent authority of the requested Party shall:

a) Confirm receipt of a request in writing to the competent authority of the requesting Party and shall notify the competent authority of the requesting Party of deficiencies in the request, if any, within 60 days of the receipt of the request.

b) If the competent authority of the requested Party has been unable to obtain and provide the information within 90 days of receipt of the request, including if it encounters obstacles in furnishing the information or it refuses to furnish the information, it shall immediately inform the requesting Party, explaining the reason for its inability, the nature of the obstacles or the reasons for its refusal.

Article 6 Tax Examinations Abroad

1. At the request of the competent authority of the requesting Party, the requested Party may allow representatives of the competent authority of the requesting Party to enter the territory of the requested Party, to the extent permitted under its domestic laws, to interview individuals and examine records with the prior written consent of the individuals or other persons concerned. The competent authority of the requesting Party shall notify the competent authority of the requested Party of the time and place of the intended meeting with the individuals concerned.

2. At the request of the competent authority of the requesting Party, the requested Party may allow representatives of the competent authority of the requesting Party to be present at the appropriate part of a tax examination in the requested Party, in which case the competent authority of the requested Party conducting the examination shall, as soon as possible, notify the competent authority of the requesting Party about the time and place of the examination, the authority or official designated to carry out the examination and the procedures and conditions required by the requested Party for the conduct of the examination. All decisions with respect to the conduct of the tax examination shall be made by the Party conducting the examination.

Article 7 Possibility of Declining a Request for information

1. The competent authority of the requested Party may decline to assist:

(a) where the request is not made in conformity with this Agreement; or

(b) where the requesting Party has not pursued all means available in its own territory to obtain the information, except where recourse to such means would give rise to disproportionate difficulty; or

(c) where disclosure of the information would be contrary to public policy (ordre public) of the requested Party.

2. This Agreement shall not impose on a Contracting Party the obligation:

(i) to supply information which would disclose any trade, business, industrial, commercial or professional secret or trade process, provided that information described in paragraph 4 of Article 5 shall not be treated as such a secret or trade process merely because it meets the criteria in that paragraph; or

(ii) to obtain or provide information, which would reveal confidential communications between a client and an attorney, solicitor or other admitted legal representative where such communications are:

(a) produced for the purposes of seeking or providing legal advice or

(b) produced for the purposes of use in existing or contemplated legal proceedings; or

(iii) to carry out administrative measures at variance with its laws and administrative practices, provided nothing in this subparagraph shall affect the obligations of a Contracting Party under paragraph 4 of Article 5.

3. A request for information shall not be refused on the ground that the tax claim giving rise to the request is disputed.

4. The requested Party shall not be required to obtain and provide information which the requesting Party would be unable to obtain in similar circumstances under its own laws for the purpose of the administration or enforcement of its own tax laws or in response to a valid request from the requested Party under this Agreement.

5. The requested Party may decline a request for information if the information is requested by the requesting Party to administer or enforce a provision of the tax law of the requesting Party, or any requirement connected therewith, which discriminates against a national of the requested party as compared with a national of the requesting Party in the same circumstances.

Article 8 Confidentiality

Any information received by a Contracting Party under this Agreement shall be treated as confidential and may be disclosed only to persons or authorities (including courts and administrative bodies) in the jurisdiction of the Contracting Party concerned with the assessment or collection of, the enforcement or prosecution in respect of, or the determination of appeals in relation to, the taxes covered by this Agreement. Such persons or authorities shall use such information only for such purposes. They may disclose the information in public court proceedings or in judicial decisions. The information may not be disclosed to any other person or entity or authority or any other jurisdiction (including a foreign Government) without the express written consent of the competent authority of the Requested Party.

Article 9 Costs 1.

Unless the competent authorities of the Contracting Parties otherwise agree, ordinary costs incurred in providing assistance shall be borne by the Requested Party, and, subject to the provisions of this Article, extraordinary costs incurred in providing assistance shall, if they exceed USD 500, be borne by the Requesting Party.

2. The competent authorities will consult each other, in advance, in any particular case where extraordinary costs are likely to exceed USD 500 to determine whether the Requesting party will continue to pursue the request and bear the cost.

3. The competent authorities shall consult from time to time with regard to this Article.

4. Ordinary costs include internal administration costs, any minor external costs and overhead expenses incurred by the Requested Party in reviewing and responding to information requests submitted by the Requested Party. Examples of extraordinary costs incurred in providing assistance include, but are not limited to the following:

a) reasonable fees charged by third parties for copying documents on behalf of the Requested Party;

b) reasonable costs of engaging interpreters, translators or other agreed experts;

c) reasonablecosts of conveying documents to the Requesting Party;

d) reasonable litigation costs of the Requested Party in relation to a specific request for information; and

e) reasonable costs for obtaining deposition or testimony.

Article 10 Implementation Legislation

The Contracting Parties shall enact any legislation necessary to comply with, and give effect to, the terms of the Agreement. Such legislation shall be enacted within six months of entry into force of this Agreement.

Article 11 Mutual Agreement Procedure

1. Where difficulties or doubts arise between the Contracting Parties regarding the implementation or interpretation of the Agreement, the competent authorities shall endeavour to resolve the matter by mutual agreement. In addition, the competent authorities of the Contracting Parties may mutually agree on the procedures to be used under Articles 5, 6 and 9 of this Agreement.

2. The competent authorities of the Contracting Parties may communicate with each other directly for purposes of reaching agreement under this Article.

Article 12 Other International Agreements or Arrangements

The possibilities of assistance provided by this agreement do not limit, nor are they limited by, those contained in existing international agreements or other arrangements between the Contracting Parties which relate to cooperation in tax matters.

Article 13 Entry into Force

1. The Contracting Parties shall notify each other in writing, through diplomatic channels, of the completion of the procedures required by the respective laws for the entry into force of this Agreement.

2. This Agreement shall enter into force on the date of the later of the notifications referred to in paragraph 1 of this Article and shall thereupon have effect forthwith.

Article 14 Termination

1. This Agreement shall remain in force until terminated by either Contracting Party.

2. Either Contracting Party may, after the expiry of three years from the date of its entry into force, terminate the Agreement by serving a written notice of termination to the other Contracting Party through diplomatic channels.

3. Such termination shall become effective on the first day of the month following the expiration of a period of six months after the date of receipt of notice of termination by the other Contracting Party. All requests received up to the effective date of termination shall be dealt with in accordance with the provisions of the Agreement.

4. Following termination of the Agreement Contracting Parties shall remain bound by the provisions of Article 8 with respect to any information obtained under this Agreement. In witness whereof, the undersigned, being duly authorised thereto, have signed this Agreement. DONE in duplicate at New York on 11th November, 2014 each in the Hindi and English languages, both texts being equally authentic. In case of divergence of interpretation, the English text shall prevail. For the Government of the For the Government of the Republic of India: Saint Kitts and News (Asoke Kumar Mukerji) (Delano Frank Bart) Q.C Ambassador Extraordinary and Ambassador Extraordinary and Plenipotentiary and Plenipotentiary and Permanent Representative of India to Permanent Representative of India to the United Nations Saint Kitts and Nevis to the Permanent Representative of the United Nations

Food service sector to be key part of economy: NRAI : 21-07-2016


Sound macro-economic performance will in turn help the food services sector become a key part of the economy, National Restaurant Association of India (NRAI) said in a report released on Wednesday. The size of the market, organised as well as unorganised, was around Rs 3.09 lakh crore in financial year 2015-16 (FY16) and is projected to grow at a compounded annual growth rate of 10 per cent to reach Rs 4.98 lakh crore by FY21, it said.

“Within this, the unorganised sector holds a 67 per cent share, with an estimated size of Rs 2.07 lakh crore in FY16. However, this is expected to fall and reach Rs 2.93 lakh crore by FY21. The organised sector, which includes chain outlets, standalone outlets and restaurants in hotels, is estimated at Rs 1.01 lakh crore in FY16 and is projected to grow at a CAGR of 15 per cent to reach Rs 2.04 lakh crore by FY21,” it said in the report.

Real estate for food services has emerged is driving the retail space. “On an average, 25-30 per cent of the retail space in malls is dedicated to food services outlets, which have started to operate on a revenue sharing model with mall operators,” the report said.

The food services sector is expected to have generated direct employment for 5.5-6 million people in FY16, which is expected to increase to 8.5-9 million by FY21. Indirect employment has seen a growth at CAGR of four per cent from 2013-2016 and expected to grow six per cent till 2021, it added.

In terms of tax revenue, the chain and standalone segments will contribute an estimated Rs 22,000-22,400 crore in calendar year 2016 and Rs 42,000-45,000 crore in 2021. “The chain market will contribute an estimated Rs 4,800-5,000 crore towards tax in 2016 and Rs 12,000-13,000 crore in 2021,” it further said.

Source : Business Line

Duty-free shops and what they should do : 21-07-2016


The Central Board of Excise and Customs (CBEC) has permitted duty-free shops in Customs areas to accept payment in rupees till a ceiling of Rs 25,000 from those going out of or coming into the country.

They will also be required to display the prices in rupees alongside those in foreign currency and the exchange rate adopted.

The decision follows the Reserve Bank’s notification which revised the limit for export from and import into this country of Indian currency, from Rs 5,000 to Rs 25,000 per person. CBEC has prescribed the procedures to be followed by operators of the duty-free shops for accounting of receipt, storage, operations and removal of goods at their boned warehouses and shops.

The Customs Act was amended on May 14 this year, introducing a provision for licensing special warehouses that will be subject to physical control by the Customs.

CBEC issued the notification for supply to duty-free shops in a Customs area in the class of goods which shall be deposited in a licensed special warehouse.

The Board also notified the Special Warehouse Licensing Regulations and the Special Warehouse (Custody and Handling of Goods) Regulations.

These do not permit retail sales from such a warehouse. CBEC has said a duty-free shop in a Customs area should not be treated as a warehouse. It is a point of sale for the goods, which are to be ex-bonded and removed from a special warehouse for being brought to such shops for sale to those eligible-passengers arriving or departing from India.

Operators of these shops store goods in large warehouses in the city and/or in smaller warehouses in and around the precinct of the airport, as a staging area for replenishing of stocks. Such warehouses qualify to be licensed as bonded ones, as they are capable of being under the lock of Customs.

CBEC now says the maintenance of records of goods deposited in a special warehouses should be only in digital form.

The software for maintenance of electronic records must incorporate the feature of audit trail. Meaning a secure, computer-generated and time-stamped electronic record.

It must allow for reconstruction of the course of events on the creation, modification or deletion of an e-record. The monthly returns may be filed as a paper copy or in digital form, as preferred by the licensee (digital form means a pen drive or CD). The monthly returns need not include details of sales to individual passengers.

The procedures prescribed for receipt of goods in the warehouses and their removal from these must be followed. Under Customs escort, goods can be removed from a special warehouse to duty-free shops or loaded on a scheduled commercial airline for sale to passengers going abroad, as in flight duty-free shop sales.

The Board has also issued guidelines for recovery of the costs of Customs supervision. Overall, CBEC’s latest instructions appear reasonable and easy to comply with.

Source : Business Standard

Notification No. 61/2016 20-7-2016


Central Government notifies the districts of the States mentioned as backward areas under the first proviso to clause (iia) of sub-section (1) of section 32 and sub-section (1) of section 32AD of the Income Tax Act 1961 – 61/2016 – Dated 20-7-2016 – Income Tax

MINISTRY OF FINANCE

(DEPARTMENT OF REVENUE)

(CENTRAL BOARD OF DIRECT TAXES)

NOTIFICATION NO. 61/2016

INCOME-TAX

New Delhi, the 20th July, 2016

S. O. 2478 (E).- In exercise of the powers conferred by section 32 and section 32AD of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby notifies the following districts of the States mentioned below as backward areas under the first proviso to clause (iia) of sub-section (1) of section 32 and sub-section (1) of section 32AD of the said Act, namely:-

State of Telangana

1. Adilabad

2. Nizamabad

3. Karimnagar

4. Warangal

5. Medak

6. Mahbubnagar

7. Rangareddy

8. Nalgoda

9. Khammam

State of West Bengal

1. South 24 Parganas

2. Bankura

3. Birbhum

4. Dakshin Dinajpur

5. Uttar Dinajpur

6. Jalpaiguri

7. Malda

8. East Medinipur

9. West Medinipur

10. Murshidabad

11. Purulia

State of Bihar

1. Arwal

2. Banka

3. Begusarai

4. Bhagalpur

5. Buxar

6. Gopalganj

7. Khagaria

8. Kishanganj

9. Madhepura

10. Munger

11. West Champaran

12. East Champaran

13. Saharsa

14. Saran

15. Sheikhpura

16. Sitamarhi

17. Siwan.

2. This notification shall come into force on the date of its publication in the Official Gazette.

[2016/F.No.142/13/2015-TPL]

PITAMBAR DAS, DIRECTOR (Tax Policy & Legislation

Notification No. 60/2016 20-7-2016


Income Declaration Scheme, (Amendment) Rules, 2016 – 60/2016 – Dated 20-7-2016 – Income Tax

MINISTRY OF FINANCE

(Department Of Revenue)

(CENTRAL BOARD OF DIRECT TAXES)

NOTIFICATION No. 60/2016

New Delhi, the 20th July, 2016

S.O. 2477(E).- In exercise of the powers conferred by sub-section (1) and sub-section (2) of section 199 of the Finance Act, 2016 (28 of 2016), the Central Board of Direct Taxes, makes the following rules further to amend the Income Declaration Scheme Rules, 2016 (hereinafter referred to as the principal rules) namely:-

1. (1) These rules may be called the Income Declaration Scheme, (Amendment) Rules, 2016.

(2) These rules shall come into force from the date of their publication in the Official Gazette.

2. In the principal rules, in Form-1, for serial numbers 1 and 2 and entries relating thereto the following serial numbers and entries shall be substituted, namely:-

“1. Name and address of the declarant

(a) Name             ……………………………

(b) Address: Office……………………………………………………………….………………………………………………………

…………………………………………………………………………………………………………………………………………………….

E-mail…………………………….Telephone No………………………

Residence…………………………………………………………………………………………………………………………………..

………………………………………………………………………………………………………………………………………………….

Mobile No. …………………….Telephone No………………………………..

2.  Filing status

(a) Whether the declaration                       ___is original                     ___or revised

(b) If revised-

(i) Enter receipt No. and Date of filing original Form-1          ………………….       /     /

(DD/MM/YYYY)

(ii) Reasons for revised declaration                                ………………………

(not exceeding 100 words)”.

[F.No.142/8/2016-TPL]

Dr. T.S. MAPWAL, Under Secy.

Note:- The principal rules were published vide notification number S.O.1831(E), dated the 19th May, 2016.

Notification No. 59/2016 20-7-2016


Amendment in Notification Number S.O.1830(E) dated the 19th May, 2016 – 59/2016 – Dated 20-7-2016 – Income Tax

MINISTRY OF FINANCE

(Department Of Revenue)

NOTIFICATION No. 59/2016

New Delhi, the 20th July, 2016

S.O. 2476(E).- In exercise of the powers conferred by section 187 of the Finance Act, 2016 (28 of 2016), the Central Government hereby amends the notification of the Ministry of Finance (Department of Revenue), notification number S.O.1830(E) dated the 19th May, 2016, published in the Gazette of India, Extraordinary, Part-II, Section-3, Subsection (ii) dated the 19th May, 2016.

2. In the said notification, for clause (ii), the following clause shall be substituted, namely:-

“(ii) the date on or before which the tax and surcharge is payable under section 184, and the penalty is payable under section 185 in respect of undisclosed income shall be as follows, namely:-

(a) the 30th day of November, 2016, for an amount not less than twenty-five per cent. of such tax, surcharge and penalty;

(b) the 31st day of March, 2017, for an amount not less than fifty per cent. of such tax, surcharge and penalty as reduced by the amount paid under clause (a);

(c) the 30th day of September, 2017, for the whole amount payable under section 184 and 185 as reduced by the amounts paid under clause (a) and (b);”.

[ F.No.142/8/2016-TPL]

Dr. T.S. MAPWAL, Under Secy.

Note:- The principal notification was published vide notification number S.O. 1830(E), dated the 19th May, 2016.

Reserve Bank of India to pay higher dividend on higher income : 20-07-2016


Its fight against inflation has not stopped the Reserve Bank of India from embarking on its own quantitative easing as it lowered interest rates and ensured that there is enough liquidity. Its higher bond holdings means higher income for itself, and higher dividend payout to the government.

It bought bonds worth Rs 1.85 lakh crore in its fiscal year ended June 30, data from the central bank show. Its overall balance sheet expanded by 35%, or a record Rs 3.8 lakh crore, during the year, an analysis of the data in its weekly statistical supplement, or WSS, shows. Its total balance sheet size as on July 1 was Rs 32.4 lakh crore, more than double the Rs 15.2 lakh crore at the end of June 2010. “The RBI had been markedly cautious in recent years in expanding its balance sheet.

As a result, primary liquidity (reserve money) grew only about 8% per year during the three-year period ending mid-2015, considerably lower than the long-term average of about 14% per year,” said Siddhartha Sanyal, chief India economist, Barclays Capital. “Of late, the RBI has clearly eased its stance in this regard; I view this as a welcome development. This will likely push reserve money growth towards its long-term average in the coming months.”

The two main contributors to its balance sheet size are the amount of government bonds it purchased from the market — the central bank no longer directly subscribes to bonds — and the foreign currency assets it bought from the market.

For the first time in four years, RBI bought more securities from the local markets through its open market operations than by mopping up foreign currency flows and releasing rupee resources into the system. The central bank’s rupee equivalent purchases of foreign currency ended up being marginally lower than its bond purchases at Rs 1.83 lakh crore.

It can only get better with the RBI changing its liquidity stance to neutral from deficit, which means that it would ensure banks don’t borrow from it to meet their daily requirements. “The concern over liquidity is how long we propose to take to move from a situation of systemic liquidity deficit to one of close to neutrality,” said RBI governor Raghuram Rajan after presenting the bi-monthly monetary policy in early June. “We will not commit to a time frame by which we will move to a neutral  position, but we will be opportunistic in moving this system towards that goal.”

Going by the pattern of its balance sheet growth, the Reserve Bank is likely to transfer higher profits to the government as the return on government securities is higher than the return on deploying its foreign currency assets in the top-rated sovereign bonds or parking them with central banks and commercial banks overseas. While the return on bond yields is linked to the coupon rate of bonds it purchase  income from overseas investments is linked to the yields on US treasury bonds, which have been marginal despite the US Fed raising rates in December 2015.

The Reserve Bank had transferred a surplus of Rs 65,896 crore last year (ending June 2015). But the exact impact on the overall return is difficult to estimate.

The Reserve Bank’s accounting principle is unlike that of a corporate entity and has stringent provisioning for market volatility and depreciation of assets, following international best practices adopted by central banks globally and its operations are not guided by a profit motive, but providing adequate liquidity and foreign currency and maintaining orderly conditions in the market.

Source : PTI

200 more cooperative banks under RuPay card : 20-07-2016


The National Payments Corporation of India (NPCI) has included more than 200 district central cooperative banks(DCCBs) under the network of RuPay debit card. With this, NPCI has digitised two-thirds of 675 districts in the country through its network of regional rural banks. RuPay (rupee plus payment) card is an Indian version of credit/debit card, initiated by NPCI, which also said there are over 280 million RuPay cardholders who have access to 220,000-plus ATMs and over 120,000 point of sale terminals across the country.

 

Sorce : Financial Express

PM Narendra Modi at mid-term is good enough for re-election in 2019: Swaminathan Aiyar : 20-07-2016


How well has Narendra Modi fared in two years? On the economic side, he has not been the radical reformer liberalisers hoped for. On the socio-political side, he has not been the communal ogre that many liberals feared. He has not delivered ‘achhe din’. Yet he has probably done enough for re-election in 2019. India is supposedly the fastestgrowing major economy in the world (7.6% GDP growth). This sits ill with falling exports for 19 months and an Index of Industrial Production (IIP) showing  almost zero growth.

Some experts fear statistical flaws. An insightful exercise by economist Pranjul Bhandari suggests manufacturing growth may have been inflated 4.5% and GDP growth 0.8% in 2015-16. However, even an adjusted rate would make India among the fastest in a slowing global economy. Problem: it’s nowhere near fast enough to fulfill Modi’s pledge of good jobs for all. That explains spreading agitations of well-off castes for government job reservations, notably the Hardik  Patel agitation in Gujarat.

In economic policy, Modi has successfully followed what Chief Economic Advisor Arvind Subramanian calls “persistent, creative and encompassing incrementalism”. Many Congress schemes have been rebranded and expanded. These include the JAM trinity of Jan Dhan Yojana, Aadhaar and mobile telephony, Swachh Bharat and Digital India.The only big bang attempt was on land acquisition, which ran into political hurdles and was abandoned. Modi’s greatest achievement   is ending big corruption in New Delhi. Much of his supposed over-centralisation of decision-making in the PMO aims at checking bribes. Corruption continues merrily in the states and lower bureaucracy. Still, Modi’s no-favourites approach has been a clear positive.

He has privatised nothing, and avoided the promised corporatisation of the Railways and Port Trusts. The banking system remains government-dominated and used for financing sundry government schemes (including  oft-disastrous public-private partnership (PPP) infrastructure projects). But efforts have begun to clean up bank books, check crony loans, and seize assets of willful defaulters.

Green Shoots Visible

Public investment in infrastructure has picked up. Road building has risen stridently. India is actually power surplus in many regions, though state-level subsidies for electricity remain ruinously high. Infrastructure remains sub-standard, but is not a binding constraint   on growth. No prime minister has pushed as hard as Modi for foreign direct investment (FDI) or the improved ‘ease of doing business’. His relentless drive for maximising jobs has led him to dilute his party’s traditional wariness of foreign investment, to the dismay of the Swadeshi Jagran Manch.

Modi has wooed the Indian diaspora, including MNC chiefs like Google’s Sundar Pichai, Microsoft’s Satya Nadella, and Pepsi’s Indra Nooyi. Modi’s message to the RSS is that MNCs cannot be viewed as ‘white imperialists’ when their bosses are globalised Indians. Even the Tata group’s current chief, Cyrus Mistry, is an Irish citizen.

Modi’s job emphasis also explains his drive to improve ‘ease of doing business’. Thousands of rules and procedures are being streamlined unobtrusively but steadily. Modi has succeeded in making chief ministers compete to become businessfriendly (including in labour flexibility). The changes are not dramatic. But ‘pervasive incrementalism’ is adding up across all sectors. It can have a big, positive impact over five years.

His election campaign promised ‘maximum governance, minimum government’. He has done little on either count. All government services —police courts, administration education health — remain unreformed and dismal. Subsidies have been pruned, but mainly because of good luck in falling global commodity prices, helping slash the oil and fertiliser subsidies. Whether all subsidies will be pruned and replaced by cash transfers remains to seen.

Focus On Governance

Critics have accused Modi of propagating communal hate, killing beefeaters and jailing dissenters like student leader Kanhaiya. There have, indeed, been many condemnable communal incidents. BJP ultranationalism over Kanhaiya and Muslims refusing to say ‘Bharat Mata ki Jai’ were deplorable. The eagerness to ban all cattle slaughter and beef-eating was an attack on not just Muslims but on Dalits and low-caste beef-eaters as well.

However, the communal situation is not remotely as bad as in the Babri Masjid days. Modi does not and cannot dissociate himself from the lunatic Hindu elements the BJP has always harboured. He has often resorted to ‘strategic silences’ before condemning communal statements of his partymen. But ultimately he has said the right thing. Communal polarisation led the party to lose the Bihar election, and so was abandoned in the Assam election. The BJP no longer seems to view it as an election-winner. That is a positive development.

The saffronisation of many cultural and educational posts has eroded institutional quality. Yesmen are in favour more than independent thinkers like RBI Governor Raghuram Rajan. But the Congress was guilty of similar sins. The problem is actually worse in state governments. All this falls far short of ‘achhe din’. Yet, despite many shortcomings, Modi has probably done enough to win re-election in 2019, although his majority may be greatly reduced.  It is no mean feat in two years to have created a good chance to rule for ten.

Caveat: unexpected disasters have sunk many governments in their last two years. But right now, Modi can allow himself a smile.

Source : PTI

No. F .No.279/Misc./M-74/2016-ITJ Dated:19-7-2016


Implementation of the Direct Tax Dispute Resolution Scheme 2016 – Circular – Dated 19-7-2016 – Income Tax

F .No.279/Misc./M-74/2016-ITJ
Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes

New Delhi, the 19th July, 2016

To,

All Principal Chief Commissioners of Income Tax,
Principal Chief Commissioner of Income Tax (IT & TP),
Chief Commissioner of Income Tax (Exemptions)

Madam/ Sir,

Sub: Implementation of the Direct Tax Dispute Resolution Scheme 2016 reg.

The Direct Tax Dispute Resolution Scheme, 2016 was introduced with effect from 1-6-2016 to address the issue of pending litigation before CsIT(A). Taxpayers stand to benefit by a timely disposal of their litigation, while the Department stands to reduce its administrative cost in disposing appeals and also to collect its due taxes. Therefore, it becomes expedient on the part of all officers to ensure that the Scheme is a resounding success.

2. On 29-2-2016, there were 73,402 appeals with tax effect above ₹ 10 lakhs and 1,85,858 appeals with tax effect below ₹ 10 lakhs pending before CsIT (Appeal). Thus, 2,59,260 appellants are eligible for the benefit of this Scheme. Unlike the Income Tax Disclosure Scheme, 2016, the target audience for this Scheme is limited to the above appellants and their representatives. This relatively smaller target group can easily be approached/informed of the benefits of this Scheme by the Designated Authorities being the PCIT/CIT.

3. The following steps have been taken in the matter:

i.  A proforma has been issued to all the Pr. CCsIT for reporting.

ii.  Dedicated corner containing the Scheme, Rules, Forms and FAQs relating to DRS Scheme is being created on the Department website. A Dashboard for daily reporting is being created on the website.

iii.  Pr. DGIT systems has been requested to forward a list of appeals pending before CIT (A) as on 29-2-2016, not yet disposed, mapped to each PCIT/CIT, containing the name of appellant, PAN, A.Y., category of appeal (tax disputed in appeal), address and e-mail/telephone number, where available.

4. Towards the successful implementation of the Scheme, Pr. CCsIT/CCsIT may ensure that:-

i.   All CsIT (A) peruse the grounds of appeal in each appeal pending before them and draw up a list of cases to be intimated to PCIT/CIT which would be eligible for this Scheme. This may include cases where appeal has been filed against mandatory interest, mandatory fees, covered cases and any other case found fit in the opinion of the CIT (A) to be included in this Scheme.

ii.   While paying special attention to the list received from the CIT(A), the PCIT/CIT will reach out to each appellant, as per the list provided by Systems, and address a letter (specimen enclosed – Annexure ‘A’) for discussing the benefits of this Scheme as applicable to the appellant.

iii.   PCIT/CIT must interact with the local CA Associations and Bar Associations to explain the benefits of this Scheme.

iv.  A ‘Standard Operating Procedure’ (Annexure ‘B’) is enclosed herewith for attention of all PCIT/CIT.

5. This issues with the approval of Member (A&J).

Annexure ‘A’

To,

___________________

___________________

Dear Taxpayer,

Sub: Direct Tax Dispute Resolution Scheme, 2016 – reg.

The Direct Tax Dispute Resolution Scheme, 2016, (Scheme) was introduced with effect from 1-6-2016. The primary aim is to reduce taxpayer grievance and uncertainty caused due to long pending litigation before the Commissioner Income Tax (Appeals). Whereas, litigation before CIT(A) is disposed chronologically and is dependent on tax effect, this Scheme provides an outer limit of 120 days for resolution of the pending matter. Practically, this period would be much shorter.

2. The Scheme provides for further relief in the following ways:

(i)  Tax payable would include tax & interest till the date of assessment. Interest accrued thereafter would not form part of tax payable.

(ii)  If the disputed tax is below ₹ 10 lakhs, penalty would stand waived on payment of tax & interest.

(iii)  Where the disputed tax is more than ₹ 10 lakhs, penalty of 75% would stand waived on payment of tax, interest and 25% of penalty levied/leviable.

(iv)  In the case of a penalty appeal, the same can be resolved on payment of 25%, provided the tax and all interest due have been paid.

(v)  Immunity from prosecution on the disputed tax would be available.

3. The Scheme, thus, provides a time bound process to resolve pending litigation without any uncertainty of the amount payable, which has been kept at the minimum. You may like to approach the undersigned to discuss the benefits of the scheme as applicable in your case. As per record, your appeal is pending with CIT (A) . . . . . . . . . . . . . . . for the A.Y. . . . . . . . . . . . . . . . ..

 

Yours faithfully

Pr. Commissioner of Income-tax

 

Annexure ‘B’

STANDARD OPERATING PROCEDURE FOR

DIRECT TAX DISPUTE RESOLUTION SCHEME 2016

While introducing the Direct Tax Dispute Resolution Scheme, 2016, (Scheme) in his Budget speech, 2016, the Ho’nable Finance Minister observed that, ‘litigation is a scourge for a tax friendly regime and creates an environment of distrust in addition to increasing the compliance cost of the taxpayers and administrative cost for the Government. There are about 3 lakh tax cases pending with the 1st Appellate Authority with disputed amount being 5.5 lakh crores.” This scheme offers an opportunity to the taxpayers to resolve pending litigation and to bring clarity and certainty in their tax matters. The Department stands to benefit with reduced administrative cost involved in handling appeals as well as timely collection of tax/interest/penalty due.

2. The following Standard Operating Procedure is laid down for processing declarations received under this Scheme:

a.  PCIT/CIT/CIT (Appeals) will provide all counsel, advice and assistance to the taxpayers in the implementation of this Scheme. Any doubts which remain may be sent to ts.mapwal@nic.in

b.  On receipt of a declaration under section 202 of the Scheme in Form 1 and Form 2 (where applicable), the same will be entered in the prescribed format by the Designated Authority.

c.  The PCIT/CIT will obtain (by hand preferably on the same day) an endorsement from the CIT(A) concerned that the appeal in question was pending on 29-2-2016 and has not yet been disposed.

d. PCIT/CIT will issue a Certificate in Form 3 determining the amount payable by the declarant. This Certificate will be expeditiously issued without waiting for the prescribed period of 60 days.

e. On receipt of details of payment in Form 4, the same will be entered in the Proforma prescribed and the PCIT/CIT will pass the order under section 204(2) of the Scheme in Form 5 or Form 6, well within the prescribed period of 30 days. The date of order will be entered in the Proforma.

f.  If any declaration could not be proceeded with, reasons for the same may be entered in the remarks column of the proforma and intimated to the CIT (A) concerned.

g.  On expiry of the Scheme and processing of all declarations, the entire data would be transferred by the PCIT/CIT to the Pr. CCIT/CCIT. The Pr. CCIT on consolidating the data of all PCIT/CIT would proceed to analyse the same based on “Person” and “Residential Status” and submit a report thereon to Member (A&J) CBDT with a soft copy to cit.aj.cbdt@incometax.gov.in.

Notification [F.NO.01/04/2013 CL-V (PT-I)] Dated: 19-07-2016


COMPANIES (SHARE CAPITAL AND DEBENTURES) THIRD AMENDMENT RULES, 2016 – AMENDMENT IN RULES 4, 8, 12, 13, 15 AND 18

NOTIFICATION [F.NO.01/04/2013 CL-V (PART-II)]DATED 19-7-2016

In exercise of the powers conferred by sub-sections (1) and (2) of section 469 of the Companies Act, 2013 (18 of 2013), the Central Government hereby makes the following rules further to amend the Companies (Share Capital and Debentures) Rules, 2014, namely: —

1. (1) These rules may be called the Companies (Share Capital and Debentures) Third Amendment Rules, 2016.

(2) They shall come into force on the date of their publication in the Official Gazette.

2. In the Companies (Share Capital and Debentures) Rules, 2014, (herein after referred to as the principal rules), in rule 4, in sub-rule (1), after sub clause (g), the following proviso shall be inserted, namely.—

“Provided that a company may issue equity shares with differential rights upon expiry of five years from the end of the financial year in which such default was made good.”.

3. In the principal rules, in rule 8, in sub-rule (4), after the first proviso, the following proviso shall be inserted, namely:—

“Provided further that a startup company, as defined in notification number GSR 180(E) dated 17th February, 2016 issued by the Department of Industrial Policy and Promotion, Ministry of Commerce and Industry, Government of India, may issue sweat equity shares not exceeding fifty percent of its paid up capital upto five years from the date of its incorporation or registration”.

4. In the principal rules, in rule 12, in sub-rule(l), in clause (c), after sub clause (ii), the following proviso shall be inserted, namely:—

“Provided that in case of a startup company, as defined in notification number GSR 180(E) dated 17th February, 2016 issued by the Department of Industrial Policy and Promotion, Ministry of Commerce and Industry Government of India, Government of India, the conditions mentioned in sub-clause (i) and (ii) shall not apply upto five years from the date of its incorporation or registration.”.

5. In the principal rules, in rule 13, in sub-rule (2),—

(i) clause (c) shall be omitted.
(ii) for clause (h), the following clause shall be substituted, namely:—
“(h) where convertible securities are offered on a preferential basis with an option to apply for and get equity shares allotted, the price of the resultant shares pursuant to conversion shall be determined—
(i) either upfront at the time when the offer of convertible securities is made, on the basis of valuation report of the registered valuer given at the stage of such offer, or
(ii) at the time, which shall not be earlier than thirty days to the date when the holder of convertible security becomes entitled to apply for shares, on the basis of valuation report of the registered valuer given not earlier than sixty days of the date when the holder of convertible security becomes entitled to apply for shares:
Provided that the company shall take a decision on sub-clauses (i) or (ii) at the time of offer of convertible security itself and make such disclosure under sub-clause (v) of clause (d) of sub-rule (2) of this rule.”.

6. In the principal rules, in rule 15, after the words “or a company redeems any redeemable preference shares”, the words “or a company not having share capital increases number of its members” shall be inserted.

7. In the principal rules, in rule 18,—

(A) in sub-rule (1),—

(a) for clause (b), the following clause shall be substituted, namely:—
“(b) Such an issue of debentures shall be secured by the creation of a charge on the properties or assets of the company or its subsidiaries or its holding company or its associates companies, having a value which is sufficient for the due repayment of the amount of debentures and interest thereon.”;
(b) in clause (d), for sub-clause (i), the following sub-clause shall be substituted, namely.—
“(i) any specific movable property of the company or its holding company or subsidiaries or associate companies or otherwise.”;

(B) in sub-rule (7),—

(a) in clause (b), in sub-clause (ii) and (iii) for the words “of the value of debentures” wherever they occur, the words “of the value of outstanding debentures” shall be substituted;
(b) in clause (b), after sub-clause (iii), the following proviso shall be inserted, namely:—
“Provided that where a company intends to redeem its debentures prematurely, it may provide for transfer of such amount in Debenture Redemption Reserve as is necessary for redemption of such debentures even if it exceeds the limits specified in this sub-rule.”.

Notification [F.NO.01/23/2013 CL-V (PT-I)] Dated: 19-07-2016


SECTION 381 OF THE COMPANIES ACT, 2013 – FOREIGN COMPANY – ACCOUNTS OF – EXCEPTIONS AND MODIFICATIONS WITH WHICH SUB-SECTION (1) OF SECTION 594 OF THE COMPANIES ACT, 1956 APPLIES TO A FOREIGN COMPANY – SUPERSESSION OF NOTIFICATION NO. GSR 59, DATED 6-1-1959

NOTIFICATION [F.NO.1/23/2013 CL-V]DATED 19-7-2016

In exercise of the powers conferred by sub- section (1) of section 381 of the Companies Act, 2013 (18 of 2013) (hereinafter referred to as “the Act”) and in supersession of the notification number G.S.R 59, dated 6-1-1959issued under sub-section (1) of section 594 of the Companies Act, 1956 (1 of 1956), in so far as it relates to the foreign company which is an airlines company, the Central Government hereby directs that the requirement of clause (a) of sub-section (1) of section 381 of the Act shall apply to a foreign company which is an airlines company (hereinafter referred to as “the company”) having a share capital, subject to the following exceptions and modifications, namely:—

1. It shall be deemed sufficient compliance of the provisions of clause (a) of sub-section (1) of section 381 of the Act, if in respect of the period ending on or after the 31st March, 2016, a company submits to the appropriate Registrar of Companies in India,—

(i) documents relating to copies of latest consolidated financial statements of the parent foreign company, as submitted by it to the prescribed authority in the country of its incorporation under the provisions of the law for the time being in force in that country:
Provided that where such documents are not in English language, there shall be annexed to it a certified translation thereof in the English language.
(ii) in respect of its Indian Business operations, a statement of receipts and payments for the financial year, duly authenticated by a practicing Chartered Accountant in India or a firm or a Limited Liability Partnership of practicing Chartered Accountants in India.
(iii) the documents required to be filed with Registrar of Companies under sub-rule (2) of rule 4 of the Companies (Registration of Foreign Companies) Rules, 2014.

2. Notwithstanding anything contained in the above paragraphs, the company shall, if so required by notice in writing from the Central Government, furnish to the Central Government such information with regard to its accounts as the Central Government may require.

3. This notification shall come into force on the date of its publication in the Official Gazette.

 

1038/26/2016-CX – 19-7-2016


GOVERNMENT OF INDIA MINISTRY OF FINANCE

DEPARTMENT OF REVENUE CENTRAL BOARD OF EXCISE AND CUSTOMS

NEW DELHI

CIRCULAR NO

1038/26/2016-CX, Dated: July 19, 2016

Sub:- Manual signatures on digitally signed invoices – reg.

Attention is invited to Notification No. 18/2015-Central Excise (NT) dated 06.07.2015 by which conditions, safeguards and procedures in relation to authentication of invoices by digital signatures were specified. Representations have been received from the trade requesting for clarification on whether a manufacturer who opts to authenticate invoices with digital signature can simultaneously also authenticate invoices by manual signature. The need for the trade to simultaneously use digital and manual signature has apparently arisen because many of the customers of a manufacturer or service provider, who receive goods and services under cover of an invoice authenticated by a digital signature, do not have the requisite Information Technology infrastructure lo accept or receive such invoices electronically. In such situations they demand manually authenticated invoices from manufacturers or service providers who otherwise issue digitally signed invoices.

2. The issue has been examined. It is hereby clarified that a manufacturer or a service provider who opts to issue invoices authenticated by digital signature may print a copy of such invoice and sign them manually and forward the same to such customers who are unable to accept or receive the digitally signed invoices. Such invoices in effect would be authenticated by two signatures, digital signature as well as manual signature and would be considered to be in conformity with rule 11 of Central Excise Rules, 2002 or Rule 4A, 4B and 4C of the Service Tax Rules, 1994. Such invoices would also be a valid document to avail CENVAT credit.

3. Difficulty, if any, in implementing the circular should be brought to the notice of the Board. Hindi version would follow.

F.No.224/44/2014-CX.6

(Shankar Prasad Sarma)
Under Secretary (CX.6)

1037/25/2016-CX – 19-7-2016


GOVERNMENT OF INDIA MINISTRY OF FINANCE

DEPARTMENT OF REVENUE CENTRAL BOARD OF EXCISE AND CUSTOMS 

NEW DELHI

CIRCULAR NO

1037/25/2016-CX, Dated: July 19, 2016

Sub: Classification of Tamarind Kernel Powder under CETA, 1985-reg.

Representations have been received from the members of the trade requesting clarification regarding classification of tamarind kernel powder. It has been stated in these representations that there is divergence in the field regarding practice of classification of tamarind kernel powder.

MANUFACTURE

2.1 The issue has been examined after taking inputs from the field formations. The process of converting tamarind seed into powder involves drying of tamarind seed in a rotary drum at 100° C. This drying is done of pure tamarind seed and without addition of any chemical compound. After drying, the tamarind seed is fed into disintegrator to remove the black skin. The inner kernel of tamarind seed obtained is then pulverised to fine powder in a pulveriser and the powder thus obtained is sieved in a sieving machine. The tamarind seed powder after sieving may be packed in gunny bags and sold. The tamarind kernel powder obtained from the above process is plain (unmodified) tamarind kernel powder.

2.2 Plain (unmodified) tamarind kernel powder may be further processed with heat or chemical treatment to obtain modified (treated) tamarind kernel powder. The primary difference between unmodified (plain) kernel powder and modified (treated) kernel powder is that the former is not soluble in cold water or water at room temperature, while the latter is soluble in cold water or water at room temperature. In order to use the unmodified powder as a thickener, it must be mixed into hot/ boiling water and stirred constantly to form a paste. Modified powder, on the other hand, is mixed using a high speed stirrer, into cold water or water at room temperature. This forms a paste and can be used as a thickener paste. Tamarind Kernel Powder, both plain and treated, are manufactured products and are used inter alia in textile and printing industry.

CLASSIFICATION

3. There are two tariff items where classification of tamarind kernel powder may be considered namely 1106 3010 and 1302 32 90. Chapter 11 of the Central Excise Tariff Act (CETA), 1985 covers products of milling industry. Heading 1106 covers flour, meal and powder of the products of Chapter 8. Chapter 8 covers edible fruits and nuts. Tamarind as an edible fruit, whether fresh or dried, is classified under the respective Tariff Headings of Chapter 8. Tariff item 1106 30 10 specifically covers flour, meal and powder of tamarind (as a product of Chapter 8). Therefore, Tariff item 1106 30 10 would cover flour, meal and powder derived from the pulp that is fleshy edible portion of tamarind fruit and not from the seeds of tamarind. Tamarind kernel powder can therefore not be classified under CETH 1106 30 10.

4. Chapter Heading 1302 of the CETA, 1985 covers vegetable saps and extracts, pectic substances, pectinates and pectates, agar-agar and other mucilages and thickeners, whether or not modified, derived from vegetable products. Further, sub-heading 1302 32 covers ‘mucilages and thickeners, whether or not modified, derived from locust beans, locust bean seeds or guar seeds’. Thus, sub-heading 1302 32 would inter alia cover products used as thickeners which are derived from seeds. HSN Explanatory Notes C(5) to the Heading 1302 specifically covers cotyledon (kernel) flour of tamarind seeds even if modified by heat or chemical treatment. In view of above, it is directed that tamarind kernel powder shall be classified under tariff item 1302 32 90 of CETA, 1985 as a product derived from the seed of the tamarind fruit. The said classification shall apply to both treated (modified) tamarind kernel powder and plain (unmodified) tamarind kernel powder.

5. Board Circular F. No. 10/18/86-CX.I dated 14.08.1986, issued on the above subject, is hereby rescinded. Difficulty faced, if any, in implementing the circular should be brought to the notice of the Board. Hindi version will follow.

F.No.116/17/2016-CX.3

(Rohan)
Under Secretary to the Govt. of India

RBI to make funds transfer via smartphones easier : 19-07-2016


HYDERABAD: RBI on Monday said it will become easier in coming weeks for people to transfer funds between bank accounts through their smartphones.

Speaking at the IDRBT Banking Technology Excellence Awards function, RBI GovernorRaghuram Rajan also made a case for tax benefits to merchants for promoting digital transactions.

Leveraging the high mobile density, mobile banking services are being encouraged through inter-operable USSD channel like *99# and the Unified Payments Interface (UPI).

“I am especially enthused by UPI, as smartphones become more widely available. Transfers from bank account to bank account will become easier in a few weeks via smartphone through the Unified Payment Interface,” the Governor said.

Elaborating, Rajan said a villager needing to pay a shopkeeper only needs to know the latter’s alias – say Ram@xyzbank.psp to transfer funds.

“Neither needs to visit the bank to take out or deposit money, no point of sale machine is needed. With the price of smartphones falling sharply, we are on the verge of solving the last-mile problem,” he said.

The Governor said that despite the huge potential, activation rates and usage levels of electronic payment services remain at low levels though growth is picking up.

“No doubt, the fear of taxation as payments move from cash to electronic plays a part in dampening activity. As information technology brings down the possible space to avoid or evade tax, and as the benefits… I have no doubt that merchants will push more for electronic payments,” he said.

“Some tax benefits to those merchants who show increases in digital transactions, and perhaps innovative ways to encourage customer participation, may be beneficial.”

Rajan also stressed on the importance of systems that offer security of transactions even to the unsophisticated user and do not place a huge burden of care on them.

“There is no point creating security for the ideal customer, instead the system should incorporate the possibility of mistakes by the actual customer that we have,” the Governor said.
Source : The Hindu

 

RBI creating registry of banking correspondents: Raghuram Rajan : 19-07-2016


Reserve Bank of India is in the process of strengthening the network of banking correspondents by creating a registry, Governor Raghuram Rajan said here today.

“We are engaged in strengthening the network of banking correspondents by creating a registry of banking correspondents, giving them the ability to take and give cash on behalf of any bank through the Aadhaar Enabled Payment System which will also give them adequate remuneration, and requiring that they are adequately  trained in providing financial services.

“Cash-in-cash-out points will expand soon as the Postal Payment Bank and telecom affiliated payment banks make post offices and telephone kiosks entry points into the financial system,” Rajan said at a seminar at the National Institute of Rural Development and Panchayati Raj.

Transfers from bank account to bank account will become easier via mobile through the Unified Payment Interface which is going to be launched shortly, the RBI Governor said.

RBI has created a new institution called ‘small finance bank’, where “small” refers to the kind of customer the bank deals with, not its size. With 75 per cent of the loans mandated to be below Rs 25 lakhs, the small finance bank is intended to provide services to the excluded, he said.

“Thus far,  the licences have been largely given to micro-finance institutions and one local area bank, but there is no reason why these cannot be given to regional rural banks and co-operatives in the future. The hope is that these institutions will maintain a low-cost structure, augmented by technology, to provide a menu of financial services to the excluded,” he said.

“Going forward, by the end of the year, the Credit Information Bureau of India will start providing individuals with one free credit report a year, so that they can check their credit rating and petition if they see possible discrepancies,” Rajan said.

An important proposal of the government is to give small businesses “Udyog Aadhaar” numbers, which are unique IDs tied to both the entity as well as the promoter. Such IDs could allow small firms to build credit histories with credit   histories with credit bureaus, especially as the histories are tied to specific promoters, he said.

Source : Financial Express

 

Govt notifies norms for retrofitting electric kit in vehicles : 18-07-2016


To curb vehicular pollution, the government has notified rules for retrofitment of hybrid electric system, or electric kit, for vehicles. This applies to the vehicles that meet emission norms and are run on either diesel or gasoline only.

“The Retrofitment of hybrid electric system kit to vehicles having Gross Vehicle Weight not exceeding 3,500 kg shall be permitted if it conforms to Bharat Stage-II or subsequent emission norms, if it was not retrofitted earlier,” Ministry of Road Transport and Highways said in the notification.

It mentions that the installation of type approved hybrid electric system kit shall be done only by an installer authorised by the manufacturer or supplier of such kits.

The rules – Central Motor Vehicles (Seventh Amendment) Rules, 2016 — were notified following amendment in the Central Motor Vehicles Rules, 1989.

The notification also mentions that the conversion of vehicles for pure electric operation with fitment of electric kit shall be permitted if the vehicle was manufactured on or after January 1, 1990 and “it is not provided with permits for carrying dangerous or hazardous goods, as defined in CMV Rules, 1989.”

It also stipulated that the kit manufacturer or supplier shall obtain the type approval certificate from a specified test agency and such certificate will be valid for three years from the date of issue.

Source : Times of India

Mis-selling of derivatives cause high speculation in market: BSE CEO : 18-07-2016


Holding the vested interests of select groups responsible for large volumes in derivatives segment on the exchanges, Ashish Chauhan, MD and CEO, said that mis-selling of derivatives products through these select groups makes India the second largest speculative market in the world.

Raising the issue of mis-selling of derivatives products to retail investors and traders, Chauhan highlighted the far-reaching adverse impacts on the overall participation of retail investors in such products.

“India has become second largest in terms of market speculation. The derivatives:equity ratio in India is 15, second only to South Korea at 30. Whereas other Western matured markets have this ratio much less,” he said attributing this increased levels of speculation in the market to mis-selling of products like derivatives by a ‘select group’ of people, including brokers and exchanges.

“If there is mis-selling of insurance or any other product, people get worried. (But) I am worried about the mis-selling in derivatives. There are vested interest of small groups, who keep volumes (in derivatives) up and then claim strength in the market,” Chauhan said here after an interactive session at Ahmedabad chapter of Young Indians (Yi) at CII house.

Chauhan expressed the need for a framework for retail participation in derivatives segments.

“Today, the cycle has become very fast. A person entering financial market, is directly taken to derivatives by falsely showcasing higher returns against equities. This is because brokers and exchanges get higher income from higher trading volumes. So without considering other factors like return on investments, India’s market cap etc, they mis-sell derivatives to retail traders,” he said.

“The person, who has faced losses in this, would never return and will tell other people not to venture into derivatives,,” he added.

BSE reported derivatives (F&O in index and equities) turnover of Rs. 20.97 crore for July 15, 2016 againstRs. 3,04,380.30 crore reported on the NSE.

Source : The Hindu

Nifty50 eyes Mt 9K by Dec if GST gets through; top 10 stocks to bet on : 18-07-2016


The much-awaited Goods and Service Tax (GST), which subsumes multiple indirect taxes such as excise duty, service tax, value added tax (VAT) along with local taxes, could well become a reality in the monsoon session of Parliament.

The market is already factoring in a positive scenario of likely passage of the bill, but uncertainty still remains. Latest media reports suggest that a high-level meeting between the government and principal Opposition Congress held ahead of the monsoon  session of Parliament failed to break the standoff.

If GST bill gets through, it can be a big trigger for the market, which could well take Nifty50 towards the 9,000 level by December, translating into a 5-7 per cent upside from current level, provided the monsoon rains are above normal.

The government is doing all that it can to push the reform in the monsoon session of Parliament, which starts from Monday, July 18. But if the government fails to strike the right chord with the Congress to get the bill passed, the market may correct from its current level.

“There is a very high likelihood of GST becoming a reality in the monsoon session of Parliament. This is largely factored in by the market. The recent surge in the prices of logistics stocks confirms that the  market has already priced in the passage of GST, if not fully, to a large extent,” V K Vijayakumar, Chief Investment Strategist, Geojit BNP ParibasBSE -0.13 %, said in an interview with ETNow.

“The major beneficiary of GST will be the entire economy as it will add around 1 per cent to the India’s GDP growth rate. This higher growth rate and its beneficial effects on corporate earnings will be a trigger for the markets, not immediately, but over a period of time,” he said.

Vijayakumar said if the passage of the GST bill coincides with an above-normal monsoon, it will sustain the present rally in the market. The Nifty50 could touch the 9,000 mark by December in such a scenario.

Overall GST will have a positive effect on various sectors. For OEMs, potential gainers would be the ones which are producers of small vehicles, commercial vehicles, and two-wheelers. Other sectors that can benefit include paints, tiles, sanitaryware, footwear, auto OEMs, air coolers, fans, wire and entertainment.

Here is a list of 10 stocks that are likely to benefit more from the implementation of the GST:

Analyst: Vinod Nair, Head of Research, Geojit BNP Paribas
HUL: The GST implementation would provide FMCG companies cost gains by 15-20 per cent as a result of warehouse consolidation.

Personal care and household products may see more consolidation, given the longer shelf life of products compared to F&B (food and beverages), where warehouses are already located closer to the distributors. Tax incidence will also come down to 18-20 per cent from 28-30 per cent at present. Companies like HULBSE -0.71 % will benefit from GST implementation.

Maruti Suzuki: Overall tax rates on small cars are expected to come down to 18 per cent from 24 per cent currently on GST implementation, leading to 7 per cent reduction in vehicle prices.

Being a leading player in the small car segment (about 50 per cent market share) Maruti would benefit from the passage of GST. Also under GST, the issues like CST paid on inputs cannot be set off against VAT liability on output etc will get addressed.

PVR: PVR can also be a beneficiary of the proposed GST implementation on likely savings in the entertainment tax, which is a major cost of the exhibition business. Average e-tax as a percentage of PVR’s gross box office revenue was 21 per cent in FY16.

With the implementation of GST, entertainment tax is expected to be rationalized and there would be a uniform e-tax across states. Though a partial benefit will be passed over to consumers, any drop in e-tax would be  margin accretive.

“Factoring 18 per cent E-tax post GST, we expect an additional benefit of 170bps in FY18E Ebitda Margin assuming any impact from the increase in VAT on F&B will be passed on,” he said.

Asian Paints : Paint companies will get the benefit from GST bill due to benefit from lower effective tax rate. A 35 per cent of the market is controlled by the unorganized players and there is stiff competition in entry-level paint like distemper and putty.

GST can narrow price difference with unorganized players and increase opportunities for organized players. Asian paint is the market leader in the Indian paint manufacturing industry with a market share of 53 per cent. Indeed, Asian PaintsBSE 1.13 % will get cost benefit on account of lower inventory carrying and logistics cost.

Havells India: Havell’s majority of revenue comes from Fans, wires, and cables where the share of unorganized players is 30-40 per cent. Also, there exists different rate of taxes in different states leading to tax arbitrage which will increase the share of the unorganized market.

Overall, GST will strengthen the positioning of organised players in the market by removing unfavourable advantage enjoyed by the unorganised players.

SMC Research:
Sintex Industries: The government’s strong focus on wide range of infrastructure and social improvement plans viz. education, healthcare, sanitation, housing etc., is expected to benefit the company going forward. Besides, the positive business and consumer sentiment improved  the performance of the automobile sector (four-wheelers and two-wheelers) leading to robust growth for the custom-moulding business.

Bajaj Auto: With the strong volume growth expected in the next two years, management expects the volume run-rate for Avenger to improve from 25,000 units per month to 30,000 in coming quarters. V15 is also expected to touch 30,000 units per month and the company is in a position to increase capacity given fungibility between products .

Exide Industries: As the company is one of the largest leaders in the battery space, it is likely to get the benefit, if the demand scenario improves. Moreover, it is also expected that cost reduction initiative and focus on profitable segment would drive the margins going forward.

The company has the advantage of having strong brand value, large network, widely spread product range, strong partners and collaborators relationship. It is fully prepared to meet the challenge of competition, leveraging its competitive strengths of network quality, technology, product range and brand value.

Gabriel India: The company has strongly adopted innovation in GabrielBSE 2.45 % and Anand group. Innovations have helped in coming out with some breakthrough ideas which has helped it to reduce energy cost and raw material cost.

The company has solid brand value and it hopes to cash-in on the same. Going forward the company will focus on debt reduction and automation.

Himatsingka Seide: The company is enhancing its branded revenue streams. The intention of the management is to take care of its manufacturing growth while also at the same time to focus on enhancing its retail and distribution growth.

According to the management of the company, branded products to add Rs 900-1,000 crore in revenues and it would commission a new sheeting plant to double its manufacturing capacity by July end, which will utilise around 45-50 per cent capacity in FY17.

(Views and recommendations given in this section are the analysts’ own and do not represent those of ETMarkets.com. Please consult your financial adviser before taking any position in the stock/s mentioned.)

Source : Economic Times

Govt to offload 5-10% stake in insurance firms : 16-07-2016


While the government will offload 5-10% of its holdings in the proposed initial public offers (IPOs) by state-owned general insurance companies, these companies would issue fresh shares in their bid to raise capital to expand business, sources told FE.

The Cabinet will soon take up the listing proposals of the insurance companies, an official said. Besides re-insurer General Insurance Corporation (GIC Re), four general insurers — New India Assurance, National Insurance Company, Oriental Insurance Company and United India Insurance Company — will be listed one-by-one over three years.

GIC Re, India’s only reinsurance company, will likely to be the insurance company to list in the exchanges by December this year. GIC will be likely followed by New India early next year.

“The IPO will likely be a mix of fresh equity shares to be issued by the companies and 5-10% stake offloaded by the government,” an official with knowledge on the matter said. The official said the insurance IPOs are likely to command a good price as non of the insurance companies (public or private) are listed, helping the government augment its non-debt capital receipts.

The additional revenue would help the government accommodate likely increase in capital infusion in public sector banks. The capital infusion PSBs is budgeted R25,000 crore for FY17, but the Centre is likely to infuse up to R30,000 crore in one go shortly to cushion banks against sharp increase in bad loans and lending growth.

While public sector banks were hit hard by rising NPAs after RBI-mandated asset quality review in the second half of FY16, the insurance companies were largely unaffected in the recent economic slowdown. GIC’s robust performance in recent years has made it the first candidate for listing among state-owned general insurers. GIC Re’s profit after tax (PAT) rose 6% to R2,848 crore in FY16. The net worth of the company stood at R38,281 crore, including fair value change account at March-end 2016.

New India IPO is expected in early 2017 to help the company fund its business growth plans. It has posted a profit after tax of R829 crore in FY16, down 42% from the year-ago period, partly on account of loss due to the Chennai floods. However, it still commanded nearly 16% market share in domestic general insurance premium income underwritten in FY16.

Source : The Hindu

7th Pay Commission: NCM member writes to Arun Jaitley, seeks changes in proposed govt salaries : 16-07-2016


Contending prices of essential commodities are same for all, an NCM member today urged Centre to increase salary of its lowest paid employees by Rs 4,000 and reduce that of highest paid personnel by Rs 25,000 under 7th Pay Commission to see those earning less are not affected.

In his letter to Finance Minister Arun Jaitley, National Commission for Minorities member Praveen Davar said that the minimum pay of Rs 18,000 as recommended in the 7th Pay Commission is “not adequate”, while the maximum pay of Rs 2.5 lakh is “a little too much”.

Davar though said his opinions expressed in the letter, dated July 11, was all personal and did not represent any organisation or group of individuals.

“Prices of essential commodities are equal for everyone. But those paid lower are affected more than those drawing high salaries. It is my personal opinion that the minimum pay in the 7th Pay Commission of Rs 18,000 is not adequate.

However, the maximum pay of Rs 2.5 lakh is a little too much,” he argued. Stating that the ratio of the highest and lowest paid should be ideally 10:1, Davar said, “the minimum pay is increased to Rs 22,000 and the maximum pay is brought down to Rs 2.25 lakhs.Similar modifications can be made in the intermediately pay scales.”

The move, he said, will not only narrow the gap between highest and lowest paid, but also result in substantially reducing the financial burden on the exchequer.

Davar also criticised the decision to offer steep hike in salary of MLAs in Delhi assembly saying the move has set a “wrong” precedent.

“Why should be anyone paid far above his genuine needs?,” he asked.

Source : Financial Express

GST Bill: Congress retreats, tax reform comes closer to reality : 16-07-2016


The Congress party on Friday indicated that it could support the crucial constitutional Bill for the goods and services tax (GST) in the Rajya Sabha if the government agrees to cap the tax rate in the statute, a climbdown from its earlier demand that the rate ceiling be specified in the Constitution itself. With this development, the long-delayed tax reform is set to cross a major milestone as the Bill, passed by the Lok Sabha and requiring at least half of the Upper House to be present and supporting with a two-thirds majority, could be passed during the winter session starting on Monday.

Finance minister Arun Jaitley and minister for parliamentary affairs Ananth Kumar on Friday met senior Congress leaders Ghulam Nabi Azad and Anand Sharma in a bid to help break the impasse. “We are trying to build consensus on GST. We have discussed all the points. Once the session starts, we will meet again after discussing the issue within our respective parties,” the finance minister said after the meeting, which lasted close to an hour.

While sources confirmed the Congress’ relenting, Azad said: “We had an in-depth discussion. We gave our point of view, they gave theirs. We put forth our apprehensions and suggestions. We will get back to our leadership and they will get back to their leadership and then we will meet again.”

Sharma said, “The talks are on. We will brief our leadership and will meet again after the session starts.”

While the ruling National Democratic Alliance (NDA) has only 72 members in the Rajya Sabha, whose current strength is 244, several non-NDA parties — with a total strength of close to 100 — had agreed to support the Bill in what opened the possibility of the Bill’s passage even without the support of the Congress with 60 members.

The GST is a crucial reform that could produce incremental economic growth as it would remove cascading of indirect taxes, reduce the incidence of taxes on businesses and consumers, facilitate a pan-India market for goods and services and potentially make Indian goods more competitive in the world markets.

The Congress has been stubborn in demanding some crucial changes in the GST Constitutional Amendment Bill, including mentioning the GST rate ceiling in the Constitution. The government has indicated that it is willing to drop a plan to introduce a 1% tax on interstate transactions, which was meant to help “manufacturing states” as the GST, being a destination-based tax on consumption, is expected to boost the revenue of “consumption states” rather than the former.

Last month, at a meeting of the empowered committee of state finance ministers held in Kolkata, almost all states in the country — with the only notable exception of Tamil Nadu — lent their weight to the Centre’s determined bid to quickly usher in the GST by endorsing its model GST law and decried the Congress party’s obdurate demand for capping the tax rate in the Constitution, leaving the main opposition party virtually isolated in the matter.

Source : Economic Times

Model GST Law – where is ease of doing business? – 15-07-2016


JULY 15, 2016

By S Sivakumar, LL.B., FCA, FCS MBA, ACSI, Advocate & R Vaidyanathan, M.Com., M.Phil, Consultant

A cursory reading of the model GST law could invariably bring out the imprint of the VAT law, as contrasted to the central excise/service tax law, in the model GST law. It seems clear that the States have had their way in the drafting of the model law, in as much as, most of the obnoxious provisions currently in the VAT law would seem to have found their way into the model GST law. It would seem that all the talk of a simplified GST law has been thrown to the winds and unless some serious introspection goes into the minds of the Government, this country would be doomed to live with a GST law that could discourage rather than encourage the concept of ‘Make In India’.

Be that as it may…… consider some of these draconian provisions.

Take a look at the definition of ‘supply’, which is the most important aspect of taxation under the GST law, as much as, the tax is leviable on the ‘supply’ of goods and/or services.

3. Meaning and scope of supply

(1) Supply includes

(a) all forms of supply of goods and/or services such as sale, transfer, barter, exchange, license, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business,

(b) importation of service, whether or not for a consideration and whether or not in the course or furtherance of business, and

(c) a supply specified in Schedule I, made or agreed to be made without a consideration.

(2) Schedule II, in respect of matters mentioned therein, shall apply for determining what is, or is to be treated as a supply of goods or a supply of services.

This is an inclusive definition. Not only that, the definition also includes the words ‘such as’, which would expand the scope of a definition, which is in any case, is already wide enough being an ‘inclusive’ definition. As students of central excise law, we know that, Section 2(f) of the Central Excise Act 1944, defines ‘manufacture’ in an inclusive matter and due to this, even after 70 years, we still have confusion as to what constitutes manufacture and we need the Apex Court to decide cases, on ‘manufacture’, even now. At least, insofar as the definition of ‘service’ under Section 65B(44) of the Finance Act, 1994, there is some clarity as the definition uses the words ‘means and includes’. In fact, the definition of ‘sale’ under the VAT law is much more clear. For instance, Section 2(29) of the Karnataka VAT Act, 2003 defines ‘sale’ to mean every transfer of the property in goods…

Now, look at the definition of ‘supply’ in the model GST law. By using an inclusive definition and the words ‘such as’, the GST regime could cover every transaction under the sun and we could have litigation for the next 70 years, on what constitutes ‘supply’. The billion dollar question is, is this kind of a very loose definition justified in a law that promises to usher in the ease of doing business? If the lawmaker is himself not sure as to what constitutes ‘supply’, what kind of a confusion and the consequent litigation that this loose definition could create in the years to come is left to the fertile imagination of the readers.

Taking this discussion forward…. take a look at the very important definition of the term ‘consideration’. In terms of Section 2(28) of the model law, we again have an inclusive definition. Of course, the term ‘consideration’ is not defined under the service tax, VAT and central excise laws. This fact cannot justify having a very wide definition that can haunt industry forever. While the Government’s eagerness to cover transactions involving exchange, barter, etc. is understandable one would expect a much tighter definition which can minimize litigation.

Look at the definition of ‘business’, which again, is an inclusive definition. Section 2(17) of the model law reads as under:

(17) “business” includes -

(a) any trade, commerce, manufacture, profession, vocation or any other similar activity, whether or not it is for a pecuniary benefit;

(b) any transaction in connection with or incidental or ancillary to (a) above;

(c) any transaction in the nature of (a) above, whether or not there is volume, frequency, continuity or regularity of such transaction;

(d) supply or acquisition of goods including capital assets and services in connection with commencement or closure of business;

(e) provision by a club, association, society, or any such body (for a subscription or any other consideration) of the facilities or benefits to its members, as the case may be;

(f) admission, for a consideration, of person s to any premises; and

(g) services supplied by a person as the holder of an office which has been accepted by him in the course or furtherance of his trade, profession or vocation;

One is rather worried to see that even after substantially increasing the scope of the definition of ‘business’ [Section 2(6) of the Karnataka VAT Act, 2003 only has two clauses, under the definition of 'Business'] by listing 7 clauses, the definition is still an inclusive one.

By the way, most of the definitions in the model law are ‘inclusive’ definitions, reflecting the lack of clarity on the part of the Babus who have drafted this model law. We don’t find many definitions that are exhaustive, indicating the lack of homework on the part of the Babus, despite that, the introduction of the GST regime has been in the cards for about 15 years now.

Taking this discussion further…. the provisions relating to input credit are most draconian, impractical and anti-Industry. In terms of Section 16 of the model law, input credit can be availed by the purchaser/service recipient, if and only if, the seller has paid the tax collected and also has filed the requisite return. This provision seems to have been completely driven by the States as we have not had a similar provision under the central indirect tax laws. It seems ironical that the buying dealer/service receiver should not only run his business effectively but also ensure that his suppliers/service providers are also complying with the provisions related to payment of tax, filing of returns, etc., for availing input tax credit. How could the Government seek to transfer its mandatory responsibility of ensuring compliance with the law, to the Industry itself? Why then do we require the tax bureaucracy if it cannot ensure compliance by the assessees? We shudder at the issues that could crop up in the case of large assessees, who might have to take responsibility for ensuring that, not only do they maintain their own records and file returns, they will also have to ensure that, their tens of thousands of vendors and service providers have also filed returns and made payments. Billions and billions of invoices would need to be checked by the GSTN and should there be any technical glitches, the whole system could get thrown out of gear, seriously affecting the very GST system. In our view, there is no need for rushing into this restriction at this point of time. This can always be attempted after the GST system has stabilized. We are informed that, even countries like China and Brazil, which had gone for this kind of a system of input tax credit have miserably failed and hence, it would seem that this system of allowing input credit on the basis of the payment of the output tax by the seller/service provider is very likely to fail in India, as well.

Besides this, the input credit system is likely to create a lot of issues for Industry especially given the fact that the restrictions that are currently applicable in the service tax regime are continuing under the model law, including the denial of credit in respect of construction of immovable property as well as, denial of credit in respect of commercial realty players. Where is the justification to deny credit to a manufacturer who is setting up a new factory, under the GST law and will this not result in increased cost of setting up business in India?

Under the model law, input credit attributable to personal usage (as contrasted to usage for business) is to be denied. Though the Government could come out with a formula, similar to the existing Rule 6(3) of the Cenvat Credit Rules, 2004, to deny credit on common inputs/input services, couldn’t have the GST model law followed the Income tax Act, 1961 insofar as what constitutes personal expenses? The requirement to apportion credit as attributable to personal usage could result in large scale litigation for Industry. Couldn’t the Government follow the provisions contained in the income tax law, under which, personal expenses (as contrasted to business expenses) are disallowed under Section 37(1) of the Income tax Act?

The model GST law has some highly obnoxious provisions related to pre-deposit, penalty, etc. It would seem that the Karnataka VAT Act has had a role to play, vis-à-vis the levy of mandatory penalty of 10% of the short payment of tax, under Section 66(2) of the model law. Under Section 66(1), of course, there is a mention of a mandatory penalty of 100% of the tax evaded/short paid in the case of evasion, wrong availment of credit, etc. It would seem that, once it is proved that there has been an evasion, etc., there is no discretion insofar as the levy of penalty of 100% is concerned. Compare these draconian penalty provisions in the model law with those in the Karnataka VAT law, wherein, a mandatory penalty of only 10% is levied, irrespective of whether the case involves ‘mens rea’.

Talking of pre-deposit… under Section 79(6) of the model law, a pre-deposit of 10% of the disputed amount would need to be effected for filing the appeal. Since 100% penalty is expected to be routinely confirmed under the GST regime, the pre-deposit would actually amount to 20% of the tax, as contrasted to the present dispensation, wherein, 10%/7.5% of only the tax or penalty is to be pre-deposited depending on whether the order appealed against has been passed by the Commissioner or the Appellate Commissioner.

The imprint of the States is very clearly seen, in terms of the revisionary powers granted to Commissioners under Section 80 of the model law. As far as we can see, this section would seem to have been directly taken out of the VAT law. Based on our experience of handling VAT law in Karnataka for over three decades now, we can submit that, the revisional powers have been largely misused by the senior officers of the Commercial Taxes Department and one can expect the same situation, under the GST law.

Provisions related to advance ruling contained in Sections 94 to 105 of the model law may not make much sense, as it seems that the Commissioner under Section 80 could have the powers to revise the advance rulings, as is the case under the Karnataka VAT Act now.

Under the GST model law, assessees rendering services in multiple states would need to take CGST registration in each of these states, as the concept of ‘centralized registration’ that is currently available under the service tax law, is not applicable under GST. The Government should seriously think of allowing services providers having operations in multiple States to have a centralized registration, vis-à-vis CGST. Further, it would seem that the CGST input tax credit that is available on one State cannot be transferred to another State.

The current concept of agency under the VAT law is proposed to be replaced with a draconian concept under the GST law, wherein, under Section 2(2A), where a person acting as an agent who, for an agreed commission or brokerage, either supplies or receives any goods and/or services on behalf of any principal, the transaction between such principal and agent shall be deemed to be a supply. This could create situations that would be impossible to handle, as in such cases, the commission agent would get treated as a full-fledged ‘supplier’ under law, whereas, under business conditions, a commission agent would not buy goods or procure services on his own account. Under the model law, the commission agent is likely to get converted into a ‘principal’ which would go against the fundamental concepts of business law. It also seems that a C & F agent would also be treated as a full ‘supplier’ under the model law, which goes completely against the business understanding.

The transitional provisions are draconian and impractical, to say the least. More on this, later, perhaps, by way of another article.

Talking of the Realty Sector…. It would seem that this industry would suffer the most, under the GST regime, inasmuch as, the composition scheme that is currently followed by all States in one form or another, is not finding its place under the model law. For example, Developers pay a composition tax of 1% in Maharashtra while they pay, 4% on the construction value in Karnataka and are entitled to exemption in respect of the sub-contract turnover. Under Section 8 of the model law, the composition scheme is restricted to players with an aggregate turnover of Rs 50 lakhs or less and consequently, this scheme, as envisaged under the model law, with its other restrictions, would largely be inapplicable to Realty Developers. I would wonder as to how Developers in Maharashtra, Karnataka and other States would be able to charge and collect GST at rates of around 18% from their flat buyers, under the GST regime. Since in any case, the players opting for the composition scheme are not allowed to make inter-state purchases, the Government would do well to find some alternate scheme for Developers and Builders, comparable to the existing composition scheme, as otherwise, the Realty Sector could crumble under the impact of the higher GST rates.

Apart from the Realty Sector, we feel that the services sector would also get impacted in a big way, under the GST regime. The leading software and services exporters would have to knock at the doors of the State Governments also, for refund of the SGST, in addition to seeking refund of the CGST from the Central Government. Moreover, the services sector, which has happily been outside the ambit of the VAT law (and consequently, the harassment from the VAT Department) would now have to face the challenges of the State GST machinery. Good luck to the services sector.

As another example of the imprint of the VAT law, in the model GST law, we have Section 123 which squarely lays the responsibility of proving the genuineness of the input tax credit on the claimant. Perhaps, under the GST law, large companies will need to police the activities of their suppliers and service providers to ensure the authenticity of the relevant documents, supplies, etc.

The provisions contained in the model GST Valuation (Determination of the Value of Supply of Goods and Services), 2016 are equally confusing, to say the least. In terms of Rule 3(5) of these rules, where goods are transferred from (a) one place of business to another place of the same business or the principal to an agent or from an agent to the principal, whether or not situated in the same State, the value of such supply shall be the transaction value.One fails to understand as to how, inter branch transfers of goods can be valued at the transactional value? Moreover, it seems that the confusion related to levy of tax on reimbursements would continue to haunt the Industry under the GST regime as well.

The provisions related to arrest contained in Section 62 of the model law look very vague and obnoxious. Under this Section, the Commissioner can order arrest even in cases when he has a reason to believe that there is a failure to supply any information that the supplier is required to provide to the Department in terms of Section 73(1)(k) of the model Act. Even an attempt to commit any of the offences specified in Section 73(1) could result in an arrest. Needless to say…. these are draconian and anti-Industry provisions which can be misused and Industry would be well advised to protest against these provisions. On a lighter vein… one of the co-authors of this article, being a Consultant, is extremely worried about the implications arising out of Section 73(1)(l) read with Section 63 of the model law, in terms of which, even a person who ‘abets’ any of the offences mentioned therein, can be arrested.

We can go on and on and on…a cursory reading of the model law could lead one to conclude that, the same has been drafted with no concerns for the Industry, service providers, trade and professionals.

Before concluding…

The model GST law falls very short of expectations. If this is the law that is expected to ensure ease of doing business, God save the Indian Industry. In our strong view, the entire GST law needs to be re-written with the sole aim of facilitating the concept of ease of doing business. Making cosmetic changes to the model law would not do, in our view.

The model law which is a combination of the negative aspects of the current indirect tax laws, nay, an improvement upon these negative aspects, is a cruel joke on Industry. While there are some positive aspects like availability of credit on inter-state purchases, removal of multiple taxes on the same transaction, etc., we feel that the negative aspects of the GST model law far outweigh the positive aspects.

While we do not suspect the good intentions of the PM and the FM, the model law, in its current form would seem to be the result of the drafting by the babus and especially, the babus from the States, whose main intention would seem to have the footprint of the bureaucracy in the GST regime. Unless the law is completely re-written in an Industry friendly manner, the country is likely to suffer the consequences for the next 50 to 70 years. It also seems that the Industry, the main stakeholder under the GST law, has been kept outside of the drafting of the law.

Fortunately, we are now having stalwarts like Mr P Chidambaram in the Rajya Sabha. In our view, the present Government should actively engage intellectuals like Mr Chidambaram in evolving a good GST law, especially given his proven expertise in tax matters as also the fact that it was he, who had made the first announcement of the impending GST regime in his Budget speech on 28-2-2006.

Unfortunately, it would seem that a lot of discussion is currently being centred on the GST rate, with the Congress apparently seeking a cap on the GST rate and a mention of this in the 122 nd Constitutional Amendment Bill. In our view…. the GST rate is not that important, as compared to having a good GST law in place. Considering the fact that the GST law would be a money bill which can be introduced with its passage in the Lok Sabha, all efforts should now be put in, to draft a good GST law. In case a good GST law cannot be introduced in 2017, it does not matter, as having waited for a long time, the country can as well wait for another year to have a good law in place.

Perhaps, some of the Rules might contain certain beneficial provisions. But, given the contours of the model law, we would wonder if the Rules could pleasantly surprise us.

The GST is expected to be an economic landmark. The model law, by expanding on the current negative provisions contained in the central excise, customs, service tax and State laws including VAT, would seem to proceed in a wrong direction and could, in fact, derail the economic reforms initiated by the current Government and could act as a major dampener for new investors.

We still have time – instead of a half-baked product, it would be prudent to create a GST law for which the Government would be admired rather than creating a law which sinks the already floundering Indian industry!

Ban On Cash Transactions Above 3 Lakhs To Be Considered By Government : 15-07-2016


Paying more than three lakhs in cash for anything should be made illegal and holding more than 15 lakhs in cash at any point should be banned for individuals – two major recommendations that the government will now review as it tries to eliminate thousands of crores of black or undeclared money.

The proposals have been made by a Special Investigation Team or SIT, which was appointed immediately after Prime Minister Narendra Modi took office. The committee reports to the Supreme Court, which, since 2011, has been supervising the government’s efforts to locate and recover undeclared cash, much of it stashed abroad to avoid taxes.

“Having considered the provisions which exist in this regard in various countries and also having considered various reports and observations of courts regarding cash transactions, the SIT felt that there is a need to put an upper limit to cash transactions,” says the fifth in a series of reports presented by the expert committee to the top court on Thursday, explaining the need for a 3-lakh cap on cash transactions.

So far, the committee’s recommendations have been carefully evaluated and implemented by the government. This has included offering a four-month compliance window which ends in September and offers citizens the opportunity to reveal undisclosed income from any sort of asset and escape criminal action. The disclosures are taxed at 45% of their value.

In the monsoon session of parliament, which starts on Monday, the government will ask law-makers to approve changes to a 1988 law that defines benami or proxy-owned assets especially property and will provide upto seven years in jail along with a stiff fine for those found guilty.

In May, market regulator SEBI strengthened the rules for P-notes to improve transparency and check money laundering through stocks. Participatory (“P”) Notes allow foreign investors to buy Indian stocks. The new norms require the registration with SEBI of these Offshore Derivative Instruments used by foreign investors to invest in the domestic stock market, and the beneficiaries have to be identified and verified to help detect illegal money flowing into the country.

The government has also said it will start imposing capital gains tax on investments coming from Mauritius starting next year in an attempt to stop “round tripping” or the return to India of wealth that has not been accounted for by routing it through countries that provide easy channeling of funds without too many questions.

Source : Economic Times

OFFICE MEMORANDUM [F.1/5/2016-SEZ]


NSTRUCTION ON DOCUMENTS TO BE FORWARDED FOR FULL NOTIFICATION/ADDITIONAL AREA NOTIFICATION/PARTIAL DE-NOTIFICATION/FULL DE-NOTIFICATION/CHANGE OF NAME OF DEVELOPER OR CO-DEVELOPER AND SHIFTING OF UNIT FROM ONE SEZ TO ANOTHER SEZ

OFFICE MEMORANDUM [F.1/5/2016-SEZ]DATED 14-7-2016

The undersigned is directed to say that of late it has been noted in number of instances the documents forwarded by the office of DCs for full notification/additional area notification/partial de-notification/full de-notification/change of name of developer or co-developer and shifting of unit from one SEZ to another SEZ are not complete in all respect thereby leading to avoidable delay. A checklist for each of the aforesaid item of work is hereby circulated to ensure that complete documents are forwarded along with DC’s recommendation to this Department.

CHECKLIST FOR FULL AREA NOTIFICATION

(i) State Government’s Recommendation.
(ii) Inspection Report in prescribed format.
(iii) Developer’s Certificate countersigned by DC.
(iv) Legal Possession Certificate from revenue authorities.
(v) Non-encumbrance Certificate from revenue authorities.
(vi) Land details of area to be notified duly certified by revenue authorities.
(vii) Colored Map clearly indicating survey numbers and duly certified by revenue authorities.
(viii) Copy of Registered Lease /sale Deed.

CHECKLIST FOR ADDITIONAL AREA NOTIFICATION

(i) Certificate from concerned State Government or its authorized agency stating that the developer has irrevocable rights to develop the sad area as SEZ.
(ii) Form-C4 for increase in area along with DC’s recommendation.
(iii) Inspection Report in prescribed format .
(iv) Developer’s Certificate countersigned by DC.
(v) Legal Possession Certificate from revenue authorities.
(vi) Non-encumbrance Certificate from revenue authorities.
(vii) Land details of the area to be notified duly certified by revenue authorities.
(viii) Colored Map clearly indicating survey numbers and duly certified by revenue authorities.
(ix) Copy of Registered Lease/sale Deed.

CHECKLIST FOR PARTIAL DE-NOTIFICATION

(i) Form-C5 for decrease in area along with DC’s recommendation.
(ii) DC certificate in prescribed format .
(iii) Developer’s Certificate countersigned by DC.
(iv) Land details of the area to be de-notified countersigned by DC.
(v) Coloured Map of the SEZ clearly indicating area to be de-notified and left over area duly countersigned by DC.
(vi) “No-Objection Certificate” from the state government w.r.t instructions issued by DoC vide its instruction No.D.12/45/2009-SEZ dated 13.09.2013 for partial de-notification shall be complied with Annex A.
(vii) ‘No Dues Certificate’ from specified officer.

CHECKLIST FOR FULL DE-NOTIFICATION

(i) Form-C6 for full de-notification along with DC’s recommendation. Annex ‘B’
(ii) DC Certificate in prescribed format Annex ‘C’.
(iii) “No-Objection Certificate” from the state government w.r.t instructions issued by DoC vide its instruction No.D.12/45/2009-SEZ dated 13-9-2013 for full de-notification shall be complied with.
(iv) ‘No Dues Certificate’ from specified officer.

CHECKLIST FOR CHANGE OF NAME OF DEVELOPER/CO-DEVELOPER

(i) Copy of Fresh Certificate of Incorporation, consequent on change of name issued by Registrar of Companies.
(ii) The details of Board of Directors and their shareholding pattern before and after name change duly certified by Chartered Accountant.
(iii) ‘No Objection Certificate’ from the developer, in case proposal is for change in name of co-developer.

CHECKLIST FOR SHIFTING OF UNIT FROM ONE SEZ TO ANOTHER

(i) ‘No Dues Certificate’ from the existing developer/co-developer.
(ii) Consent Letter/Offer of space from the developer/co-developer where unit wants to shift.

2. Such proposals should not henceforth be sent to the Department by post/courier. A responsible officer not below the level of DDC should deliver the proposals to this Department. In case the proposals do not fulfill the above requirement, the proposals shall not be accepted and shall be returned to the DDC for completion.

ANNEX – A

No.D.12/45/2009-SEZ

Government of India

Ministry of Commerce & Industry

Department of Commerce

(SEZ Division)

*****

Udyog Bhavan, New Delhi

Dated the 13th September, 2013

To

The Chief Secretaries of States /UTs

Subject: Implementation of the Special Economic Zones (Amendment] Rules, 2013 – Clarifications regarding

Sir/Madam,

Please refer to the amendment to the provisions of the SEZ Rules, 2006 vide GSR 540(E] dated 12th August, 2013 issued by the Ministry of Commerce & industry (Department of Commerce], Government of India, which may be viewed at http://sezindia.nic.in/Iatest-updates.asp [SEZ(Amendment) Rule 2013 Gazette copy]. I am directed to say that the intent and purpose behind the said amendments is to address the challenges being faced by SEZ Developers and Units on the one hand, while creating a more investor friendly environment on the other. The amendments are a part of the SEZ reforms which aim to better achieve the objectives of the SEZ Policy viz. growth of economic activity, attracting investment, boosting exports and generating additional employment. In order to facilitate better understanding of the amended Rules, the following clarifications are issued:

1. Minimum land area requirements for setting up of SEZ: In order to address the problem of aggregating large tracts of uncultivable land for setting up SEZs, while conforming to Vacancy and contiguity norms, the minimum land area requirements for setting up of SEZ in various categories has been reduced by half. This is also aimed at permitting optimum utilization of land by the existing SEZs. The amendments permit the setting up of Multi-product SEZ with minimum land area requirements of 500 Ha. instead of 1000 Ha. Similarly, a sector specific SEZ can be set-up with a minimum land area requirements of 50 Ha. instead of 100 Ha.

The amendments for special category states etc have accordingly been reduced also.

2. In order to encourage agro-based industries in SEZs, a new sector -‘agro-based food processing sector has been introduced. A sector specific SEZ in this sector would require a minimum land area requirement of 10 Ha.

3. IT/ITES Sector: The minimum land requirement criteria of 10 Ha. for setting up of IT/ITES SEZs as envisaged in SEZ Rules, 2006 has been dispensed with. There will be no minimum land area requirement for IT/ITES SEZs but they will have to conform with a minimum built up area requirement. Furthermore the amendments provide that the minimum built up area requirement of one lakh square meters will now be insisted upon for the seven major cities viz: Mumbai, Delhi (NCR), Chennai, Hyderabad, Bangalore, Pune and Kolkata. For the other set of Category B cities 50,000 square meters norm will be applicable and for the remaining cities/locations 25,000 square meters of minimum built up area will be insisted upon.

4. In order to give effect to the changes made in IT/ITES Sector, classification of cities based on their IT density has been made and inserted as Annexure IVA to the amended Rules.

5. Consequent to above amendments, there may be certain requests/proposals for seeking de-notification of parcels of land from the existing SEZs. In order to prevent any possible misuse of such de-notified parcels of land by the Developers, Department of Commerce will consider only such applications which fullfil the following criteria:

(i) All such proposals must have an unambiguous ‘No Objection Certificate’ from State Government concerned.
(ii) State governments may also ensure that such de-notified parcels would be utilised toward creation of infrastructure which would sub-serve the objective of the SEZ as originally envisaged
(iii) Such land parcels after denotifcation will conform to Land Use guidelines/master plans of the respective State Governments.

These conditions are in addition to conditions which the Board of Approval may impose including refund of duties/benefits which the Developer may have availed on the land to be de-notified, preservation of contiguity of the remaining parcel of SEZ land, fulfilment of other conditions etc.

6. Broad-banding: Sectoral broad-banding provisions have been introduced for categories of sectors to encompass similar/related areas with each broad-banded sector treated as a single sector for the purposes of minimum land area criteria. The principle of broad-banding would be applied taking into account the fact that no additional environmental externalities be required for the additional units which would come up on account of such broad-banding. Some illustrative examples of such broad-banded category comprising a sector would include:

Textile, apparel, hosiery, fashion garments, wool and carpet
Leather, leather handicrafts, leather garments and sports goods
Auto components/parts, light engineering
Biotechnology, Pharmaceuticals and chemicals
IT, ITES, Electronic components and hardware manufacturing, non-conventional energy, BPO (including legal, medical and similar services), KPO and R&D

Related ancillary services of the sector and R&D services will be included and treated as an integral part of the sectoral broad-banding. Board of Approval (BoA) will have the discretion to allow additional categories to be broad-banded into a sector based on compatibility of area requirement etc.

7. Graded Scale for Minimum Land Criteria: In order to allow greater flexibility and address the intermediate size land tracts falling between different categories, it has further been decided to introduce a Graded Scale for Minimum Land Criteria. Thus for each contiguous fifty hectare parcel of land in a existing SEZ or which is added to a notified SEZ, an additional sector would be allowed. This would permit flexibility to the Developer to allot land to the Units thereby encouraging optimal utilization of the SEZ land.

8. Vacancy Norms clarified: It has been provided that addition or inclusion of any land to an existing SEZ, where such land contains a port, manufacturing unit, or structures in which no commercial, industrial or economic activity is in progress, then such existing ports, manufacturing units, or structures will not be entitled to any duty benefits in respect of the pre-existing structures. However any additions or upgradations to such existing ports, manufacturing units, or structures after their addition or inclusion in a SEZ would qualify for the fiscal incentives as applicable for a new infrastructure in a SEZ. The authorised operations being carried on in such infrastructure would also be eligible for benefits as provided for under the SEZ Act and rules.

9. Transfer of Assets by SEZ Units upon their exit: Norms have been laid dawn in Rule 74A which allow a SEZ Unit to opt out of a SEZ by transferring its assets and liabilities to another entity by way of transfer of ownership including sale of subject to the conditions enumerated in the Rule. These include that the Unit has held a valid Letter of Approval as well as lease of land for at least a period of five years and has been in operation in at least two years. The transfer will be approved by the Unit Approval Committee keeping in mind the fulfillment of all eligibility conditions by the new entity to be a SEZ Unit. Furthermore the applicable duty liabilities, if any, as calculated under rule 74, as well as export obligations of the transferee company, if any, shall stand transferred to the new entity who shall be under obligation to discharge the same on the same term and conditions as the transferee company.

ANNEX – ‘C’

CERTIFICATE

(to be furnished by Development Commissioner for De-notification of entire area/part of Special Economic Zone along with Form C5 or C6 submitted by the Developer)

With regard to the request of M/s ……………..for de-notification of the entire area of……………Ha* OR an area of …..Ha*, of the Multi Product*/Sector Specific SEZ for ……….at …, it is certified that:—

(a) There are no unit in the SEZ* OR the existing units have been de-bonded following the procedure prescribed in rule 74 of the SEZ Rules.*
(b) The developer has not availed any tax/duty benefits, under the SEZ Act/Rules, in r/o the land being de-notified.* OR The developer had availed the following tax/duty benefits under the SEZ Act/Rules:—
(i) & (iii)** ** **
All tax/duty benefit indicated above have been refunded by the developer to my satisfaction.*
(c) The SEZ shall remain contiguous even after de-notification of the area of. . . . . . . . . Ha and shall meet the minimum land requirement prescribed for the . . . . . . . sector which is . . . . . . . Ha.#
(d) The land details for de-notification and a coloured map of the SEZ showing the area being de-notified, duly countersigned by me, are attached.#
(e) The request for de-notification was approved by BoA in its. . . . . . . . meeting held on . . . . . . and approval was conveyed by D/o Commerce vide letter no. . . . . . . . dated . . . . . . . * OR The request can be approved on file as per the decision of the BoA, taken in the meeting held on-8th June, 2010 (item no. 40.16), as the area being de-notified is less than 10% of the existing area.*
(f) All conditions subject to which the BoA has granted the approval for de-notification, of the above, area of the SEZ have been fulfilled to my satisfaction.
(g) The State Government has given its ‘No Objection’ regarding de-notification of the above stated area of the SEZ.
Place:-
Date:-
(Signature of the Development Commissioner)
Note:-

* Please strike out whichever is not applicable.

# Applicable only in the cases of part de-notification.

ANNEX ‘B’

CERTIFICATE TO BE FURNISHED BY DEVELOPMENT COMMISSIONER FOR PARTIAL/FULL NOTIFICATION ALONG WITH INSPECTION REPORT

1. Name of Developer
2. Date of Formal Approval
3. Sector
4. State
5. Location of the SEZ
6. Area in hectares (Present Area)
7. Additional Area (in hectares) proposed to be notified
8. Whether land is in possession
9. Whether physical Inspection conducted
10. Whether land is vacant
11. Whether land is contiguous
12. Documents attached:
(i) Proof of legal right and possession documents attested by State Govt. of authorised agency say revenue/Land Authority of the State govt./copy of Registered Lease deed.
(ii) Non-encumbrance certificate issued/certified by State Govt./Revenue/Land Authorities.
(iii) Map clearly showing the area of the SEZ certified by the concerned State Govt./Revenue/Land Authorities
(iv) List of block numbers/survey numbers/Khasra numbers along with area in hectares certified by the State Government/Revenue/Land authorities. (Notification will be issued on the basis of above details)
13 Is there any compulsory acquisition?
14 Is there any litigation over the land/If so, details
15 Is the DC satisfied that all the conditions as required under the SEZ Act/Rules are fully met for the notification?

Signature of the Development Commissioner

No. 312/67/2016-OT Dated:14-7-2016


Expeditious disposal of refunds in non-CASS cases – relaxation of requirements of Section 245 of the I. T. Act 1961 – Circular – Dated 14-7-2016 – Income Tax

No. 312/67/2016-OT
Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes

New Delhi, Dated 14th July 2016

Office Memorandum

Sub: – Expeditious disposal of refunds in non-CASS cases – relaxation of requirements of Section 245 of the I. T. Act 1961 – reg.

With a view to provide relief to small taxpayers. it has been decided that refunds up to ₹ 5,000/-, as also refunds in cases where arrear demand is up to ₹ 5,000/- in non-CASS cases, may be issued expeditiously without any adjustment of outstanding demand under Section 245 during the Financial Year 2016-17.

2. The refund pendency data has revealed that there are a large number of pending claims of refunds upto ₹ 5,000/- involving non- CASS cases for Assessment Years 2013-14, 2014-15 and 2015-16. It is requested that the Assessing Officers be directed to issue refunds expeditiously in such cases without making any adjustment of arrear demands under Section 245. Similarly, the non­ CASS cases for these assessment years where refund claim is more than 5,000/- but the outstanding demand is ₹ 5,000/- or less, may also be processed for expeditious issue of refund without making any adjustment under Section 245.

3. It is also found that there are several refund claims in respect of which notices have been issued proposing adjustment of outstanding demand under Section 245, but no response has been received from the taxpayer even after expiry of 60 days, as against the stipulated period of 30 days. I am directed to convey that such cases be treated as though the taxpayer had “no-objection” to the proposed adjustment and accordingly returns may be processed expeditiously and balance refund be issued to the taxpayer, if any, after adjustment of outstanding demand along with applicable interest.

4. The above exercise may be completed and a compliance report be sent to the Board by 29th July, 2016

5. This issues with the approval of Chairman, CBDT.

Yours faithfully

(Salil Mishra)

Director (OT&WT)

No. 5/2016 Dated: 14-7-2016


Direction regarding scope of enquiry in cases under ‘Limited Scrutiny’ selected through CASS 2015 & 2016 – Order-Instruction – Dated 14-7-2016 – Income Tax

Instruction No. 5/2016

Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes

North Block, New Delhi, the 14th of July, 2016

Subject: Direction regarding scope of enquiry in cases under ‘Limited Scrutiny’ selected through CASS 2015 & 2016-regd.

Vide Instruction No. 20/2015 dated 29.12.2015 in File of even number, Board has laid down Standard Operating Procedure for handling of cases under ‘Limited Scrutiny’ which were selected through Computer Aided Scrutiny Selection in ‘CASS Cycle 2015’. In these cases, it was stated that the general scope of enquiry in scrutiny proceedings should be restricted to the relevant parameters which formed the basis for selecting the case for scrutiny. However, in revenue potential cases, it was further provided that ‘Complete Scrutiny’ could be conducted, if there was potential escapement of income above a prescribed monetary limit, subject to the approval of administrative Pr. CIT/CIT/Pr. DIT/DIT.

2. In order to ensure that maximum objectivity is maintained in converting a case falling under ‘Limited Scrutiny’ into a ‘Complete Scrutiny’ case, the matter has been further examined and in partial modification to Para 3(d) of the earlier order dated 29.12.2015, Board hereby lays down that while proposing to take up ‘Complete Scrutiny’ in a case which was originally earmarked for ‘Limited Scrutiny’, the Assessing Officer (‘AO’) shall be required to form a reasonable view that there is possibility of under assessment of income if the case is not examined under ‘Complete Scrutiny’. In this regard, the monetary limits and requirement of administrative approval from Pr. CIT/CIT/Pr. DIT/DIT, as prescribed in Para 3(d) of earlier Instruction dated 29.12.2015, shall continue to remain applicable.

3. Further, while forming the reasonable view, the Assessing Officer would ensure that:

a. there exists credible material or information available on record for forming such view;

b. this reasonable view should not be based on mere suspicion, conjecture or unreliable source; and

c. there must be a direct nexus between the available material and formation of such view.

4. It is further clarified that in cases under ‘Limited Scrutiny’, the scrutiny assessment proceedings would initially be confined only to issues under ‘Limited Scrutiny’ and questionnaires, enquiry, investigation etc. would be restricted to such issues. Only upon conversion of case to ‘Complete Scrutiny’ after following the procedure outlined above, the AO may examine the additional issues besides the issue(s) involved in ‘Limited Scrutiny’. The AO shall also expeditiously intimate the taxpayer concerned regarding conducting ‘Complete Scrutiny’ in such cases.

5. It is also clarified that once a case has been converted to ‘Complete Scrutiny’, the AO can deal with any issue emerging from ongoing scrutiny proceedings notwithstanding the fact that the reason for such issue have not been included in the Note.

6. To ensure proper monitoring in cases which have been converted from ‘Limited Scrutiny’ to ‘Complete Scrutiny’, it is suggested, that provisions of section 144A of the Act may be invoked in suitable cases. To prevent possibility of fishing and roving enquiries in such cases, it is desirable that these cases should invariably be picked up while conducting Review or Inspection by the administrative authorities.

7. The above Instruction shall be applicable from the date of its issue and would cover the cases selected under CASS 2015 which are pending scrutiny cases as well as cases selected/being selected under the CASS 2016.

8. The contents of this Instruction may be brought to the notice of all for necessary compliance.

9. Hindi version to follow.

(Rohit Garg)

Deputy Secretary to the Government of India

(F.No. 225/269/2015-ITA.11)

Notification [F.NO.01/40/2013 CL-V (PT-I)] Dated: 14-07-2016


COMPANIES (COST RECORDS AND AUDIT) AMENDMENT RULES, 2016 – AMENDMENT IN RULES 2, 3, 4 & 6

NOTIFICATION [F.NO.1/40/2013-CL-V]DATED 14-7-2016

In exercise of the powers conferred by sub-sections (1) and (2) of section 469 and section 148 of the Companies Act, 2013 (18 of 2013) (hereinafter referred as the Act), the Central Government hereby makes the following rules further to amend the Companies (cost records and audit) Rules, 2014, namely:—

1. (1) These rules may be called the Companies (cost records and audit) Amendment Rules, 2016.

(2) They shall come into force on the date of their publication in the official Gazette.

2. In the Companies (cost records and audit) Rules, 2014 (hereinafter referred to as the Principal Rules),—

(i) in rule 2, for clause (d), the following clause shall be substituted, namely:—
“(d) “cost audit report” means the duly signed cost auditor’s report on the cost records examined and cost statements which are prepared as per these rules, including attachment, annexure, qualifications or observations attached with or included in such report;”
(ii) in rule 3, for Table (A) and Table (B), the following Tables shall be substituted, namely:-

“TABLE

(A) Regulated Sectors
SI. No. Industry/ Sector/ Product/ Service Central Excise Tariff Act Heading (wherever applicable)
1. Telecommunication services made available to users by means of any transmission or reception of signs, signals, writing, images and sounds or intelligence of any nature and regulated by the Telecom Regulatory Authority of India under the Telecom Regulatory Authority of India Act, 1997 (24 of 1997); including activities that requires authorisation or license issued by the Department of Telecommunications, Government of India under Indian Telegraph Act, 1885 (13 of 1885); Not applicable.
2. Generation, transmission, distribution and supply of electricity regulated by the relevant regulatory body or authority under the Electricity Act, 2003 (36 of 2003); Generation- 2716; Other Activity-Not Applicable
3. Petroleum products; including activities regulated by the Petroleum and Natural Gas Regulatory Board under the Petroleum and Natural Gas Regulatory Board Act, 2006 (19 of 2006); 2709 to 2715;

Other Activity-Not Applicable

4. Drugs and pharmaceuticals; 2901 to 2942; 3001 to 3006.
5. Fertilisers; 3102 to 3105.
6. Sugar and industrial alcohol; 1701; 1703; 2207.
(B) Non-regulated Sectors
SI. No. Industry/ Sector/ Product/ Service Central Excise Tariff Act Heading (wherever applicable)
1. Machinery and mechanical appliances used in defence, space and atomic energy sectors excluding any ancillary item or items;

Explanation. – For the purposes of this sub-clause, any company which is engaged in any item or items supplied exclusively for use under this clause, shall be deemed to be covered under these rules

8401; 8801 to 8805; 8901 to 8908.
2. Turbo jets and turbo propellers; 8411
3 Arms, ammunitions and Explosives; 3601 to 3603; 9301 to 9306.
4. Propellant powders; prepared explosives (other than propellant powders); safety fuses; detonating fuses; percussion or detonating caps; igniters; electric detonators” 3601 to 3603
5. Radar apparatus, radio navigational aid apparatus and radio remote control apparatus; 8526
6. Tanks and other armoured fighting vehicles, motortsed, whether or not fitted with weapons and parts of such vehicles, that are funded (investment made in the company) to the extent of ninety per cent or more by the Government or Government agencies; 8710
7. Port services of stevedoring, pilotage, hauling, mooring, re-mooring, hooking, measuring, loading and unloading services rendered by a Port in relation to a vessel or goods regulated by the Tariff Authority for Major Ports; Not applicable.
8. Aeronautical services of air traffic management, aircraft operations, ground safety services, ground handling, cargo facilities and supplying fuel rendered by airports and regulated by the Airports Economic Regulatory Authority under the Airports Economic Regulatory Authority of India Act, 2008 (27 of 2008); Not applicable
9. Iron and Steel; 7201 to 7229; 7301 to 7326
10. Roads and other infrastructure projects corresponding to para No. (1) (a) as specified in Schedule VI of the Companies Act, 2013 (18 of 2013); Not applicable.
11. Rubber and allied products; including products regulated by the Rubber Board constituted under the Rubber Act, 1947 (XXIV of 1947); 4001 to 4017
12. Coffee and tea; 0901 to 0902
13. Railway or tramway locomotives, rolling stock, railway or tramway fixtures and fittings, mechanical (including electro mechanical) traffic signalling equipment’s of all kind; 8601 to 8608.
14. Cement; 2523; 6811 to 6812
15. Ores and Mineral products; 2502 to 2522; 2524 to 2526; 2528 to 2530; 2601 to 2617
16. Mineral fuels (other than Petroleum), mineral oils etc.; 2701 to 2708
17. Base metals; 7401 to 7403; 7405 to 7413; 7419; 7501 to 7508; 7601 to 7614; 7801 to 7802; 7804; 7806; 7901 to 7905; 7907; 8001; 8003; 8007; 8101 to 8113.
18. Inorganic chemicals, organic or inorganic compounds of precious metals, rare-earth metals of radioactive elements or isotopes, and organic chemicals; 2801 to 2853; 2901 to 2942; 3801 to 3807; 3402 to 3403; 3809 to 3824.
19. Jute and Jute Products; 5303,5310
20. Edible Oil; 1507 to 1518
21. Construction Industry as per para No. (5) (a) as specified in Schedule VI of the Companies Act, 2013 (18 of 2013); Not applicable.
22. Health services, namely functioning as or running hospitals, diagnostic centres, clinical centres or test laboratories; Not applicable.
23. Education services, other than such similar services falling under philanthropy or as part of social spend which do not form part of any business; Not applicable.
24. Milk powder; 0402
25. Insecticides; 3808
26. Plastics and polymers; 3901 to 3914; 3916 to 3921; 3925
27. Tyres and tubes; 4011 to 4013
28. Paper; 4801 to 4802.
29. Textiles; 5004 to 5007; 5106 to 5113; 5205 to 5212; 5303; 5310; 5401 to 5408; 5501 to 5516
30. Glass; 7003 to 7008; 7011; 7016
31. Other machinery and Mechanical Appliances; 8402 to 8487
32. Electricals or electronic machinery; 8501 to 8507; 8511 to 8512; 8514 to 8515; 8517; 8525 to 8536; 8538 to 8547.
33. Production, import and supply or trading of following

medical devices, namely:—

(i) Cardiac stents;

(ii) Drug eluting stents;

(iii) Catheters;

(iv) Intra ocular lenses;

(v) Bone cements;

(vi) Heart valves;

(vii) Orthopaedic implants;

(viii) Internal prosthetic replacements;

(ix) Scalp vein set;

(x) Deep brain stimulator;

(xi) Ventricular peripheral shud;

(xii) Spinal implants;

(xiii) Automatic impalpable cardiac deflobillator;

(xiv) Pacemaker (temporary and permanent);

(xv) Patent ductus arteriosus, atrial septal defect and

ventricular septal defect closure device;

(xvi) Cardiac re-synchronise therapy;

(xvii) Urethra spinicture devices;

(xviii) Sling male or female;

(xix) Prostate occlusion device; and

(xx) Urethral stents:

9018 to 9022
(iii) in rule 4, in sub-rule (3), after clause (ii), following clause shall be inserted, namely:—
“(iii) which is engaged in generation of electricity for captive consumption through Captive Generating Plant. For this purpose, the term “Captive Generating Plant” shall have the same meaning as assigned in rule 3 of the Electricity Rules, 2005″;
(iv) in rule 6, in sub-rule (1), the following proviso shall be inserted, namely: —
“Provided that before such appointment is made, the written consent of the cost auditor to such appointment, and a certificate from him or it, as provided in sub-rule (1A), shall be obtained”;
(v) In rule 6, after sub-rule (1), the following sub-rule shall be inserted, namely:—
“(1A) The cost auditor appointed under sub-rule (1) shall submit a certificate that—
(a) the individual or the firm, as the case may be, is eligible for appointment and is not disqualified for appointment under the Act, the Cost and Works Accountants Act, 1959 (23 of 1959) and the rules or regulations made thereunder;
(b) the individual or the firm, as the case may be, satisfies the criteria provided in section 141 of the Act, so far as may be applicable;
(c) the proposed appointment is within the limits laid down by or under the authority of the Act; and
(d) the list of proceedings against the cost auditor or audit firm or any partner of the audit firm pending with respect to professional matters of conduct, as disclosed in the certificate, is true and correct”;
(vi) in rule 6, in sub-rule (3), the following provisos shall be inserted, namely:—
“Provided that the cost auditor appointed under these rules may be removed from his office before the expiry of his term, through a board resolution after giving a reasonable opportunity of being heard to the Cost Auditor and recording the reasons for such removal in writing;
Provided further that the Form CRA-2 to be filed with the Central Government for intimating appointment of another cost auditor shall enclose the relevant Board Resolution to the effect;
Provided also that nothing contained in this sub-rule shall prejudice the right of the cost auditor to resign from such office of the company.”;
(vii) in rule 6, after sub-rule (3A), following sub-rule shall be inserted, namely:—
“(3B) The cost statements, including other statements to be annexed to the cost audit report, shall be approved by the Board of Directors before they are signed on behalf of the Board by any of the director authorised by the Board, for submission to the cost auditor to report thereon”;
(viii) in rule 6, for sub-rule (5), the following sub-rule shall be substituted, namely:—
“(5) Every cost auditor shall forward his duly signed report to the Board of Directors of the company within a period of one hundred and eighty days from the closure of the financial year to which the report relates and the Board of Directors shall consider and examine such report, particularly any reservation or qualification contained therein.”;
(ix) in rule 6, for sub-rule (6), the following sub-rule shall be substituted, namely:—
“(6) Every company covered under these rules shall, within a period of thirty days from the date of receipt of a copy of the cost audit report, furnish the Central Government with such report alongwith full information and explanation on every reservation or qualification contained therein, in Form CRA-4 in Extensible Business Reporting Language format in the manner as specified in the Companies (Filing of Documents and Forms in Extensible Business Reporting language) Rules, 2015 along with fees specified in the Companies (Registration Offices and Fees) Rules, 2014.”.

2 – 14-7-2016


EXIM BANK’S GoI SUPPORTED LINE OF CREDIT OF USD 86.31 MILLION TO MYANMA FOREIGN TRADE BANK (MFTB), MYANMAR

A.P. (DIR SERIES 2016-17) CIRCULAR NO.2DATED 14-7-2016

Export-Import Bank of India (Exim Bank) has entered into an agreement dated December 11, 2013 with Myanma Foreign Trade Bank (MFTB), Myanmar for making available to the latter, a Government of India supported Line of Credit (LOC) of USD 155 million (USD one hundred fifty five million only) for financing the procurement of rolling stock, equipment and upgradation of three major railway workshops in Myanmar. Subsequently, Exim Bank signed First Amendatory Agreement with MFTB on October 03, 2015, for reducing the value of the LOC from USD 155 million to USD 86.31 million (USD eighty six million three hundred ten thousand). The goods, machinery, equipment, and services including consultancy services from India for exports under this Agreement are those which are eligible for export under the Foreign Trade Policy of the Government of India and whose purchase may be agreed to be financed by the Exim Bank under this Agreement. Out of the total credit by Exim Bank under this Agreement, the goods and services including consultancy services of the value of at least 75% of the contract price shall be supplied by the seller from India and the remaining 25% goods and services may be procured by the seller for the purpose of the eligible contract from outside India.

2. The credit agreement under the LOC is effective from June 27, 2016. Under LOC, the terminal utilization period is 48 months from scheduled completion date of contract in case of project export and 72 months from execution of the Credit Agreement in case of other supply contracts.

3. Shipments under the LOC will have to be declared on EDF/ SDF Forms as per instructions issued by the Reserve Bank from time to time.

4. No agency commission is payable under the above LOC. However, if required, the exporter may use his own resources or utilize balances in his Exchange Earners’ Foreign Currency Account for payment of commission in free foreign exchange. Authorised Dealer Category- l (AD Category-l) banks may allow such remittance after realization of full payment of contract value subject to compliance with the prevailing instructions for payment of agency commission.

5. AD Category-I banks may bring the contents of this circular to the notice of their exporter constituents and advise them to obtain full details of the Line of Credit from the Exim Bank’s office at Centre One, Floor 21, World Trade Centre Complex, Cuffe Parade, Mumbai 400 005 or log on to www.eximbankindia.in.

6. The Directions contained in this circular have been issued under section 10(4) and 11(1) of the Foreign Exchange Management Act (FEMA), 1999 (42 of 1999) and are without prejudice to permissions/approvals, if any, required under any other law.

 

Oil companies get nod to increase kerosene price by 25 paise every month till April 2017 : 14-07-2016


he government has paved the way to prune fuel subsidy. On July 1, it raised the price of kerosene by 25 paise a litre, the first time in five years. But this is not a one-off move, two people familiar with the government decision told ET. Oil companies have received the green signal to increase kerosene price by 25 paise every month till April 2017, a move that has not been publicly announced.

A spokesperson for Indian Oil CorporationBSE 0.17 % (IOC), India’s largest oil marketing  company (OMC), confirmed the development. “The 25-paise hike per month for next ten months (beginning July) in PDS kerosene is as per government directive,” the person said in a response to an ET query. An email to the ministry of petroleum and natural gas went unanswered.

Kerosene and LPG are sold well below their cost of production. Currently, under-recoveries on kerosene and LPG are Rs 13.1 a litre and Rs 116 per cylinder, respectively. The government gives a subsidy of Rs 12 per litre on kerosene while the balance is borne by upstream petroleum companies such as Oil IndiaBSE and ONGCBSE

The state-owned OMCs — IOC, Hindustan PetroleumBSE 1.06 % and Bharat PetroleumBSE 0.82 % — have been asked to raise the price of subsidised kerosene over a period to bring it closer to the market-determined price.

Kerosene accounted for 42% of the total petroleum subsidy in 2015-16.

The proposed price hike would lower the government’s subsidy burden by Rs 1,000 crore this year. This is expected to ensure quicker payments for the downstream companies and better working capital efficiency.

“It’s a bold move… This bodes well for oil marketing companies. Also, a direct transfer subsidiary would reduce leakages..,” said Nilesh Shah, CEO of Kotak Mutual Fund. “It could also make divestment of oil marketing companies easier,” said Shah.

The monthly kerosene price increase is similar to the path taken by the government to decontrol diesel price. Deregulating prices of fuel — particularly kerosene, the poor man’s fuel — has always been a politically tricky subject. The market seems to have had a whiff of the government’s decision.

According to a Bank of America-Merrill Lynch report (released soon after the July 1 price hike), “This is a significant pricing reform, long in waiting, and a positive surprise to the market  given the stiff opposition in the past. Post the price increase, overall FY17/FY18 subsidies will fall by Rs 1,100 crore and Rs 2,400 crore, respectively.” The government’s current directive for raising price, is, however, restricted to FY17.

Petrol and diesel are sold at market-related rates following price deregulation.

Higher kerosene price would benefit OMCs as well as upstream companies such as ONGC and Oil India. Among the OMCs, IOC, with more than 67% market shar .. market share, will gain the most. ONGC and Oil India may undergo earnings upgrade of 1-1.5% for the next two years. In the past two fiscals, the government incurred under-recoveries of Rs 24,799 crore and Rs 11,496 crore on kerosene.

Kerosene consumption has been falling at 3% a year since FY01, thanks to rising electrification and use of LPG by more households. LPG demand has grown by 7% a year since FY01.

Source : Economic Times

Real estate could be exempted from central environmental rules : 14-07-2016


Following the NDA government’s “Ease of Business” mantra, the environment ministry has proposed that the entire construction sector could be exempted from mandatory environmental clearances if states impose pre-specified and standard green conditions under their building bye-laws.

But, even before the environment ministry carries out mandatory public consultation and notifies these proposed changes, the urban development ministry has already amended its model Building bye-laws public announcing the relaxation for the construction industry.

It has asked the states to adopt the model bye-laws to avoid the mandatory environmental clearances. Taking cue, the Delhi Development Authority has adopted these amended building bye-laws without awaiting a final notification of the changes by the environment ministry.

Business Standard reviewed documents that show the two ministries consulted repeatedly to decide that the changes would be made to ease the business for the entire real estate and construction industry though the environment ministry’s draft said the purpose of the changes was to provide houses to the weaker section under the ‘Housing For All’ scheme.

It was decided between the two that if the states impose a standard list of environmental conditions under the building bye-laws then the environment ministry will exempt the buildings in the state from following the more detailed environmental conditions and clearance norms under the Environment Protection Act, 1986.

Subsequent to the internal agreement, the Union urban development ministry put out the amended building bye-laws on March 18, 2016 for states to adopt. Delhi Development Authority, which is controlled by the urban development ministry took the lead and on March 22, 2016 proposed the amendments to its bye-laws for the city.

The law requires that environment ministry first consult public before making changes to the environmental clearance processes. The ministry put out the draft notification for mandatory public consultation on April 29, 2016 – more than a month after the urban development ministry had already incorporated the ease of regulations for construction sector that the environment ministry was yet to propose.

The decision of the NDA government also comes after a spate of judgements by NGT and the Supreme Court against illegal construction in violation of environmental norms. In some cases fine in the range of Rs 50-100 crores have been imposed by the court and tribunals for such violations.

The urban development ministry did not respond to queries from Business Standard.

The environment ministry in a detailed response to queries said the changes to the regulations, “Will not only go a long way in easing the procedure for doing business without compromising environment conditions, it would also instil a spirit of competition among the states.”

Business Standard asked if the urban development ministry’s amendments to model building bye-laws presented a fait accompli for environment ministry and the subsequent public consultations had been rendered useless. The ministry said, Ministry of Urban Development is co-ordinating on streamlining the building permission. It was a consensus among the participating departments. The (public) comments have come and department will carefully consider all of them before reaching at any conclusion. Comments of public, stakeholders and ministries are useful in finalizing the notification, so it cannot be called redundant.”

Documents show that the urban development minister, Venkaiah Naidu wrote to his then counterpart in February 2016, noting, “It is hoped that this will immensely help the real estate business as landmark step in Ease of Doing Business…This will also facilitate in improving the country’s ranking in Ease of Doing Business, which is dream of our Honourable Prime Minister to make efforts for bringing the country in top 50 rank in the World.”

The environment ministry’s notification in April 2016 noted, “The Central government is working for ensuring Ease of Doing Responsible Business.”  The notification also said that the rules were being amended to streamline permissions which is important “for providing house and for this purpose the scheme of Housing for all by 2022 with an objective of making available of affordable housing to weaker section in urban area has ambitious target.”

But the exemption would be available not only for weaker section housing but for all kind of real estate projects including malls, entertainment centres and commercial buildings. When queried why all real estate and construction was being exempted if the purpose was only to ease the generation of housing for poor, the environment ministry said, “This point has been raised in several comments received. Ministry will keep this in view while finalizing the notification.”

The urban development ministry shared the draft of the model bye-laws with the environment ministry. The environment ministry had two key suggestions to make. It told the urban development ministry instead of writing “dispense with environment clearances” in one part of the bye-laws, the urban development ministry should say, “Integrate the environment clearance with building permissions”. It also said that the heading of the chapter in the building byelaws should use the phrase “integration of environmental clearance conditions with building permissions” in place of “delegation of environmental clearance to local authorities.” The changes were incorporated. The sub-chapter delegating powers to local authorities was consequently called, “Requirement for climate resilient construction”.

The environment ministry justified the changes saying existing clearances, given by state level authorities, cover construction projects over 20,000 square metres and the proposed building bye-law route would cover buildings above 5,000 square metres. Therefore, the ministry said a larger section of the construction sector would eventually get covered.

The demand for relaxation for the real estate industry has been repeatedly made since 2009. But the ministry had till mid-2015 held the view that with large amount of the building stock yet to come up in India it is essential to keep a tab on the overall impact of the sector on the environment.

Yet, the existing norms for real estate have always been kept easier than that for polluting industry. Over the past four years-time bound clearance process was also put in place and the states told to enhance the number of expert bodies that clear the projects, if necessary.

In India, unlike in many developed parts of the world, city master plans under the state authorities are not prepared based on environmental carrying capacity studies and common lands such as catchment of water bodies have often been converted to real estate causing problems such as flooding in Chennai and Mumbai. The ministry responded to comments on this fact to say, “The urban areas of Municipal Corporations or Development Authorities have Master Plans, concept of Zoning and land use. This broadly takes care of major environmental features. The standard, objectively monitorable environmental guidelines in larger section of buildings will have more positive impact on environment.”

Legal experts, such as Ritwick Dutta, have said exempting the sector from provisions of the central Environment Protection Act would also imply that the industry cannot be taken to National Green Tribunal in case of any environmental damage. The ministry in response has said that would not be the case.

PROPOSED NORMS FOR EASE OF REAL-ESTATE BUSINESS

  • If states put pre-fixed standard environmental conditions under bye-laws, then builders would not require prior clearance under strict central environment law
  • Three categories of construction and building, based on size to be cleared by local authorities. Larger projects to have slightly more detailed standard pre-conditions than smaller buildings
  • Evaluation of impact on environment and location of project left to district authorities under state laws

No. 27/2016 Dated: 14-07-2016


F.No.142/8/2016-TPL

Government of India

Ministry of Finance Department of Revenue

Central Board of Direct Taxes

(TPL Division)

***

Dated 14th day of July, 2016

Clarifications on the Income Declaration Scheme, 2016

The Income Declaration Scheme, 2016 (hereinafter referred to as ‘the Scheme’) came into effect on 1st June, 2016. To address doubts and concerns raised by the stakeholders, the Board has issued three sets of FAQs vide Circular Nos. 17, 24 & 25 of 2016. In order to address further queries received from the public relating to the Scheme, following clarifications are issued.-

Question No.1: Can a declaration made under the Scheme be revised before the date of closure of the Scheme i.e. 30.09.2016?

Answer: It is expected that the declarations made under the Scheme are filed correctly. However, a revised declaration can be filed on or before the date of closure of the Scheme provided the undisclosed income in the revised declaration is not less than the undisclosed income declared in the declaration already filed.

Question No.2: If an undisclosed income represented in the form of an asset or otherwise pertains to a year falling beyond the time limit allowed under section 149 of the Income-tax Act, 1961 and the said undisclosed income is not declared under the Scheme, then as per the provisions of section 197(c) of the Finance Act, 2016, the said undisclosed income shall be treated as the income of the year in which a notice under section 148 of the Income-tax Act has been issued. The said provision is inconsistent with the existing time lines provided under the Income-tax Act for reopening a case. Please clarify?

Answer: Question No. 4 of Circular No. 24 of 2016 may be referred where the tax treatment of such income has been clarified. Since the Scheme contained in Chapter IX of the Finance Act, 2016 is a later law in time, 2 the provisions of the Scheme shall prevail over the provisions of earlier laws.

Question No.3: The declaration made in respect of cash, investment etc. under the Scheme would result in increase in capital in the Balance Sheet in extra ordinary manner. Whether such cases of the declarants would be selected for scrutiny under the CASS for this reason?

Answer: The cases of the declarant shall not be selected for scrutiny under the CASS only on the ground that there is increase in capital in the balance sheet as a result of the declaration made under the Scheme.

Question No.4: In a case where the declarant gets the benami asset transferred in his name without payment of any monetary consideration to the benamidar, whether capital gains would be chargeable in the hands of benamidar consequent upon such transfer and whether the tax at source @ 1% would be deducted in such case?

Answer: In this case the consideration for acquisition of benami property has already been paid by the beneficial owner and the fair market value of the property has been declared by the beneficial owner under the Scheme. Since, the transfer of property from benamidar to beneficial owner is only to regularize and there will be no involvement of monetary consideration for transfer of immovable property by the benamidar in the name of the declarant, the question of capital gains in the hands of benamidar and deduction of tax at source thereon shall not arise.

Question No.5: Under what provision can a declarant be sure that the information contained in a valid declaration shall not be shared with any other law enforcement agency and also shall not be shared within the income-tax department for investigation?

Answer: Section 195 of the Act provides that provisions of section 138 of the Income-tax Act shall apply in relation to the proceedings under the Scheme. Vide notification S.O. 2322(E) dated 06.07.2016, an order has been passed by the Central Government directing that no public servant shall produce before any person or authority any such document or record or any information or computerized data or part thereof as comes into his possession during the discharge of official duties in respect of a valid declaration made under the Scheme. 3

Question No.6: With reference to question No. 5 issued vide Circular No. 25 of 2016, wherein it has been stated that the department will not make any enquiry in respect of sources of income, payment of tax, surcharge and penalty, it may be clarified that whether the payment under the Scheme can be made out of undisclosed income without including the same in the income declared, thereby bringing down the effective rate of tax, surcharge and penalty payable under the Scheme to around 31 per cent?

Answer: It is clarified that the intent of the clarification issued vide question No.5 of Circular No. 25 of 2016 was limited to conduct of enquiry by the Department. It in no way intends to modify or alter the rate of tax, surcharge and penalty payable under the Scheme which have been clearly specified in the Scheme itself. Sections 184 & 185 of the Finance Act, 2016 unambiguously provide for payment of tax, surcharge and penalty at the rate of 45 per cent of undisclosed income. This is illustrated by the following example — In a case a person declares Rs. 100 lakh as undisclosed income, being the fair market value of undisclosed immovable property as on 1st June, 2016 and pays tax, surcharge and penalty of Rs.45 lakh (30 lakh + 7.5 lakh + 7.5 lakh) on the same out of his other undisclosed income. In this case the declarant will not get any immunity under the Scheme in respect of undisclosed income of 45 lakh utilized for payment of tax, surcharge & penalty but not included in the declaration filed under the Scheme. To get immunity under the Scheme in respect the entire undisclosed income of Rs.145 lakh, the declarant has to declare undisclosed income of Rs.145 lakh (Rs.100 lakh being the undisclosed income represented by immovable property and Rs.45 lakh being the payment made from undisclosed income) and pay tax, surcharge and penalty under the Scheme amounting to Rs.65.25 lakh i.e., 45 per cent of Rs.145 lakh.

Question No.7: Whether there is any time limit for the declarant under the Scheme to file Form-3?

Answer: As per section 187(2) of the Finance Act, 2016, the time limit for filing Form-3 is same as the time limit notified for payment of tax, surcharge and penalty under the Scheme. 4

Question No.8: Whether immunity from initiation of prosecution would be available to the Directors of the company or the partners of the firm in respect of the undisclosed income declared under the Scheme by the company or partnership firm, as the case may be?

Answer: Yes, immunity to the directors or the partners, as the case may be, shall be available in respect of the undisclosed income declared under the Scheme by the company or partnership firm.

Question No.9: Whether a person having undisclosed income in the form of an investment in immovable property in the name of his spouse can declare the fair market value of the property in his own name if the funds for acquisition of the said property were provided by such person?

Answer: Yes.

Question No.10: Rule 3(1)(c)(I) of the Income Declaration Scheme Rules, 2016 provides for manner of determination of fair market value of quoted shares and securities. In this context, it may be clarified that if a share is listed on more than one recognised stock exchange and the quoted price of the share as on 01.06.2016 on the recognised stock exchanges is different, then what shall be the quoted share price for determining the fair market value of such share under the Scheme?

Answer: In such a case the quoted price of the share shall be computed with reference to the recognised stock exchange which records the highest volume of trading in the share as on 01.06.2016.

(Dr. T.S. Mapwal) Under Secretary to the Government of India

 

Copy to:-

1. PS to FM/ OSD to FM/ OSD to MoS(R).

2. PS to Secretary (Revenue).

3. The Chairperson, Members and all other officers in CBDT of the rank of Under Secretary and above.

4. All Pr. Chief Commissioners/ Pr. Director General of Income-tax – with a request to circulate amongst all officers in their regions/ charges.

5. Pr. DGIT (Systems)/ Pr. DGIT (Vigilance)/ Pr. DGIT (Admn.)/ Pr. DG (NADT)/ Pr. DGIT (L&R).

6. CIT (M&TP), CBDT.

7. Web manager for posting on the departmental website.

Notification No. 57/2016 14-7-2016


Transfer pricing – Computation of Arm s length price – Notified percentage under third proviso to section 92C – 57/2016 – Dated 14-7-2016 – Income Tax

MINISTRY OF FINANCE

(Department of Revenue)

NOTIFICATION No. 57/2016

New Delhi, the 14th July, 2016

[INCOME TAX]

S. O. 2425(E).-In exercise of the powers conferred by the third proviso to sub-section (2) of section 92C of theIncome-tax Act,1961 (43 of 1961), read with proviso to sub-rule (7) of rule 10CA of the Income-tax Rules, 1962, the Central Government hereby notifies that where the variation between the arm’s length price determined undersection 92C and the price at which the international transaction or specified domestic transaction has actually been undertaken does not exceed one percent.of the latter in respect of wholesale trading and three percent.of the latter in all other cases, the price at which the international transaction or specified domestic transaction has actually been undertaken shall be deemed to be the arm’s length price for Assessment Year 2016-2017.

Explanation.- For the purposes of this notification, “wholesale trading” means an international transaction or specified domestic transaction of trading in goods, which fulfils the following conditions, namely:-

(i) purchase cost of finished goods is eighty percent. or more of the total cost pertaining to such trading activities; and

(ii) average monthly closing inventory of such goods is ten percent. or less of sales pertaining to such trading activities.

[F. No. 500/1/2014-APA-II]

SOBHAN KAR, Director

Notification No. S.O. 2432(E) 13-07-2016


SECTION 4 OF THE SPECIAL ECONOMIC ZONES ACT, 2005 – HCL TECHNOLOGIES LTD.

NOTIFICATION NO. SO 2432(E) [F.2/85/2005-SEZ]DATED 13-7-2016

WHEREAS, M/s. HCL Technologies Limited, had proposed under section 3 of the Special Economic Zones Act, 2005 (28 of 2005), (hereinafter referred to as the said Act) to set up a sector specific Special Economic Zone for Information Technology and/or Information Technology Enabled Services at Plot Number 3A, Sector 126, Noida, in the State of Uttar Pradesh;

AND, WHEREAS, the Central Government, in exercise of the powers conferred by sub-section (1) of section 4 of the said Act read with rule 8 of the Special Economic Zones Rules 2006, had notified the following areas at above Special Economic Zone as per the details given below;

(Area in hectares)

S. No. Area notified Gazette No. Date & year of notification Resultant Area
(1) 16.91 S.O.2107(E) 15.12.2006 16.91 Ha
(2) 1.49 S.O.2635 (E) 20.10.2009 18.4 Ha
(3)  0.5915 S.O.2013( E) 20.07.2015 18.9915

AND, WHEREAS, M/s. HCL Technologies Limited, has now proposed to include an area of 1.326 hectares at Plot Number 2C, Noida in the State of Uttar Pradesh as a part of the above Special Economic Zone;

NOW, THEREFORE, in exercise of the powers conferred by second proviso to sub-section (1) of section 4 of the Special Economic Zones Act, 2005 and in pursuance of rule 8 of the Special Economic Zones Rules, 2006, the Central Government hereby notifies an area of 1.326 hectares at Plot Number 2C, Noida in the State of Uttar Pradesh as a part of the above Special Economic Zone, thereby making total area of the Special Economic Zone as 20.3175 hectares.

 

Government looking for concrete suggestions from Congress on GST Bill: Arjun Ram Meghwal : 13-07-2016


The government is looking for concrete and practical suggestions from the Congress on the Goods and Services Tax (GST) Bill, said Arjun Ram Meghwal, the newly appointed minister of state for finance and corporate affairs.

Meghwal’s comment to ET comes at a time when the government has revived attempts to convince the Congress to enable passage of the Bill in Rajya Sabha, where the ruling coalition is a minority. He expressed the government’s willingness for negotiations on all objec .. but also sought clear suggestions as to how proposals could be implemented.

For instance, he mentioned demand for capping GST rate at 18% in the constitutional amendment Bill and what he sees as the practical problem of implementing it. “Let them tell us which country with a GST has written (GST) rate in their Constitution. How will it function, let them tell us,” he told ET.

“Whichever item, if (at some point) it is felt that its rate should be more than 18%, it will have to go into a constitutional amendment (to change the rate). It (the proposal) will then go to 50% states … how can that happen? It is not possible. It isn’t practical.”

Source : The Hindu

No form 16 yet? You can still file your income tax returns : 13-07-2016


BENGALURU: Two weeks to the tax filing deadline and still have not received your Form 16? Maybe it’s time you tried filing your returns without one.
The Income-Tax Act lays down that TDS certificate must be issued by the employer, once a year, on or before May 31 of the financial year immediately following the financial year in which tax is deducted. “If an employer fails to provide you with a Form 16 after having deducted TDS – the minimum penalty that the employer will pay is Rs 100 for every day the default continues,” says Archit Gupta, CEO, ClearTax.in.

The reason for not issuing Form 16 could be many . The company might be in trouble and may not have deposited your taxes at all or the HR department may be just lazy . Whatever may be the case, there is no point running after your employer anymore since the deadline is close. You might start collecting the alternate documents that will help you calculate your tax liability and file returns. This will take some time especially if you are planning to file your returns yourself.

Start by familiarising yourself with the different ITR forms and the correct form for you. Most of the salaried class will be filing an ITR 1 , 2 or 2A. Form 3, 4 and 4A are for people with income from professional practice or business. If you are using the government filing site, you will have to choose and download the correct ITR.

The form-selection process is automated if you are filing through an online-filing platform. Next step is to get all the documents ready to calculate your taxable income.

Declaring your taxable income: In absence of Form 16, your payslip is the second-best resource to calculate your income from salary . Remember to deduct the non-taxable heads such as HRA, LTA and other reimbursements from total income. If you are filing ITR2A, ITR-2 and ITR-4, you will have to provide a detailed salary schedule with a break-up of allowances that are exempt from tax along with value of perquisites. “Refer to your appointment letter that gives a break-up of your CTC for details,” says Gupta.

Your income should include earnings from other sources too. Interest income can be easily retrieved from your TDS certificates from bank or Form 26AS. Do not forget to declare rental income, capital gains, income from savings bank account, cash gifts above Rs 50,000 received from a non-relative and even income exempted from tax such as dividend income.

Match your TDS numbers: Form 26AS is the best source to cross-check 26AS is the best source to cross-check your entries. Your income from all the sources (including interest income where you had submitted a Form 15GH), tax deducted at source and any high-value transactions and sale of immovable property are all reflected in Form 26AS. An advance tax paid needs to be mentioned in the ITR as well.
Verify your tax payment challan(s) numbers with the figures in Part D of Form 26AS is a must as many have been getting notices from the department recently where the ITR filed by the taxpayer does not match with the information available in the form,” s ay s S u d h i r K a u s h i k , C F O, Taxspanner.com.

Recheck the TDS figures carefully , if your employer is in some financial trouble. Cross-check the TAN num bers to know verify the employer and the corresponding TDS. There have been cases where the employer had deducted TDS from your salary but the same was not deposited with the government. The onus of filing correct returns is on the taxpayer.

If the employer has deducted tax, it must show up in your Form 26AS. If it does not, either your PAN was not correctly mentioned or the employer did not deposit the TDS. “If it is the latter and the employer refuses make corrections you may have to pay tax to the government on your income yourself and later on claim from your employer,” says Gupta. Another solution can be approaching your jurisdictional TDS Commissioner.

“We have seen examples wherein the company immediately deposited TDS and issued Form 16 upon receipt of notice from the tax department. Nondeposit of TDS is a serious offence and can result in prosecution and rigorous imprisonment,” says Vaibhav Sankla, director, H&R Block India.

Claim the correct deductions: If you were diligent in declaring your investments during January and February , you are perhaps well-organised already . Most of your deductions under Section 80C such as insurance premiums, mutual fund investments, PPF contribution, children’s school tuition fee, are easily traceable.

Just get the investment proofs, add the numbers and you can fill the aggre the numbers and you can fill the aggregate as deduction under Section 80C. Remember to include your EPF contributions and investment made in NPS under Section 80C too. You can get your EPF contributions in your EPFO statement. If the employer has not provided one, just go online. All you need is account number and establishment code, which are usually mentioned at the top of your salary slip. You will also have to key-in the state where the employers’ EPF trust is registered.

Your NPS contributions will be under two sections. Your contributions as an employee gets deduction under Section 80CCD(1), which comes under the overall Rs 1.5 lakh limit under Section 80C. This year onwards, you can claim an additional 50,000 deduction under Section 80CCD(1b)for individual contribution, which includes any contribution made as an employee. “If you contributed Rs 50,000 or more towards NPS via salary deductions, maximise the tax benefits under both Section 80C and Section 80CCD(1b).Claim the full Rs 50,000 under the new section first and then adjust the residual to achieve total tax deduction of Rs 2 lakh,” says Gupta. The contributions towards NPS by your employer is deductible under Section 80CCD(2).

If you have a home loan, principal repayments will also be added under Section 80C. Consult the loan certificate to know the break-up between your principal and interest payments.

 Source : The Hindu

India, Russia resolve to deepen trade ties : 12-07-2016


Indian and Russia on Monday resolved to strengthen bilateral trade ties and enhance cooperation so that the two countries can play a major role in reviving global growth.

Indian Commerce Minister Nirmala Sitharaman met Russian Minister of Trade and Industry Denis Manturov here, the venue of Russia’s biggest manufacturing trade fair – Innoprom – where India is the partner country this year.

“There is a strong potential for growth in India-Russia bilateral trade. Be it high-end engineering, or manufacturing, India is moving towards being synonymous to quality, reliability and durability,” Sitharaman said according to a statement by India’s commerce ministry.

Sitharaman and Manturov discussed various specifics to further strengthen industrial and trading ties, the statement said.

Later, addressing the India-Russia business forum, Sitharaman invited Russian companies to partner with India so that the two nations “can play a major role in reviving global growth”.

“We will discover the full potential of inter-regional cooperation. Over the last years cooperation between Russia and India has grown significantly. We are ready to intensify our cooperation with all the interested business, investors and financial organisations,” Manturov said addressing the forum.

“India is doing Make in India programme, and its course to open the economy and attract foreign capital makes it interesting for Russian business to invest in your country,” he added.

As many as 110 Indian companies are taking part in Innoprom 2016, including the Department of Heavy Industries, Department of Electronics and IT, Ministry of New and Renewable Energy, Bharat Forge, Sun Group, NTPC, NHPC and the Engineering Exports Promotion Council (EEPC).

“We are proud to be the partner country at Innoprom 2016. The Indian companies participating will highlight the strengths in the area of engineering and innovation,” Sitharaman said at the Innoprom inauguration.

Noting that India’s Tata and Sun Groups are exploring investment options in Russia in the natural resources, construction, smart cities and engineering services, Sitharaman said: “Russia is the first country to welcome the ‘Make in India’ programme.”

Manturov said Russia is realising its programme to build industrial and technoparks in 50 regions of the country, like the Skolkovo City near Moscow.

Source : PTI

India wants new foreign investment pacts to limit lawsuits : 12-07-2016


India has triggered the escape clause on dozens of bilateral investment treaties, aiming to renegotiate toward securing better protection from foreign litigation.

The notifications, issued earlier this year, effectively let governments know they have 12 months to broker new treaties before the old ones expire. The changes India seeks could make it harder for foreign investors to legally challenge government decisions that negatively affect their businesses in India.

But observers say the move could potentially backfire by spooking investors and ultimately jeopardizing Prime Minister Narendra Modi’s top priority – bringing in new business from abroad.

Already some have voiced concern.

In a letter to India’s commerce and finance ministers, the European commissioner for trade warned that India’s notifying “a significant number” of European Union nations could “have serious consequences” if Brussels cannot negotiate a replacement by next April.

“It would create a gap in investment protection and consequently discourage EU enterprises from further investing in India,” Commissioner Cecilia Malmstrom said in the letter, dated May 25. Some investors “may perceive the investment climate as deteriorating,” while some may be unable to secure financing without treaty protections in place.

“Such an outcome would run contrary to the efforts of attracting more investment to India,” the letter said. “I truly hope that India will not opt for such a radical policy shift with regard to investment from the EU.”

Investment protection treaties have long been considered a prerequisite to doing business abroad. More than 3,400 such treaties have been brokered worldwide since the first U.S. investment treaties in the 1980s, according to the U.N. Conference on Trade and Development. These treaties generally lay out rules protecting foreign investment and assets. They codify how disputes should be handled, and often guarantee that a government will offer investors the best possible deal.

India may have surprised its investment partners in seeking to revise business relationships, but it is not the first to do so -and it is not alone.

Since 2012, according to UNCTAD, at least 60 countries have begun revising investment agreements, including South Africa, Brazil and Indonesia -all large, developing economies like India.

“Foreign investors are always coming from advanced economies, so they already have the upper hand,” said economist and trade expert Biswajit Dhar, a professor at Jawaharlal Nehru University in New Delhi. “The countries that need more investment are the ones worried about giving too much away.”

The trend among developing countries stems from a growing feeling that investment treaties, as initially designed by Western nations, give too much protection to investors without safeguarding a country’s ability to manage policy or regulations. That puts countries like India – still working out how to exploit natural resources or farm out telecom licenses – at a disadvantage in working out their policies, analysts say.

Failing to negotiate replacements before old treaties expire wouldn’t necessarily affect all business; existing investments would be covered by the old treaty for a period of about 10-15 years.

But new investments would not be protected, and for a job-hungry nation like India, that could be a problem.

India has been aggressively courting foreign investment and manufacturing to boost its economy. Since taking office in 2014, Prime Minister Modi has spent much of his time visiting foreign capitals and touting his “Make in India” campaign showcasing the country as a manufacturing destination- with its large labor force, young population and investor-friendly tax regimes.

Yet, India remains at the low end of the World Bank’s ease of doing business ranking, currently placing 130th out of 189 countries surveyed. While foreign investment shot up to more than $44 billion in 2015 _ a 65 percent jump from when Modi took office- the manufacturing drive so far has had lackluster results. The sector accounts for about 15 percent of India’s gross domestic product, while employing about 12 percent of the work force.

India entered into its first bilateral investment treaties as it was liberalizing its markets and courting foreign investment in the 1990s. Its first bilateral investment treaty, with Britain, went into effect in 1995, and was followed by more than 80 others.

The idea for renegotiating quickly took hold about five years ago, as it was hit by a series of lawsuits. In 2011, India lost the first case in international arbitration to Australia’s White Industries, a manufacturer of metal components that argued that the cancellation of a contract with Coal India violated the terms of Australia’s 2000 bilateral investment treaty with India.

Since then, more than a dozen cases have been filed against India, over issues such as retroactive taxation or canceled licenses. Britain-based Vodafone has a case pending with the International Court of Justice for arbitration over a bill for $2.5 billion that India’s tax authorities say the company owes for a 2007 asset purchase, based on legislation passed only in 2012. And last month, an arbitration panel based in The Hague began adjudicating a similar dispute over retroactive taxation imposed on Cairn Energy, an oil and gas exploration company based in Scotland.

“India is understandably worried about being held hostage by investors,” said Dhar, the New Delhi professor.”It is very bad publicity to get caught up in disputes where the government looks helpless.”

Still, India’s sudden move to renegotiate 47 treaties, by some reports, was jarring. “It’s a huge number,” Dhar said. “I’m worried about how it’s going to play out in the next year.”

Modi’s government had signaled its plans to renegotiate the treaties in 2015, when it adopted a new “model” pact by which it said all future bilateral investment treaties should be drafted.

“Our Cabinet has approved a bilateral model -the new terms,”Finance MinisterArun Jaitley told The Associated Press recently in Beijing.”We are entitled to ask for a renegotiation, in terms of the new terms, of the changed agreement that we have drafted. And these will all be subject to negotiation with our foreign partners.”

But in notifying dozens of governments this year, India’s timing couldn’t be worse. With the world economy reeling after Britain’s vote to exit the European Union, governments may decide that negotiating new investment treaties with India is not a priority, analysts said.

Jaitley assured that the “structural changes” would not hurt business prospects.”These remain investor friendly,” he said. The changes were being sought from “some governments,” he said, but declined to say which or how many.

But the changes India seeks could mean negotiations take longer than India expects. India’s treaty template deviates from others worldwide in a number of ways that will give investors pause, including removing the possibility of international arbitration over disputes relating to taxation or licensing.

Even in non-tax cases, under the new model treaty terms, foreign investors would have to exhaust all Indian judicial avenues for resolving a dispute before appealing for international arbitration. Given the notorious backlog in Indian courts, with some cases languishing for decades, this could prove an obstacle for investment.

It also does not include a most favored nation clause-a standard provision designed to ensure that investors are being given the best terms available.

Still, the new terms may not matter to investors if they can still envision profits through investing abroad.

“Some of these changes are inevitable, and this is not just India,” said Sachin Chaturvedi, head of the Research and Information System for Developing Countries think tank in New Delhi.” What governments are doing are insulating the system from any kind of legal tangle they may end up in. And once the rules and regulations are streamlined, there will be more predictability for investors.

Even if India does manage to reach dozens of new bilateral investment agreements within a few months, analysts say it may do damage just by reneging on past agreements and forcing new negotiations with little time to spare.

India doesn’t really have the bandwidth to address all of the countries wanting to work in the country now,” said Dipen Rughani, the immediate former chairman of the Australia India Business Council.”Modi’s done a fantastic job of traveling around the world and garnering interest. But there are risks that have to be addressed.”

Australia which recently concluded more-comprehensive free-trade pacts with China, South Korea and Japan has seen its talks started with India in 2011 on a comprehensive economic partnership agreement stall, though its $16-18 billion in bilateral business was still covered by an investment treaty in force since 2000.

“If this agreement is going to be revoked, then I think it’s going to be very hard to attract the kind of investment” India is looking for, Rughani said.

Source : Business Standard

NSE unveils online bidding platform for gold bond issuance : 11-07-2016


To facilitate orderly trading in sovereign gold bonds, top stock exchange NSE has introduced online bid collection facility for such issuances.

The bourse has received approval from the Reserve Bank of India (RBI) to act as a receiving office for sovereign gold bond (SGB) issuances.

So far, three tranches of the bonds have been issued amounting to about Rs 1,322 crore and the fourth one is expected by July 18.

“An online bid collection facility shall be available to trading members on existing web based e-IPO platform,” the NSE said in a notice.

“Bid entry for gold bonds shall be available through single bid entry and bulk upload facility.”

Accordingly, the exchange will collect bids from its registered stock brokers for their clients for the gold bond issuance.

 Sovereign gold bonds provide investors a choice to diversify portfolio without the need to buy the metal in physical form. The scheme was announced by the government on October 30, 2015.
 These bonds are issued by RBI on behalf of the government. The tenure of the bonds is eight years with an exit option from fifth year to be exercised on the interest payment dates.
The bonds will carry an interest rate of 2.75 per cent (fixed rate) per annum on the amount of initial investment.
 Interest is to be paid half-yearly and the last interest will be payable on maturity, along with the principal.
Source : Economic Times

Back New MoS for Finance suggests PPP route for utilising idle PSU assets : 11-07-2016


Government can use the PPP mode and global bidding process to optimally utilise idle assets of PSUs with a view to promote skill development and generate new jobs, newly appointed Minister of State for Finance Arjun Ram Meghwal has said.

“There is a lot of scope for the Department of Investment and Public Asset Management (DIPAM). Focus should be on investment and using the PSU assets for employment generation. We need to engage the youth, talent of the country and offer them better services to increase the economic productivity,” he told

PSU assets, he said, are “national property” and should be put to use to create scope for skill development and setting up of new institutions.

“It can also be done through PPP (public private partnership) mode or global bidding. There are huge lands lying vacant at prime locations,” he said.

Citing an example, Meghwal said, idle space lying vacant at telephone exchanges can be utilised for setting up skill development centres.

“In good old days telephone exchanges required a lot of space and with the advancement of technology and spectrum, the space requirement has come down drastically,” he said.

Similarly, he said, railway property around small stations can also be put to productive use.

“There is lot of space, shade. So can’t we open a technical institution like ITI? This is asset management. Assets which are not properly utilised or lying idle where government money is involved should be put to productive use” he said.

In Budget 2016-17, Finance Minister Arun Jaitley renamed the Department of Disinvestment as DIPAM and expanded their scope of work to managing and monetising idle PSU assets for funding investments.

“We will encourage CPSEs to divest individual assets like land, manufacturing unit to release their asset value for making investments in new projects.
“We will adopt a comprehensive approach for efficient management of the government investment in CPSEs by addressing issued such as capital restructuring, dividend, bonus shares,” Jaitley had said.

Source : The Hindu

Govt. mulling raising FDI cap in newspapers, periodicals : 08-07-2016


The government is mulling a raise in foreign direct investment limit in newspapers and periodicals to 49 per cent from 26 per cent at present.

Currently, the FDI policy permits 26 per cent foreign direct investment in the publishing of newspapers and periodicals dealing with news and current affairs through government approval route.

“Increasing the limit in these areas is an old suggestion of the Department of Economic Affairs. They have again asked the Department of Industrial Policy and Promotion (DIPP) to consider the proposal,” sources said.

Recently, the government relaxed FDI norms in eight sectors, including civil aviation, defence, private security agencies, pharmaceuticals and food processing industry.

Source : Economic Times

RBI notifies rates for small saving schemes for Q2 : 08-07-2016


Reserve Bank today notified the interest rates for different small savings schemes for the quarter ending September.

The interest rates have been retained as they were for the previous April-June quarter.

On the basis of the decision of the government, interest rates for small savings schemes, like Public Provident Fund Scheme and Kisan Vikas Patra, are notified on quarterly basis.

Interest rate on savings deposit is 4 per cent, while for 5-year recurring deposit and 5-year senior citizens savings scheme is 7.4 per cent and 8.6 per cent, respectively.

Public Provident Fund Scheme earns interest rate of 8.1 per cent and Kisan Vikas Patra 7.8 per cent (110 months maturity period).

The interest rate on Sukanya Samriddhi Account Scheme is 8.6 per cent.

“The company is now eligible only to operate as a Non-Deposit Taking Non-Banking Financial Company (NBFC-ND),” the central bank said.

As such, the company cannot accept public deposits.

Source : PTI

Notification No. SO 2321(E) Dated: 06-07-2016


SECTION 408, READ WITH SECTION 466, OF THE COMPANIES ACT, 2013 – NATIONAL COMPANY LAW TRIBUNAL – CONSTITUTION OF – NOTIFIED AD INTERIM PRESIDENT OF NATIONAL COMPANY LAW TRIBUNAL

NOTIFICATION NO. SO 2321(E) [F.NO.A-45011/20/2013-AD.IV]DATED 6-7-2016

In exercise of powers conferred under section 408 read with sub-section (1) of section 466 of the Companies Act, 2013, the Central Government hereby appoints Justice (Retd.), Shri M. M. Kumar, Chairman, Company Law Board as President, National Company Law Tribunal with effect from 1st June, 2016 as an ad-interimarrangement till joining of a regular incumbent to the post or until further orders, whichever is earlier.

 

Notification No. SO 2320(E) Dated: 06-07-2016


SECTION 410 OF THE COMPANIES ACT, 2013 – NATIONAL COMPANY LAW TRIBUNAL AND APPELLATE TRIBUNAL – CONSTITUTION OF – NOTIFIED CHAIRPERSON OF NATIONAL COMPANY LAW APPELLATE TRIBUNAL

NOTIFICATION NO. SO 2320(E) [F.NO.A-45011/20/2013-AD.IV]DATED 6-7-2016

In exercise of powers conferred under section 408 read with sub section (1) of section 466 of the Companies Act, 2013, the Central Government hereby appoints Justice (Retd.), Shri M. M. Kumar, Chairman, Company Law Board as President, National Company Law Tribunal with effect from 1st June, 2016 as an ad-interimarrangement till joining of a regular incumbent to the post or until further orders, whichever is earlier.

1036/24/2016-CX – 6-7-2016


GOVERNMENT OF INDIA MINISTRY OF FINANCE

DEPARTMENT OF REVENUE CENTRAL BOARD OF EXCISE AND CUSTOMS

NEW DELHI

CIRCULAR NO

1036/24/2016-CX, Dated: July 6, 2016

Sub:- Scope of word ‘site’ appearing in Notification No. 12/2012-Central Excise, dated 17.03.2012-reg

Representations have been received from the trade regarding difficulties being faced in availing of benefit of exemption applicable to goods manufactured at the site of construction for use in construction work at such site vide S.No. 186 of Notification No. 12/2012-Central Excise, dated 17.03.2012, as amended. The issue is, how should the expression “site” used and defined in the aforesaid notification be interpreted, particularly for projects which run long distances, such as construction of road, laying of pipelines or laying of railway tracks etc.

2.1 The issue has been examined in the Board. The expression site has been defined in the notification (ibid) as “any premises made available for the manufacture of goods by way of a specific mention in the contract or agreement for such construction work, provided that the goods manufactured at such premises are solely used in the said construction work only”.

2.2 It is clear from the definition that the expression “site” cannot be given a restrictive meaning while interpreting the same so long as the premises under consideration for availing benefit of exemption under S.No. 186 of Notification No. 12/2012-Central Excise, dated 17.03.2012 fulfils following conditions:-

i. The said premises are made available to the manufacturer of goods by way of a specific mention in the contract/agreement for such construction work.

ii. The goods under Chapter 68 (except 6804, 6805, 6811, 6812 and 6813), for which exemption is claimed are manufactured at the said premises; and

iii. Such goods manufactured at the said premises are exclusively used for the construction work, as per the relevant contract or agreement.

3. It appears that in some field formations, the distance at which goods manufactured at site is used in the project, has been considered as criteria for examining the eligibility of goods for exemption. This is an extraneous criteria not flowing from the language used in the notification, particularly when the expression “site” stands explained in the notification. As explained in para 2.2 above, the eligibility criteria must flow from the plain reading of the explanation of the expression “site” in the notification.

4. In view of the above, it is hereby directed that each case may be decided taking into consideration the facts of the individual case, examined in light of the clarification given above. Circular No. 456/22/99-CX, dated 18.05.1999 is hereby rescinded.

5. Field formations and trade may be suitably informed. Difficulty experienced, if any, in implementing the circular should be brought to the notice of the Board. Hindi version would follow.

[F.No.68/1/2016- CX.I]

(Santosh Kumar Mishra)
Under Secretary to the Government of India

Notification No. 56/2016 6-7-2016


TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (ii)]

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

(DEPARTMENT OF REVENUE)

ORDER

New Delhi, the 6th July, 2016

S.O.2322 (E)- In exercise of the powers conferred by sub-section (2) of section 138 of the Income-tax Act, 1961(43 of 1961), the Central Government having regard to all the relevant factors, hereby directs that no public servant shall produce before any person or authority any such document or record or any information or computerised data or part thereof as comes into his possession during the discharge of official duties in respect of a valid declaration made under ‘the Income Declaration Scheme, 2016’, contained in Chapter IX of the Finance Act, 2016 (28 of 2016).

 

[Notification No. 56 /2016, F.No.142/8/2016-TPL]

(Dr. T.S.Mapwal)

Under Secretary to the Government of India

Green body proposes 22% tax on diesel cars : 06-07-2016


Vehicle buyers may face a truly prohibitive tax, going up to 22 per cent of the vehicle cost, on diesel cars if the recommendations of the Environment Pollution (Prevention and Control) Authority (EPCA) are implemented.

Taking into consideration the health and environmental concerns, complicated by the lucrative lower taxes on the fuel, EPCA has recommended an ‘environment compensation charge’ (ECC) of 20 per cent tax on diesel vehicles under 1,500 cc and 22 per cent on those over 1,500 cc.

The massive over-2,000 cc diesel SUVs, which were earlier barred from plying by the Supreme Court, will ideally attract 24 per cent ECC, it said.

Global trend

The report notes that globally the health cost of diesel vehicles are computed into the cost of vehicles, which make diesel cars more expensive.

“A Euro IV diesel car in Europe has lifetime external cost up to five times higher than Euro IV petrol car. Thus, the pollution cost based on lifetime particulate emissions, costs of a diesel car and petrol car are €435 and €87 respectively. For NOx it is €220 and €70, respectively,” EPCA said.

The authority’s recommendation of 20 per cent (for less than 1,500 cc) and 22 per cent (for over 1,500 cc) green cess stands at ₹179,766 and ₹215,883 respectively.

Lack of data

These figures, the EPCA says in its report, underestimate the actual compensation that should be imposed, given the lack of quantifiable health damage data in India, which is available in developed countries.

The EPCA estimates that more 2.8 lakh people in Delhi are at additional risk of cancer considering the exposure to pollutants from diesel cars.

“However, due to the unavailability of comprehensive quantifiable cost of health damage specific to the Indian context, at present the same is not being factored into the ECC. This therefore underestimates the ECC,” the EPCA noted.

Fuel pricing

It further questioned the lopsided taxing regime on fuel, given that diesel, which is marginally more expensive than petrol (by ₹0.33) when it goes to dealers, becomes significantly cheaper (by ₹10.46 in Delhi) than petrol after taxes are imposed.

“Removing the fuel price differential through the imposition of ECC will be a step in removing the incentive for diesel vehicles. This is needed to reduce public health risk as diesel emissions are among the more harmful pollutants,” the EPCA noted.

Source : Business Standard

Cabinet rejig focus on performance : 06-07-2016


Prime Minister Narendra Modi on Tuesday reshuffled the portfolios of several of his key ministers, inducted 19 new faces and sacked five ministers of state.

While electoral considerations, particularly the Assembly polls in five states by early 2017, did influence the changes, the overriding message was of rewarding performers and punishing laggards.

The PM’s signal to his ministerial colleagues was clear – he wants better performance from his ministers manning social sector portfolios. The social sector constitutes the core of Modi’s Budget priority towards “gaon” (villages), “garib” (the poor) and “kisan” (farmers).

The more notable changes included Smriti Irani, who had earned much bad press for the way she dealt with recent developments in Jawaharlal Nehru University and Hyderabad Central University, being shifted from the human resource development (HRD) ministry to a less high-profile textiles ministry.

Prakash Javadekar, known for his unassuming approach, will be her successor at the HRDministry. Javadekar was also promoted to the Cabinet rank.

However, neither Coal and Power Minister Piyush Goyal nor Petroleum and Natural Gas Minister Dharmendra Pradhan, got the much-anticipated Cabinet rank. Javadekar’s portfolio of environment and forests has been entrusted to Anil Madhav Dave.

Another key change, in the context of the upcoming monsoon session of Parliament, was in handing Ananth Kumar the parliamentary affairs portfolio to indicate the government’s intent at better floor management that will be needed to ensure the passage of the Goods and Services Tax (GST) Constitution amendment. Veteran S S Ahluwalia was appointed MoS in the parliamentary affairs ministry.

But M Venkaiah Naidu’s seniority and utility was respected, with him being given the information and broadcasting portfolio. Ananth Kumar will continue at the helm of chemicals and fertilisers, while Naidu retains housing and urban development. The Information and Broadcasting ministry was earlier with Finance Minister Arun Jaitley.

As for finance, Minister of State Jayant Sinha was shifted as the junior to the Civil Aviation Minister Ashok Gajapathi Raju. Jaitley has two new ministers of state in Santosh Gangwar, earlier the textiles minister, and Arjun Ram Meghwal.

Topmost of those punished was former Karnataka Chief Minister D V Sadananda Gowda, shifted from law and justice to statistics and programme implementation.

His portfolio has gone to Ravi Shankar Prasad, who, in turn, lost the communications portfolio to Uttar Pradesh leader Manoj Sinha.

Sinha has been rewarded with independent charge of the communications portfolio and will continue to be the junior to Suresh Prabhu at the railway ministry. The portfolios of Steel and Mines Minister Narendra Singh Tomar and Rural Development Minister Chaudhary Birender Singh were swapped.

Agriculture ministry was also strengthened with three ministers of state under Radhamohan Singh. These are S S Ahluwalia, Parshottam Rupala and Sudarshan Bhagat. Rupala was the agriculture minister in Modi-led state government in Gujarat. Sanjeev Kumar Balyan, an important Jat leader of western UP, was shifted from agriculture to water resources to allow him to focus on UP Assembly polls.

According to sources, the performance audit of ministers showed Irani’s performance to be woeful. The TSR Subramaniam committee report is still under wraps and no meaningful liberalisation has taken place in the HRD ministry.

Javadekar is intimately acquainted with private sector enterprise in the education sector. Sources in the government said some of the injustice meted out to Ananth Kumar during the initial allocation of portfolios in May 2014 has been redressed.

Party colleagues also view Jayant Sinha’s new appointment as a promotion. He has been sent to civil aviation at a time when the ministry is extremely active, given the roll-out of a new policy and liberalisation of FDI rules. The ministry is headed by Telugu Desam’s Raju, and the BJP has now posted their own man there.

The five ministers given the boot had all handled social sector portfolios, while none who are in-charge of departments concerning economic sectors were touched.

Source : Economic Times

Apex court directs Centre to provide 3% reservation in jobs to disabled persons : 05-07-2016


The Supreme Court has directed the government to give three per cent reservation to persons with disability (PWD) in all services, irrespective of the mode of filling such posts.

A bench of Justices J Chelameswar and Abhay Manohar Sapre observed that it was “disheartening” to note that low numbers of PWD, which was much below three per cent, were in government jobs, years after Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995, came into force.

Memoranda ‘illegal’

“We further direct the government to extend three per cent reservation to PWD in all identified posts in Group A and Group B irrespective of the mode of filling up of such posts,” the bench said, while holding as “illegal” the two memoranda issued by the Department of Personnel and Training.

These memoranda, issued in February 1997 and December 2005, had denied the statutory benefit of three per cent quota in identified posts which could be reserved for PWD, falling under groups A and B.

Petition

The court’s order came on a petition filed by some PWD employees of Prasar Bharati against these memoranda, saying it deprived them of the statutory benefit of reservation under the 1995 Act, regarding Group A and Group B posts.

The 2005 memorandum provided for reservation in favour of PWD to the extent of three per cent in all identified posts in Prasar Bharati when these are filled up by direct recruitment.

Top posts excluded

However, it provided for three per cent reservation in the posts falling in groups C and D irrespective of the mode of recruitment due to which the statutory benefit of reservation in favour of PWD was denied for groups A and B posts as these posts were to be filled up through direct recruitment only. While holding these memoranda “inconsistent” to the 1995 Act, the bench noted, “It is disheartening to note that (admittedly) low numbers of PWD (much below three per cent) are in government employment long years after the 1995 Act. Barriers to their entry must, therefore, be scrutinised by rigorous standards within the legal framework of the 1995 Act.”

Verdict

“Once a post is identified, it means that a PWD is fully capable of discharging the functions associated with the identified post. Once found to be so capable, reservation under Section 33 (of the Act) to an extent of not less than three per cent must follow,” the bench said.

“Once the post is identified, it must be reserved for PWD irrespective of the mode of recruitment adopted by the State for filling up of the said post,” it said.

Source : The  Hindu

Assocham proposes to set up National Data Bank : 05-07-2016


Industry body Assocham has offered to set up a National Data Bank containing information about electronic transactions, which can be used by the government for official purposes, like issuance of passports as well as protecting the country’s strategic interests.

The industry body wrote identical letters in this regard to the Prime Minister’s Office (PMO) and the National Security Advisor.

The proposal involves creation of a Central Co-ordination Committee, under guidance of National Security Council Secretariat (NSCS).

“A clear legal framework is required to legitimise the need for creating a National Data Bank of e-Information of Classified and heritage documents for national archive which can be integrated with national information policy demarcating information into three broad categories including information in public domain; information to be used by Government agencies for official use only; and classified information,” Assocham said in the letter.

The chamber pointed out that data which is non-sensitive in nature could be used by the public for scientific, economic and developmental purposes. It could be used for making accurate and immediate decisions invariably in large demographics for trend forecasting and taking immediate recourse in case of any civic decisions or exigency by various Ministries or Departments of Government of India.

The industry body noted the current regime of Big Data Management does not enable efficient, open sharing and interoperability of government-owned data with different inter and intra government agencies.

“This calls for need of creating cyber National Data Bank of e-Information of classified heritage documents for National Archive with the aim to promote open data sharing and access to Government of India owned data for national planning, research, development and most importantly in the interest of national security,” the chamber said.

The benefits of establishing the Data Bank include filtered and structured content ready to use by different agencies; non duplication of information of national importance and reduction of cost; quick and efficient decision-making in national interest; clear IPR and ownership of data and records; trend forecasting and demographic use of data; streamlining of procedures, etc.

RBI may soon allow interoperability of India Post’s payment bank ATMs : 05-07-2016


India Post, the world’s largest mail delivery network, is carving out a separate vertical to manage banking services, a move that will help it win RBI nod for interoperability of its ATMs with those of PSU banks.

India Posts, which had last year won a licence to operate a payment bank, has not been able to move much on starting operations.

“We wanted interoperability of the ATMs of Post Offices with other banks. RBI said we can allow it only if Post offices create a separate bank vertical because RBI has jurisdiction over only banks. The Postal department has taken a positive approach and created a separate vertical,” a finance ministry official said.

Interoperability will allow individuals to transfer money from their Post Office account to their accounts in any bank. Besides, the Post Office ATMs can be used for withdrawal of money from the bank accounts.

The official,  further, said the vertical will be created to operationalise the Post Bank licence and ultimately it would get merged suitably with the Post Bank.

DoP has 28,000 departmental post offices and 1.50 lakh rural post offices across the country.

The Postal Department is proactively setting up ATMs and micro ATMs in its rural post offices so as to tap its wide network for financial inclusion.

“RBI said this separate vertical of the Postal department is open for banking regulation. The RBI is favourably considering the option to provide interoperability,” the official said.

“This will help in moving towards  a less cash economy. Post Office has its branches even in the remotest areas where banking mitras or business correspondents cannot reach. Interoperability will allow leveraging the reach of Postal department,” the official added.

With the formal structure of Post Bank likely to take around a year and half, the government wants to kick start its operations in parts by first putting into use the ATMs of Post Offices.

India Post plans to roll out 10,000 ATMs and 20,000  micro ATMs across the country by the end of this year.

India Post payments bank will primarily target unbanked and under-banked customers in rural, semi-rural and remote areas, with a focus on providing simple deposit products and money remittance services.

The Union Cabinet last month cleared a proposal to set up India Post payments bank with a corpus of Rs 800 crore.

Payments banks can accept deposits (initially up to Rs 1 lakh per individual), offer Internet banking, facilitate money transfers and sell insurance and mutual funds by piggy-backing on existing retail or other networks. Besides, they can issue ATM/debit cards, but not credit cards.

The Postal payments bank, which will be run by Chief Executive Officer,  will be professionally managed and there will be a officials from Department of Posts, Department of Expenditure and Department of Economic Services etc on its board .

Source : Times of India

1035/23/2016-CX – 4-7-2016


GOVERNMENT OF INDIA MINISTRY OF FINANCE

DEPARTMENT OF REVENUE CENTRAL BOARD OF EXCISE AND CUSTOMS

NEW DELHI

CIRCULAR NO

1035/23/2016-CX, Dated: July 4, 2016

Sub: Recovery of confirmed demands during the pendency of stay application-reg.

Kind attention is invited to Board Circular No. 967/1/2013-CX dated 01.01.2013 on the issue of recovery of confirmed demands during the pendency of stay application filed by the assessee. Since then important changes in law have been made and important judgments have come on the subject. Accordingly, it has been decided to review the Circular.

Part I: When stay application is pending before Commissioner (Appeals) or CESTAT:

2.0 The circular dated 01.01.2013 was examined by Hon’ble High Courts in situations where stay applications was pending before Commissioner (Appeals) or CESTAT. In this regard some of the important judgments are L&T vs. UOI [2013-TIOL-99-HC-MUM-CX] and Karnavati Club ltd. Vs UOI (SCA No. 2422/2013), wherein the Courts held that recovery could be made only in cases where delay in deciding the stay could be attributed to the conduct of the assessee. No appeal was filed against these judgments of the Hon’ble High Courts by the Department and thus these judgments attained finality.

3.1 However Hon’ble High Court of Punjab and Haryana judgment in case of M/s PML Industries Ltd. Vs Commissioner of Central Excise - 2013-TIOL-201-HC-P&H-CX pronounced that during the pendency of stay, irrespective of the conduct of the assessee, no recovery could be made. In para 46. Hon’ble Court observed that:-

” …we are of the opinion that right of consideration in appeal on an application for waiver of pre-deposit, is a right conferred by the Statute and such right cannot be defeated on the basis of Circular..”.

3.2 SLP filed by the Department [SLP (Civil) 765/2014] against the judgment of Hon’ble High Court of Punjab and Haryana, has been dismissed by the Hon’ble Supreme Court, thus upholding the decision of the Hon’ble High Court. The relevant observation of the Hon’ble Supreme Court while dismissing the SLP, is reproduced below:-

“In view of the judgment and order passed by this Court in Commissioner of Customs & Central Excise. Ahmedabad v. Kumar Cotton Mills Pvt. Ltd [2005 (180) ELT 434 (SC)/ 2005-TIOL-42-SC-CX , we find no reason to interfere with the impugned order passed by the High Court The special leave petitions are dismissed..."

4.1 In light of the above judgments, the Circular No. 967/1/2013-CX dated 01.01.2013 is hereby rescinded and following fresh instructions are given on the subject. It is also clarified that seven circulars which had been rescinded vide Circular No. 967/1/2013-CX dated 01.01.2013 shall continue to remain rescinded.

4.2 In cases where stay application is pending before Commissioner (Appeals) or CESTAT for periods prior to 06.08.2014, no recovery shall be made during the pendency of the stay application.

4.3 For subsequent period i.e. from 06.08.2014 onwards, instructions contained in Circular No. 984/08/2014-CX dated 16.09.2014 shall continue to be followed. Section 129E of the Customs Act, 1962 and Section 35F of the Central Excise Act, 1944, as made applicable to Service Tax vide Section 83 of the Finance Act, 1994, was amended vide Finance Act, 2014 with effect from 06.08.2014.

Part II: When demand is confirmed by Hon'ble CESTAT or Hon'ble High Court & stay is pending before Hon'ble High Court or Hon'ble Supreme Court:

5.1 Attention is invited Sl. No. 11 of the Circular No. 967/1/2013-CX dated 01.01.2013 providing that when a demand is confirmed by a Hon'ble CESTAT or a Hon'ble High Court, recovery may be initiated immediately on the issue of order by the Hon'ble Tribunal or the High Court, if no stay is in operation. Hon'ble High Court of Gujarat in case of Karnavati Club Ltd. (SCA No. 2422/2013) examined the entire Circular dated 01.01.2013 and in relation to Sl. No 11, in para 29 of the judgment, upheld the direction contained in the circular, without any modification.

5.2 As a measure of liberalization and to ensure uniformity of practice, it is hereby directed that, recovery proceeding in relation to an order of Hon'ble High Court or Tribunal confirming demand of duty, may be initiated only after a period of sixty days from the date of order of the Hon'ble Tribunal or Hon'ble High Court, as the case may be, where no stay has been granted by Hon'ble High Court or Hon'ble Supreme Court against the order of Hon'ble Tribunal or Hon'ble High Court, respectively.

6.0 Instructions in CBEC's Excise Manual of Supplementary instructions on the above subject or any other circular, instruction or letter contrary to this circular stand amended to the extent of the conflict.

7.0 Difficulties, if any, in the implementation of above instructions may be brought to the notice of the Board. Hindi version will follow.

[F.No.208/36/2012-CX.6]

(Shankar Prasad Sarma)
Under Secretary to the Govt. of India

Govt allows state-run general insurers to sell PM’s crop insurance schemes : 04-07-2016


Government has now allowed all the four public sector general insurers to participate in its ambitious farm insurance schemes — the Pradhan Mantri Fasal Bima Yojana (PMFBY) and Unified Package Insurance Scheme — with potential of over $2.5 billion in premium collection.

The government had kicked off the scheme on June 1 without involving any of the four public sector general insurers, who control almost 50 per cent of the market.

Only 11 private sector players were allowed to participate as they have better experience in crop insurance schemes, an area which state-run companies were almost eschewing so far.

The PMFBY has replaced the existing two crop insurance schemes — the National Agricultural Insurance Scheme (NAIS) and the Modified NAIS.

For Kharif crops, the premium charged would be up to 2 per cent of the sum insured, while for Rabi crops, the premium will be up to 1.5 per cent.

“We have been allowed to participate in these schemes. Now that Kharif crop season has already begun, we will participate in the Rabi season,” the country’s largest general insurer New India Assurance’s Chairman G Srinivasan told PTI.

Its peer National Insurance Company is also gearing up for the scheme.

“We are getting ready to participate in the scheme. We are working with Agricultural Insurance Company (AIC) as they are providing us technical knowhow on the subject,” its Chairman and Managing Director Sanath Kumar said.

“I do believe that it will be a profitable venture as it has been priced on the basis of actuarial calculation which will ensure the insurers get the right price for providing cove  he said.

According to Kumar, the states have already floated tenders for the scheme for Kharif season.

“Still, I do believe that we will be able to participate in the forthcoming Rabi crops,” he said.

However, a central government official said even for Kharif crops, the state-owned general insurers can provide cover in association with AIC.

The state-run non-life insurers have a massive presence in rural and semi-urban areas compared to their  counterparts, which will help increase the reach of PMFBY, he said.

As of now, AIC is the sole state-run company which has been providing the coverage.

Now, all the four state-owned companies will associate with AIC to provide cover under the schemes.

Their participation will also ensure that the scheme benefits both loanee and non-loanee farmers as the premium is quite low.

“We have already crossed the mark of 24-25 per cent of coverage of crop loan and now we are aiming at achieving 40 per cent by the fiscal end,” he said.

SBI General Insurance is looking at doubling its crop insurance cover during the current fiscal.

“We have underwritten premium to the tune of Rs 100 crore in the crop insurance segment in the last fiscal and we are looking at doubling our crop insurance cover during the current fiscal thanks to PMFBY,” SBI General  Insurance Managing Director Pushan Mahapatra said.

Talking about state-run general insurers joining the bandwagon, he said, “More number of players will bring better competition and better risk management practices.”

State-run reinsurer GIC Re plans to become the world’s second largest agriculture reinsurer due to its participation in PMFBY.

“Our share as reinsurer in PMFBY is already at 30-40 per cent. But we want to make it to above 50 per cent by March so as to become the world’s second largest reinsurer,” GIC Re Chairperson Alice G Vaidyan said.

Source : Economic Times

No. 26/2016 Dated: 4-7-2016


GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF REVENUE
CENTRAL BOARD OF DIRECT TAXES
NEW DELHI

CIRCULAR NO

26/2016, Dated: July 4, 2016

Subject: Applicability of Section 197A(1D) and Section 10(15)(viii) of the Income tax Act, 1961 to interest paid by IFSC Banking Units (IBUs) – Clarification regarding.

Section 197A of the Income tax Act, 1961 provides the circumstances in which deduction of tax at source is not required to be made under Chapter XVII of the Act. Sub-section (1D) of this section provides that deduction is not required to be made by an Offshore Banking Unit on interest paid on deposit made on or after 1.4.2005 by a non-resident or a person not ordinarily resident in India, or on borrowing on or after 1.4.2005 from such persons. Clause (viii) of sub-section (15) of section 10 provides that such interest will not be included in the total income. Offshore Banking Unit is defined in clause (u) of section 2 of the Special Economic Zones Act, 2005 as a branch of a bank located in a Special Economic Zone, which has obtained the permission under clause (a) of sub-section (1) of section 23 of the Banking Regulation Act, 1949.

2. Representations have been received by the Central Board of Direct Taxes for clarifying the applicability of Section 197A(1D) and Section 10(15)(viii) of the Income tax Act, 1961 in respect of interest received from IFSC Banking Units (IBUs) set up in the Special Economic Zones. The matter has been examined, and it is observed that IBUs are branches of Indian Banks or Foreign Banks having presence in India, which are established in accordance with the RBI Scheme dated 1.4.2015, in the International Finance Service Centers that are set up in within the Special Economic Zones, as per Section 18 of the Special Economic Zone Act, 2005. Thus, the IBUs fulfil the necessary criteria for being considered Offshore Banking Units as defined in clause (u) of section 2 of the Special Economic Zones Act, 2005.

3. In view of the above, the Board hereby clarifies that in accordance with the provisions of Section 197A (1D) of the Income tax Act, 1961, tax is not required to be deducted on interest paid by such IBUs, on deposit made on or after 1.4.2005 by a non-resident or a person who is not ordinarily resident in India, or on borrowings made on or after 1.4.2005 from such persons.

F.No.275/26/2016-IT (B)

(Sandeep Singh)
Under Secretary to the Govt. of India

Unions against hiking investment in ETFs : 04-07-2016


Central trade unions including RSS affiliate Bharatiya Mazdoor Sangh (BMS) are up in arms against a proposal to raise proportion of EPFO’s investment in Exchange Trade Funds (ETFs) this fiscal.

“We have been opposing it. Last time when they decided to invest in ETF, all trade unions were against it. It was a wrong decision. We will oppose any proposal to increase proportion of EPFO’s investments in ETFs in July 7 meeting of the Central Board of Trustees (CBT),” Virjesh Upadhyay, BMS General Secretary and an EPFO trustee, told PTI.

Labour Minister Bandaru Dattatreya had earlier indicated that a proposal to increase proportion of EPFO’s investment in ETFs from 5 per cent of its investible deposits, will be taken up for discussion in Thursday’s CBT meeting.

Source : The Hindu

Submit data on loan defaulters to credit information firms, RBI tells banks : 02-07-2016


 The Reserve Bank of India has advised banks and financial institutions to submit data on defaulting borrowers from December 2014 onwards to Credit Information Companies (CICs) and not to the RBI.

Releasing this information, obtained through a portal complaint, Delhi-based Right to Information activist Subhash Chandra Agrawal said on Friday that it is significant to note that the RBI has not so far complied with the Supreme Court order of December 12, 2015, in the RBI vs PP Kapoor (Civil 94 of 2015) case, where it wanted the RBI to make public details of the top 100 loan defaulters among industrialists.

The details required including the names of the businessmen, firm name, principal amount, interest amount, date of default, and date of availing the loan.

In a June 24 letter addressed to Agrawal in response to his PG Portal complaint dated April 24, the RBI said it has submitted to the Supreme Court a list of defaulters above ₹500 crore in a sealed cover and claimed that the said information is confidential and requested that it may not be revealed to the public.

The matter is still under consideration of the Supreme Court.

Source : Economic Times

BSE, NSE roll out e-book platforms for issuance of debt securities : 02-07-2016


The BSE and NSE today launched electronic book platforms for issuance of debt securities worth over Rs. 500 crore on a private placement basis.

The platforms — BSE-BOND and NSE-EBP (Electronic Debt Bidding Platform) — will facilitate online bidding for private placement of debt securities.

LIC Housing Finance’s Rs. 400-crore issue got oversubscribed on the NSE soon after the launch of the platform, while other entities have also shown interest in the segment.

This platform is expected to bring in transparency and efficiency in price discovery for private placement of debt securities.

It will be optional for issues below Rs. 500 crore, but the issuers will have to disclose coupon, yield, amount raised, number of investors and category of investors to the electronic book provider or to the information repository for corporate debt market, in the format as specified by SEBI.

All investors, including institutional as well as high net worth (HNI) arrangers, are allowed to bid through this platform.

Arrangers include merchant bankers, RBI-registered primary dealers or any other registered intermediaries as notified by SEBI from time to time.

Recently, the exchanges received market regulator SEBI’s approval to act as electronic book providers (EBPs) to facilitate electronic book mechanism for issuance of debt securities on a private placement basis.

EBPs are required to have all necessary infrastructure like adequate office space, equipment, risk management capabilities, manpower and other information technology infrastructure for effective functioning.

Source : The Hindu

1 – 1-7-2016


DISCONTINUATION OF REPORTING OF BANK GUARANTEE ON BEHALF OF SERVICE IMPORTERS

A.P. (DIR SERIES 2016-17) CIRCULAR NO.1DATED 7-7-2016

Attention of Authorised Dealer Category-I (AD Category-I) banks is invited to para no. 5 of the Master Direction No.8 dated January 01, 2016 on ‘Other Remittance Facilities’ in terms of which, AD Category-I banks were permitted to issue guarantees in favour of a non-resident service provider on behalf of their resident customers importing services, subject to the conditions laid therein. AD Category-I banks were also advised vide para no.1, Part X of the Master Direction on ‘Reporting under Foreign Exchange Management Act, 1999′ dated January 1, 2016, to report to the Chief General Manager-in-Charge, Foreign Exchange Department, Foreign Investments Division (EPD), Reserve Bank of India, Central Office, Mumbai-400001 details about invocation of bank guarantee for service imports.

2. On a review of the reporting requirements and to reduce the burden of compliance, AD Category I banks are advised to discontinue submission of such reports with immediate effect. They may, however, maintain records of such invocations and furnish the required details to RBI whenever sought.

3. The Master Direction No. 18 dated January 01, 2016 is being updated to reflect the changes.

4. The directions contained in this circular have been issued under sections 10 (4) and 11 (1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and are without prejudice to permissions / approvals, if any, required under any other law.

 

1034/22/2016-CX – 1-7-2016


GOVERNMENT OF INDIA MINISTRY OF FINANCE

DEPARTMENT OF REVENUE CENTRAL BOARD OF EXCISE AND CUSTOMS

NEW DELHI

CIRCULAR NO

1034/22/2016-CX, Dated: July 01, 2016

Subject: Clearance of bunker fuels to Indian Ship/Vessel carrying containerized cargo-reg.

I am directed to refer to Sl. No. 65A of notification no. 12/2012-CE dated 17.03.2012 as amended whereby clearance of bunker fuels (i) IFO 180 CST (ii) IFO 380 CST, for use in ships or vessels has been permitted without payment of Central Excise duty subject to the conditions specified under Sl. No. 52 of the annexure to the notification. In this connection, trade has requested that a procedure be prescribed for supply of bunker fuel for such use from bonded stocks of bunker fuel being maintained by the Oil Manufacturing Companies (OMCs) at the ports located in the coastal areas where the specified ships/ vessels operate.

2.1 The issue has been examined. To facilitate dispensation of bunker fuel from existing export warehouse for petroleum products, warehousing facility is being extended to the bunker fuel for consumption as per exemption under Sl. No. 65A of notification no 12/2012-CE dt 17.3.2012. Existing warehouses from where bunker fuel would be dispensed shall be deemed to be registered under Central Excise. The existing warehousing and export warehousing procedures prescribed shall be followed mutatis mutandis for clearance of bunker fuel from refinery to the warehouses of the OMCs and for further supply to the eligible ships and vessels. (Circular no 579/16/2001-CX dated 26-6-2001, circular no. 581/18/2001-CXdated 29.06.2001 and circular no. 798/31/2004-CX dated 8.9.2004 refers.)

2.2 In pursuance of powers conferred under sub-rule (2) of rule 20 of the Central Excise Rules, 2002 read with the conditions in the exemption notification (ibid), Board specifies the following procedure and conditions for supply of indigenous bunker fuel namely, IFO 180 CST and IFO 380 CST, without payment of Central Excise duty from the warehouse of the OMCs to the eligible ships/vessels under notification no 12/2012-CE dated 17.03.2012.

Procedure for availing exemption

3.1. The Master of the eligible Indian Ship/vessel or his authorised agent shall submit two copies of the undertaking to the OMCs, from which it intends to procure bunker fuel, in the format enclosed as Annexure A. A copy of registration certificate of the ship and fuel consumption rate certificate shall be enclosed with the undertaking. The undertaking shall be submitted only once and in case of any change in the details, a new undertaking shall be submitted. OMCs shall retain one copy of the undertaking and forward second copy to the jurisdictional Assistant or Deputy Commissioner of Central Excise or Customs, as the case may be, to whom the undertaking is addressed.

3.2. OMCs shall supply bunker fuel under the provisions of this circular to ships and vessels registered under the Merchant Shipping Act, 1958 (44 of 1958) flying Indian flag and carrying containerized cargo. OMCs shall submit a one-time undertaking in the format prescribed as Annexure B to dispense bunker fuel available in the warehouse in terms of the conditions of the notifications for the intended purpose only.

3.3 The Master of the eligible Indian ship/vessel or his authorised agent on each filling of the bunker fuel shall give a dated acknowledgment of the receipt of bunker fuel to the OMCs. Such acknowledgment can even be given on the copy of delivery note/challan or sale invoice retained by the OMCs.

3.4 Liability of duty, interest and penalty arising out of violation of the condition of the notification shall shift to the Master of the Vessel, once dated acknowledgment of the receipt of bunker fuel is given to the OMC concerned.

Submission of utilisation certificate

4.1 The Master of the ship/vessel or his agent shall submit a utilization certificate to the OMCs from whom they obtained bunker fuel in the format enclosed as Annexure C. Utilization certificate shall be submitted for each quarter of the year within two months of completion of the quarter.

4.2 In case of non-receipt of utilisation certificate within the stipulated period, the OMC shall submit details of the supplies for which utilization certificate has not been received, within one month of the period prescribed for submission of utilization certificate. For example, for the quarter of April to June, 2016, utilization certificate shall be submitted by the Master of the Vessel or his agent, by end of August, 2016 and in case of non-receipt of utilization certificate, OMCs shall submit necessary details of non-receipt of utilization certificate to the Assistant/Deputy Commissioner by the end of September, 2016.

Reconciliation and recovery

5.1 Assistant/Deputy Commissioner shall write to the Master of the Ship or Vessel or his agent from whom utilization certificate has not been received to submit the same within thirty days with a copy to the OMCs, failing which recovery proceedings would be initiated.

5.2 In cases where utilization certificate is not received even after expiry of thirty days as prescribed in para 5.1, demand for recovery of duty, interest and penalty, in terms of the undertaking submitted to avail the exemption read with the provisions of the Central Excise Act, 1944 shall be initiated against the Master of the Vessel. Similar action would follow in cases where bunker fuel is not used for the intended purpose. However, in cases where utilization certificate is received, no further action would be necessary.

Removal of difficulties by Commissioner

6. The jurisdictional Commissioner of Central Excise, in order to remove any difficulty in implementation of the procedure, issue suitable orders to remove the difficulty within the overall framework of law and the procedure prescribed by this circular.

F.No.83/1/2015-CX.3 (Pt.)

(Rohan)
Under Secretary to the Govt. of India

1033/21/2016-CX – 1-7-2016


GOVERNMENT OF INDIA MINISTRY OF FINANCE TAX RESEARCH UNIT NEW DELHI

CIRCULAR NO 1033/21/2016-CX, Dated: July 1, 2016

Sub: Imposition of Central Excise duty on jewellery – Constitution of sub-committee of the High Level Committee – regarding.

Kindly refer to the Circular No. 1021/9/2016-CX dated 21.03.2016 and Circular No. 1026/14/2016dated 23.04.2016, both issued vide F.No.354/25/2016-TRU.

2. In this regard, the time limit for taking central excise registration of an establishment by a jeweller is being extended up to 31.07.2016.

3. The liability for payment of central excise duty will be with effect from 1st March, 2016. However, assessee jewellers may make the payment of excise duty for the months of March, 2016; April, 2016 and May, 2016 along with the payment of excise duty for the month of June, 2016 upto the extended date of 31.07.2016.

4. Wide publicity may be given to this circular. Difficulty, if any, in implementing the circular should be brought to the notice of the Board. Hindi version would follow.

[F.No.354/25/2016-TRU]

(Anurag Sehgal)
Under Secretary

From today, pre-2005 banknotes can be exchanged only at select RBI offices : 01-07-2016


The facility for exchanging pre-2005 banknotes will be available only at select offices of the Reserve Bank of India from July 1, 2016, the central bank said in a statement.

The RBI said a major portion of the pre-2005 banknotes have been withdrawn from circulation and only a small percentage of these notes remain in circulation.

The RBI offices where the pre-2005 notes can be exchanged are located in Ahmedabad, Bengaluru, Belapur, Bhopal, Bhubaneswar, Chandigarh, Chennai, Guwahati, Hyderabad, Jaipur, Jammu, Kanpur, Kolkata, Lucknow, Mumbai, Nagpur, New Delhi, Patna, Thiruvananthapuram and Kochi.

The central bank had, in December 2015, set June 30, 2016, as the last date for the public to exchange pre-2005 banknotes at identified bank branches and its issue offices. The Reserve Bank also clarified that these pre-2005 banknotes will continue to remain legal tender.

The RBI stated that it is a standard international practice not to have currency notes from multiple series remaining in circulation at the same time.

Soliciting cooperation from members of the public in withdrawing these banknotes from circulation, the RBI urged them to exchange pre-2005 banknotes at its offices, at their convenience.

Source : The Hindu

CBEC policies are tax-friendly: FICCI-KPMG survey : 01-07-2016


A majority of respondents in a survey of about 40,000-50,000 taxpayers, commissioned by the Central Board of Excise & Customs (CBEC), said that policies at the ground-level had become “liberal and friendly” in the past two years.

“The key question of the survey was – ‘Do you feel a perceptible change in policies of the CBEC by way of becoming liberal and friendly to the taxpayer?’ An overwhelming number of respondents, 72 per cent, responded with a “yes”,” a statement issued by the Finance Ministry said.

The survey, outsourced by industry chamber FICCI to KPMG, was done to get a feedback on the impact of reforms undertaken by CBEC during the last two years, such as single-window interface for facilitating trade, digitisation of documents, e-monitoring among others, also said that 45 per cent of the respondents saw an “attitudinal change in senior functionaries (commissioner level and above); and 51 per cent acknowledged an improvement at the ground level, at the level of inspectors and above.”

“This should come as heartening news for India Inc, as it is the inspector raj which is considered as the most stubborn stumbling block to improving the tax environment,” said the survey, which comes in the wake of allegations of “tax terrorism” cited as a barrier to entry of foreign investment in manufacturing.

The survey said of most interest to foreign businesses were responses to reforms undertaken in SVB (transfer pricing in customs) where 89 per cent respondents indicated improvements. Similarly, responses on legislative changes carried out to warehousing in the Budget also elicited a positive response from 85 per cent respondents.

Considering the Make in India initiative, central excise has been a major area of focus, where 92 per cent respondents acknowledged CBEC’s success in simplification of customs & excise business processes, the Ministry said.

About 30 per cent of the respondents in the survey were from Maharashtra, followed by Delhi with 11 per cent. Sector-wise, the 46 per cent respondents were from the service industry, 39 per cent from manufacturing and 15 per cent from the trading community.

Source : Economic Times

CBDT notifies foreign tax credit rules, corporates to gain : 01-07-2016


To provide relief to corporates with income abroad, the tax department has notified ‘Foreign Tax Credit’ rules allowing companies to claim credit for taxes, surcharge and cess paid overseas.

The rules, which come into effect from April 1, 2017, allow taxpayers to claim credit of foreign tax under dispute once it is finally settled.

Foreign tax credit (FTC) will be available against tax, surcharge and cess payable under the Act, including minimum alternate tax (MAT) but not in respect of interest, fee or penalty.

The rules also provide that disputed foreign tax will be allowed as credit for the year in which the income is taxed in India, subject to certain conditions.

To avail of the credit, the taxpayer will have to furnish evidence of settlement of the dispute and evidence of payment of the foreign tax. The taxpayer is also required to provide an undertaking that no refund, directly or indirectly, will be claimed for this foreign tax.

“The rules are progressive and provide much-needed clarity as well as certainty in claiming FTC,” said Rakesh Nangia, Managing Partner, Nangia & Co.

Taxpayers claiming FTC shall now be required to file a Statement of Income from a foreign country with details of tax paid in the prescribed Form 67.

“Rules also provide for situations of carry backward of loss of the current year resulting in refund of foreign tax,” said Amit Maheshwari, partner, Ashok Maheshwary & Associates LLP.

The Central Board of Direct Taxes (CBDT) has also allowed tax payers to give self-certified statement, giving the nature of income and the amount of foreign tax deducted or paid accompanied with the counterfoil or acknowledgment of taxes paid and/or proof of taxes having been deducted at source, for claiming FTC.

“This process is much simpler than the complex and difficult procedure involving obtaining a certificate from a foreign tax authority,” Nangia said.

The tax credit, the rule said, “shall be the aggregate of the amounts of credit computed separately for each source of income arising from a particular country or specified territory outside India”.

Source : PTI

No. 25/2016 Dated: 30-06-2016


GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF REVENUE
CENTRAL BOARD OF DIRECT TAXES
(TPL DIVISION)

CIRCULAR NO

25/2016, Dated: June 30, 2016

Clarifications on the Income Declaration Scheme, 2016

The Income Declaration Scheme, 2016 (hereinafter referred to as ‘the Scheme’) incorporated as Chapter IX of the Finance Act, 2016 provides an opportunity to persons who have not paid full taxes in the past to come forward and declare the undisclosed income and pay tax, surcharge and penalty totaling in all 45% of such undisclosed income declared. The Income Declaration Scheme Rules, 2016 (hereinafter referred to as ‘the IDS Rules’) have been notified. In this regard, Circular No. 17 of 2016 dated 20th May, 2016 and Circular No. 24 of 2016 dated 27th June, 2016 issued by the Board provided clarifications to 14 and 11 queries respectively. Subsequently, further queries have been received from the public about various provisions of the Scheme. The Board has considered the same and the following clarifications are issued.-

Question No.1: Will the information contained in the declaration be shared with other law enforcement agencies?

Answer: No; the information contained in the declaration shall not be shared with any other law enforcement agency. The information will also not be shared within the Income Tax Department for any investigation in respect of a valid declaration.

Question No.2: Whether immunity will be provided under other economic laws including Service Tax, VAT, Companies Act, SEBI Act & regulations etc.?

Answer: The Scheme provides immunity under the Income-tax Act, 1961, the Wealth-tax Act, 1957 and the Benami Transactions (Prohibition) Act, 1988. Immunity from Benami Transactions (Prohibition) Act is subject to the condition that the property will be transferred to the declarant (being the person who provided the consideration for the property) latest by 30th September, 2017. However, as mentioned in response to Question No.1 above, the information contained in the declaration made under the Scheme will not be shared with any other tax or law enforcement agency.

Question No.3: Where the value of immovable property determined under Rule 3 of the IDS Rules is lower than the value adopted or assessed/assessable by stamp valuation authority referred in section 50C or section 43CA of the Income-tax Act, whether value of such property is to be declared as per Rule 3 of the IDS Rules, or as per section 50C/43CA?

Answer: The value of the property for the purposes of declaration in such cases shall be computed as per Rule 3 of the IDS Rules even if such value is lower that the value adopted or assessed/assessable by stamp valuation authority.

Question No.4: Whether credit for tax deducted, if any, in respect of income declared shall be allowed?

Answer: Yes; credit for tax deducted shall be allowed only in those cases where the related income is declared under the Scheme and the credit for the tax has not already been claimed in the return of income file for any assessment year.

Question No.5: Where a valid declaration is made after making valuation as per the provisions of the Scheme read with IDS Rules and tax, surcharge & penalty as specified in the Scheme have been paid, whether the department will make any enquiry in respect of sources of income, payment of tax, surcharge and penalty?

Answer: No.

Question No.6: What is the purpose of obtaining the information about the nature of undisclosed income in the last column of table at point (I) relating to nature of undisclosed income in Annexure to Form-1?

Answer: The purpose of obtaining information about the nature of undisclosed income is to know whether the undisclosed income is in the form of moveable asset, immovable asset, gold, jewellery or cash. Here, the nature of income need not be confused with the source of income. There is no need to indicate the source of income at all. In the column meant for nature of undisclosed income one has to write the nomenclature such as ‘immovable property’, ‘moveable property’, ‘gold’, ‘jewellery’ or ‘cash’ etc. This will enable the taxpayer to establish the link between the income declared under the scheme and the claim, if any, made in respect of such undisclosed income in the return of income filed subsequently or during any assessment proceedings.

Question No.7: In case the value of immovable property is evidenced by registered deed, whether the value as per registered deed or the market value as on 01.06.2016 is to be declared?

Answer: As per Rule 3 of the IDS Rules, the fair market value of an immovable property shall be the higher of its cost of acquisition and the price that the property shall ordinarily fetch if it is sold in the open market as on 1st June, 2016. The value mentioned in the registered deed shall be relevant for determining the cost of acquisition and the same can be taken as the fair market value only where it is higher than the price that the property shall ordinarily fetch if sold in the open market as on 1st June, 2016.

Question No.8: In case a declaration relating to investment in undisclosed asset is made under the Scheme, whether any investigation will be initiated against the seller in respect of such declaration?

Answer: No.

Question No.9: What are the advantages of the Scheme as against declaring the past undisclosed income as current income in the return of income to be filed for Assessment Year 2017-18? How will the Department identify the year in which the undisclosed income was earned.

Answer: In this regard, the following points may be noted:

- Declaration of past undisclosed income in the current year amounts to false verification of return of income which shall attract prosecution under the Income-tax Act.

- If anyone attempts to disclose past undisclosed income in the current year, he will have to explain the source of income and substantiate the manner of earning the said income. In case of disclosure under the Scheme, there is no need to explain the source of income.

- Declaration of past undisclosed income in the current year cannot explain assets acquired in the past or provide any immunity in respect of the same.

- The Income-tax Department is in receipt of large volume of information from various sources such as registrars of property, banks, financial institutions, stock exchanges, tax deductors etc. The Department has launched a comprehensive data-mining and compliance management programme in the form of ‘Project Insight’ which will generate a large volume of reliable information about financial transactions undertaken by taxpayers and the relevant year in which the transaction was undertaken.

Question No.10: In a case the declarant earned undisclosed income of Rs. 90 lakh in previous year 2010-11. Out of the same, he acquired an immovable property in the previous year 2011-12 for Rs.50 lakh, made personal expenditure to the extent of Rs.20 lakh and balance Rs.20 lakh is left with him as cash in hand on 01.06.2016. The fair market value of the immovable property as on 01.06.2016 is Rs.80 lakh. What is the amount to be declared under the Scheme?

Answer: The declarant in this case has to declare the following:

(i) Rs. 80 lakh being fair market value of the immovable property as on 01.06.2016

(ii) Rs. 20 lakh being the cash in hand as on 01.06.2016

(iii) Rs. 20 lakh being the balance of undisclosed income [Rs. 90 lakh – (Rs.50 lakh + Rs. 20 lakh)] which is not represented in the form of investment in any asset.

Thus the total undisclosed income to be declared in this case will be Rs. 1.20 crore.

Question No.11: A person invested his undisclosed income in a house property in the previous year 2010-11 which has not been let out. The person also owned another house property from disclosed sources, which has been claimed as self-occupied property for the purposes of computation of income under the head income from house property. In case the person declares the undisclosed house property at its fair market value on 01.06.2016, whether any action will be taken for bringing the annual value of the undisclosed property to tax as income from house property by deeming it to be let property as provided under section 23(4)(b) of the Income-tax Act for the earlier previous years?

Answer: No. However, where the house property was let-out during the relevant period, the actual rent received or receivable will be required to be declared under the Scheme in addition to the fair market value of the house property as on 01.06.2016.

[F.No.142/8/2016-TPL]

(Dr T S Mapwal)
Under Secretary to the Government of India

81 – 30-6-2016


SETTLEMENT SYSTEM UNDER ASIAN CLEARING UNION (ACU)

A.P. (DIR SERIES 2015-16) CIRCULAR NO.81DATED 30-6-2016

Attention of Authorised Dealer Category-I Banks is invited to the A.P. (DIR Series) Circular No. 43 dated December 26, 2008, giving participants in ACU mechanism the option to settle their transactions either in ‘ACU Dollar’ or in ‘ACU Euro’. The ‘ACU Dollar’ and ‘ACU Euro’ is equivalent in value to one US Dollar and one Euro, respectively.

2. As the payment channel for processing ‘ACU Euro’ transactions is under review, it has become necessary to temporarily suspend operations in ‘ACU Euro’ with effect from July 01, 2016. Accordingly, all eligible current account transactions including trade transactions in ‘Euro’ are permitted to be settled outside the ACU mechanism until further notice.

3. AD Category-I Banks may bring the contents of this circular to the notice of their constituents concerned.

4. The directions contained in this circular have been issued under sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and are without prejudice to permissions/approvals, if any, required under any other law.

 

80 – 30-6-2016


EXTERNAL COMMERCIAL BORROWINGS (ECB) – APPROVAL ROUTE CASES

A.P. (DIR SERIES 2015-16) CIRCULAR NO.80DATED 30-6-2016

Attention of Authorized Dealer Category-I (AD Category-I) banks is invited to paragraph no. D.15 of Annex toA.P. (DIR Series) Circular No.32 dated November 30, 2015 and paragraph no. 2.11 of Master Direction No.5 dated January 1, 2016 on External Commercial Borrowings, Trade Credit, Borrowing and Lending in Foreign Currency by Authorised Dealers and Persons other than Authorised Dealers, in respect of ECB cases coming under the approval route. In terms of the aforesaid Circular/Direction, cases coming under the approval route were required to be considered by an Empowered Committee set up by the Reserve Bank based on the parameters stated therein.

2. With a view to rationalizing and expediting the process of giving approval, it has been decided that only select ECB proposals received in the Reserve Bank above a certain threshold limit (refixed from time to time) be placed before the Empowered Committee. The Reserve Bank will take a final decision in the cases taking into account the recommendation of the Empowered Committee.

3. All other aspects of the ECB policy shall remain unchanged. AD Category – I banks may bring the contents of this circular to the notice of their constituents and customers.

4. The Master Direction No. 5 dated January 01, 2016 is being updated to reflect the changes.

5. The directions contained in this circular have been issued under sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and are without prejudice to permissions/approvals, if any, required under any other law.

 

Notification [F.NO.01/5/2013 CL-V (PT-I)] Dated: 30-06-2016


COMPANIES (APPOINTMENT AND REMUNERATTION OF MANAGERIAL PERSONNEL) AMENDMENT RULES, 2016 – AMENDMENT IN RULES 3 & 5 AND SUBSTITUTION OF FORM MR-1

NOTIFICATION [F.NO.1/5/2013 CL-V]DATED 30-6-2016

In exercise of the powers conferred by sub-sections (1) and (2) of section 469 of the Companies Act, 2013 (18 of 2013), the Central Government hereby makes the following rules further to amend the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, namely:—

1. (1) These rules may be called the Companies (Appointment and Remuneration of Managerial Personnel) Amendment Rules, 2016.

(2) They shall come into force from the date of their publication in the Official Gazette.

2. In the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, (hereinafter referred to as the principal rules),—

(i) in rule 3, the expression “Chief Executive Officer (CEO), Company Secretary and Chief Financial Officer (CFO)” shall be omitted.

3. in rule 5 of the principal rules,—

(a) in sub-rule (1), “clauses (v), (vi), (vii) and (ix) to (xi)” shall be omitted.
(b) in sub-rule (2),—
(a) for the words ” the name of every employee of the company, who-”, the words ” the names of the top ten employees in terms of remuneration drawn and the name of every employee, who-” shall be substituted;
(b) in sub-clause (i) for the words “sixty lakh rupees”, the words “one crore and two lakh rupees” shall be substituted;
(c) in sub-clause (ii) for the words “five lakh rupees per month”, the words ” eight lakh and fifty thousand rupees per month” shall be substituted;

4. For Form MR-1 of the principal rules, the following form shall be substituted, namely.—

Form No. MR – 1

Return of appointment of managerial personnel

[Pursuant to section 196 read with section 197 and Schedule V of the Companies Act and pursuant to Rule 3 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014]

79 – 30-6-2016


DEFERRED PAYMENT PROTOCOLS DATED 30-4-1981 AND 23-12-1985 BETWEEN GOVERNMENT OF INDIA AND ERSTWHILE USSR

A.P. (DIR SERIES 2015-16) CIRCULAR NO.79DATED 30-6-2016

Attention of Authorized Dealer Category-I (AD Category-I) banks is invited to A.P. (DIR Series) Circular No. 41 dated February 04, 2016 wherein the Rupee value of the Special Currency Basket was indicated as Rs. 80.9604520 effective from January 25, 2016.

2. AD Category-I banks are advised that a further revision has taken place on June 20, 2016 and accordingly, the Rupee value of the Special Currency Basket has been fixed at Rs. 83.5796140 with effect from June 23, 2016.

3. AD Category-I banks may bring the contents of this circular to the notice of their constituents concerned.

4. The Directions contained in this circular have been issued under sections 10(4) and 11(1) of the Foreign Exchange Management Act (FEMA), 1999 (42 of 1999) and are without prejudice to permissions/approvals, if any, required under any other law.

Notification [F.NO.01/8/2013 CL-V (PT-I)] Dated: 29-06-2016


COMPANIES (ACCEPTANCE OF DEPOSITS) AMENDMENT RULES, 2016 – AMENDMENT IN RULES 2, 3, 4, 5 AND FORM DPT-1 AND INSERTION OF RULE 16A

NOTIFICATION [F.NO.1/8/2013-CL-V]DATED 29-6-2016

In exercise of the powers conferred by sections 73 and 76 read with sub section (1) of section 469 of the Companies Act, 2013, the Central Government hereby makes the following rules further to amend the Companies (Acceptance of Deposits) Rules, 2014, namely:—

(1) These rules may be called the Companies (Acceptance of Deposits) Amendment Rules, 2016.

(2) They shall come into force on the date of their publication in the Official Gazette.

2. In the Companies (Acceptance of Deposits) Rules, 2014 (hereinafter referred to as the principal rules), in rule 2, in sub-rule (1), in clause (c),—

(i) in sub-clause (ix), for the words “five years” the words “ten years” shall be substituted;
(ii) after sub-clause (ix), the following sub-clause shall be inserted, namely,—
“(ixa) any amount raised by issue of non-convertible debenture not constituting a charge on the assets of the company and listed on a recognised stock exchange as per applicable regulations made by Securities and Exchange Board of India.”;
(iii) for sub-clause (xi), the following sub-clause shall be substituted, namely:—
“(xi) any non-interest bearing amount received and held in trust;”;
(iv) in sub-clause (xii),—
(A) after item (d) and before the proviso, the following items shall be inserted, namely:-
“(e) as an advance towards consideration for providing future services in the form of a warranty or maintenance contract as per written agreement or arrangement, if the period for providing such services does not exceed the period prevalent as per common business practice or five years, from the date of acceptance of such service whichever is less;
(f) as an advance received and as allowed by any sectoral regulator or in accordance with directions of Central or State Government;
(g) as an advance for subscription towards publication, whether in print or in electronic to be adjusted against receipt of such publications; “.
(B) in the Explanation, the words “referred to in the proviso” shall be omitted;
(v) in the Explanation, after sub-clause (xiv), for the words “shall be treated as deposits”, the words “shall be considered as deposits unless specifically excluded under this clause” shall be substituted;
(vi) after sub-clause (xiv), the following sub-clauses shall be inserted, namely:—
(xv) any amount received by way of subscription in respect of a chit under the Chit Fund Act, 1982 (40 of 1982);
(xvi) any amount received by the company under any collective investment scheme in compliance with regulations framed by the Securities and Exchange Board of India;
(xvii) an amount of twenty five lakh rupees or more received by a start-up company, by way of a convertible note (convertible into equity shares or repayable within a period not exceeding live years from the date oi issue) in a single tranche, from a person.

Explanation—For the purposes of this sub-clause,—

I. “start-up company” means a private company incorporated under the Companies Act, 2013 or Companies Act, 1956 and recognised as such in accordance with notification number G.S.R. 180(E) dated 17th February, 2016 issued by the Department of Industrial Policy and Promotion, Ministry of Commerce and Industry;
II. “convertible note” means an instrument evidencing receipt of money initially as a debt, which is repayable at the option of the holder, or which is convertible into such number of equity shares of the start-up company upon occurrence of specified events and lis per the other terms and conditions agreed to and indicated in the instrument.
(xviii) any amount received by a company from Alternate Investment Funds, Domestic Venture Capital Funds and Mutual Funds registered with the Securities and Exchange Board of India in accordance with regulations made by it.”.

3. In Rule 3 of the Principal rules,—

(i) in sub-rule (3),—
(a) for the words “twenty five per cent”, the words “thirty five per cent.” shall be substituted;
(b) the following proviso shall be inserted namely:
“Provided that a private company may accept from its members monies not exceeding one hundred per cent of aggregate of the paid up share capital, free reserves and securities premium account and such company shall file the details of monies so accepted to the Registrar in such manner as may be specified.”.
(ii) for sub-rule (8), the following sub-rule shall be substituted, namely:—
“(8).- (a) Every eligible company shall obtain, at least once in a year, credit rating for deposits accepted by it and a copy of the rating shall be sent to the Registrar of Companies alongwith the return of deposits in Form DPT-3,
(b) The credit rating referred to in clause (a) shall not be below the minimum investment grade rating or other specified credit rating for fixed deposits, from any one of the approved credit rating agencies as specified for Non-Banking Financial Companies in the Non-Banking Financial Companies Acceptance of Public Deposits (Reserve Bank) Directions, 1998, issued by the Reserve Bank of India, as amended from time to time.”

4. in rule 4 of the principal rules, for sub-rule (2), the following sub-rule shall be substituted, namely:—

(2) Every eligible company intending to invite deposits shall issue a circular in the form of an advertisement in form DPT-1 for the purpose in English language in an English newspaper having country wide circulation and in vernacular language in a vernacular newspaper having wide circulation in the State in which the registered office of the company is situated, and shall also place such circular on the website of the company, if any.”.

5. in rule 5 of the principal rules, in sub-rule (1), for the proviso, the following proviso shall be substituted, namely:-

“Provided that the companies may accept deposits without deposit insurance contract till the 31st March, 2017 or till the availability of a deposit insurance product, whichever is earlier.”.

6. after rule 16 of the principal rules, the following rule shall be inserted, namely:—

“16A. Disclosures in the financial statement.—(1) Every company, other than a private company, shall disclose in its financial statement, by way of notes, about the money received from the director.

(2) Every private company shall disclose in its financial statement, by way of notes, about the money received from the directors/ or relatives of directors.”.

7. in the principal rules, in the Annexure, in Form DPT-1, the following para shall be inserted, namely:—

“6. DISCLAIMER.- It is to be distinctly understood that filing of circular or circular in the Form of advertisement with the Registrar should not in any way be deemed or construed that the same has been cleared or approved by the Registrar or Central Government. The Registrar or Central Government does not take any responsibility either for the financial soundness of any deposit scheme for which the deposit is being accepted or invited or for the correctness of the statements made or opinions expressed in the circular or circular in the Form of advertisement. The depositors should exercise due diligence before investing in the deposits schemes.”.

F.No.276/104/2016-CX.8A (Pt.) – 29-6-2016


MINISTRY OF FINANCE  DEPARTMENT OF FINANCE CENTRAL BOARD OF EXCISE AND CUSTOMS (LEGAL CELL)

Dated: June 29, 2016

INSTRUCTION

Subject: Inclusion of Show Cause Notices issued in relation to sub-section (11) of section 28 of the Customs Act, 1962 on the competency of officers of DGDRI, DGCEI and Customs (Prev.), in the “Call Book” -reg.

The Hon’ble High Court of Delhi vide the order dated 03.05.2016 in the case of Mangali Impex Ltd. in WP No. 441 / 2013 = 2016-TIOL-877-HC-DEL-CUS and others held that sub-section (11) of Section 28 of the Customs Act, 1962 cannot validate SCNs or proceedings pursuant thereto in relation to no-levy, short-levy or erroneous refund for the period prior to 8th April 2011, if such SCNs have been issued or proceedings conducted by officers of the Customs, DGDRI or DGCEL or as in the present case by the SIIB, who are not ‘proper officers’ within the meaning of sub-section (34) of Section 2 of the Act.

2. In this regard it may be mentioned that the amendment in Section 28 (11) of the Customs Act, 1962 was brought out by the Government, after the decision of Supreme Court inCommissioner of Customs vs Sayed Ali (2011) 3 SCC 537 = 2011-TIOL-20-SC-CUS, wherein it was held that Customs Preventive Officers are not proper officers to issue Show Cause Notice u/s 28 of Customs Preventive Officers to the officers of DGDRI, DGCEL and Preventive. Further, in the Statement of Facts and Reasons to the Customs (Amendment and Validation), Bill, 2011, while introducing sub-section 11 of Section 28 of the customs Act, 1962, the then FM had expressly mentioned of Legislature was clearly spelt out. Therefore, the officers of DGDRI, DGCEI and Preventive are Proper Officers even for the Show Cause Notices issued prior to issuance of Notification dated 06.07.2011. Since the order dated 03.05.2016 of High Court of Delhi challenges the constitutional validity of sub-section (11) of Section 28 of the Customs Act, 1962, the Board has decided to file an SLP in the case i.e. W.P.NO.441/20013 before the Hon’ble Supreme Court.

3. In view of the above, field formations are requested to transfer all the SCNs issued by DRI,DGCEI, SIIB, Preventive prior to 06.07.2011 and which are pending adjudication to the Call Book, till disposal of the matter in the Supreme Court.

4. Difficulties faced, if any, in implementation of this Circular may be brought to the notice of the Board. Hindi version follows.

F.No.276/104/2016-CX.8A (Pt.)

(Harsh Vardhan)
Senior Analyst (Legal)

1032/20/2016-CX – 29-6-2016


GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF REVENUE CENTRAL BOARD OF EXCISE AND CUSTOMS NEW DELHI

CIRCULAR NO 1032/20/2016-CX, Dated: June 28, 2016

Sub: Common registration and return for First Stage Dealer and Importer-reg.

Attention is invited to Notifications No. 30/2016-C.E. (NT) dated 28th June, 2016 by which it has been provided that an assessee who is registered as a First Stage Dealer shall be exempted from taking registration as an importer and vice-versa.

2.1 An assessee who conducts business both as an importer and a First Stage Dealer may take only one registration as he has been exempted from the requirement of taking a second registration. It may be noted that the facility is optional and any assessee needing separate registration for his own business purposes, may so register.

2.2 Such assessee who conducts business both as a First Stage Dealer and an Importer, henceforth shall also have the option of filing a single quarterly return giving details of transactions as a first stage dealer and an importer, one after the other in the same table of the return, viz., all transactions as first stage dealer during the return period shall be followed by all transactions as an importer during the same return period.

3. Difficulty experienced, if any, in implementing the circular should be brought to the notice of the Board, Hindi version would follow.

[F.No.201/04/2016-CX-6]

(Shankar Prasad Sarma)
Under Secretary (CX-6)

INSTRUCTION NO.A-5/8/2013-SEZ 28-06-2016


APPLICATION FOR LEAVE BY DCs OF VARIOUS SEZs – CIRCULATION OF PROFORMA

INSTRUCTION NO.A-5/8/2013-SEZDATED 28-6-2016

I am directed to say that applications for Leave and Station Leave of Development Commissioners are not being received in this Department in the prescribed format. As a result, this Division is unable to process the applications for want of complete details. It is, therefore, requested that applications for leave (other than Casual Leave) may please be furnished in the format prescribed under the Leave Rules, 1972. Further, the balance of leave at credit may also be furnished in the annexed self certificate.

APPLICATION FOR LEAVE OR EXTENSION OF LEAVE

1. Name of applicant :
2. Post held :
3. Department, Office and Section :
4. Pay :
5. House Rent and other Compensatory allowances drawn in the present post :
6. Nature and period of leave applied for and date from which the leave required : Nature of Leave. . . . . . . . .
Period from . . . . . . to. . . . .
Number of Days:
7. Sundays, and holidays, if any proposed to be prefixed/suffixed to leave : PREFIX: : . . . . . . . . .
SUFFIX : . . . . . . . . .
8. Grounds on which leave is applied for :
9. Date of return from last leave and the nature and period of that leave :
:
:
10. I propose/do not propose to avail myself of LTC for the block year during the ensuing leave. : Block Year : . . . . . . . . .
12. Address during the leave period :
In the event of my resignation or voluntary retirement from service, I undertake to refund:

1. the difference between the leave salary drawn during commuted leave and that admissible during half pay leave, which would not have been admissible had sub-rule of rule 30 had not been applied.

2. the leave salary drawn during “leave not due” which would not have been admissible had sub-rule (1) of rule 31 not been applied (strike out whichever is not applicable).

Signature of the applicant

(With date)

e-mail address: ……………………………………

13. Remarks of/ or recommendation of the Controlling Officer Signature with date Designation

Certificate regarding availability of leave applied for

It is certified that I have . . . . . . . . . . . . . . (No. of) days of . . . . . . . . . . . . . (Nature of leave) at my credit as on date.

(Strike out whichever is not applicable)

Note: The certificate as above may be necessary to process the application.

Signature: . . . . . . . . . . . . .

Name & Designation: . . . . . . . . . . . . .

Notification No. 55/2016 28-6-2016


[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (ii)]

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

DEPARTMENT OF REVENUE

[CENTRAL BOARD OF DIRECT TAXES]

Notification

New Delhi, the 28th June, 2016

INCOME-TAX

S.O. 2226 (E). – In exercise of the powers conferred by section 9 and section 285A, read with section 295 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962, namely: -

1. (1) These rules may be called the Income-tax (19th Amendment), Rules, 2016.

(2) They shall come into force on the date of their publication in the Official Gazette.

2. In the Income-tax Rules, 1962 (hereinafter referred to as the said rules), in Part II, after sub-part H, the following sub-part shall be inserted, namely: -

“I- Determination of value of assets and apportionment of income in certain cases.

11UB. Fair market value of assets in certain cases.- (1) The fair market value of asset, tangible or intangible, as on the specified date, held directly or indirectly by a company or an entity registered or incorporated outside India (hereafter referred to as “foreign company or entity”), for the purposes of clause (i) of sub-section (1) of section 9, shall be computed in accordance with the provisions of this rule.

(2) Where the asset is a share of an Indian company listed on a recognised stock exchange on the specified date, the fair market value of the share shall be the observable price of such share on the stock exchange:

Provided that where the share is held as part of the shareholding which confers, directly or indirectly, any right of management or control in relation to the aforesaid company, the fair market value of the share shall be determined in accordance with the following formula, namely:-

Fair market value = (A+B) /C 2

Where;

A= the market capitalisation of the company on the basis of observable price of its shares quoted on the recognised stock exchange;

B= the book value of liabilities of the company as on the specified date;

C= the total number of outstanding shares: Provided further that where, on the specified date, the share is listed on more than one recognised stock exchange, the observable price of the share shall be computed with reference to the recognised stock exchange which records the highest volume of trading in the share during the period considered for determining the price.

(3) Where the asset is a share of an Indian company not listed on a recognised stock exchange on the specified date, the fair market value of the share shall be its fair market value on such date as determined by a merchant banker or an accountant in accordance with any internationally accepted valuation methodology for valuation of shares on arm’s length basis as increased by the liability, if any, considered in such determination.

(4) Where the asset is an interest in a partnership firm or an association of persons, its fair market value shall be determined in the following manner, namely:-

(i) the value on the specified date of such firm or association of persons, shall be determined by a merchant banker or an accountant in accordance with any internationally accepted valuation methodology as increased by the liability, if any, considered in such determination;

(ii) the portion of the value computed in clause (i) as is equal to the amount of its capital shall be allocated among its partners or members in the proportion in which capital has been contributed by them and the residue of the value shall be allocated among the partners or members in accordance with the agreement of partnership firm or association of persons for distribution of assets in the event of dissolution of the firm or association, or, in the absence of any such agreement, in the proportion in which the partners or members are entitled to share profits and the sum total of the amount so allocated to a partner or member shall be treated as the fair market value of the interest of that partner or member in the firm or the association of persons, as the case may be.

(5) The fair market value of the asset other than those referred to in sub-rules (2), (3) and (4) shall be the price it would fetch if sold in the open market on the specified date as determined by a merchant banker or an accountant as increased by the liability, if any, considered in such determination.

(6) The fair market value of all the assets of a foreign company or an entity shall be determined in the following manner, namely:-

(i) where the transfer of share of, or interest in, the foreign company or entity is between the persons who are not connected persons, the fair market value of all the assets owned by the foreign company or the entity as on the specified date, for the purpose of such transfer, shall be determined in accordance with the following formula, namely:-

Fair market value of all assets = A+B

Where;

A = Market capitalisation of the foreign company or entity computed on the basis of the full value of consideration for transfer of the share or interest;

B = book value of the liabilities of the company or the entity as on the specified date as certified by a merchant banker or an accountant;

(ii) in any other case, if, -

(a) the share of the foreign company or entity is listed on a stock exchange on the specified date, the fair market value of all the assets owned by the foreign company or the entity shall be determined in accordance with the following formula, namely:-

Fair market value of all the assets = A+B

Where;

A = Market capitalisation of the foreign company or entity computed on the basis of the observable price of the share on the stock exchange where the share of the foreign company or the entity is listed;

B = book value of the liabilities of the company or the entity as on the specified date:

Provided that where, as on the specified date, the share is listed on more than one stock exchange, the observable price in the aforesaid formula shall be in respect of the stock exchange which records the highest volume of trading in the share during the period considered for determining the price;

(b) the share in the foreign company or entity is not listed on a stock exchange on the specified date, the value of all the assets owned by 4 the foreign company or the entity shall be determined in accordance with the following formula, namely :-

Fair market value of all the assets = A+B

Where;

A = fair market value of the foreign company or the entity as on the specified date as determined by a merchant banker or an accountant as per the internationally accepted valuation methodology;

B = value of liabilities of the company or the entity if any, considered for the determination of fair market value in A.

(7) Where fair market value has been determined on the basis of any interim balance sheet referred to in the first proviso to clause (ix) of the Explanation, then the fair market value shall be appropriately modified after finalisation of the relevant financial statement in accordance with the applicable laws and all the provisions of this rule and rules 11UC and 114DB shall apply accordingly.

(8) For determining the fair market value of any asset located in India, being a share of an Indian company or interest in a partnership firm or association of persons, all the assets and business operations of the said company or partnership firm or association of persons shall be taken into account irrespective of whether the assets or business operations are located in India or outside.

(9) The rate of exchange for the calculation in foreign currency, of the value of assets located in India and expressed in rupees shall be the telegraphic transfer buying rate of such currency as on the specified date.

Explanation: For the purposes of this rule and rule 11UC, -

(i) “accountant” means an accountant referred to in the Explanation to sub-section (2) of section 288 and for the purposes of sub-rule (6) includes any valuer recognised for undertaking similar valuation by the Government of the country where the foreign company or the entity is registered or incorporated or any of its agencies, who fulfils the following conditions, namely :-

(a) if he is a member or partner in any entity engaged in rendering accountancy or valuation services then,-

            (i) the entity or its affiliates has presence in more than two countries; and

           (ii) the annual receipt of the entity in the year preceding the year in which valuation is undertaken exceeds ten crore rupees ;

(b) if he is pursuing the profession of accountancy individually or is a valuer then,-

            (i) his annual receipt in the year preceding the year in which valuation is undertaken, from the exercise of profession, exceeds one crore rupees ; and

            (ii) he has professional experience of not less than ten years.

(ii) “connected person” shall have the meaning as assigned to it in clause (4) of section 102;

(iii) “right of management or control” shall include the right to appoint majority of the directors or to control the management or policy decision exercisable by a person or persons acting individually or in concert, directly or indirectly, including by virtue of shareholding or management rights or shareholders agreements or voting agreements or in any other manner;

(iv) “telegraphic transfer buying rate” shall have the meaning as assigned to it in the Explanation to rule 26;

(v) “observable price” in respect of a share quoted on a stock exchange shall be the higher of the following:-

                  (a) the average of the weekly high and low of the closing prices of the shares quoted on the said stock exchange during the six months period preceding the specified date; or

                  (b) the average of the weekly high and low of the closing price of the shares quoted on the said stock exchange during the two weeks preceding the specified date;

(vi) “book value of the liabilities” means the value of liabilities as shown in the balance-sheet of the company or the entity as the case may be, excluding the paid-up capital in respect of equity shares or members’ interest and the general reserves and surplus and security premium related to the paid up capital .

(vii) “specified date” shall have the meaning as assigned to it in clause (d) of Explanation 6 to clause (i) of subsection (1) of section 9;

(viii) the terms “merchant banker” and “recognised stock exchange” shall have the meaning as assigned to them in rule 11U;

(ix) “balance sheet” ,-

(a) in relation to an Indian company, means the balance-sheet of such company (including the notes annexed thereto and forming part of the accounts) as drawn up on the specified date which has been audited 6 by the auditor of the company appointed under the laws relating to companies in force; and

(b) in any other case, means the balance-sheet of the company or the entity (including the notes annexed thereto and forming part of the accounts) as drawn up on the specified date and submitted to the relevant authority outside India under the laws in force of the country in which the foreign company or the entity is registered or incorporated:

Provided that where the balance-sheet as on the specified date is not drawn up, pending finalisation of accounts, as mentioned in clauses (a) and (b), the balance sheet shall mean an interim balancesheet drawn up as on the specified date and approved by the board of directors of the company or an equivalent body in case of any other entity:

Provided further that where the specified date is the date referred to in sub-clause (ii) of clause (d) of Explanation 6 to clause (i) of subsection (1) of section 9, the balance sheet means the balance sheet as drawn up on the specified date and certified by an accountant.

11UC. Determination of Income attributable to assets in India.- (1) The income from transfer outside India of a share of, or interest in, a company or an entity referred to in clause (i) of sub-section (1) of section 9, attributable to assets located in India, shall be determined in accordance with the following formula, namely: –

A x B/C

Where;

A = Income from the transfer of the share of, or interest in, the company or the entity computed in accordance with the provisions of the Act, as if, such share or interest is located in India;

B = Fair Market Value of assets located in India as on the specified date, from which the share or interest referred to in A derives its value substantially, computed in accordance with rule 11UB;

C = Fair Market Value of all the assets of the company or the entity as on the specified date, computed in accordance with rule 11UB:

Provided that if the transferor of the share of, or interest in, the company or the entity fails to provide the information required for the application of the aforesaid formula then the income from the transfer of such share or interest attributable to the assets 7 located in India shall be determined in such manner as the Assessing Officer may deem suitable.

(2) The transferor of the share of, or interest in, a company or an entity that derives its value substantially from assets located in India, shall obtain and furnish along with the return of income a report in Form No. 3CT duly signed and verified by an accountant providing the basis of the apportionment in accordance with the formula and certifying that the income attributable to assets located in India has been correctly computed.”.

3. In the said rules, after rule 114DA, following rule shall be inserted, namely: -

“114DB. Information or documents to be furnished under section 285A.-(1) Every Indian concern referred to in section 285A shall, for the purposes of the said section, maintain and furnish the information and documents in accordance with this rule.

(2) The information shall be furnished in Form No. 49D electronically under digital signature to the Assessing Officer having jurisdiction over the Indian concern within a period of ninety days from the end of the financial year in which any transfer of the share of, or interest in, a company or entity incorporated outside India (hereafter referred to as “foreign company or entity”) referred to in Explanation 5 to clause (i) of sub-section (1) of section 9 has taken place: Provided that where the transaction in respect of the share or the interest has the effect of directly or indirectly transferring the rights of management or control in relation to the Indian concern, the information shall be furnished in the said Form within ninety days of the transaction.

(3) The Indian concern shall maintain the following alongwith its english translation, if the documents originally prepared are in foreign languages and produce the same when called upon to do so by any income-tax authority in the course of any proceeding to substantiate the information furnished under sub-rule (2), namely: -

        (i) details of the immediate holding company or entity, intermediate holding company or companies or entity or entities and ultimate holding company or entity of the Indian concern;

       (ii) details of other entities in India of the group of which the Indian concern is a constituent;

       (iii) the holding structure of the shares of, or the interest in, the foreign company or entity before and after the transfer;

       (iv) any transfer contract or agreement entered into in respect of the share of, or interest in, any foreign company or entity that holds any asset in India through, or in, the Indian concern;

        (v) financial and accounting statements of the foreign company or entity which directly or indirectly holds the assets in India through, or in, the 8 Indian concern for two years prior to the date of transfer of the share or interest ;

        (vi) information relating to the decision or implementation process of the overall arrangement of the transfer;

       (vii) information in respect of the foreign company or entity and its subsidiaries, relating to, -

                                     (a) the business operation;

                                     (b) personnel;

                                     (c) finance and properties;

                                     (d) internal and external audit or the valuation report, if any, forming basis of the consideration in respect of share, or the interest;

(viii) the asset valuation report and other supporting evidence to determine the place of location of the share or interest being transferred;

(ix) the details of payment of tax outside India, which relates to the transfer of the share or interest;

(x) the valuation report in respect of Indian asset and total assets duly certified by a merchant banker or accountant with supporting evidence;

 (xi) documents which are issued in connection with the transactions under the accounting practice followed.

(4) Where there are more than one Indian concerns that are constituent entities of a group, the information may be furnished by any one Indian concern, if, -

                        (i) the group has designated such Indian concern to furnish information on behalf of all other Indian concerns that are constituent of the group, and

                       (ii) the information regarding the designated Indian concern has been conveyed in writing on behalf of the group to the Assessing officer:

                        Provided that nothing contained in this sub-rule shall have effect if the designated Indian concern fails to furnish the information in accordance with the provisions of this rule.

(5) The Principal Director General of Income-tax (Systems) or Director General Income-tax (Systems), as the case may be, shall specify the procedure for electronically filing of Form No. 49D and shall also be responsible for evolving and implementing appropriate security, archival and retrieval policies in relation to the information so furnished under this rule.

(6) The information and documents specified in sub-rule (3) shall be kept and maintained for a period of eight years from the end of relevant assessment year.

Explanation: For the purposes of this rule,-

                                  (i) “constituent entity” shall have the meaning as assigned to it in clause (d) of sub-section (9) of section 286; 9

                                 (ii) “group” shall have the meaning as assigned to it in clause (e) of subsection (9) of section 286;

                                (iii) “intermediate holding company or entity” means a company or an entity that has controlling interest in another company or entity and is itself controlled by, or is subsidiary of, another company or entity;

                                (iv) “immediate holding company or entity” means the company or the entity that directly maintains the controlling interest in the Indian concern;

                                 (v) “ultimate holding company or entity” means a company or an entity that has ultimate control of the Indian concern directly or indirectly and such company or entity is not itself controlled by, or is subsidiary of, any other company or entity .”.

No. 24/2016 Dated: 27-06-2016


GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF REVENUE
CENTRAL BOARD OF DIRECT TAXES
(TPL DIVISION)
NEW DELHI

CIRCULAR NO

24/2016, Dated: June 27, 2016

Clarifications on the Income Declaration Scheme, 2016

The Income Declaration Scheme, 2016 (hereinafter referred to as ‘the Scheme’) incorporated as Chapter IX of the Finance Act, 2016 provides an opportunity to persons who have not paid full taxes in the past to come forward and declare the undisclosed income and pay tax, surcharge and penalty totaling in all 45% of such undisclosed income declared. The Income Declaration Scheme Rules, 2016 (hereinafter referred to as ‘the Rules’) have been notified. In this regard, Circular No. 17 of 2016 dated 20th May, 2016 issued by the Board provided clarifications to 14 queries. Subsequently, further queries have been received from the public about various provisions of the Scheme. The Board has considered the same and the following clarifications are issued.-

Question No.1: If only part payment of the tax, surcharge and penalty payable on undisclosed income declared under the Scheme is made before 30.11.2016, then whether the entire declaration fails as per section 187(3) of the Finance Act, 2016 or pro-rata declaration on which tax, surcharge and penalty has been paid remains valid?

Answer: In case of part payment, the entire declaration made under the Scheme shall be invalid. The declaration under the Scheme shall be valid only when the complete payment of tax, surcharge and penalty is made on or before 30.11.2016.

Question No.2: In case of amalgamation or in case of conversion of a company into LLP, if the amalgamated entity or LLP, as the case may be, wants to declare for the year prior to amalgamation/conversion, then whether a declaration is to be filed in the name of amalgamated entity/LLP or in the name of the amalgamating company or company existing prior to conversion into LLP?

Answer: Since the amalgamating company or the company prior to conversion into LLP is no more into existence and the assets/liabilities of such erstwhile entities have been taken over by the amalgamated company/LLP, the declaration is to be made in the name of the amalgamated company or the LLP, as the case may be, for the year in which the amalgamation/conversion takes place.

Question No.3: Whether the Scheme is open only to residents or to non-residents also?

Answer: The Scheme is available to every person, whether resident or nonresident.

Question No.4: If undisclosed income relating to an assessment year prior to A.Y. 2016-17, say A.Y. 2001-02 is detected after the closure of the Scheme, then what shall be the treatment of undisclosed income so detected?

Answer: As per the provisions of section 197(c) of the Finance Act, 2016, such income of A.Y. 2001-02 shall be assessed in the year in which the notice under section 148 or 153A or 153C, as the case may be, of the Income-tax Act is issued by the Assessing Officer. Further, if such undisclosed income is detected in the form of investment in any asset then value of such asset shall be as if the asset has been acquired or made in the year in which the notice under section 148/153A/153C is issued and the value shall be determined in accordance with rule 3 of the Rules.

Question No.5: Whether a person on whom a search has been conducted in April, 2016 but notice under section 153A is not served upto 31.05.2016, is eligible to declare undisclosed income under the Scheme?

Answer: No, in such a case time for issuance of notice under section 153A has not expired. Hence the person is not eligible to avail the Scheme in respect of assessment years for which notice under section 153A can be issued.

Question No.6: As per Circular No.17 of 2016, question No.14, it is not mandatory to attach the valuation report. But Form-1 states “attach valuation report”. How to interpret?

Answer: It is necessary for the declarant to obtain the valuation report but it is not mandatory for him to attach the same with the declaration made in Form-1. However, the jurisdictional Pr. Commissioner/ Commissioner in order to ascertain the correctness of the value of the asset quoted in Form-1 may require the declarant to file the valuation report before issuing the acknowledgment in Form-2. In such a circumstance, it will be necessary for the declarant to make the report available to the Pr. Commissioner/Commissioner.

Question No.7: Is it mandatory to furnish PAN in the Form of declaration?

Answer: Yes, PAN is the unique identifier for all direct tax purposes. This is also necessary in order to claim the benefits and immunities available under the Scheme.

Question No.8: If any proceeding is pending before the Settlement Commission, can a person be considered eligible for the Scheme?

Answer: No, a person shall not be eligible for the Scheme in respect of assessment years for which proceeding is pending with Settlement Commission.

Question No.9: Land is acquired by the assessee in year 2001 from assessed income and is regularly disclosed in return of income. Subsequently in the year 2014, a building is constructed on the said land and the construction cost is not disclosed by the assessee. What shall be the fair market value of such building for the purposes of the Scheme?

Answer: Fair market value of land and building in such a case shall be computed in accordance with Rule 3(2) by allowing proportionate deduction in respect of asset acquired from assessed income.

Question No.10: Whether cases where summons under section 131(1A) have been issued by the Department or letter under the Non-filer Monitoring System (NMS) or under section 133(6) are issued are eligible for the Scheme?

Answer: Cases where summons under section 131(1A) have been issued by the department or letters for enquiry under NMS or under section 133(6) are issued but no notice under section 142 or 143(2) or 148 or 153A or 153C [as specified in section 196(e)] of the Finance Act, 2016 has been issued are eligible for the Scheme.

Question No.11: If notices under section 142, 143(2) or 148 have been issued after 31.05.2016 and assessee makes declaration under the Scheme then what shall be the fate of these notices?

Answer: As clarified vide Explanatory Circular No. 17 dated 20.5.2016 , a person shall not be eligible for the Scheme in respect of the assessment year for which a notice under section 142, 143(2) or 148 has been received by him on or before 31.5.2016. In a case where notice has been received after the said date, the assessee shall be eligible to make a declaration under the Scheme for the said assessment year. Such declaration shall be valid if it has not been made by suppression of facts or misrepresentation and the amount payable under the Scheme has been duly paid within the specified time. On furnishing by the declarant the certificate issued by the Pr. Commissioner/Commissioner in Form-4 to the Assessing Officer, the proceedings initiated vide notice under section 142, 143(2) or 148 shall be deemed to have been closed.

F.No.142/8/2016-TPL

(Dr T S Mapwal)
Under Secretary to the Government of India

Notification No. 54/2016 27-6-2016


[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (ii)]

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

DEPARTMENT OF REVENUE

[CENTRAL BOARD OF DIRECT TAXES]

Income-tax

New Delhi, the 27th June, 2016

NOTIFICATION S.O.2213(E).─ In exercise of the powers conferred by clause(ha) of sub-section (2) of section 295 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962, namely:- 1. (1) These rules may be called the Income-tax (18th Amendment) Rules, 2016. (2) They shall come into force on the 1st day of April, 2017.

2. In the Income-tax Rules, 1962 (hereinafter referred to as the said rules), after rule 127, following rule shall be inserted, namely:-

“128. Foreign Tax Credit.- (1) An assessee, being a resident shall be allowed a credit for the amount of any foreign tax paid by him in a country or specified territory outside India, by way of deduction or otherwise, in the year in which the income corresponding to such tax has been offered to tax or assessed to tax in India, in the manner and to the extent as specified in this rule:

Provided that in a case where income on which foreign tax has been paid or deducted, is offered to tax in more than one year, credit of foreign tax shall be allowed across those years in the same proportion in which the income is offered to tax or assessed to tax in India.

(2) The foreign tax referred to in sub-rule (1) shall mean,-

(a) in respect of a country or specified territory outside India with which India has entered into an agreement for the relief or avoidance of double taxation of income in terms of section 90 or section 90A, the tax covered under the said agreement;

(b) in respect of any other country or specified territory outside India, the tax payable under the law in force in that country or specified territory in the nature of income-tax referred to in clause (iv) of the Explanation to section 91.

(3) The credit under sub-rule (1) shall be available against the amount of tax, surcharge and cess payable under the Act but not in respect of any sum payable by way of interest, fee or penalty.

(4) No credit under sub-rule (1) shall be available in respect of any amount of foreign tax or part thereof which is disputed in any manner by the assessee: Provided that the credit of such disputed tax shall be allowed for the year in which such income is offered to tax or assessed to tax in India if the assessee within six months from the end of the month in which the dispute is finally settled, furnishes evidence of settlement of dispute and an evidence to the effect that the liability for payment of such foreign tax has been discharged by him and furnishes an undertaking that no refund in respect of such amount has directly or indirectly been claimed or shall be claimed.

(5) The credit of foreign tax shall be the aggregate of the amounts of credit computed separately for each source of income arising from a particular country or specified territory outside India and shall be given effect to in the following manner:-

(i) the credit shall be the lower of the tax payable under the Act on such income and the foreign tax paid on such income: Provided that where the foreign tax paid exceeds the amount of tax payable in accordance with the provisions of the agreement for relief or avoidance of double taxation, such excess shall be ignored for the purposes of this clause;

(ii) the credit shall be determined by conversion of the currency of payment of foreign tax at the telegraphic transfer buying rate on the last day of the month immediately preceding the month in which such tax has been paid or deducted.

(6) In a case where any tax is payable under the provisions of section 115JB or section 115JC, the credit of foreign tax shall be allowed against such tax in the same manner as is allowable against any tax payable under the provisions of the Act other than the provisions of the said sections (hereafter referred to as the “normal provisions”).

(7) Where the amount of foreign tax credit available against the tax payable under the provisions of section 115JB or section 115JC exceeds the amount of tax credit available against the normal provisions, then while computing the amount of credit under section 115JAA or section 115JD in respect of the taxes paid under section 115JB or section 115JC, as the case may be, such excess shall be ignored.

(8) Credit of any foreign tax shall be allowed on furnishing the following documents by the assessee, namely:-

(i) a statement of income from the country or specified territory outside India offered for tax for the previous year and of foreign tax deducted or paid on such income in Form No.67 and verified in the manner specified therein;

 (ii) certificate or statement specifying the nature of income and the amount of tax deducted therefrom or paid by the assessee,- (a) from the tax authority of the country or specified territory outside India; or (b) from the person responsible for deduction of such tax; or (c) signed by the assessee: Provided that the statement furnished by the assessee in clause (c) shall be valid if it is accompanied by,-

(A) an acknowledgment of online payment or bank counter foil or challan for payment of tax where the payment has been made by the assessee;

(B) proof of deduction where the tax has been deducted.

(9) The statement in Form No.67 referred to in clause (i) of sub-rule (8) and the certificate or the statement referred to in clause (ii) of sub-rule (8) shall be furnished on or before the due date specified for furnishing the return of income under sub-section (1) of section 139, in the manner specified for furnishing such return of income.

(10) Form No.67 shall also be furnished in a case where the carry backward of loss of the current year results in refund of foreign tax for which credit has been claimed in any earlier previous year or years.”. Explanation.- For the purposes of this rule ‘telegraphic transfer buying rate’ shall have the same meaning as assigned to it in Explanation to rule 26.

Notification No. 53/2016 24-6-2016


[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART-II, SECTION 3, SUB-SECTION (ii)]

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

(DEPARTMENT OF REVENUE)

(CENTRAL BOARD OF DIRECT TAXES)

NOTIFICATION

New Delhi, the 24 th June, 2016

INCOME-TAX

S.O. 2196 (E).— In exercise of the powers conferred by clause (ii) of sub-section (7) of section 206AA, read with section 295 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962, namely:- 1. (1) These rules may be called the Income-tax ( 17th Amendment) Rules, 2016.

(2) They shall come into force on the date of their publication in the Official Gazette.

2. In the Income-tax Rules, 1962 (hereafter referred to as the said rules), after rule 37BB, the following rule shall be inserted, namely :-

“37BC. Relaxation from deduction of tax at higher rate under section 206AA.- (1) In the case of a non-resident, not being a company, or a foreign company ( hereafter referred to as ‘the deductee’) and not having permanent account number the provisions of section 206AA shall not apply in respect of payments in the nature of interest, royalty, fees for technical services and payments on transfer of any capital asset, if the deductee furnishes the details and the documents specified in sub-rule (2) to the deductor.

(2) The deductee referred to in sub-rule (1), shall in respect of payments specified therein, furnish the following details and documents to the deductor, namely :- (i) name, e-mail id, contact number; (ii) address in the country or specified territory outside India of which the deductee is a resident; (iii) a certificate of his being resident in any country or specified territory outside India from the Government of that country or specified territory if the law of that country or specified territory provides for issuance of such certificate;

(iv) Tax Identification Number of the deductee in the country or specified territory of his residence and in case no such number is available, then a unique number on the basis of which the deductee is identified by the Government of that country or the specified territory of which he claims to be a resident. 3. In the said rules, in Appendix II, in Form No. 27Q,- (a) in the second line, after the figures and letters “194LB”, the figures and letters “194LBA, 194LBB,194 LBC” shall be inserted;

[Notification No. 53 /2016, F.No.370 142/16/2016-TPL]

(LAKSHMI NARAYANAN) UNDER SECRETRAY (TAX POLICY AND LEGISLATION)

Note: The principal rules were published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (ii) vide notification number S.O.969( E), dated the 26th March, 1962 and last amended vide notification number S.O.2179(E), dated the 22nd June 2016

No. 23/2016 Dated:24-6-2016


GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF REVENUE
CENTRAL BOARD OF DIRECT TAXES
(TPL DIVISION)
NEW DELHI

CIRCULAR NO

23/2016, Dated: June 24, 2016

Sub: Amendment in Section 206C of the Income-tax Act vide Finance Act 2016 – Clarifications regarding.

In order to curb the cash economy, Finance Act 2016 has amended section 206C of the Income-tax Act to provide that the seller shall collect tax at the rate of one per cent from the purchaser on sale in cash of certain goods or provision of services exceeding two lakh rupees. Subsequent to the amendment, a number of representations were received from various stakeholders with regard to the scope of the provisions and the procedure to be followed in case of the amended provisions of Section 206C of the Act. The Board, after examining the representations of the stakeholders, issued FAQs vide circular.No22/2016 dated 8th June, 2016. The Board has further decided to clarify the issue as regards applicability of the provisions relating to levy of TCS where the sale consideration received is partly in cash and partly in cash and partly in cheque by issue of an addendum to the above circular in the form of question and answer as under:

Question 1: Whether tax collection at source under section 206C(1D) at the rate of 1% will apply in cases where the sale consideration received is partly in cash and partly in cheque and the cash receipt is less than two lak rupees.

Answer: No. Tax collection at source will not be levied if the cash receipt does not exceed two lakh rupees even if the sale consideration exceeds two lakh rupees.

Illustration: Goods worth Rs. 5 lakhs is sold for which the consideration amounting to Rs.4 lakhs has been received in cheque and Rs.1 lakh has been received in cash. As the cash receipt does not exceed Rs.2 lakh, no tax is required to be collected at source as per section 206C (1D).

Question 2: Whether tax collection at source under section 206C (1D) will apply only to cash component or in respect of whole of sales consideration.

Answer: Under section 206C (1D), the tax is required to be collected at source on cash component of the sales consideration and not on the whole of sales consideration.

Illustration: Goods worth Rs. 5 lakhs is sold for which the consideration amounting to Rs.2 lakhs has been received in cheque and Rs.3 lakh has been received in cash. Tax is required to be collected under section 206C (1D) only on cash receipt of Rs.3 lakhs and not on the whole of sales consideration of Rs.5 lakh.

[F. No. 370142/17/2016-TPL]

(Pitambar Das)
Director (TPL-III)

Notification No. 52/2016 23-6-2016


[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (ii)]

 

MINSTRY OF FINANCE

(DEPARTMENT OF REVENUE)

(CENTRAL BOARD OF DIRECT TAXES)

INCOME-TAX

CORRIGENDUM

New Delhi, the 23rd June, 2016

S.O. (E).-In the notification of the Government of India in the Ministry of Finance, Department of Revenue (Central Board of Direct Taxes), number 46/2016, dated the 17th June, 2016, published vide number S.O. 2142 (E), dated the 17th June, 2016, in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (ii), at page 2, in line 5, for “to section 115TC” read “below section 115TCA”.

[Notification No. 52 /2016 F.No. 275/16/2016-IT(B)]

(Sandeep Singh)

Under Secretary to the Govt. of India

To

The Manager,

Government of India Press,

Ring Road, Mayapuri,

New Delhi-110054

Notification No. 51/2016 23-6-2016


Central Government notifies the Core Settlement Guarantee Fund set up by National Securities Clearing Corporation Limited (NSCCL), Mumbai

 

MINISTRY OF FINANCE

DEPARTMENT OF REVENUE

(CENTRAL BOARD OF DIRECT TAXES)

(Income-tax)

NOTIFICATION NO. 51/2016

 

New Delhi, the 23rd June, 2016

S.O. 2184(E).-In exercise of the powers conferred by clause (23EE) of section 10 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby notifies the Core Settlement Guarantee Fund set up by National Securities Clearing Corporation Limited (NSCCL), Mumbai, a recognised clearing corporation, for the purposes of the said clause for the assessment year 2016-17 and subsequent assessment years.

[F. No. 197/39/2015-ITA-I]

DEEPSHIKHA SHARMA, Directo

Notification No. 50/2016 23-6-2016


CBDT notifies Core Settlement Guarantee Fund, set up by Indian Clearing Corporation Limited (ICCL), Mumbai for the purpose of clause (23EE) of section 10 of the Income-tax Act, 1961

MINISTRY OF FINANCE

(DEPARTMENT OF REVENUE)

(CENTRAL BOARD OF DIRECT TAXES)

(Income-tax)

Notification No. 50/2016

New Delhi, the 23rd June, 2016

S.O. 2183(E).-In exercise of the powers conferred by clause (23EE) of section 10 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby notify the Core Settlement Guarantee Fund, set up by Indian Clearing Corporation Limited (ICCL), Mumbai, a recognised clearing corporation, for the purposes of the said clause, for the assessment year 2016-17 and subsequent assessment years.

[F. No. 197/47/2015-ITA-I]

DEEPSHIKHA SHARMA, Director

 

Notification No : 36/2016 Dated: 23-6-2016


[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (i)]

GOVERNMENT OF INDIA
MINISTRY OF FINANCE
(DEPARTMENT OF REVENUE)
NEW DELHI

NOTIFICATION NO

36/2016-Service Tax, Dated: June 23, 2016

In exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts the taxable services by way of transportation of goods by a vessel from outside India upto the customs station in India with respect to which the invoice for the service has been issued on or before the 31st May, 2016, from the whole of service tax leviable thereon, subject to the condition that the import manifest or import report required to be delivered under section 30 of the the Customs Act, 1962 (52 of 1962) has been delivered on or before the 31st May, 2016 and the service provider or recipient produces Customs certified copy of such import manifest or import report.

[F.No. B-1/21/2016 - TRU]

(Mohit Tiwari)
Under Secretary

Notification No : 35/2016 Dated: 23-6-2016


[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (i)]

GOVERNMENT OF INDIA
MINISTRY OF FINANCE
(DEPARTMENT OF REVENUE)
NEW DELHI

NOTIFICATION NO

35/2016-Service Tax, Dated: June 23, 2016

In exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994), read with sub-section (5) of section 161 of the Finance Act, 2016 (28 of 2016), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts taxable services with respect to which the invoice for the service has been issued on or before the 31st May, 2016, from the whole of Krishi Kalyan Cess leviable thereon, subject to condition that the provision of service has been completed on or before the 31st May, 2016.

[F.No. B-1/21/2016 - TRU]

(Mohit Tiwari)
Under Secretary

78 – 23-6-2016


PERMITTING WRITING OF OPTIONS AGAINST CONTRACTED EXPOSURES BY INDIAN RESIDENTS

A.P. (DIR SERIES 2015-16) CIRCULAR NO.78DATED 23-6-2016

Attention of Authorised Dealer Category – I (AD Cat – I) banks is invited to Foreign Exchange Management (Foreign Exchange Derivative Contracts) Regulations, 2000 dated May 3, 2000 (Notification No. FEMA/25/RB-2000 dated May 3, 2000) as amended from time to time and A.P. (DIR Series) circular no. 32 dated December 28, 2010 - Comprehensive Guidelines on Over the Counter (OTC) Foreign Exchange Derivatives and Overseas Hedging of Commodity Price and Freight Risks, as amended from time to time. Attention is also invited to Reserve Bank circular No. DBOD.No.BP.BC. 86/21.04.157/2006-07 dated April 20, 2007 on Comprehensive Guidelines on Derivatives as well as the modifications issued through circular No. DBOD.No.BP.BC. 44/21.04.157/2011-12 dated November 2, 2011.

2. As announced in the Bi-Monthly Monetary Policy Statement on April 7, 2015, in order to encourage participation in the Over the Counter (OTC) currency options market and improve its liquidity, it has been decided to permit resident exporters and importers of goods and services to write (sell) standalone plain vanilla European call and put option contracts against their contracted exposure, i.e. covered call and covered put respectively, to any AD Cat-I bank in India subject to operational guidelines, terms and conditions given in Annex I to this circular.

3. Necessary amendments (Notification No. FEMA 365 /2016-RB dated June 1, 2016) to Foreign Exchange Management (Foreign Exchange Derivatives Contracts) Regulations, 2000 (Notification No. FEMA.25/RB-2000 dated May 3, 2000) (Regulations) have been notified in the Official Gazette vide G.S.R. No. 571 (E) dated June 1st, 2016, a copy of which is enclosed (Annex II).

4. AD Cat-I banks may bring the contents of this circular to the notice of their constituents and customers.

5. The directions contained in this circular have been issued under Sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and are without prejudice to permissions/ approvals, if any, required under any other law.

6. These guidelines will be reviewed after one year based on experience.

Annex I

Writing of Covered Call and Put Currency Option contracts by Indian exporters and importers of goods and services

1. Participants

a. Market-makers: AD Category-I banks in India who have Reserve Bank’s approval to run cross-currency and foreign currency-Indian Rupee options books.
b. Users: Listed companies and their subsidiaries/joint ventures/associates having common treasury and consolidated balance sheet or unlisted companies with a minimum net worth of Rs. 200 crore provided appropriate disclosures are made in the financial statements as prescribed by the Institute of Chartered Accountants of India (ICAI).

2. Product

a. Covered Call: A resident exporter may write (sell) a standalone plain vanilla European call option contract to an AD Category-I bank in India against the cover of contracted exposure arising out of exports of goods and services from India.
b. Covered Put: A resident importer may write (sell) a standalone plain vanilla European put option contract to an AD Category-I bank in India against the cover of contracted exposure arising out of imports of goods and services into India.
c. The use of Covered option shall not be considered as a hedging strategy.
d. Being a combination of an underlying cash instrument and a generic derivative product, covered call and covered put options shall be treated as structured derivative products in terms of the Comprehensive Guidelines on Derivatives issued vide Circular DBOD.No.BP.BC. 86/21.04.157/2006-07 dated April 20, 2007, as amended from time to time.

3. Operational guidelines, terms and conditions

a. All the guidelines governing derivative products in general and structured products in particular of the circular mentioned in para. (2)(d) above and subsequent amendments thereof will apply, mutatis mutandis, to covered options.
b. AD Category-I banks may enter into covered options with their exporter or importer constituents only after obtaining specific approval in this regard from their competent authority (Board/Risk Committee/ALCO) and as per the terms and conditions contained in A.P. (DIR Series) Circular No. 32 dated December 28, 2010, as amended from time to time, on running Cross Currency and Foreign Currency – INR options book.
c. The responsibility of assessing the strength of risk management systems, financial soundness of the option writer shall rest with the concerned AD Cat-I bank. AD Category I banks may stipulate safeguards, such as, continuous profitability, higher net worth, turnover, etc. depending on the scale of forex operations and risk profile of the option writers.
d. Covered options may be written against either a portion or the full value of the underlying.
e. AD Cat-I banks shall treat the exposures against which a covered option has been written as an “unhedged exposure”. Accordingly, the guidelines issued vide Reserve Bank Circular DBOD.No.BP.BC. 85/21.06.200/2013-14 dated January 15, 2014 on Capital and Provisioning Requirements for Exposures to entities with Unhedged Foreign Currency Exposure shall apply.
f. Covered option contracts may be written for a period up to the maturity of the underlying subject to a maximum maturity period of 12 month.
g. Covered options may be freely cancelled and rebooked subject to the verification of the underlying by the AD Cat-I bank concerned.
h. For eligible underlying contracted exposures, the option seller may write the covered option either as a single FCY-INR option or as separate options for the FCY-USD and USD-INR legs.
i. The operational guidelines and terms and conditions as laid down under “Contracted Exposures” – Forward Foreign Exchange Contracts, Cross Currency Options (not involving Rupee) and Foreign Currency-INR Options of the A.P. (DIR Series) No. 32 dated December 28, 2010, as amended from time to time, shall be applicable to covered options to the extent relevant.
j. Except as mentioned in these guidelines, covered options shall not be undertaken in combination with any other derivative or cash instrument.
k. As provided under Comprehensive Guidelines on Derivatives, as amended from time to time, authorised dealers may maintain cash margin/liquid collateral in respect of covered options sold to them by exporters and importers, if necessary.
l. AD Cat-I banks entering into covered options with their constituents may report the same to CCIL’s reporting platform for OTC foreign exchange derivatives in terms of our circular FMD.MSRG.No.75/02.05.002/2012-13 dated March 13, 2013, as amended from time to time.

4. In addition to the above, “General Instructions for OTC forex derivative contracts entered by Residents in India,” as laid down under Section (I)(B) of the A.P. (DIR Series) No. 32 dated December 28, 2010, as amended from time to time, shall be applicable, mutatis mutandis, to covered options.

Annex II

Notification No. FEMA.365/2016-RB June 1, 2016

Foreign Exchange Management (Foreign Exchange Derivative Contracts) (Amendment) Regulations, 2016

In exercise of the powers conferred by clause (h) of sub-section (2) of Section 47 of the Foreign Exchange Management Act, 1999 (42 of 1999), the Reserve Bank hereby makes the following amendments in the Foreign Exchange Management (Foreign Exchange Derivative Contracts) Regulations, 2000 (Notification No.FEMA 25/2000-RB dated 3rd May 2000) namely:—

Short Title and Commencement

1. (i) These Regulations may be called the Foreign Exchange Management (Foreign Exchange Derivative Contracts) (Amendment) Regulations, 2016.

(ii) They shall come in to force from the date of their publication in the Official Gazette.

Amendment of Regulations

2. (i) The existing Regulation 4 shall be substituted by the following:

“A person resident in India may enter into a foreign exchange derivative contract in accordance with provisions contained in Schedule I, to hedge an exposure to risk or otherwise, in respect of a transaction permissible under the Act, or rules or regulations or directions or orders made or issued thereunder.”

(ii) In Schedule I, after the existing paragraph ‘B’, the following shall be added, viz.:

“(C) Writing of standalone options against underlying exposure

A person resident in India may enter into cross-currency option contract (not involving the rupee as one of the currencies) and/or foreign currency – rupee option contract with an authorised dealer against an underlying foreign exchange exposure in respect of a transaction for which sale and/or purchase of foreign currency is permitted under the Act or the rules or regulations or directions or orders made or issued thereunder subject to such terms and conditions as may be stipulated by the Reserve Bank from time to time.”

77 [(2)/10(R)] – 23-6-2016


FEM (FOREIGN CURRENCY ACCOUNTS BY A PERSON RESIDENT IN INDIA) REGULATIONS, 2015 – REGULATORY RELAXATIONS FOR STARTUPS

A.P. (DIR SERIES 2015-16) CIRCULAR NO.77[(2)/10(R)]DATED 23-6-2016

Attention of Authorised Dealers Banks is invited to the Foreign Exchange Management (Foreign Currency Accounts by a person resident in India) Regulations, 2015, notified vide Notification No. FEMA 10(R)/2015-RB dated January 21, 2016 and A.P (DIR Series) Circular No. 51 dated February 11, 2016 with respect to regulatory relaxations for startups.

2. In line with the Government of India’s startup initiative, it has been decided that an Indian startup, having an overseas subsidiary, may open a foreign currency account with a bank outside India for the purpose of crediting to the account the foreign exchange earnings out of exports/sales made by the said startup or its overseas subsidiary. The balances held in such accounts, to the extent they represent exports from India, shall be repatriated to India within the period prescribed for realization of exports, in Foreign Exchange Management (Export of Goods and Services) Regulations, 2015 dated January 12, 2016, as amended from time to time.

3. In addition, payments received in foreign exchange by an Indian startup arising out of sales/export made by the startup or its overseas subsidiaries will be a permissible credit to the Exchange Earners Foreign Currency (EEFC) account maintained in India by the startup.

4. A startup will mean an entity which complies with the conditions laid down in Notification No. GSR 180(E) dated February 17, 2016 issued by Department of Industrial Policy and Promotion, Ministry of Commerce and Industry, Government of India.

5. Further, the existing facility of opening foreign currency account outside India, available to the Life Insurance Corporation of India or the General Insurance Corporation of India and their subsidiaries for the purpose of meeting the expenditure incidental to the insurance business carried on by them has now been liberalised. Accordingly, any insurance/reinsurance company registered with the Insurance Regulatory and Development Authority of India (IRDA) may open a foreign currency account with a bank outside India to carry out insurance/reinsurance business.

6. AD Category – I banks may bring the contents of this circular to the notice of their constituents and customers concerned.

7. Reserve Bank has since amended the subject Regulations accordingly through the Foreign Exchange Management (Foreign Currency Accounts by a person resident in India) (Amendment) Regulations, 2016 which have been notified vide Notification No. FEMA 10(R)/(1)/2016-RB dated June 1, 2016, vide G.S.R.No.570(E) dated June 1, 2016. Necessary amendments have also been carried out in Master Direction No. 14 on Deposits and Accounts.

8. The directions contained in this circular have been issued under sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and are without prejudice to permissions/approvals, if any, required under any other law.

Notification No. 11/2016 22-6-2016


Government of India
Ministry of Finance
Central Board of Direct Taxes
Directorate of Income Tax (Systems)

Notification No j /2016

New Delhi, 22-June, 2016

Procedure for online submission of statement of deduction of tax under sub-section (3) of section 200 and statement of collection of tax under proviso to sub-section (3) of section 206C of the Income-tax Act, 1961 read with rule 31 A(5) and rule 31 AA(5) of the income-tax Rules, 1962 respectively

The provisions relating to the statement of deduction of tax under sub-section (3) of section 200 and the statement of collection of tax under proviso to sub-section (3) of section 206C of the Income-tax Act, 1961 (the Act) are prescribed under Rule 31A and Rule 31AA of the Income-tax Rules, 1962 (the Rules) respectively. As per sub-rule (5) of rule 31A and sub-rule (5) of rule 31AA of the Rules, the Director General of Income-tax (Systems) shall specify the procedures, formats and standards for the purposes of furnishing and verification of the statements and shall be responsible for the day to day administration in relation to furnishing and verification of the statements in the manner so specified.

  1. In exercise of power conferred by sub-rule (5) of rule 31A and sub-rule (5) of rule 31AA of the Rules, the Principal Director General of Income-tax (Systems) hereby lays down the following procedures of registration in the e-filing portal, the manner of the preparation of the statements and submission of the statements as follows:
  2. The deductors/collectors will have the option of online filing of e-TDSITCS returns through e-filing portal or submission at TIN Facilitation Centres. Procedure for filing e­TDSTTCS statement online through e-filing portal is as under:
    1. a.    Registration: The deductor/collector should hold valid TAN and is required to be registered in the e-filing website (https://incometaxindiaefiling.gov.in/) as “Tax Deductor & Collector” to file the “e-TDS/e-TCS Return”.
    2. b.    Preparation: The Return Preparation Utility (RPU) to prepare the TDS/TCS Statement and File Validation Utility(FVU) to validate the Statements can be downloaded from the tin-nsdl website (https://www.tin-nsdl.com/). The statement is required to be uploaded as a zip file and submitted using either Digital Signature Certificate (DSC) or Electronic Verification Code (EVC). For DSC mode, the signature for the zip file can be generated using the DSC Management Utility (available               under                    Downloads         in                the e-Filing  website
      http://incometaxindiaefiling.govin/). Alternatively, deductor/collector can e-Verify using EVC.

Notification No. 49/2016 22-6-2016


[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (ii)]

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

DEPARTMENT OF REVENUE

[CENTRAL BOARD OF DIRECT TAXES]

NOTIFICATION

New Delhi, the 22nd June, 2016

INCOME-TAX

S.O. 2179(E).- In exercise of the powers conferred by section 101, read with section 295 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962, namely:-

 1. (1) These rules may be called the Income-tax (16th Amendment) Rules, 2016.

(2) They shall come into force from the date of their publication in the Official Gazette.

2. In the Income-tax Rules, 1962, in rule 10U,-

(i) in sub-rule (1), in clause (d), for the figures, letters and words “30th day of August, 2010”, the figures, letters and words “1st day of April, 2017” shall be substituted;

(ii) in sub-rule (2), for the figures, letters and words “1st day of April, 2015”, the figures, letters and words “1st day of April, 2017” shall be substituted.

[Notification No. 49/2016/ F. No. 370142/10/2016-TPL]

(Niraj Kumar)

Under Secretary (Tax Policy and Legislation)

Note: The principal rules were published in the Gazette of India, Extraordinary, Part-II, Section-3, Sub-section (ii) vide number S.O. 969 (E) dated the 26th March, 1962 and was last amended vide notification number S.O. 2151(E), dated the 20th June, 2016.

Notification No. 48/2016 20-6-2016


[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (ii)]

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

DEPARTMENT OF REVENUE

CENTRAL BOARD OF DIRECT TAXES

NOTIFICATION

New Delhi, the 20th June, 2016

S.O. 2151(E).-In exercise of the powers conferred by section 285BA read with section 295 of the Income-tax Act, 1961 (43 of 1961), the Central Government with respect to registration of persons, due diligence and maintenance of information, and the Central Board of Direct Taxes for matters relating to statement of reportable accounts, hereby make the following rules further to amend the Income-tax Rules, 1962, namely:-

1. (1) These rules may be called the Income–tax (15th Amendment) Rules, 2016.

(2) Save as otherwise provided in these rules, they shall come into force on the date of their publication in the Official Gazette.

2. In the Income-tax Rules 1962 (hereafter referred to as the said rules) in rule 114F, in clause (6), in the Explanation, in clause (D),-

(a) in sub-clause (ii), for the word, brackets and figure “clause (3)”, the words, brackets and figure “clause (3), which is not located in any of the jurisdictions specified by the Central Board of Direct Taxes in this behalf” shall be substituted;

(b) for sub-clause (iii), the following sub-clause shall be substituted, namely:- “(iii) not a withholding foreign partnership or a withholding foreign trust;”,

3. In the said rules, in rule 114H,- (a) in sub-rule (3),- (I) in clause (b), in sub-clause (i), for item (D), the following item shall be substituted, namely:- “(D) in case of U.S. reportable account, any standing instructions to transfer funds to an account maintained in a country or territory outside India and in case of other reportable account, any standing instructions (other than with respect to a depository account) to transfer funds to an account maintained in a country or territory outside India; or”;

(II) in clause (c), in sub-clause (ii), for item (E), the following item shall be substituted, namely:- “(E) in case of U.S. reportable account, any standing instructions to transfer funds currently in effect and in case of other reportable account any standing instructions (other than with respect to a depository account) to transfer funds currently in effect:”;

(III) in clause (d), for sub-clause (ii), the following sub-clause shall be substituted, namely:- “(ii) in case of a U.S. reportable account which is low value account as on the 30th June, 2014, shall be completed by the 30th June, 2016 and in case of other reportable account which is high value account as on the 31st December, 2015, shall be completed by the 31st December, 2016;”; (b) in sub-rule (5), in clause (e), for sub-clause (i), the following sub-clause shall be substituted, namely:-

“(i) review of pre-existing entity accounts with an aggregate account balance or value that exceeds an amount equivalent to two hundred and fifty thousand U.S. dollars as on the 30th June, 2014 (in case of a U.S. reportable account) shall be completed by the 30th June, 2016 and review of pre-existing entity accounts with an aggregate account balance or value that exceeds an amount equivalent to two hundred and fifty thousand U.S. dollars as on the, 31st December, 2015 (in case of other reportable account) shall be completed by the 31st December, 2016;”.

4. In the said rules, in Appendix-II, with effect from 1st January, 2017, for Form 61B, the following form shall be substituted, namely:-

Notification No. 47/2016 17-6-2016


[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (ii)]

MINISTRY OF FINANCE

(DEPARTMNET OF REVENUE)

(CENTRAL BOARD OF DIRECT TAXES)

NOTIFICATION New Delhi, the 17th June, 2016

No. 47/2016

INCOME TAX

S.O. (E).- In exercise of the powers conferred by sub-section (1F) of section 197A of the Income-tax Act, 1961 (43 of 1961) and in supersession of the notification of the Government of India, Ministry of Finance (Department of Revenue) number S.O. 3069 (E) dated 31st December, 2012, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (ii), the Central Government hereby notifies that no deduction of tax under Chapter XVII of the said Act shall be made on the payments of the nature specified below, in case such payment is made by a person to a bank listed in the Second Schedule to the Reserve Bank of India Act, 1934 (2 of 1934), excluding a foreign bank, or to any payment systems company authorised by the Reserve Bank of India under Sub-section (2) of Section 4 of the Payment and Settlement Systems Act, 2007 (51 of 2007), namely

(i) bank guarantee commission;

(ii) cash management service charges;

(iii) depository charges on maintenance of DEMAT accounts;

(iv) charges for warehousing services for commodities;

(v) underwriting service charges;

(vi) clearing charges (MICR charges) including interchange fee or any other similar charges by whatever name called charged at the time of settlement or for clearing activities under the Payment and Settlement Systems Act, 2007;

(vii) credit card or debit card commission for transaction between merchant establishment and acquirer bank.

2. This notification shall come into force from the date of its publication in the Official Gazette.

[Notification No. 47/2016/ F. No. 275/53/2012 – IT(B)]

( Sandeep Singh)

Under Secretary to the Govt. of India

To,

The Manager,

Government of India Press, Ring Road,

Mayapuri, New Delhi – 110054

Notification No. 46/2016 17-6-2016


[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (ii)]

 

 

MINSTRY OF FINANCE

(DEPARTMENT OF REVENUE)

(CENTRAL BOARD OF DIRECT TAXES) NOTIFICATION

New Delhi, the 17th June, 2016

No.46 /2016

INCOME-TAX

S.O. (E).-In exercise of the powers conferred by sub-section (1F) of section 197A of the Incometax Act, 1961 (43 of 1961) (hereinafter referred to as the said ‘Act’), the Central Government hereby notifies that no deduction of tax under Chapter XVII of the said Act shall be made on the payments of the nature specified in clause (23DA) of section 10 of the said Act received by any securitisation trust as defined in clause (d) of the Explanation to section 115TC of the said Act.

2. This notification shall come into force from the date of its publication in the Official Gazette.

[Notification No.46 /2016 F.No. 275/16/2016-IT(B)]

(Sandeep Singh)

Under Secretary to the Govt. of India

 

 

To

The Manager,

Government of India Press, Ring Road,

Mayapuri, New Delhi-110054

76 – 16-6-2016


EXIM BANK’S GoI SUPPORTED LINE OF CREDIT OF USD 2 BILLION TO THE GOVERNMENT OF PEOPLE’S REPUBLIC OF BANGLADESH

A.P. (DIR SERIES 2015-16) CIRCULAR NO.76DATED 16-6-2016

Export-Import Bank of India (Exim Bank) has entered into an Agreement dated March 09, 2016 with the Government of the People’s Republic of Bangladesh, for making available to the latter, a Government of India supported Line of Credit (LOC) of USD 2 billion (USD Two billion) for financing various social and infrastructure development projects such as Power, Railways, Road Transportation, Information and Communication Technology, Shipping, Health and Technical Education Sectors in Bangladesh. The goods, machinery, equipment and services including consultancy services from India for exports under this agreement are those which are eligible for export under the Foreign Trade Policy of the Government of India and whose purchase may be agreed to be financed by the Exim Bank under this agreement. Out of the total credit by Exim Bank under this agreement, the goods and services including consultancy services of the value of at least 75% of the contract price shall be supplied by the seller from India and the remaining 25% goods and services (other than consultancy services) may be procured by the seller for the purpose of the eligible contract from outside India. Further in case of projects involving civil construction, the eligible goods upto the contract price supplied by the seller from India may be further reduced from 75% to 65% and further reduction can be considered on a case to case basis, provided the sourcing is not from a third country.

2. The credit agreement under the LOC is effective from May 27, 2016 and the date of execution of agreement is March 09, 2016. Under the LOC, the terminal utilization period is 48 months from scheduled completion date of contract in case of project export and 72 months from execution of the Credit Agreement in case of other supply contracts.

3. Shipments under the LOC will have to be declared on EDF/SDF Forms as per instructions issued by the Reserve Bank from time to time.

4. No agency commission is payable under the above LOC. However, if required, the exporter may use his own resources or utilize balances in his Exchange Earners’ Foreign Currency Account for payment of commission in free foreign exchange. Authorised Dealer Category- l (AD Category-l) banks may allow such remittance after realization of full payment of contract value subject to compliance with the prevailing instructions for payment of agency commission.

5. AD Category-I banks may bring the contents of this circular to the notice of their exporter constituents and advise them to obtain full details of the Line of Credit from the Exim Bank’s office at Centre One, Floor 21, World Trade Centre Complex, Cuffe Parade, Mumbai 400 005 or log on to www.eximbankindia.in.

6. The Directions contained in this circular have been issued under sections 10(4) and 11(1) of the Foreign Exchange Management Act (FEMA), 1999 (42 of 1999) and are without prejudice to permissions/approvals, if any, required under any other law.

 

No. 195/05/2016 Dated: 15-6-2016


GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF REVENUE
CENTRAL BOARD OF EXCISE AND CUSTOMS
SERVICE TAX WING
NEW DELHI

CIRCULAR NO

195/05/2016-SERVICE TAX, Dated: June 15, 2016

Subject: Speedy disbursal of pending refund claims of exporters of services under rule 5 of the CENVAT Credit Rules, 2004

I am directed to refer to Board’s circular No. 187/6/2015-Service Tax dated 10th November, 2015 on the above subject and to inform that in the light of some representations received in this context from accounting bodies, industry associations and others, the following points are clarified.

2.0 Applicability of the scheme

2.1 At the outset it is reiterated that this scheme is not a substitute for the various notifications but is meant to complement them and is aimed at enabling ease of doing business. It has to operate within the general parameters of the notifications governing such refunds.

2.2 This scheme is applicable only to service tax registrants who are exporters of services, with respect to refund claims under rule 5 of the CENVAT Credit Rules, 2004, which have been filed on or before 31-3-2015, and which have not been disposed of as on the date of the issue of the circular dated 10-11-2015. As clarified therein, claims which have been remanded are out of the purview of this scheme.

3.0 Additional documents to be submitted (i.e. in addition to those required to be filed along with the claim)

3.1 At the outset, the relevance of the certificate has to be clearly understood. It is not a substitute for verification by the refund sanctioning authority. It will ensure diligence on the part of the claimant and the statutory auditor, which will make him eligible for a provisional payment of 80% of the claimed amount It had been clarified in the circular that the decision to grant provisional payment is an administrative order and not a quasi-judicial order and should not be subjected to review. There is thus no reason to treat either the certificate or the provisional payment with fear or suspicion.

3.2 The certificate has to be furnished by the statutory auditor in the case of companies, and from a chartered accountant in the case of assessees who are not companies, in the prescribed format. The phrase “statutory auditor” will refer to the auditor who prepares the financial statements under the Companies Act 2013. The certificate cannot be furnished by a Cost and Management Accountant or a Company Secretary. In the case of companies, it cannot be furnished by a Chartered Accountant who is not the statutory auditor.

3.3 The certificate has to be given in the format given in Annexure-1 to the circular dated 10-11-2015. During the conference of Service Tax Chief Commissioners and Commissioners in November 2015 itself, it had been clarified that “the averments in Annexure-1 have to be made and any general additional remarks, which do not negate the wording of paragraphs 1.1 to 1.4, may be ignored.” Inspite of this it has been reported that general disclaimers by the auditor are resulting in the rejection of the certificate and consequently the claim for 80% provisional payment.

3.4 It must be understood that auditors while discharging their duties are bound by the provisions of the statute governing them as well as Guidance Notes, Accounting Standards etc relating to their profession. The Institute of Chartered Accountants of India has issued Guidance Notes on reports and certificates issued by auditors. These Guidance Notes relate to situations where the auditor has freedom with respect to the wording of a certificate as well as to situations where he has to adhere to a prescribed format. In both situations the auditor has to indicate the manner in which the audit was done, assumptions, limitations in scope and reference to information and explanations obtained in the certificate. Adherence of the auditors to these requirements should not be considered to be violations of the circular. If at all, by mentioning that they have adhered to the various legal and accounting requirements, they are adding value to their certificate. It is clarified once again that as long as the four points which are contained in Annexure-1 to the circular dated 10-11-2015 are present, the certificate should not be rejected on the ground of any disclaimers which the auditor has to give, owing to the Guidance Notes.

4.0 Principal Chief Commissioners/Chief Commissioners should ensure that the contents of this circular are brought to the notice of the claimants as well as the departmental officers.

F.No.137/62/2015-Service Tax

(Rajeev Yadav)
Director (Service Tax)

Notification No. 45/2016 14-6-2016


Government of India

Ministry of Finance

Department of Revenue Central Board of Direct Taxes

Notification No. 45/2016

New Delhi, the 14th June, 2016

CBDT- startup – Tax Exemption on Investments above Fair Market Value

S.O.- In exercise of the powers conferred by the clause (ii) of the proviso to clause (viib) of subsection (2) of section 56 of the Income-tax Act, 1961 (43 of 1961), the Central Government, hereby notifies the ‘classes of persons’ for the purposes of the said clause as being the ‘person’ defined under sub-section (31) of section 2 of the said Act, being resident, who make any consideration exceeding the face value for issues of shares of a ‘startup’ company.

Explanation.-For the purposes of this notification, “startup” shall mean a company in which the public are not substantially interested and which fulfills the conditions specified in the notification of the Government of India, Ministry of Commerce and Industry, Department of Industrial Policy and Promotion, number G.S.R.180(E), dated the 17th, February, 2016, published in the Gazette of India, Extraordinary, part 11, section 3, sub-section (i), dated the 18th February, 2016.

 

(F. No. 173/ 103/2016-ITA-I)

(Rohit Garg)

Deputy Secretary to the Govt. of India

Notification No. : 25/2016 Dated:14-06-2016


[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB - SECTION (I)]

GOVERNMENT OF INDIA
MINISTRY OF FINANCE
(DEPARTMENT OF REVENUE)

NOTIFICATION NO

25/2016-Central Excise, Dated: June 14, 2016

In exercise of the powers conferred by sub-section (1) of section 5A of the Central Excise Act, 1944 (1 of 1944), read with sub-section (3) of section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (58 of 1957) the Central Government on being satisfied that it is necessary in the public interest so to do, hereby makes the following further amendments in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No.67/95-Central Excises, dated the 16th March, 1995, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 259(E), dated the 16th March, 1986, namely:-

In the said notification, in the proviso, in item (i), for the words ”Free Trade Zone” the words“Special Economic Zone” shall be substituted.

F. No. 354/34/2016-TRU

(Anurag Sehgal)
Under Secretary to the Government of India

Note: The principal notification No.67/95-Central Excises, dated the 16th March, 1995, was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 259(E), dated the 16th March, 1995 and was last amended vide notification No.19/2014-Central Excise, dated the 11th July, 2014, published vide number G.S.R. 450(E), dated the 11th July, 2014.

Notification No. : 24/2016 Dated:14-06-2016


[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB - SECTION (I)]

GOVERNMENT OF INDIA
MINISTRY OF FINANCE
(DEPARTMENT OF REVENUE)

NOTIFICATION NO

24/2016-Central Excise, Dated: June 14, 2016

In exercise of the powers conferred by sub – section (1) of section 5A of the Centr al Excise Act, 1944 (1 of 1944) read with sub – section (3) of section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (58 of 1957) and sub – section (3) of section 136 of the Finance Act, 2001(14 of 2001), the Central Government on being satisfied that it is necessary in the public interest so to do, hereby makes the following further amendments in the notification of the Government of India in the Min istry of Finan ce (Department of Revenue), No.214/86 – Central Excise s , dated the 25 th March, 1986 , published in the Gazette of India, Extraordinary, Part II, Section 3, Sub – section (i) vide number G.S.R. 547 (E), dated the 27th March, 1986 , namely: -

In the said notification, for the words “free trade zone”, wherever they occur, the words“Special Economic Zone” shall be substituted.

F. No. 354/34/2016 – TRU

(Anurag Sehgal)
Under Secretary to the Government of India

Note: The principal notification No. 214/86 – Central Excise s , dated the 25th March, 1986 , was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub – section (i), vide number G.S.R. 547(E), dated the 27th March, 1986 and was last amended vide notification No. 48/2006 – Central Excise, dated the 30 th December, 2006, published vide number G.S.R. 804(E), dated the 30 th December, 2006.

1031/19/2016-CX – 14-6-2016


GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF REVENUE
CENTRAL BOARD OF EXCISE AND CUSTOMS
NEW DELHI

CIRCULAR NO

1031/19/2016-CX, Dated: June 14, 2016

Subject: Levy of excise duty on readymade garments and made articles of textiles bearing a brand name or sold under a brand name and having a retail sale price of Rs. 1000 or more – reg.

Representations have been received from the trade regarding the scope of the levy of excise duty on readymade garments and made articles of textiles bearing a brand name or sold under a brand name and having a retail sale price of Rs. 1000 or more in this year’s Budget.

2. The issue raised is whether excise duty would be chargeable on readymade garments or made up articles of textiles which are sold by a retail store which merely affixes the retail sale price on the readymade garments or made up articles of textiles which are purchased by such retail store from the open market.

3. The issue has been examined in the Ministry. The present levy is not on all readymade garments and made ups, and is restricted only to readymade garments and made up articles of textiles bearing a brand name or sold under a brand name and having retail sale price (RSP) of Rs. 1000 or above. Further, to avoid disputes and minimize duty evasion, it has also been provided that affixing a brand name on the product, labeling or relabeling of its containers or repacking from bulk packs to retail packs or the adoption of any other treatment to render the product marketable to the consumer, shall amount to manufacture.

3.1 For this purpose, “Brand name” means a brand name, whether registered or not, that is to say, a name or a mark, such as a symbol monogram, label, signature or invented words or any writing which is used in relation to a product, for the purpose of indicating, or so as to indicate, a connection in the course of trade between the product and some person using such name or mark with or without any indication of the identity of that person.

4. However, such retailer shall not be liable to pay excise duty if:

a) the retail sale price of such readymade garments or made up articles of textiles is less than Rs. 1000, or

b) the aggregate value of clearances for home consumption by such person is less than Rs. 1.5 crore in a year [provided aggregate value of clearances during previous financial year was less than Rs. 4 crore].

5. Further, merely because the outlets [shop] of a retailer, from where readymade garments or made ups are sold, has a name, say, M/s XYZ and Sons, the readymade garments or made ups sold from such outlet [shop] cannot be held as branded readymade garments or made ups and become liable to excise duty. Needless to say, deemed manufacture and liability to excise duty will arise only if such retailer affixes a brand name on the readymade garments and affixes a label bearing the RSP on the packages containing the readymade garments of Rs. 1000 or above.

6. Further, it is hereby directed that field formations shall not visit individual retail outlets or retail chains, except based on specific inputs regarding duty evasion and with the approval of the jurisdictional Commissioner or Additional Director General or above.

7. The above position may be brought to the notice of formations under your charge for strict compliance. Difficulties, if any, faced in the implementation of the instructions may be brought to the notice of the Ministry at an early date.

[F. No. 332/5/2016-TRU]

(Devi Prasad Misra)
Technical Officer (TRU)

GST: With Rajya Sabha poll boost, Arun Jaitley flies to Kolkata : 14-06-2016


Finance minister Arun Jaitley will meet the empowered committee of state finance ministers to discuss the contours of the Goods and Services Tax Bill (GST) at a two-day meeting in Kolkata starting Tuesday. The recent addition to the ruling alliance’s strength in the Upper House and the indications that a clutch of non-NDA parties like Trinamool Congress, CPI(M) and NCP could support the tax reform have brightened the chances of GST Constutional Amendment Bill getting passed by the Rajya Sabha in the monsoon session.

Minister of state for finance Jayant Sinha was quoted as saying on Monday that the new indirect tax regime through GST would be rolled out from April 1, 2017. “If we can pass it in the monsoon session (of Parliament beginning next month), we can implement it in April 1, 2017,” Sinha told a news agency.

Currently, the empowered committee is headed by West Bengal finance minister Amit Mitra, which is likely to talk out issues, including exemptions list and levy of tax over tobacco products.

The Narendra Modi government is targeting to reach a political consensus over the proposed GST, so that it could clear the floors of Parliament in the upcoming session next month.

“Our expectation is that we will get support from many parties. We would like it to be passed with a national consensus, so we would like all parties to approve it. In the Lok Sabha when the Constitution amendment was passed, it was passed unanimously. So, we would like it to be passed in the Rajya Sabha unanimously as well,” Sinha told the news agency.

According to reports, the GST Bill, which is expected to be one of the biggest tax reforms in recent times, has also been discussed at the recently held the BJPnational executive meet in Allahabad.

The Congress has been stubborn in demanding some crucial changes in the GST Constitutional Amendment Bill, including mentioning the GST rate in the Constitution. The government has indicated that it is willing to drop a plan to introduce a 1% tax on inter-state transactions. The tax was mulled in view of the fact that GST would help consuming states more than maufacturing states.

Source : Financial Express

Government drafting separate bankruptcy law for financial companies : Jayant Sinha : 14-06-2016


Having overhauled the century-old bankruptcy laws for companies, the government will now bring a new insolvency law for banks and financial institutions to vest with depositors the first right over assets of a defunct entity.

In an interview to PTI, Minister for State for Finance Jayant Sinha said the new legislation that is in the process of being drafted will help in quick winding up of stressed banks, NBFCs and microfinance institutions while safeguarding the interest of small savers.

“We are also looking at additional legislation for resolution of bankruptcy in financial firms,” he said.

Last month, Parliament passed the Insolvency and Bankruptcy Code that unifies more than four overlapping sets of laws and aims to slash time taken to wind up a dying company or recover dues from a defaulter.

The inability to shut loss-making firms and collect dues had locked up funds at banks and damped lending and investment. The government is setting up infrastructure to operationalise the law, he said.

Financial firms, Sinha said, “by their characteristics, have depositors of money as well. So we have to come up with appropriate resolution processes for orderly winding down of financial firms. It will be a new law.

“We are working on that as well. So this is more in terms of the structural reforms we are doing which is to look at the resolution and insolvency process”.

The new law will deal with financial institutions including banks, NBFCs, and other financial institutions that have money deposited, he said.

Asked whether the depositors would have first charge on liquidation, he said, “let’s wait for that legislation to be drafted, but obviously yes depositor money is first in line We are working on that”.

Sinha said the government is also planning to come out with comprehensive law — Enforcement of Security Interest and Recovery of Debt Laws and Miscellaneous Provisions (Amendment) Bill, 2016 — to amend the debt recovery laws with an overall objective of improving the ease of doing business.

“We are making amendments to the DRT and Sarfaesi Act,” he said.

The bill, which was introduced in the Lok Sabha last month, seeks to amend four legislations — Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (Sarfaesi) Act, 2002, the Recovery of Debts due to Banks and Financial Institutions Act, 1993, the Indian Stamp Act, 1899 and the Depositories Act, 1996.

Source : PTI

 

DCB Bank launches Aadhaar-based ATM in Bengaluru; to expand facility : 14-03-2016


DCB Bank, on Monday, launched a “card-less and PIN-less” ATM in Bengaluru. The ATM accepts Aadhaar number and Aadhaar fingerprint (biometric) instead of ATM / debit card and PIN to dispense cash from the bank account.

Launching the facility, Nasser Munjee, Chairman, DCB Bank, said, “Bengaluru is an important centre for us. We are delighted to launch first Aadhaar-based ATM, a unique and transformative facility for users. These ATMs are testimony to our commitment to invest in customer facing technology and promote a new way of banking.”

The bank had, in April launched a pilot Aadhaar-based ATM in Mumbai. This was followed by launch of Aadhaar-based ATMs in Odisha and Punjab.

“Now the bank plans to upgrade its entire 400-plus ATMs to provide Aadhaar-based functionality in the next six months. Currently, only DCB Bank customers will be able to use this facility,” Munjee said.

Nandan Nilekani, Chairperson and Co-founder of EkStep Foundation, a non-profit literacy organisation, after inaugurating the facility said, “I am delighted that DCB Bank is launching an Aadhaar-based ATM in Bengaluru, the first such facility in the city. I am confident the ATM will provide Aadhaar cardholders a convenient way to withdraw cash.”

Source : Economic Times

Notification No. S.O. 2137(E) 13-06-2016


SECTION 4 OF THE SPECIAL ECONOMIC ZONES ACT, 2005 – SALITRE DEVELOPERS PVT. LTD.

NOTIFICATION NO. SO 2137(E) [F.NO.F.1/9/2016-SEZ]DATED 13-6-2016

Whereas, M/s. Salitre Developers Private. Ltd. has proposed under section 3 of the Special Economic Zones Act, 2005 (28 of 2005), (hereinafter referred to as the said Act), to set up a Sector Specific Special Economic Zone for IT/ITES at Outer Ring Road, Rachanahalli Village, Nagavara, District- Bangalore, in the State of Karnataka;

And, whereas, the Central Government is satisfied that requirements under sub-section (8) of section 3 of the said Act, and other related requirements are fulfilled and it has granted letter of approval under sub-section (10) of section 3 of the said Act for development, operation and maintenance of the above sector specific Special Economic Zone on 21st April, 2016;

Now, therefore, the Central Government, in exercise of the powers conferred by sub-section (1) of section 4 of the Special Economic Zones Act, 2005 and in pursuance of rule 8 of the Special Economic Zones Rules, 2006, hereby notifies the 4.05 hectares area at above location with survey numbers given in the table below as a Special Economic Zone, namely:

TABLE

S.No. Name of Village Survey No. Area (in hectares)
1. Rachanahalli, Nagavara 8/4P 0.19
2. 8/5P 0.27
3. 31/1P 0.07
4. 31/2P 0.07
5. 31/3P 0.08
6. 31/4P 0.23
7. 31/5P 0.27
8. 44/2P 0.39
9. 44/3P 0.83
10. 45/1P 0.48
11. 45/2P 0.87
12. 46/1P 0.06
13. 46/2P 0.05
14. 46/3P 0.08
15. 47/2B P 0.12
Total 4.05

And, therefore, the Central Government, in exercise of the powers conferred by sub-section (1) of section 13 of the Special Economic Zones Act, 2005 (28 of 2005), hereby constitutes a Committee to be called the Approval Committee for the above Special Economic Zone for the purposes of section 14 of the said Act consisting of the following Chairperson and Members, namely:—

1. Development Commissioner of the Special Economic Zone Chairperson ex officio;
2. Director or Deputy Secretary to the Government of India, Ministry of Commerce and Industry, Department of Commerce or his nominee not below the rank of Under Secretary to the Government of India Member ex officio;
3. Zonal Joint Director General of Foreign Trade having territorial jurisdiction over the Special Economic Zone Member ex officio;
4. Commissioner of Customs or Central Excise having territorial jurisdiction over the Special Economic Zone or his nominee not below the rank of Joint Commissioner Member ex officio;
5. Commissioner of Income Tax having territorial jurisdiction over the Special Economic Zone or his nominee not below the rank of Joint Commissioner Member ex officio;
6. Director (Banking) in the Ministry of Finance, Banking Division, Government of India Member ex officio;
7. Two officers, not below the rank of Joint Secretary, to be nominated by the State Government Member ex officio;
8. Representative of the Developer of the zone Special invitee

And, therefore, the Central Government, in exercise of the powers conferred by sub-section (2) of section 53 of the Special Economic Zones Act, 2005 (28 of 2005), hereby appoints the 13th day of June, 2016 as the date from which the above Special Economic Zone shall be deemed to be Inland Container Depot under section 7 of the Customs Act, 1962 (52 of 1962).

 

Delhi HC’s decision vis-a-vis levy of ST on sale of unfinished flats – an analysis : 13-06-2016


JUNE 13, 2016

By S Sivakumar, FCA, FCS, MBA, ACSI, Advocate

THE very recent decision of the Delhi High Court in Suresh Kumar Bansal v Union of India 2016-TIOL-1077-HC-DEL-ST is bound to create a fresh set of controversies and confusion, insofar as the levy of service tax on the Realty Sector is concerned. Service tax on the construction of residential complexes that was introduced with effect from June 16, 2005 has continued to confuse the taxpayer and the taxman alike over the years and this decision would seem to add to this confusion.

In a case of the Builder entering into a single and composite agreement of sale of a flat to a prospective buyer, the Delhi High Court has held that, in the absence of a statutory provision or Rule to provide for the ascertaining of the value of the undivided portion of land which cannot be subjected to service tax, service tax cannot be levied. This decision has been rendered in the context of the service tax law that stood in 2011. The Court was not impressed with the argument of the Revenue that as per the abatement notification, an abatement of 75% of the entire consideration including the value of the undivided interest in land and consequently, provides for the levy of service tax only on 25% of the entire consideration. The Court has taken the view that, the in the absence of a machinery provision in the statute or in the Rules providing for a mechanism for deducting the value of the land, the very levy of service tax on the sale of an unfinished flat, in terms of a composite agreement, is invalid . The Court has referred to several decisions of the Supreme Court including the landmark decision rendered in Larsen & Toubro Ltd v State of Karnataka 2013-TIOL-46-SC-CT- LB rendered in September 2013.

Be that as it may…what are the possible implications arising out of this decision, on the Realty Sector. To my mind, this decision will apply only in cases of composite agreements involving also sale of land and not to composite works contracts, as is clear from Para 45 and other paras of the decision. Thus, this decision will not have a bearing on a large number of Builders who are following the practice of entering into two separate agreements, viz. one, for the sale of the undivided portion of the land and another, for rendering the construction services. The two agreement system, as we know, is followed by a very large portion of the Realty Sector and especially, in the South. The construction agreement is considered as a ‘works contract’ within the meaning of the VAT laws of the States and is consequently subjected to the levy of VAT. Many States allow the Builders to opt for what is known as the Composition Scheme allowing the Builders to pay VAT at a certain percentage of the construction value (like, in Karnataka) or, at a certain percentage of the total value including the value of the land (like, in Maharashtra). Levy of service tax in these cases of works contracts is largely governed by the provisions contained in Rule 2A of the Service Tax (Determination of Value) Rules, 2006 in terms of which, post 1-7-2012, service tax is levied on 40% of the construction value when the VAT on the value of the goods transferred in the course of execution of the works contract, i.e. the construction activity, is not paid on the actual value of such goods. It is clear that, in these cases, it cannot be said that the service tax rules do not provide for a machinery provision for determining the goods portion involved in the execution of the works contracts.

Taking this discussion further…many Builders who enter into two agreements, as stated above, have also opted to pay service tax on the basis of the abatement notification, in terms of which, they pay service tax on 25% / 30% of the total consideration including the value of the land. The relevant abatement notification does not specify that the option to pay service tax on 25% / 30% of the total consideration is applicable only when the Builder enters into a composite agreement and accordingly, both before 1-7-2012 and thereafter, many Builders have been paying service tax on the basis of the abatement notification, even when they enter into two separate agreements, viz. one, for the sale of the undivided interest in land and another, for rendering the construction services. In these cases also, this decision of the Delhi High Court would not apply, on facts, in my view.

It seems to me that the High Court has proceeded on the basis that a composite agreement for sale of an unfinished flat is not a works contract

In my view, even when a composite agreement of sale of an unfinished flat is entered into, it would be a case of a works contract from the VAT law point of view, as was held by the Apex Court in Larsen & Toubro Limited v State of Karnataka and this decision of the Supreme Court was, as a matter of fact, has been referred to in this decision, at several places. I am a bit surprised to note that the Delhi High Court has thought it fit not to consider the impact arising out of the binding precedent in Larsen & Toubro Limited v State of Karnataka, in this present decision, as is clear from Para 23 which is reproduced below.

Quote :

23. Although such composite contracts for development of complex and sale of units therein would fall within the scope of works contract as held by the Supreme Court in Larsen and Toubro v. State of Karnataka (supra), we do not propose to examine whether services involved in construction of complexes is exigible to service tax as services in relation to execution of a works contract falling within the scope of Section 65(105)(zzzza) of the Act or under Section 65B (44) after the amendments brought about in the Act by virtue of Finance Act, 2012 – the said controversy is outside the scope of the present petitions and it would not be appropriate for us to examine it in these petitions [See Hindustan Polymers Co. Ltd. and Others v. Collector of Central Excise, Guntur: - 2002-TIOL-822-SC-CX.

Unquote :

It seems to me that, a composite agreement to sell a flat, when entered into before the completion of the flat, as are the facts that are applicable in this decision, would very much be a works contract, in terms of the decision of the Supreme Court in Larsen & Toubro v State of Karnataka and if this view had been accepted by the Delhi High Court, the decision could possibly have been different, inasmuch as, Rule 2A of the Service Tax (Determination of Value) Rules, 2006 would have become applicable, as the said Rule is applicable when VAT is paid or payable in terms of the VAT law, on a works contract. Once an agreement can be treated as a works contract under the VAT law, it should also be treated as a works contract under the service tax law. Therefore, in my view, the legal distinction between a composite agreement involving sale of an unfinished flat and a composite works contract involving development of and sale of a flat, is largely not that relevant, at least, insofar as the levy of VAT and service tax is concerned, in the light of the decision of the Supreme Court in Larsen & Toubro Ltd v State of Karnataka.

The impact of this decision would also be diluted in the post 1-7-2012 era inasmuch as the distinction between ‘construction of complex services’ and ‘works contract services’ has got blurred, due to the introduction of the negative list based service tax law. What can be subjected to tax is the ‘service element’ in the execution of a works contract, even when the benefit of the abatement notification No. 25/2012-ST dated 20-6-2012 is availed by the Builder.

Before concluding….

Most national newspapers have carried reports that the Delhi High Court has struck down the service tax levy on sale of flats. The heat is already being faced by Developers/Builders as many flat buyers are asking for service tax not to be charged (or worse… for service tax already collected, to be refunded).

While allowing the writ petitions, the High Court has ordered the Department to examine whether the builder has collected any amount as service tax from the Petitioners for taxable service as defined in Section 65(105)(zzzh) of the Finance Act, 1994 (as it then existed) and has deposited the same with the respondent authorities and if so to refund to the Petitioners with interest at the rate of 6% from the date of deposit till the date of refund. I would wonder if the Builder had availed of cenvat credit and remitted the balance service tax liability, as is very likely to be the case. This decision could create a lot of difficulties in these situations.

The Centre is bound to take this decision to the Supreme Court and might also ask for a stay of this decision.

Even otherwise, if the laws that are being framed are held fragile, it would not be long before we once again have retrospective legislations becoming the order of the day!

Centre plans to use unclaimed provident fund money to boost its flagship schemes : 13-06-2016


The government is considering using more than Rs 43,000 crore of unclaimed provident fund money to provide a fillip to its flagship schemes such as Swachh Bharat Abhiyan and Housing for All.

Officials said the idea is being firmed up at the government’s think tank NITI Aayog, which has been entrusted with not just monitoring but also implementation of key schemes so that the projects are not delayed due to insufficient fund flow. “We are looking into the proposition of taking a  loan from EPFO’s unclaimed kitty to partially pump money into some of our schemes,” asenior official of NITI Aayog told ETon condition of anonymity.

The proposal is still at a nascent stage and it is yet to be decided whether this would be in the form of a loan or bonds, the official said. The Employees’ Provident Fund Organisation recently committed itself to crediting interest into the unclaimed accounts with effect from this year, reversing the decision of the previous UPA government.

“We are open to the proposal of lending money to the Centre from the unclaimed PF amount provided we earn higher rate of interest on it,” a senior labour ministry official said, requesting not to be identified. “We have the flexibility of parking money anywhere, but it has to backed by some security because this is workers’ money which can be claimed at any time,” he said.

The EPFO has invested the provident fund corpus of more than.`7 lakh crore in government securities, bonds, debts and equity as per the investment pattern notified by the Centre from time to time. The Narendra Modi-led NDA government has set for itself robust targets, all of which will require large sums of money to be implemented in a time-bound manner. These include Rs 2 lakh crore for constructing 12 crore toilets across India by 2019 under Swachh Bharat Abhiyan and Rs 6 lakh crore to build 6 crore houses under Housing for All by 2022.

Since the government does not have enough funds at its disposal to run some of its biggest programmes, it is scouting for money from agencies including World Bank and other financial institutions.

Source : The Hindu

IRDA approves a slew of new products : 13-06-2016


Insurance regulator IRDA has ramped up new product clearances, signalling its commitment to improve life insurance penetration in the country.

New insurance product approvals grew 46 per cent in 2015-16 to 227 from 155 in previous fiscal, official data showed.

Although IRDA has been driving change in the insurance sector, the level of life insurance penetration has been low. The country’s life insurance penetration had dipped to 2.6 per cent in 2014-15 from 2.8 per cent in 2013-14.

IRDA has been working on several fronts to improve protection levels in the country.

First, the regulator made it mandatory for life insurance players to offer life cover, five times the annual premium and subsequently raised it to ten times. This was done so that consumers had access to products that assured a higher quantum of protection.

Second, IRDA ensured that new insurance products filed for approval were quickly approved.

Protection space

Commenting on the product approvals, Sandeep Batra, Executive Director, ICICI Prudential Life Insurance, said this is a reflection of insurers getting more simple and sharper products in the protection space.

A number of product approvals by the IRDA in recent times have been in the protection space, he said.

With the large protection gap and IRDA supporting higher protection for the Indian population there is still ample scope for growth, Batra told BusinessLine.

A major area of concern for the insurance regulator has been the ‘mortality protection gap’.

Mortality protection gap is the difference between the actual insurance cover required as against the current cover. The regulator has been making efforts to increase awareness on the importance of protection.

Falling premium rates

Another life insurance industry honcho pointed out that IRDA was willing to walk the extra mile in improving levels of protection. There is need to remove misconception that IRDA is not keen to give product approvals, the top official said.

An important factor that is aiding the improvement in protection is the fall in ‘premium rates’ in recent decade. “Product support has been there from IRDA. The regulator has been supporting the industry in terms of innovation it wants to do,” said another private life insurance player.

Source : PTI

Sebi to relax REIT, portfolio manager norms to woo investors : 13-06-2016


To deepen Indian capital markets, regulator Sebi has lined up wide-ranging relaxations to its norms for REITs while an easier set of compliance rules is in the works for foreign fund managers keen to relocate to India.

Among the changes, which would be considered by Sebi at its next board meeting scheduled for this week, the regulator is looking to make Real Estate Investment Trusts (REITs) more attractive to investors by allowing them to invest a large portion of funds in under-construction assets.

Besides, REITs would be allowed to have a larger number of sponsors, while regulations regarding the minimum public offer size and related party transactions could also be eased, a senior official said.

With regard to foreign fund managers willing to relocate to Indian shores, the Sebi board will consider allowing them to function as ‘Portfolio Managers’ under a simpler regulatory regime, a move that will make it easier for such entities to operate  in India.

Besides, an existing Sebi-registered Portfolio Manager will also be allowed to act as Eligible Fund Manager (EFM) with prior intimation from Sebi and subject to certain conditions.

The Securities and Exchange Board of India (Sebi) would also present its annual accounts for the fiscal 2015-16 before its board, which comprises of nominees from the government and RBI in addition to the whole-time and independent members.

Regarding REITs, Sebi plans to remove the restriction on the SPV (Special Purpose Vehicle) to invest in other SPVs holding the assets, which in turn would allow REITs to invest in a holding company owning stake in SPVs.

It is being proposed that the REIT would hold controlling interest and at least 50 per cent equity in the holding company. The holding company can in turn hold controlling interest and at least 50 per cent equity in underlying SPV.

Another proposed move is to allow the REITs to have up to five sponsors, as against the current norm for maximum three.

Sebi also plans to rationalise the requirements under the related party transactions, under which approval of 60 per cent unitholders apart from related parties, is required for passing a related party transaction.

Further, approval is required of 75 per cent unitholders, apart from related parties, for passing special resolutions such as change in investment manager,  investment strategy and delisting of units.

Another current provision requires that units offered to the public should be at least 25 per cent. This would be aligned with Sebi regulations about the public offer size of 25 per cent, or 10 per cent initially with an eventual raising of public holding to 25 per cent.

One of the major proposals relate to allowing REITs to invest up to 20 per cent in under-construction projects.

Existing regulations require at least 80 per cent of the value of REIT assets should be invested, in proportion to the holding of the REITs, in completed and rent-generating assets.

Source : Economic Times

India plans to levy 25% tax on sugar exports: Ram Vilas Paswan : 10-06-2016


India plans to impose a 25 per cent tax on sugar exports to maintain adequate supplies of the sweetener in the local market, food minister Ram Vilas Paswan tweeted on Thursday evening.

Source : PTI

GST final draft goes to state Finance Ministers’ Committee : 10-06-2016


A group of central and state government officials set up to frame the law for the proposed goods and services tax (GST) has submitted its final draft that could be taken up at a meeting of the empowered committee of state finance ministers next week.

“The final draft is done… The empowered committee can now take a call,” a government official privy to the development told et. The draft law may be made public after it’s deliberated by the empowered panel headed by West Bengal  finance minister Amit Mitra.

The government is expected to make a renewed push for the passage of the constitutional amendment bill to roll out GST in the upcoming monsoon session of Parliament, armed with more members in the Rajya Sabha and a broad-based national support for this reform.

The constitutional amendment will merely allow for this single tax, which is not possible under the current structure of taxation. At present states are not empowered constitutional to tax services and the central government cannot tax goods sold in retail.

The constitutional amendment will seek to change this, empowering both the states and centre to levy this tax. The Narendra Modi government has been seeking to persuade Congress to drop its resistance to GST and help get parliamentary approvals. GST seeks to replace central and state taxes such as excise duty, service tax, value-added tax, entry tax and octroi with a single levy and create a unified  national market.

Congress, which has more numbers in the upper house, has set four conditions for backing the Bill.

The main opposition party wants the rate to be capped at 18 per cent in the Constitution amendment bill itself and the 1 per cent levy on inter-state sales to be scrapped. It also wants an independent dispute settlement mechanism and voting power of threefourths for states in place of the two-thirds suggested.

The government is not inclined to impose a constitutional cap on the rate, which will make the tax rigid as it can then be only changed through a constitutional amendment.

In what could help get Congress on board, the GST law could have rates enshrined in it after the council decides on the tax rate. Tax-related decisions including exemption for a good or service or inclusion will also rest with the proposed council.

The government has already indicated that it is willing to drop the proposed up to 1 per cent tax on inter-states sales.

Source : Economic Times

Japan may seek WTO help to resolve India steel tariff dispute : 20-06-2016


Japan said it may ask the World Trade Organization (WTO) to help resolve a dispute related to India’s “safeguard” tariffs on the import of hot-rolled steel.

Prompted by massive steel exports from the China, the world’s top producer, countries including the United States and Australia as well as the European Union have imposed duties on steel imports. As the second-largest global steel producer, Japan’s own exports are potentially under pressure because of these protectionist stances.

India has extended its safeguard import taxes on some steel products until March 2018, in a bid to stop cheap overseas purchases from flooding its market and bolster the domestic steel sector.

Japan will make repeated requests to the Indian authorities to ensure the consistency of their measures with the WTO agreements, the Japanese Ministry of Economy, Trade and Industry (METI) said in its annual report on unfair trade on Wednesday.

The India safeguard tariffs were placed as one of the priority issues that the METI will be working on, said Osamu Nishiwaki, director of rules and dispute settlement at METI, on Thursday.

“We will step up our bilateral discussions with India over the safeguard measures,” he said.

Asked whether Japan may consider bringing the issue to the WTO soon, Nishiwaki said it will depend on the results of the bilateral talks.

Japan exported about 1.25 million tonnes of hot-rolled steel to India in 2015, or about 10 percent of its total hot-rolled exports of 13 million last year, according to the Japan Iron and Steel Federation.

Japan earlier criticized India’s tariffs and a decision to put minimum prices on imported iron and steel at a WTO meeting in April.

The METI report on Wednesday also identified Vietnam’s safeguard measures against semi-finished steel products and steel bars as policies that may not be consistent with international rules.

Vietnam began provisionally imposing additional tariffs of about 23 percent on semi-finished steel products and 14 percent on steel bars from March, the report said.

The global trade dispute over steel escalated last month after the U.S. slapped Chinese steelmakers with final import duties of 522 percent on cold-rolled flat steel.

Still, Chinese steel exports rose 3.7 percent to 9.42 million tonnes in May from the previous month, customs data showed on Wednesday, as mills continued to ship output abroad.

Source : Business Standard

F. No. 278A/21/2015-Legal – 9-6-2016


GOVERNMENT OF INDIA  MINISTRY OF FINANCE  DEPARTMENT OF REVENUE  CENTRAL BOARD OF EXCISE AND CUSTOMS  NEW DELHI

CIRCULAR NO 1031/19/2016-CX, Dated: June 14, 2016

Subject: Levy of excise duty on readymade garments and made articles of textiles bearing a brand name or sold under a brand name and having a retail sale price of Rs. 1000 or more – reg.

Representations have been received from the trade regarding the scope of the levy of excise duty on readymade garments and made articles of textiles bearing a brand name or sold under a brand name and having a retail sale price of Rs. 1000 or more in this year’s Budget.

2. The issue raised is whether excise duty would be chargeable on readymade garments or made up articles of textiles which are sold by a retail store which merely affixes the retail sale price on the readymade garments or made up articles of textiles which are purchased by such retail store from the open market.

3. The issue has been examined in the Ministry. The present levy is not on all readymade garments and made ups, and is restricted only to readymade garments and made up articles of textiles bearing a brand name or sold under a brand name and having retail sale price (RSP) of Rs. 1000 or above. Further, to avoid disputes and minimize duty evasion, it has also been provided that affixing a brand name on the product, labeling or relabeling of its containers or repacking from bulk packs to retail packs or the adoption of any other treatment to render the product marketable to the consumer, shall amount to manufacture.

3.1 For this purpose, “Brand name” means a brand name, whether registered or not, that is to say, a name or a mark, such as a symbol monogram, label, signature or invented words or any writing which is used in relation to a product, for the purpose of indicating, or so as to indicate, a connection in the course of trade between the product and some person using such name or mark with or without any indication of the identity of that person.

4. However, such retailer shall not be liable to pay excise duty if:

a) the retail sale price of such readymade garments or made up articles of textiles is less than Rs. 1000, or

b) the aggregate value of clearances for home consumption by such person is less than Rs. 1.5 crore in a year [provided aggregate value of clearances during previous financial year was less than Rs. 4 crore].

5. Further, merely because the outlets [shop] of a retailer, from where readymade garments or made ups are sold, has a name, say, M/s XYZ and Sons, the readymade garments or made ups sold from such outlet [shop] cannot be held as branded readymade garments or made ups and become liable to excise duty. Needless to say, deemed manufacture and liability to excise duty will arise only if such retailer affixes a brand name on the readymade garments and affixes a label bearing the RSP on the packages containing the readymade garments of Rs. 1000 or above.

6. Further, it is hereby directed that field formations shall not visit individual retail outlets or retail chains, except based on specific inputs regarding duty evasion and with the approval of the jurisdictional Commissioner or Additional Director General or above.

7. The above position may be brought to the notice of formations under your charge for strict compliance. Difficulties, if any, faced in the implementation of the instructions may be brought to the notice of the Ministry at an early date.

[F. No. 332/5/2016-TRU]

(Devi Prasad Misra)
Technical Officer (TRU)

75 – 9-6-2016


EXIM BANK’S GoI SUPPORTED LINE OF CREDIT OF USD 24.00 MILLION TO GOVERNMENT OF REPUBLIC OF COTE D’LVOIRE

CIRCULAR A.P. (DIR SERIES 2015-16) CIRCULAR NO.75DATED 9-6-2016

Export-Import Bank of India (Exim Bank) has entered into an Agreement dated September 22, 2015 with the Government of the Republic of Cote d’Ivoire for making available to the latter, a Government of India supported Line of Credit (LOC) of USD 24.00 million (USD Twenty Four million) for financing Electricity Interconnection Project between Cote d’Ivoire and Mali. The goods, machinery, equipment, and services including consultancy services from India for exports under this Agreement are those which are eligible for export under the Foreign Trade Policy of the Government of India and whose purchase may be agreed to be financed by the Exim Bank under this Agreement. Out of the total credit by Exim Bank under this Agreement, the goods and services including consultancy services of the value of at least 75% of the contract price shall be supplied by the seller from India and the remaining 25% goods and services may be procured by the seller for the purpose of the eligible contract from outside India.

2. The credit agreement under the LOC is effective from May 26, 2016. Under LOC, the last date for disbursement will be 60 months after the scheduled completion date of the project.

3. Shipments under the LOC will have to be declared on EDF/SDF Forms as per instructions issued by the Reserve Bank from time to time.

4. No agency commission is payable under the above LOC. However, if required, the exporter may use his own resources or utilize balances in his Exchange Earners’ Foreign Currency Account for payment of commission in free foreign exchange. Authorised Dealer Category-I (AD Category-I) banks may allow such remittance after realization of full payment of contract value subject to compliance with the prevailing instructions for payment of agency commission.

5. AD Category-I banks may bring the contents of this circular to the notice of their exporter constituents and advise them to obtain full details of the Line of Credit from the Exim Bank’s office at Centre One, Floor 21, World Trade Centre Complex, Cuffe Parade, Mumbai 400 005 or log on to www.eximbankindia.in.

6. The Directions contained in this circular have been issued under sections 10(4) and 11(1) of the Foreign Exchange Management Act (FEMA), 1999 (42 of 1999) and are without prejudice to permissions/approvals, if any, required under any other law.

 

 

Notification No : 9/2016 Dated: 9-6-2016


Simplification of procedure for Form No. 15G & 15H – Clarifications – 9/2016 – Dated 9-6-2016 – Income Tax

 

F. No. DGIT(S)/CPC(TDS)/DCIT/15GH /2016-17/4539

Government of India

Ministry of Finance

Central Board of Direct Taxes

Directorate of Income-tax (Systems)

New Delhi

Notification No. 9/2016

New Delhi, 9th  June, 2016

Subject: Simplification of procedure for Form No. 15G & 15H -  Clarifications- reg.

The existing provisions of section  197A of the Income-tax Act,  1961 (‘the Act’) inter alia provide that tax shall not be deducted, if the recipient of certain payment on which tax is deductible furnishes to the payer a self-declaration in Form No.15G/15H in accordance with provisions of the said section. The manner of filing such declarations and the particulars have been laid down in Rule 29C of the Income-tax Rules, 1962 (‘the Rules’) w.e.f  1.10.2015 videNotification No.76/2015 dated 29.09.2015.

2.  As per sub-rule (7) and (8) of rule 29C of the Rules notified vide aforesaid notification, the Principal Director General of Income-tax (Systems) is required to specify the procedures, formats and standards for the purposes of furnishing and verification of the declaration and allotment of unique identification number. In pursuance of the same, Principal Director General of Income-tax (Systems) has issued Notification No. 4/2015 dated 1st December, 2015 to notify the procedure, formats and standards.

3. Representations have been received for clarification on the following issues:

(a) Due date for quarterly uploading of 15G/H declarations by payers on e-filing portal,

(b) The manner for dealing with Form 15G/15H received by payer during the period from 1.10.2015 to 31.3.2016.

4. In this regard, it is hereby specified that:

a) The due date for quarterly furnishing of 15G/15H declarations received by the payer from 1.4.2016 onwards shall be as given below:

SI. No

Date of ending of the quarter of the financial year

Due Date

(1)

(2)

(3)

1.

30th  June 15th  July of the financial year

2.

30th  September 15th  October of the financial year

3.

31st  December 15th  January of the financial year

4.

31st March 30th  April of   the   financial  year immediately following the financial year in which declaration is made.

(b) The payer shall furnish 15G/15H declarations received during the period from 1.10.2015 to 31.3.2016 on e-filing portal (http://incometaxindiaefiling.gov.in) in the  given format on or before 30th June, 2016.

(S. Thuingaleng)

Dy. Commissioner of Income Tax(CPC-TDS)

O/o The Pr. Director General of Income-tax (Systems)

Arun Jaitley holds meet to review status of actions taken for NIIF operationalization : 09-06-2016


The second meeting of the Governing Council of National Investment and Infrastructure Fund (NIIF) was held under the chairmanship of Union Finance Minister Arun Jaitley today to review the status of actions taken for the operationalization of the NIIF and to provide the road map for further activities.

The council was apprised of the interactions that have been held with a large number of long-term investors, sovereign wealth funds, pension funds from across the globe, seeking to invest in the NIIF.

These include the discussions held during the India Investment Summit held earlier in February this year and during investment meetings led by the Finance Minister in Australia, United States and Japan.

They were informed of the follow-up action being taken for investments with some of these investors.

The progress of discussions to follow up on the MoUs with several investors such as ADIA from UAE, RUSNANO OJSC from Russia and Qatar Investment Authority, Qatar, were also placed before the members.

They also discussed the guidelines for investment of the corpus of NIIF including the Investment Policy.

The council was also apprised of the status of the various establishment activities of the NIIF since its last meeting held in December 2015.

These inter-alia included finalization of office spaces and other compliance activities.

It was also appraised of the refinement in the structure of NIIF carried out pursuant to discussions with the investors.

The NIIF would have various sector-specific or investor-specific close ended schemes (funds) and each fund may issue various classes of units.

The government along with other investors would subscribe to the units of various funds.

The members were informed that Financial Times (London) has adjudged NIIF as the Most Innovative structure in Asia Pacific under Finance category.

The status of projects shortlisted for initial investment by the NIIF and the selection process of Chief Executive Officer (CEO) of NIIF Ltd. were also placed before the council.

It was also informed that a core team has been put in place to carry-out the activities of the NIIF.

Source : Financial Express

Govt banks on new PSU norms for higher non-tax revenue : 09-06-2016


The Centre has released a new set of guidelines on capital restructuring of state-owned companies, which will make them more accountable on matters of dividends, buybacks and bonuses, and will help the government meet its non-tax revenue and capital receipts target for the year.

The guidelines, applicable from April 1, make it mandatory for all central public sector enterprises (CPSEs) to pay a minimum annual dividend of 30 per cent of profit after tax, or five per cent of net worth, whichever is higher. If they cannot, they will have to explain to the ministry concerned if they are constrained by capacity to borrow or if the free cash is being put into capital spending and infrastructure.

The guidelines also state that every CPSE with a net worth of at least Rs 2,000 crore, and cash and bank balance of Rs 1,000 crore will exercise the option of buyback of shares.

“It has been observed that CPSEs are not looking into merit-based capital restructuring, including the option of buyback of shares, if they do not have plans to deploy surplus funds optimally for business purposes,” the guidelines state.

There are strict timelines as well. If some companies are exempt from paying the full dividend, then they, through their respective ministries, have to submit their reports of exemption to secretary, department of investment and public asset management (Dipam), and secretary, economic affairs, before the end of the second quarter of a financial year.

Every CPSE has to consider the various parameters to buy back shares, in the first board meeting after the closure of a financial year.

“You, as a PSU, either spend more on formation of assets, or borrow more, or you maximise your investors’ interests by issuing dividends and buybacks,” said a government official.

The consolidated guidelines have been issued by Dipam. In earlier years, these were issued by the department of public enterprises and department of economic affairs.

The government is looking to earn dividends from CPSEs of Rs 53,883 crore in 2016-17, about 20 per cent higher than 2015-16 revised estimates. The total disinvestment target for the year is Rs 56,500 crore, of which Rs 36,000 crore is expected from minority stake sales and buybacks, with the rest from strategic sales. The CPSEs, which have already announced share buybacks include NMDC and MOIL, from which the Centre expects to get Rs 6,500 crore combined, and Coal India, from which the Centre hopes to garner Rs 6,000 crore.

For bonuses, every CPSE with defined reserves and surplus of 10 times or more of its paid-up equity share capital will have to issue bonus shares to shareholders.

Source : PTI

 

Experts want retrospective provisions out of GAAR : 09-06-2016


Ahead of the general anti-avoidance rules (GAAR) on tax kicking in from the next financial year, many feel the government should remove the retrospective provisions in the rules.

A proposed panel of officials that would be set up to decide applicability of GAAR might be used to harass honest taxpayers, said experts.

Although GAAR would be applicable prospectively from April 1, 2017, continued benefits arising out of transactions entered into prior to that would be denied the benefits, they said. GAAR is a set of rules designed to give Indian authorities the right to scrutinise and tax transactions they find are structured solely to avoid taxes. It also gives the tax department the power to override tax treaties. “As GAAR stands, continued benefits such as those of depreciation, interest claims arising out of transactions such as securitisation or sale/sale back, lease in/lease out entered into prior to the Rules coming into force, may be denied. To that extent there is a bit of retroactivity in the provisions,” said Rahul Garg, leader-direct tax, PwC. Another argument was related to the decision-making panel that would decide if GAAR provisions would be applied in a case. Experts said industry representatives or at least officials from theministry of commerce and industry should be part of the panel.

“One would have to keep in mind that even if an investment is made before March 31, 2017, but if certain events such as conversion of debentures to shares, bonus issue, etc, occur after that date, there could still be questions around applicability of GAAR in such cases,” said Rajesh H Gandhi of Deloitte. He added that determining what constitutes commercial substance remained another challenge as no objective tests have been laid down.

“Similarly there could be issues around protection from GAAR when specific anti-avoidance rules in the treaty are complied with, whether treaty benefits would be available on transactions reclassified under GAAR and TDS related penalties against payer if GAAR is invoked against recipient of income. Clarifications on these issues will be welcomed by taxpayers.”

The tax department has sought stakeholders’ feedback on provisions requiring clarity, ahead of the announcement of the guidelines for implementation. The last date for stakeholder to give feedback is June 30. The tax department has, however, asked stakeholders to refrain from giving references of “hypothetical situations”.

Experts also argued for an amendment to ensure that GAAR be implemented prospectively from April 1, 2017, instead of August 2010. India and Mauritius have amended their bilateral tax treaty, giving New Delhi the right to impose capital gains tax on investment in shares. While investments will be exempted till April 2017, 50 per cent of the tax rate, which is 7.5 per cent, would be imposed for two years on those qualifying the limitation of benefits (LOB) condition in Mauritius in the previous year. One of the criteria for LoB is that the company concerned should have invested Rs 27 lakh in the island nation.

Source : Business Standard

No. 22/2016 Dated: 8-6-2016


Amendment in Section 206C vide Finance Act 2016 – Clarifications – Circular – Dated 8-6-2016 – Income Tax

Circular No. 22/2016

F. No 370142/17/2016-TPL

Government of India

Ministry of Finance

Department of Revenue

Central Board of Direct Taxes

(TPL Division)

Dated 8th June 2016

Sub: Amendment in Section 206C vide Finance Act 2016 – Clarifications regarding

Section 206C of the Income-tax Act, 1961  (hereafter referred to as ‘Act’), prior to amendment by Finance Act, 2016, provided that the seller shall collect tax at source at specified rate from the buyer at the time of sale of specified items such as alcoholic liquor for human consumption, tender leaves, mineral being coal or lignite or iron ore etc. It also provided for collection of tax at source at the rate of one per cent on sale in cash of bullion exceeding 2 lakh rupees and jewellery exceeding 5 lakh rupees.

In order to reduce the cash transactions in sale of goods and services. Finance Act 2016 has expanded the scope of section 206C (1 D) to provide that the seller shall collect tax at the rate of one per cent from the purchaser on sale in cash of any goods (other than bullion and jewellery) or providing of any services (other than payment on which tax is deducted at source under Chapter XVII-B) exceeding two lakh rupees.  So far as sale of Jewellery and bullion is concerned, the provisions of sub-section (1D) of section 206C prior to its amendment by the Finance Act 2016 shall continue to apply. Further, with a view to bring high value transactions within the tax net, it has been provided in sub- section (1 F) of section 206C of the Act that the seller who receives consideration for sale of a motor vehicle exceeding ten lakh rupees, shall collect one per cent of the sale consideration as tax from the buyer. Any person who obtains in any sale. the goods of the nature specified in sub-section (I D) or (IF) of section 206C is a buyer. The seller for the purposes of collection of tax under section 206C shall be –

(i) A Central Government or a state Government,

(ii) Any local authority, or corporation or authority established under any Central, State or Provincial Act,

(iii) Any company, firm or cooperative society,

(iv) An individual or Hindu undivided family who is liable to audit as per provisions of section 44AB during the financial year immediately preceding the financial year in which the goods are sold or the services are provided.

The amendments brought in section 206C by Finance Act. 2016 are applicable form 1st June 2016.

In this regard a number of queries have been received about the scope of the provisions and the procedure to be followed. The board has considered the same and decided to clarify the points raised by issue of a circular in the form of questions and answers as follows:

Question 1: Whether tax collection at source (‘TCS’) at the rate of 1%  is on sale of Motor Vehicle  at  retail  level  or  also  on  sale  of motor  vehicles  by  manufacturers  to dealers/distributors.

Answer: To bring high value transactions within the tax net, section 206C of the Act has been  amended to provide that the seller shall collect the tax at the rate of one per cent from the purchaser on sale of motor vehicle of the value exceeding ten lakh rupees.  This is brought to cover all transactions of retail sales and accordingly it will not apply on sale of motor vehicles by manufacturers to dealers/distributors.

Question 2: Whether TCS at the rate of 1% is on sale of Motor Vehicle is applicable only to Luxury Cars?

Answer: No. As per sub section (1 F) of Section 206C of the Act the seller shall collect the tax at the rate of one per cent from the purchaser on sale of any motor vehicle of the value exceeding ten lakh rupees.

Question 3: Whether TCS at the rate of 1% is applicable in the case of sale to Government Departments. Embassies, Consulates and United Nation Institutions for sale of motor vehicle or any other goods or provision of services”

Answer:  Government.  institutions  notified  under  United  Nations  (  Privileges  and Immunities) Act 1947. and Embassies, Consulates. High Commission. Legation, Commission and trade representation of a foreign State and shall not be liable to levy of TCS at the rate of I% under sub-section (1 D) and (1 F) of section 206 C of the Act.

Question 4: Whether TCS is applicable on each sale of motor vehicle or on aggregate value of sale during the year?

Answer:  Tax is to be collected at source at the rate of 1% on sale consideration of a motor vehicle exceeding ten lakh rupees. It is applicable to each sale and not to aggregate value of sale made during the year. This can be explained by way of an illustration:

Illustration: Motor vehicle worth  20  lakh is sold and for which payments are made in instalments, one at the time of booking and the other at the time of delivery . At the time of booking 5 lakh rupees are paid and 15 lakh rupees are paid at the time of delivery. Tax at the rate of 1% on 5 lakh rupees  at the time of booking and at the rate of I % on remaining 15 lakh rupees at the time of delivery shall be collected at source.

Similar will be the position with regard to collection of tax at source under sub-section (1 D) of section 206C.

Question 5: whether TCS at the rate of 1% on sale of motor vehicle is applicable in case of an individual?

Answer:   The definition of “Seller” as given in clause (c) of the Explanation below sub-section (11) of section 206Cshall be applicable in the case of sale of motor vehicles also Accordingly, an individual who is liable to audit as per the provisions of section 44AB of the Act during the financial year immediately preceding the financial year in which the motor vehicle is sold shall be liable for collection of tax at source on sale of motor vehicle by him.

Question 6: How would the provisions of TCS on sale of motor vehicle be applicable in a case where part of the payment is made in cash and part is made by cheque?

Answer: The provisions of TCS on sale of motor vehicle exceeding ten lakh rupees is not dependent on mode of payment. Any sale of Motor Vehicle exceeding ten lakh would attract TCS at the rate of 1%.

Question 7:  As per section 206C(1 D) , tax is to be collected at source at the rate of 1% if sale consideration received in cash exceeds 2 lakh rupees whereas as per section 206C(1F) tax is to be collected at source at the rate of 1% of the sale consideration of a motor vehicle exceeding 10 lakh rupees . Whether TCS will be made under both sub-section(ID) and (IF) of the section 206C @ 2% where part of the payment for purchase of motor vehicle exceeds 2 lakh rupees in cash?

Answer: Sub-section (IF) of the section 206C of the Act provides for TCS at the rate of I% on sale of motor vehicle of value exceeding 10 lakh rupees. This is irrespective of the mode of payment. Thus if the value of motor vehicle is 20 lakh rupees, out of which 5 lakh rupees has been paid in cash and balance amount by way of cheque , the tax shall be collected at source at the rate of 1% on total sale consideration of 20 lakh rupees only under sub-section (IF) of section 206C of the Act. However, if a vehicle is sold for 8 lakh rupees and the consideration is paid in cash, tax shall be collected at source at the rate of 1% on  8 lakh rupees as per sub-section(I D) of section 206C of theAct.

Lakshmi Narayanan

Under Secretary TPL-III

 CBDT

Foreign banks, insurance firms keen to set up shop at GIFT City : 08-06-2016


At least five foreign banks, two Indian insurance companies and many other financial institutions have approached the state-promoted Gujarat International Fin-Tec City (GIFT) City to set up shop in the country’s first International Financial Services Centre (IFSC) being established here.

“Two of these foreign banks are in an advanced stage of discussions. Once they take a decision, they will approach Indian regulators, including the RBI, for a final approval. We expect some action in the next six months, by the time the Vibrant Gujarat Summit is held here in January 2017,” Ajay Pandey, Managing Director and Group CEO, GIFT City, told BusinessLine. He, however, declined to identify the foreign banks at this stage.

On the reasons for an increasing interest evinced by Indian and international financial institutions at GIFT-IFSC, he said, besides being early birds to derive the benefits of being in an emerging global business centre, some of these entities will also save 25-30 per cent in their operational costs, have lower compliance costs, enjoy the best infrastructure in India and a favourable cultural milieu.

The IFSC’s business transaction mark, which was over $100 million in February 2016, is expected to cross the $1-billion mark in the next few weeks.

The banks that have started operations at GIFT IFSC include ICICI Bank, IDBI Bank, YES Bank, Federal Bank and Kotak Bank. India’s largest lender SBI and IndusInd Bank are also expected to start their operations soon. Last week, Singapore International Arbitration Centre (SIAC) signed an agreement for a presence at GIFT-IFSC. Edelweiss and JM Financial have also evinced “substantial” interest, besides a slew of IT players with overseas business interests.

Pandey said New India Assurance and General Insurance Company are also likely to set up operations soon. Stock exchanges with whom MoUs have been signed by GIFT for IFSC operations include BSE, NSE and MCX.

At present, five office towers are coming up at GIFT SEZ. The Hiranandani Group’s tower will be ready by January 2017 where major financial players would move their offices. Besides, Bengaluru’s Brigade Group’s two towers will be ready in the next two years and Ahmedabad’s Savvy Group’s tower will follow. SBI, which will move in its Local Head Office in a 2.20-lakh sq ft area, and Reliance Capital will construct its own towers.

Source : Business Standard

Start-ups writing a new chapter in publishing : 08-06-2016


You might be a housewife trying to publish your first cookbook or a professor looking to print your work. Unlike earlier days, you needn’t wait for your agent to return your call or worry about rejections, for self-publishing platforms are on the rise.

Start-ups such as Notion Press, Pothi.com, Partridge Publishing and CinnamonTeal help not only first-time writers, but also professionals. These start-ups partner with e-commerce platforms and print books only when a customer places an order. It is a win-win situation as books are printed based only on demand, eliminating the need to maintain a warehouse.

Eliminating risk

For authors like Venkat Kumar, who had been trying to publish his short-story collection for two years, the platforms are a boon. “These platforms make it easier to publish books and have a faster turnaround time. If I want to publish by on my own, it will cost over a lakh rupees and entails risk,” Kumar said.

Professionals such as teachers, technocrats and businessmen cash in on these platforms as they understand its utility. Professor Shobana S says self-publishing alleviates the concern of marketing. “I’m working on a book on organic chemistry. Though buyers are limited, I’m not shelling out more in terms of investment and hence they are appealing,” she said.

Jaya Jha, co-founder, Pothi.com says, “The major advantage is, there is no need for a warehouse.” These platforms are driven by wide customer reach and the high comfort level in buying books online. “Most of our authors are from India. But foreign authors too are finding this medium easy to use, considering the high costs of imported editions. We have authors from the US, Australia and European countries,” she adds.

Hurdles ahead

But it is not all rosy as there are hurdles ahead. A major one is the logistics cost as books are not printed in bulk. Sometimes, the cost of shipping is more than the cost of printing. “We need to continuously evaluate our process to bring the cost down,” says Jha.

“We are relying on a completely digital process. E-commerce platforms keep changing the rules for listing products. We have to catch up with them, otherwise we stand the chance of losing to competitors.” The company prints 100 titles per month and have 4,000 titles to its credit. The customer does not have to invest in anything and the company shares the profit with the author.

To keep ahead of the curve, these companies are innovating. Pothi.com has introduced InstaScribe exclusively for publishing e-books. Through this platform, a customer can create an e-book specifically for Kindle, Macbook or Nook. “Right now, it is available for free as we are testing the market. We are working out the details for making it a paid product,” Jha said.

Naveen Valsakumar, co-founder, Notion Press, said, “We need to constantly innovate and keep up with the trends. So we are concentrating on mobile platforms.” With the advent of Kindle and Kindle app the number of people using mobile devices for accessing books has increased. “We are creating books as apps to cater to this crowd.”

For example, the company is now developing a cookbook as an interactive mobile app. Rather than going by recipes, it suggests a suitable recipe as and when the user inputs the ingredients. “This kind of an app will not work with all books. So we are trying to talk with authors and recommend them only when applicable,” Valsakumar said.

Source : PTI

RBI may supply dollars during FCNR redemption : 08-06-2016


The Reserve Bank of India may step in to supply dollars in case of extreme volatlity once a concessional swap facility for non-residents starts to mature in coming months, RBI Governor Raghuram Rajan said on Tuesday, though he warned markets not to be complacent.

Rajan said the outflow from the concessional swap facility to get foreign currency non-resident (bank), or FCNR (B) deposits could be $20 billion.

The RBI governor reiterated the central bank’s commitment t to supply short-term funds into the banking system and said the transmission of policy rate cuts remains a work in progress.

Earlier today, the RBI left its key policy rates unchanged, while cautiously signalling it could cut later this year if monsoon rains, and other factors, dampen upward pressure on food prices.

Source : Economic Times

Central govt staff to go on strike from July 11 : 07-06-2016


About 32 lakh Central Government employees including railways, defence and postal department have decided to go on indefinite strike from July 11, for which they will serve strike notices to their respective departments on June 9.

This has been decided by the Joint Action Committee (NJAC), according to a statement. Shivagopal Mishra, Convenor of NJAC, stated that there has been no action on the Seventh Pay Commission report, six months after its submission. The charter of demands calls for settling issues related to recommendations of the Seventh Pay Commission implementation sent to the Cabinet Secretary on December 10, 2015.

“Remove injustice done in the assignment of pay scales to technical/safety categories in railways, defence and different categories in all Central government establishments,” NJAC has demanded. It has also called for scrapping of PFRDA Act and the new defined contribution pension scheme – National Pension Scheme – and restoring defined benefit schemes of pension/family pension rules. Since 2004, all Central government employees — except defence personnel, who are covered in defined benefit pension scheme – have been shifted to defined contribution scheme.

NJAC is a joint body of federations and unions representing 32 lakh employees in Central government departments, including postal, railway and defence workers. Indian Railways is the largest government employer with 13 lakh employees.

Earlier this year, in February, almost 95 per cent of 9.69 lakh railway employees had voted in favour of an indefinite strike from April 11, which was deferred after the Cabinet Secretary requested the NJAC to do in the backdrop of the then-forthcoming-elections in Tamil Nadu, West Bengal, Assam and Kerala.

Source : Business Standard

Indirect tax row needs resolution : 07-06-2016


In his Budget speech, the finance minister had said, “Litigation is a scourge for a tax-friendly regime and creates an environment of distrust, in addition to increasing the compliance cost on taxpayers and administrative cost for the government. There are about 300,000 tax cases pending with the 1st Appellate Authority, the disputed amount being Rs 5.5 lakh crore. To reduce this number, I propose a new Dispute Resolution Scheme.”

Accordingly, Chapter XI of the Finance Bill proposed anIndirect Tax Dispute Resolution Scheme, taking effect on June 1.

The ministry notified the necessary Rules, prescribing the forms and procedures; the Central Board of Excise and Customs (CBEC) has issued the necessary instructions for implementation.

The scheme is applicable for all orders in respect of any of the provisions of the Customs Act, Central Excise Act or Chapter V of the Finance Act, 1994 (dealing with service tax), which were under challenge before the commissioner (appeals) as on March 1, 2016.

The Scheme is not available if the order was in respect of search and seizure proceedings or narcotic drugs or other prohibited goods or for any offence punishable under the Indian Penal Code, the Narcotic Drugs and Psychotropic Substances Act or the Prevention of Corruption Act. Or where prosecution for a punishable offence has been instituted or a detention order passed under the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act.

Under the Scheme, any person can make a declaration to the designated authority before end-December this year, in the prescribed format, giving details of the dispute. A dated acknowledgment will be had within a week.

The declarant should send the copy of declaration and acknowledgement to the commissioner (appeals) in question within 15 days, to enable the latter to suspend the appeal proceedings for 60 days.

The declarant should pay the tax due, with interest, at the prescribed rate; plus an amount equivalent to 25 per cent of the penalty imposed in the original order within 15 days of the acknowledgement. He should intimate the designated authority in the prescribed form within seven days of making such payment.

On getting the proof of payment of tax, interest and reduced penalty, the designated authority must, within 15 days of the receipt of such proof, pass an order of discharge of the dues in the form and manner prescribed. The declarant should send the discharge order to the commissioner (appeals) before the expiry period for suspension of proceedings.

The latter must, within the next seven days, remove the appeal from the list of pending ones with him and intimate the declarant. Thus, the appeal would stand disposed and the declarant shall get immunity from all proceedings under the Act in respect of the indirect tax dispute for which the declaration has been made. CBEC has asked the commissioners to specify any officer not below the rank of assistant commissioner as the designated authority.

The Scheme gives a chance to those who do not expect to succeed in these legal forums to opt for escape.

Source : Economic Times

F. No. 221/01/2016-CX.6 – 6-6-2016


F.No.221/01/2016-CX.6 

GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF REVENUE CENTRAL BOARD OF EXCISE AND CUSTOMS NEW DELHI

Dated: June 6, 2016

INSTRUCTION

Sub: Instructions on Information returns to be furnished under Notification No. 4/2016-ST dated 15.02.2016 – reg.

Attention is invited to Notification No. 4/2016-ST dated 15.2.2016 by which the ‘Service Tax and Central Excise (Furnishing of Annual Information Return) Rules, 2016′ has been notified.

2. As per Rule 3 of said Rules, a State Electricity Board or an electricity distribution or transmission licensee under the Electricity Act 2003, or any other entity entrusted with such functions by the Central Government or State Government, who is duly authorised by such State Electricity Board or an electricity distribution or transmission licensee or other entity(hereinafter referred to as ‘State Electricity Agency’), as the case may be, shall furnish information return electronically under sub-section (I) of Section 15A of the Central Excise Act, 1944, with regard to certain class of assesses in the form prescribed as Form AIRF along with the Annexure to the said Form (AIRA-II).

3. It may be noted that the said Rules require the Principal Chief Commissioner or the Chief Commissioner of Central Excise and Service Tax in-charge of the Central Excise or Service Tax Zone to identify and intimate the State Electricity Agency, information of such manufacturers, who are using an induction furnace or rolling mill to manufacture goods falling under Section XV of the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), whose aggregate value of clearances exceeds one hundred and fifty lakh rupees in the financial year to which the return pertains.

4. In this regard, to maintain uniformity of practice the following procedure is hereby prescribed:-

i. The Principal Chief Commissioner or the Chief Commissioner of Central Excise and Service Tax in-charge of the Central Excise or Service Tax Zone shall nominate an officer to liaison with the officials of the Stale Electricity Agencies to apprise them of the compliance required under the Service Tax and Central Excise (Furnishing of Annual Information Return) Rules, 2016.

ii. It may be conveyed to the State Electricity Agencies that as required under the said rules, an officer is required to be duly authorised by such State Electricity Agency to furnish information return in the format prescribed in the said rules. The procedure for furnishing such return may also he conveyed for ease of compliance.

iii. The Principal Chief Commissioner or the Chief Commissioner of Central Excise and Service Tax shall identify and intimate to such authorised officer, information pertaining to such manufacturers who are using an induction furnace or rolling mill to manufacture goods falling under Section XV of the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) whose aggregate value of clearances exceeds one hundred and fifty lakh rupees in the financial year to which the return pertains, by the 30th June of the subsequent financial year.

iv. It may also be noted that till such time the formats for electronic filing of return is not finalised, such returns may be received in a computer readable media (Compact Disc-Read Only Memory (CD-ROM) or a Digital Video Disc (DVD).

5. After receipt of the data, responsibility of its analysis, dissemination to the field formations and monitoring of the action taken, shall rest with the Principal Chief Commissioner / Chief Commissioner of Central Excise and Service Tax.

6. It may also be noted that after receipt and preliminary analysis of the data, Chief Commissioners shall forward detailed views on the format in which data should be collected along with suggestions of checks and verification.

7. Difficulty experienced, if any, in implementing the instruction should be brought to the notice of the Board.

(Shankar Prasad Sarma)
Under Secretary to the Government of India

Notification No : 34/2016 Dated: 6-6-2016


Seeks to amend notification No. 30/2012-Service Tax dated 20th June, 2012, so as to prescribe extent of payment of service tax by a business entity as a recipient of services provided by senior advocates – 34/2016 – Dated 6-6-2016 – Service Tax

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

(DEPARTMENT OF REVENUE)

NOTIFICATION No. 34/2016-Service Tax

New Delhi, the 6th June, 2016

G.S.R.____(E).- In exercise of the powers conferred by sub-section (2) of section 68 of the Finance Act, 1994 (32 of 1994), the Central Government hereby makes the following further amendments in the notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 30/2012-Service Tax, dated the 20thJune, 2012, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 472 (E), dated the 20thJune, 2012, namely:-

1. In the said notification,-

(a) in paragraph I, in clause (A),-

(i) in sub-clause (iv), for item (B), the following item shall be substituted, namely:-

“(B) an individual advocate or a firm of advocates by way of legal services other than representational services by senior advocates, or”;

(ii) for sub-clause (iva), the following sub-clauses shall be substituted, namely:-

“(iva) provided or agreed to be provided by a senior advocate by way of representational services before any court, tribunal or authority, directly or indirectly, to any business entity located in the taxable territory, including where contract for provision of such service has been entered through another advocate or a firm of advocates, and the senior advocate is providing such services, to such business entity who is litigant, applicant, or petitioner, as the case may be”;

(ivb) provided or agreed to be provided by a director of a company or a body corporate to the said company or the body corporate;”

(b) in paragraph (II):-

(i) in the TABLE, against Sl. No. 5, for the entry under column (2), the following entry shall be substituted, namely:-

“in respect of services provided or agreed to be provided by an individual advocate or firm of advocates by way of legal services, directly or indirectly”;

(ii) after Explanation II., the following shall be inserted, namely:-

“Explanation III. – The business entity located in the taxable territory who is litigant, applicant or petitioner, as the case may be, shall be treated as the person who receives the legal services for the purpose of this notification.”.

[F.No. B-1/7/2016-TRU]

(Anurag Sehgal)

Under Secretary

Note:-The principal notification was published in the Gazette of India, Extraordinary, vide  notification No. 30/2012 – Service Tax, dated the 20thJune, 2012, vide number G.S.R. 472 (E), dated the 20thJune, 2012 and last amended vide notification No. 18/2016-Service Tax, dated the 1st March, 2016 vide number G.S.R. 266, dated the 1st March, 2016.

Notification No : 33/2016 Dated: 6-6-2016


Seeks to amend Service Tax Rules, 1994 so as to specify the business entity as the person liable to service tax in respect of services provided by senior advocates – 33/2016 – Dated 6-6-2016 – Service Tax

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

(DEPARTMENT OF REVENUE)

NOTIFICATION No. 33/2016-Service Tax

New Delhi, the 6th June, 2016

G.S.R.____(E).-In exercise of the powers conferred by sub-section (1) read with subsection (2) of section 94 of theFinance Act, 1994 (32 of 1994), the Central Government hereby makes the following rules further to amend theService Tax Rules, 1994, namely:-

1. These rules may be called the Service Tax (Fourth Amendment) Rules, 2016.

2. In the Service Tax Rules, 1994, in rule 2, in sub-rule (1), in clause (d), in sub-clause(i),-

(a) in item (D), for sub-item (II), the following sub-item shall be substituted, namely:-

“(II) an individual advocate or a firm of advocates by way of legal services other than representational services by senior advocates;”

(b) after item (D), the following item shall be inserted, namely:-

“(DD) in relation to service provided or agreed to be provided by a senior advocate by way of representational services before any court, tribunal or authority, directly or indirectly, to any business entity located in the taxable territory, including where contract for provision of such service has been entered through another advocate or a firm of advocates, and the senior advocate is providing such services, the recipient of such services, which is the business entity who is litigant, applicant, or petitioner, as the case may be”.

[F. No. B-1/7/2016-TRU]

(Anurag Sehgal)

Under Secretary

Note:- The principal rules were published in the Gazette of India, Extraordinary, Part II, Section-3, Sub-section (i) by notification No. 2/94-Service Tax, dated the 28th June, 1994 vide number G.S.R. 546 (E), dated the 28th June, 1994 and last amended vide notification No. 31/2016-Service Tax, dated the 26th May, 2016 vide number G.S.R. 554(E), dated the 26th May, 2016.

Notification No : 32/2016 Dated: 6-6-2016


Seeks to amend notification No. 25/2012 – Service Tax, dated the 20th June, 2012, so as to exempt the legal services provided by senior advocates to a business entity with a turnover up to rupees ten lakh in the preceding financial year – 32/2016 – Dated 6-6-2016 – Service Tax

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

(DEPARTMENT OF REVENUE)

NOTIFICATION No. 32/2016-Service Tax

New Delhi, the 6th June, 2016

G.S.R.….(E).-In exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994), the Central Government being satisfied that it is necessary in the public interest so to do, hereby makes the following further amendments in the notification of the Government of India in the Ministry of Finance (Department of Revenue) No.25/2012-Service Tax, dated the 20thJune, 2012, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 467 (E), dated the 20thJune, 2012, namely:-

1. In the said notification, in the first paragraph, in entry 6, for clause (c), the following clause shall be substituted, namely:-

“(c) a senior advocate by way of legal services to-

(i) any person other than a business entity; or

(ii) a business entity with a turnover up to rupees ten lakh in the preceding

financial year;”.

[F. No. B-1/7/2016-TRU]

(Anurag Sehgal)

Under Secretary

Note:-The principal notification was published in the Gazette of India, Extraordinary, vide notification No. 25/2012 – Service Tax, dated the 20th June, 2012, vide number G.S.R. 467 (E), dated the 20th June, 2012 and last amended vide notification number 26/2016 – Service Tax, dated the 20th May, 2016 vide number G.S.R. 538, dated the 20thMay, 2016.

Directorate of Revenue Intelligence may be authorised to probe export frauds in SEZs : 06-06-2016


The Directorate of Revenue Intelligence may soon be authorised to probe export-import frauds in Special Economic Zones.

At a recent meeting of intelligence agencies, the DRI raised the issue of misuse of SEZ units to commit import and export frauds worth crores of rupees and suggested empowering a central agency to probe such offences.

Various SEZ units are under the scanner of intelligence agencies for alleged misuse of incentives and grants for committing such fraud, official sources said.

The Directorate General of Foreign Trade ( DGFT ) has received a “self-contained proposal” from Directorate General of Export Promotion regarding operationalisation of relevant provisions of the Special Economic Zones Act, 2015 dealing with notification of offences, enforcement authorities and modalities thereof, the sources said.

At a recent meeting of Economic Intelligence Council headed by Finance Minister Arun Jaitley, the DGFT has been asked to examine the proposal and “issue appropriate notifications to enable officers to investigate offences”, they said.

Sources said it has been decided to authorise a central agency to probe offences in the Special Economic Zones, which are designated areas created for promotion of exports and to attract foreign investment, among others.

The SEZs get special incentives and tax benefits including exemption from sales tax and service tax.

According to the latest Commerce Ministry data, there are 330 notified SEZs across the country. The export by these units in 2015-16 stood at Rs 3,41,685 crore.

“There are reports that some people are misusing SEZs for committing import and export fraud. The agencies are facing problem in the absence of relevant provisions to check such activities,” a source said.

He said the government is considering authorising officers of the DRI, the lead agency under the Finance Ministry to check customs duty fraud, to take action in cases of misuse of SEZ units to commit fraud.

Various central government departments are adopting a coordinated approach to check cases of tax evasion, black money and fraud.

As much as Rs 50,000 crore of evasion in indirect tax — comprising service tax, excise and customs duty — has been unearthed by the government agencies in the last two years.

 

Source : Business Standard

Anti-dumping duty imposed on import of chemical from US, China : 06-06-2016


Anti-dumping duty of $0.277- 0.404 per kilogram has been imposed on a compound, used in the pharmaceutical industry, imported from the us and China to protect domestic makers from cheap shipments.

The Central Board of Excise and Customs ( CBEC ) has imposed definitive anti-dumping on import of Methyl Acetoacetate from the two countries for five years.

The duty has been slapped following recommendation by the Directorate General of Anti-dumping and  Allied Duties ( DGAD ).

The DGAD, after an investigation into the imports, said in its final findings that the chemical has been exported to India from the two countries below normal values and the domestic industry has suffered material injury .

“The material injury has been caused by the dumped imports of subject goods from the subject countries,” it said, while recommending the levy on imports of the chemical “in order to remove injury to the domestic industry.”

In January last year, DGAD had initiated a probe to ascertain if the chemical was being dumped in the country. The probe followed a petition by Laxmi Organic Industries.

In January last year, DGAD had initiated a probe to ascertain if the chemical was being dumped in the country. The probe followed a petition by Laxmi Organic Industries.

Methyl Acetoacetate is used in industries like pharmaceuticals, agrochemicals and polymers, among others.

Source : PTI

Cyprus says ‘very close’ to revising tax treaty with India : 06-06-2016


In a step forward, Cyprus has said it is “very close” to revising the bilateral tax treaty with India as the island nation has accepted “in principle” proposals made by the Indian side on taxing capital gains.

Cyprus, a source of significant foreign fund flows into the country, said rising importance of India, both as the “largest emerging economy and a major security player in the new geopolitical chess game, necessitated a serious re-appraisal and upgrading of the bilateral  relationship”.

As part of larger efforts to curb illicit fund flows, Indian government has been working on revising tax treaties with various countries, including Cyprus and Singapore. Last month, India announced revising taxation agreement with Mauritius — a major source of FDI — that would allow levy of capital gains tax on investments coming from that nation.

“Cyprus and India are very close to concluding a revised Double Taxation Agreement. The Cyprus authorities have expressed their readiness to the Indian authorities to finalise the revised agreement.

“After final and formal approval by both sides, the new agreement will be ready for finalisation, signing and entry into force,” a Cyprus government official told PTI.

Responding to a query on whether both sides have been able to resolve pending issues related to taxation, the official said, the Cyprus authorities have accepted the main proposals submitted by the Indian side, as an indication of good faith.

“The few pending issues, including on source-based taxation of capital gains from alienation of shares, have been accepted by both sides, in principle. Therefore, they are expected to be formally agreed upon soon,” the Cyprus foreign ministry  official said in e-mailed responses.

Source : Economic Times

Infra projects: RBI eases refinancing norms for NBFCs : 03-06-2016


To encourage infrastructure financing, RBI today eased norms for NBFCs to refinance such projects and provide longer repayment tenures.

“NBFCs may refinance any existing infrastructure and other project loans by way of take-out financing, without a pre-determined agreement with other lenders, and fix a longer repayment period, the same would not be considered as restructuring if… Such loans should be ‘standard’ in the books of the existing lenders and should have not been restructured in the past,” RBI said in a notification.

Another condition is that such loans should be substantially taken over from the existing financing lenders. Also, the repayment period should be fixed by taking into account the life cycle of the project and cash flows from the project.

In cases where the aggregate exposure of all institutional lenders is minimum Rs 1,000 crore, the refinancing by NBFCs will not be considered as restructuring in the books of the existing as well as taking over lenders if the project has started commercial operation after achieving Date of Commencement of Commercial Operation (DCCO).

Further, a lender who has extended only working capital finance for a “project may be treated as a ‘new lender’ for taking over part of the project term loan as required under the guidelines”.

The provisions are already applicable for banks.

Source : Business Standard

Competition Commission gives green signal to five deals : 03-06-2016


New Delhi, Jun 2 () Competition Commission today said it has cleared five merger and acquisition transactions, including the Edelweiss’ purchase of mutual fund business of JP Morgan in India.

The watchdog keeps a tab on unfair business practices across sectors and deals beyond a certain threshold requiring its approval.

Competition Commission of India (CCI) has approved five deals, according to five separate tweets by the regulator.

Edelweiss’ purchase of JP Morgan’s Indian mutual fund business, Yokohama Rubber’s acquisition off-highway-tyre manufacturer Alliance Tire Group (ATG), and AkzoNobel buying industrial coatings business of BASF SE are among the deals that have received green signal from CCI.

Two other transactions are the merger of Dr Wolfgang Porsche Holding GmbH andFerdinand Porsche Familien-Holding GmbH, and acquisition of Lanxess India pigment dispersion business by Clariant Chemical (India).

In January, CCI streamlined rules and procedures for filings pertaining to merger and acquisitions.

The regulator had amended the combination regulations for the fifth time to make it more user friendly, amid concerns expressed in certain quarters about some existing requirements.

From omitting certain requirements to simplifying existing norms, a slew of changes were effected by way of the amendment.

Among others, CCI has started giving an opportunity to the parties concerned before deciding on invalidating a notice. It has powers to reject an application if it is found to be incomplete.

Besides, acquisition of less than ten per cent of the total shares or voting rights of an enterprise should be treated as solely an investment subject to certain conditions. PRJ RAM ANU

Source : Times of India

Public sector banks delay plans to raise capital : 03-06-2016


(PSBs), which are starved for equity capital, are refusing to tap the markets to raise funds, despite having all the necessary approvals in place. State Bank of India (SBI), Bank of India, United Bank, Oriental Bank of Commerce, Union Bank and IDBI Bank have had the permissions for more than a year or more but they have refrained from raising capital via the qualified institutional placement (QIP) route.

Arun Tiwari, chairman and managing director of Union Bank, points out that even though they have the approvals to raise Rs 1,386 crore via QIP, they haven’t done it as yet because they do not need the funds now. “The credit growth in the system has been low and the areas that we are growing in don’t require as much capital. Therefore, the need for capital-raising hasn’t come yet,” he said.

The credit growth in the banking system has been in the range of 8.5-11 per cent for almost two financial years now. And the PSBs, excluding SBI, seem to be the worst affected. According to Reserve Bank of India data, during the January-March quarter, bank credit of PSBs — excluding SBI and its associates — grew by a mere 1.4 per cent, compared with 7.8 per cent in the corresponding period in FY15.

Another reason, experts point out, which is stopping the lenders from approaching the market is the stress on the balance sheet, which may deter potential investors. In fact in the last one year, the quantum of bad loans on the book of PSBs has close to doubled, with the tally of bad loans for the listed PSBs (including SBI & associates) at Rs 5.81 lakh crore at the end of March 2016, compared with about Rs 3 lakh crore at the end of March 2015.

Bankers also admit that all this combined with the volatility in the market has also deterred them from entering the capital markets.

Rama Rao, executive director, Vijaya Bank, explained that the present share value of the bank is at a discount to its book value and therefore it may not be lucrative to raise capital now. “It will make sense to tap the market when the price improves. The bank may look at raising equity capital from market at the end of the financial year,” he said.

Also, recently with the banking regulator allowing banks to include certain items such as property value, foreign exchange for calculation of its Tier-I capital, lenders may find them on a slightly stronger footing as far as capital base is concerned.

Source : Economic Times

Notification No: 44/2016 Dated: 2-6-2016


Corrigendum – Notification Number 33/2016, dated the 19th May, 2016 – 44/2016 – Dated 2-6-2016 – Income Tax

 

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

(DEPARTMENT OF REVENUE)

Notification No.44/2016

THE INCOME DECLARATION SCHEME, 2016

CORRIGENDUM

New Delhi, the 02nd June, 2016

S.O. 1950(E). –  In the notification of the Government of India, Ministry of Finance, Department of Revenue (Central Board of Direct Taxes), number 33/2016, dated the 19th May, 2016, published vide number S.O. 1831(E), dated the 19th May, 2016, in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (ii), at page 21, in line 12, for “rule 4” read “rule 3(2)”.

[F. No.142/8/2016-TPL]

(Dr. T.S. Mapwal)

Under Secretary to the Government of India

Notification No : 43/2016 Dated: 2-6-2016


Income tax (14th Amendment) Rules, 2016 – 43/2016 – Dated 2-6-2016 – Income Tax

 

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

DEPARTMENT OF REVENUE

CENTRAL BOARD OF DIRECT TAXES

NOTIFICATION NO. 43/2016

New Delhi, the 02nd  June, 2016

S.O. 1949(E)- In exercise of the powers conferred by section 295 read with sub-section (2) of section 14A of theIncome-tax Act, 1961 (43 of 1961), the Central Government hereby makes the following rules further to amend theIncome-tax Rules, 1962, namely:-

1.   (1) These rules may be called the Income–tax (14th Amendment) Rules, 2016.

(2) They shall come into force on the date of their publication in the Official Gazette.

2. In the Income-tax Rules 1962, in rule 8D,-

(I) for sub-rule (2), the following sub-rule shall be substituted, namely:- “(2) The expenditure in relation to income which does not form part of the total income shall be the aggregate of following amounts, namely:- (i) the amount of expenditure directly relating to income which does not form part of total income; and

(ii) an amount equal to one per cent of the annual average of the monthly averages of the opening and closing balances of the value of investment, income from which does not or shall not form part of total income:

Provided that the amount referred to in clause (i) and clause (ii) shall not exceed the total expenditure claimed by the assessee.”;

(II) sub-rule (3) shall be omitted.

 [F.No. 370142/7/2016-TPL]

(Dr. T.S. Mapwal)

Under Secretary to Government of India

Note:- The principal rules were published vide Notification S.O. 969 (E), dated 26th March, 1962 and last amended by Income-tax (13th Amendment) Rules, 2016 vide Notification S.O.1923(E), dated 31.05.2016.

Notification No: 42/2016 Dated: 2-6-2016


Cost Inflation Index for Financial Year notified as 1125 – Amendments in Notification Number S.O. 709(E), dated the 20th August, 1998 – 42/2016 – Dated 2-6-2016 – Income Tax

MINISTRY OF FINANCE

(Department of Revenue)

(CENTRAL BOARD OF DIRECT TAXES)

NOTIFICATION NO. 42/2016

New Delhi, the 2nd June, 2016

INCOME-TAX

S.O.1948(E).-In exercise of the powers conferred by clause (v) of the Explanation to section 48 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby makes the following further amendments in the notification of the Government of India, in the Ministry of Finance (Department of Revenue), Central Board of Direct Taxes, published in the Gazette of India, Extraordinary, vide number S.O. 709(E), dated the 20th August, 1998, namely:-

2. In the said notification, in the Table, after serial number 35 and the entries relating thereto, the following serial number and entries shall be inserted, namely:-

Sl. No.

Financial Year

Cost Inflation Index

(1)

(2)

(3)

“36

2016-17

1125”.

[F.No.142/5/2016-TPL]

PRAVIN RAWAL, Director

Note:- The principal notification was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section(ii), vide number S.O.709(E), dated the 20th August, 1998 and last amended vide number S.O.2031(E), dated the 24th July,2015.

Notification No : 41/2016 Dated: 2-6-2016


Section 10(46) of the Income-tax Act, 1961 Central Government notifies Uttar Pradesh State AIDS Control Society a body constituted by the Government of Uttar Pradesh in respect of the following specified income arising to that Society – 41/2016 – Dated 2-6-2016 – Income Tax

 

MINISTRY OF FINANCE

(Department of Revenue)

(CENTRAL BOARD OF DIRECT TAXES)

NOTIFICATION 41/2016

New Delhi, the 2nd June, 2016

S.O. 1945(E).-In exercise of the powers conferred by clause (46) of section 10 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby notifies for the purposes of the said clause, the Uttar Pradesh State AIDS Control Society, a body constituted by the Government of Uttar Pradesh, in respect of the following specified income arising to that Society, namely:-

“Grant received from National Aids Control Organisation, Government of India and interest received on deposits with Banks.”

2. This notification shall be deemed to have been applied for the period from 1st June, 2011 to 31st March, 2013 and the financial years 2013-2014, 2014-2015 and 2015-2016.

3. This notification shall be effective subject to the following conditions, namely:-

(a) the Uttar Pradesh State AIDS Control Society does not engage in any commercial activity;

(b) the activities and the nature of the specified income of the Uttar Pradesh State AIDS Control Society remain unchanged throughout the financial years; and

(c) the Uttar Pradesh State AIDS Control Society files return of income in accordance with the provision ofclause (g) of sub-section (4C) of section 139 of the Income-tax Act, 1961.

4. The grants received by the said Society shall be received and applied in accordance with the prevailing rules and regulations.

[F. No.196/87/2012-ITA-I]

DEEPSHIKHA SHARMA, Director

Notification No : 40/2016 Dated: 2-6-2016


Section 10(46) of the Income-tax Act, 1961 Central Government notifies Pollution Control Board, Assam a body constituted by the Government of Assam in respect of the following specified income arising to that Board – 40/2016 – Dated 2-6-2016 – Income Tax

MINISTRY OF FINANCE

(Department of Revenue)

(CENTRAL BOARD OF DIRECT TAXES)

NOTIFICATION  NO. 40/2016

New Delhi, the 2nd June, 2016

S.O. 1944(E).-In exercise of the powers conferred by clause (46) of section 10 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby notifies for the purposes of the said clause, the Pollution Control Board, Assam, a body constituted by Government of Assam, in respect of the following specified income arising to that Board, namely:-

(a) consent fees;

(b) analysis fees;

(c) reimbursement of the expense received from Central Pollution Control Board towards National Air Monitoring Programmes, global environment monitoring system and monitoring of India National Aquatic resources and like schemes;

(d) authorisation fees;

(e) cess re-imbursement and cess appeal fees;

(f) fees received under the RTI Act, 2005;

(g) public hearing fees;

(h) interest on loans & advances given to staff of the board;

(i) misc. income such as sale of old or scrap items, tender fees & other matters relating thereto

and

(j) interest on deposits.

2. This notification shall be effective subject to the conditions that the Pollution Control Board, Assam,-

(a) shall not engage in any commercial activity;

(b) activities and the nature of the specified income remain unchanged throughout the financial years; and

(c) shall file return of income in accordance with the provision of clause (g) of sub-section (4C) section 139of the Income-tax Act, 1961.

3. This notification shall be deemed to have been apply for the Financial Year 2015-2016 and shall apply with respect to the Financial Years 2016-2017, 2017-2018, 2018-2019 and 2019-20.

[ F.No.196/03/2016-ITA-I]

DEEPSHIKHA SHARMA, Director

Sebi, NCDEX tighten risk management mechanism : 02-06-2016


The Securities and Exchange Board of India (Sebi) and the National Commodity & Derivatives Exchange (NCDEX) seem to have learnt some lessons from the suspension of futures trading in castor seed on January 27 this year.

Both are strengthening the risk management and surveillance mechanism at their level. While Sebi has set up a task force and risk management committee, which is considering the methodology for handling default by members, among others, the NCDEX has strengthened mandi-level surveillance, which influences futures the most.

NCDEX, a leading agri-centric commodity derivative exchange, had in January suspended all contracts of castor seed, which was among the top five volume gainers, “to protect the integrity of the market”. Sebi handled this episode professionally and the commodity derivatives market witnessed how the regulator managed the crisis swiftly without impacting the market’s integrity. The measures taken following the episode will shape the way the commodities derivatives market would be regulated in future.

Sebi’s whole-time member Rajeev Kumar Agarwal, who is also in charge of commodity derivatives at Sebi, said: “Sebi followed a multi-pronged approach. It examined the issue from the angle of systemic risk, governance of the exchange, market integrity and investor grievance. A task force was set up to examine systemic issues, including risk management at exchanges. The board of the exchange was advised to fix responsibility if there have been any lapses in risk management and an interim order debarring 22 entities was passed to take care of market integrity aspect. NCDEX also has been directed to address grievance and facilitate the sale of stocks of those who were on sale side and did not get the opportunity to give delivery and to consider monetary compensation.”

What went wrong with castor futures

Castor prices were rising through December due to the impact of draught and also because new crop arrivals would start only after February. Sensing that the prices went up too much, some players, especially those who were having naked short positions in the market found out that in the past few months one foreign bank and a couple of non-banking financial companies were withdrawing lines of credit from all borrowers.

Ruchi Soya, the largest exporter of castor from India, was one of them. It had to manage funds to return that prematurely. Towards the end of 2015, Ruchi is said to have picked up huge deliveries of castor seeds on the NCDEX platform.

This financial crunch further strengthened the belief that it’s better to remain short in the February contract to ensure one big competitor is badly hurt. When bears were having the upper hand, NCDEX was forced to suspend trading on castor seed contracts.

Going by Sebi’s interim order issued by whole-time member Rajeev Agarwal, Ruchi manipulated the system and built positions using some players as their front.

Now, all of them came under the regulator’s net and barred by Sebi from dealings in the securities market. This was one of the fastest regulatory actions in commodity manipulation in recent times and Sebi has signalled the market how decisively it can act.

Ruchi Soya declined to comment on any of these issues. When contacted, an NCDEX spokesperson, too, declined to comment on the castor seed episode. The exchange did its internal audit and found that it needs to include surveillance of the physical market (mandi) because most of the developments impacting derivatives were happening outside the futures market. It immediately tightened its mandi-level surveillance team by appointing 11 more persons. It buttressed the core surveillance team, too, by hiring persons with forensic skills. Sebi is in touch with the management of the exchange. The exchange’s board has ordered a forensic audit report of the whole episode, which is expected to be submitted to the board in the next few days.

How Sebi handled the episode

1. Systemic aspect: Before the castor seed episode came to light, the regulator reduced position limits. Trading in the forward segment was suspended. After the castor seed issue, it further tightened position limits for agricultural commodities and restricted netting of positions

Its task force is also considering liquidity-linked initial margins, concentration margins, methodology for handling of member default and norms for default waterfall.

2. Governance aspect: Sebi has asked the exchange’s board to examine the role of the management in suspension of castor seed Contracts thoroughly and fix responsibility for failure in assessing the situation,

3. Market integrity aspect: 22 entities were debarred from the market vide an interim order.

4. Public grievances aspect: The exchange was advised to resolve the grievances of hedgers. Following this, the exchange in consultation with brokers’ association facilitated liquidation of stocks of hedgers and compensated of losses arising out of suspension of castor seed contracts.

THE CASTOR SEED CATASTROPHE: A TIMELINE

* 27 January: Suspension of castor seed contracts

* 29 January: Settlement price for outstanding positions announced

* 17 February: Constitution of a special cell for redressal of castor participants’ grievances

* 18 February: offered NeML platform to sell castor seed stocks to help genuine sellers who could not give delivery

* 2 March: Restraining order against Trading members and their defaulting clients

* 6 May: Exchange announces close out price to compensate genuine hedgers

Source : Economic Times

Notification No. 10(R)/(1)/2016-RB 1-6-2016


RESERVE BANK OF INDIA
(FOREIGN EXCHANGE DEPARTMENT)
(CENTRAL OFFICE)

FEMA NOTIFICATION

10 (R)/(1)/2016-RB, Dated: June 1, 2016

Foreign Exchange Management (Foreign Currency Accounts by a person resident in India) (Amendment) Regulations, 2016

G.S.R.No.570(E)- In exercise of the powers conferred by Section 9 and clause (e) of sub-section (2) of section 47 of the Foreign Exchange Management Act, 1999 (42 of 1999), the Reserve Bank of India makes the following amendments in the Foreign Exchange Management (Foreign Currency Accounts by a person resident in India) Regulations, 2015 [ Notification No. FEMA 10(R)/2015-RB dated January 21, 2016 ], namely:

1. Short Title & Commencement:-

(i) These Regulations may be called the Foreign Exchange Management (Foreign Currency Accounts by a person resident in India) (Amendment) Regulations, 2016.

(ii) They shall come into force from the date of publication in the official Gazette.

2. Amendment to Regulation 5

A. The existing sub-regulation (E) shall be re-numbered as (F).

B. In the re-numbered regulation (F), the existing sub-regulation (3) shall be substituted by the following namely:

“Insurance/reinsurance companies registered with Insurance Regulatory and Development Authority of India (IRDA) to carry out insurance/reinsurance business may open, hold and maintain a Foreign Currency Account with a bank outside India for the purpose of meeting the expenditure incidental to the insurance/reinsurance business carried on by them and for that purpose, credit to such account the insurance/reinsurance premia received by them outside India.”

C. After the existing sub-regulation (D), the following shall be inserted namely:-

“(E) Accounts in respect of Startups

An Indian startup or any other entity as may be notified by the Reserve Bank in consultation with the Central Government, having an overseas subsidiary, may open a foreign currency account with a bank outside India for the purpose of crediting to it foreign exchange earnings out of exports/ sales made by the said entity and/ or the receivables, arising out of exports/ sales, of its overseas subsidiary.

Provided that the balances in the account shall be repatriated to India within the period prescribed in Foreign Exchange Management (Export of Goods and Services) Regulations, 2015 dated January 12, 2016, as amended from time to time, for realization of export proceeds.

Explanation: For the purpose of this sub-regulation a ‘startup’ means an entity which complies with the conditions laid down in Notification No. G.S.R 180(E) dated February 17, 2016 issued by Department of Industrial Policy and Promotion, Ministry of Commerce and Industry, Government of India.”

3. Amendment to Schedule 1

In Paragraph 1, in sub-paragraph (1), after the existing clause (vi), the following shall be inserted namely:-

“vii) Payments received in foreign exchange by an Indian startup, or any other entity as may be notified by the Reserve Bank in consultation with the Central Government, arising out of exports/ sales made by the said entity or its overseas subsidiaries, if any.

Explanation: For the purpose of this schedule a ‘startup’ means an entity which complies with the conditions laid down in Notification No. G.S.R 180(E) dated February 17, 2016 issued by Department of Industrial Policy and Promotion, Ministry of Commerce and Industry, Government of India.”

(J. K. Pandey)
General Manager (Officer- in- charge)

Foot Note:- The Principal Regulations were published in the Official Gazette vide G.S.R. No.96 (E) dated January 21, 2016 in Part II, Section 3, sub-Section (i).

F No 1080/06/DLA/IDRS/2016 – 1-6-2016


F.No.1080/06/DLA/IDRS/2016
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF REVENUE
CENTRAL BOARD OF EXCISE AND CUSTOMS
DIRECTORATE OF LEAGAL AFFAIRS
NEW DELHI

Dated: June 1, 2016

INSTRUCTION

Sub: Indirect Tax Dispute Resolution Scheme, 2016.

The Chapter XI of the Finance Act, 2016 (28 of 2016) comprising of section 212 to 218, is in respect of the Indirect Tax Dispute Resolution Scheme, 2016. The said scheme allows the party in appeal before the Commissioner (Appeals) on 1st March 2016, to file a declaration before the Designated Authority for the purpose of availing the benefit of the scheme.

2. As per clause (e) to sub-section (1) to section 213 of the Finance Act, 2014, the“designated authority” means an officer not below the rank of Assistant Commissioner who is authorised to act as Assistant commissioner by the Commissioner for the purposes of this Scheme;. As per the said clause (e) every Commissioner is required to authorize an officer not below the rank of Assistant Commissioner to function as Assistant Commissioner, Designated Authority for the purpose of this scheme. Accordingly you may get the Designated Authority, specified in your jurisdiction by the concerned Commissioners at the earliest. The details of Designated Authority so specified must be communicated to Commissioner Directorate of Legal Affairs.

3. The Indirect Tax Dispute Resolution Scheme Rules, 2016 has been notified by Notification No. 29/2016-CE(NT) dated 31st May 2016. These rules provide for the forms to be used for making the scheme operational. Following Forms have been prescribed by the said Rules:

(a) Form 1, has been prescribed for making declaration under the scheme.

(b) Form 2, is the form in which the designated authority shall give the acknowledgement about the receipt of declaration by him. Once such an acknowledgement has been given by the designated authority, the proceedings before the Commissioner (Appeals) shall remain suspended for sixty days, and the Commissioner will not proceed any further with the appeal till expiry of said sixty days.

(c) Form 3, is the form to be filed by the declarant giving the details of the amounts deposited by him as required under the scheme. Declarant has to deposit the sums required to be deposited by him within fortnight of the receipt of the dated acknowledgement and report the details of deposit made within seven days of making the deposit to the designated authority.

(d) Form 4, is the form in which the said designated authority shall pass an order of discharge of dues in respect of the case before Commissioner (Appeals) for which the declaration has been made in Form 1.

4. Commissioner will on receipt of the order in Form 4 from the declarant shall match the same with the copy received directly from the designated authority and shall remove the appeal from his pendency as being disposed off. Since the Commissioner (Appeals) has not decided on the issues raised in appeal, said disposal of appeal shall have no binding precedent value.

5. You should publicize the scheme in your jurisdiction so as to make it a success.

6. Any further issue which is noticed by you while making the scheme operational in your jurisdiction should be brought to the notice of board for suitable clarification.

(Sanjiv Srivastava)
Commissioner (DLA)

Notification No. SO 1935(E) Dated: 01-06-2016


SECTION 419 OF THE COMPANIES ACT, 2013 – NATIONAL COMPANY LAW TRIBUNAL AND APPELLATE TRIBUNAL – NOTIFIED BENCHES OF NATIONAL COMPANY LAW TRIBUNAL

NOTIFICATION NO. SO 1935(E) [F.NO.A-45011/14/2016-AD.IV]DATED 1-6-2016

In exercise of the powers conferred by sub-section (1) of section 419 of the Companies Act, 2013 (18 of 2013), the Central Government hereby constitutes the following Benches of the National Company Law Tribunal mentioned in column (2) of the table below, located at the place mentioned in column (3) and to exercise the jurisdiction over the area mentioned in column (4), namely:—

TABLE

Serial Number Title of the Bench Location Territorial Jurisdiction of the Bench
(1) (2) (3) (4)
1. (a) National Company Law Tribunal, Principal Bench.

(b) National Company Law Tribunal, New Delhi Bench.

New Delhi (1) State of Haryana.

(2) State of Rajasthan.

(3) Union territory of Delhi.

2. National Company Law Tribunal, Ahmedabad Bench. Ahmedabad (1) State of Gujarat.

(2) State of Madhya Pradesh.

(3) Union territory of Dadra and Nagar Haveli.

(4) Union territory of Daman and Diu.

3. National Company Law Tribunal, Allahabad Bench. Allahabad (1) State of Uttar Pradesh.

(2) State of Uttarakhand.

4. National Company Law Tribunal, Bengaluru Bench. Bengaluru (1) State of Karnataka.
5. National Company Law Tribunal, Chandigarh Bench. Chandigarh (1) State of Himachal Pradesh.

(2) State of Jammu and Kashmir.

(3) State of Punjab.

(4) Union territory of Chandigarh.

6. National Company Law Tribunal, Chennai Bench. Chennai (1) State of Kerala.

(2) State of Tamil Nadu.

(3) Union territory of Lakshadweep.

(4) Union territory of Puducherry.

7. National Company Law Tribunal, Guwahati Bench. Guwahati (1) State of Arunachal Pradesh.

(2) State of Assam.

(3) State of Manipur.

(4) State of Mizoram.

(5) State of Meghalaya.

(6) State of Nagaland.

(7) State of Sikkim.

(8) State of Tripura.

8. National Company Law Tribunal, Hyderabad Bench. Hyderabad (1) State of Andhra Pradesh.

(2) State of Telangana.

9. National Company Law Tribunal, Kolkata Bench. Kolkata (1) State of Bihar.

(2) State of Jharkhand.

(3) State of Odisha.

(4) State of West Bengal.

(5) Union territory of Andaman and Nicobar Islands.

10. National Company Law Tribunal, Mumbai Bench. Mumbai (1) State of Chhattisgarh.

(2) State of Goa.

(3) State of Maharashtra.

 

Notification No. SO 1934(E) Dated: 01-06-2016


SECTION 1 OF THE COMPANIES ACT, 2013 – ACT – ENFORCEMENT OF – NOTIFIED DATE ON WHICH SPECIFIED PROVISIONS OF SAID ACT SHALL COME INTO FORCE

NOTIFICATION NO. SO 1934(E) [F.NO.A-45011/14/2016-AD.IV]DATED 1-6-2016

In exercise of the powers conferred by sub-section (3) of section 1 of the Companies Act, 20l3 (18 of 20l3), the Central Government hereby appoints the 1st day of June, 2016 as the date on which the following provisions of the said Act shall come into force, namely :—

Sl. No. Section
1. Sub-section (7) of section 7 [except clauses (c) and (d)]
2. Second proviso to sub-section (1) of section 14
3. Sub-section (2) of section 14
4. Sub-section (3) of section 55
5. Proviso to Clause (b) of sub-section (1) of section 61
6. Sub-sections (4) to (6) of section 62
7. Sub-sections (9) to (11) of section 71
8. Section 75
9. Section 97
10. Section 98
11. Section 99
12. Sub-section (4) of section 119
13. Section 130
14. Section 131
15. Second proviso to sub-section (4) and sub-section (5) of section 140
16. Sub-section (4) of section 169
17. Section 213
18. Sub-section (2) of Section 216
19. Section 218
20. Section 221
21. Section 222
22. Sub-section (5) of section 224
23. Sections 241, 242 [except clause (b) of sub-section (1), clauses (c) & (g) of sub-section (2)], 243, 244, and 245
24. Reference of word ‘Tribunal’ in sub-section (2) of section 399
25. Sections 415 to 433 (both inclusive)
26. Sub-section (1)(a) and (b) of section 434
27. Sub-section (2) of section 434
28. Section 441
29. Section 466

 

 

Notification No. SO 1933(E) Dated: 01-06-2016


SECTION 410 OF THE COMPANIES ACT, 2013 – NATIONAL COMPANY LAW TRIBUNAL AND APPELLATE TRIBUNAL – CONSTITUTION OF – CONSTITUTION OF NATIONAL COMPANY LAW APPELLATE TRIBUNAL W.E.F. 1-6-2016

NOTIFICATION NO. SO 1933(E) [F.NO.A-45011/14/2016-AD.IV]DATED 1-6-2016

In exercise of the powers conferred by section 410 of the Companies Act, 2013 (18 of 2013), the Central Government hereby constitutes the National Company Law Appellate Tribunal for hearing appeals against the orders of the National Company Law Tribunal with effect from the 1st day of June, 2016.

Notification No. SO 1932(E) Dated: 01-06-2016


SECTION 408 OF THE COMPANIES ACT, 2013 – NATIONAL COMPANY LAW TRIBUNAL – CONSTITUTION OF – CONSTITUTION OF NATIONAL COMPANY LAW TRIBUNAL W.E.F. 1-6-2016

NOTIFICATION NO. SO 1932(E) [F.NO.A-45011/14/2016-AD.IV]DATED 1-6-2016

In exercise of the powers conferred by section 408 of the Companies Act, 2013 (18 of 2013), the Central Government hereby constitutes the National Company Law Tribunal to exercise and discharge the powers and functions as are, or may be, conferred on it by or under the said Act with effect from the 1st day of June, 2016.

Notification No. SO 1936(E) Dated: 01-06-2016


SECTION 434 OF THE COMPANIES ACT, 2013 – NATIONAL COMPANY LAW TRIBUNAL – TRANSFER OF – CERTAIN PENDING PROCEEDINGS – TRANSFER OF CASES FROM BOARD OF COMPANY LAW ADMINISTRATION (CLB) TO NATIONAL COMPANY LAW TRIBUNAL (NCLT) W.E.F. 1-6-2016

NOTIFICATION NO. SO 1936(E)[F.NO.1/30/CLB/2013/CL-V]DATED 1-6-2016

In exercise of the powers conferred by clause (a) of sub-section (1) of section 434 of the Companies Act, 2013 (18 of 2013), the Central Government hereby appoints the 1st day of June, 2016, on which all matters or proceedings or cases pending before the Board of Company Law Administration (Company Law Board) shall stand transferred to the National Company Law Tribunal and it shall dispose of such matters or proceedings or cases in accordance with the provisions of the Companies Act, 2013 or the Companies Act, 1956.

Notification No. 365/2016-RB 01-6-2016


FEM (FOREIGN EXCHANGE DERIVATIVE CONTRACTS) (AMENDMENT) REGULATIONS, 2016 – SUBSTITUTION OF REGULATION 4 AND AMENDMENT IN SCHEDULE 1

NOTIFICATION NO.FEMA 365/2016-RB/GSR 571(E)DATED 1-6-2016

In exercise of the powers conferred by clause (h) of sub-section (2) of section 47 of the Foreign Exchange Management Act, 1999 (42 of 1999), the Reserve Bank hereby makes the following amendments in the Foreign Exchange Management (Foreign Exchange Derivative Contracts) Regulations, 2000 (Notification No.FEMA 25/2000-RB dated 3rd May 2000) namely:—

Short Title and Commencement

1. (i) These Regulations may be called the Foreign Exchange Management (Foreign Exchange Derivative Contracts) (Amendment) Regulations, 2016.

(ii) They shall come in to force from the date of their publication in the Official Gazette.

Amendment of Regulations

2. (i) The existing Regulation 4 shall be substituted by the following:

“A person resident in India may enter into a foreign exchange derivative contract in accordance with provisions contained in Schedule I, to hedge an exposure to risk or otherwise, in respect of a transaction permissible under the Act, or rules or regulations or directions or orders made or issued thereunder.”

(ii) In Schedule I, after the existing paragraph ‘B’, the following shall be added, viz.:

“(C) Writing of standalone options against underlying exposure

A person resident in India may enter into cross-currency option contract (not involving the rupee as one of the currencies) and/or foreign currency – rupee option contract authorised dealer against an underlying foreign exchange exposure in respect of a transaction for which sale and/or purchase of foreign currency is permitted under the Act or the rules or regulations or directions or orders made or issued thereunder subject to such terms and conditions as may be stipulated by the Reserve Bank from time to time.”

 

No. [F.NO.279/MISC/M-61/2016, Dated: 1-6-2016


Designated Authority – Under Direct Tax Dispute Resolution Scheme, 2016 – Order-Instruction – Dated 1-6-2016 – Income Tax

 

Designated Authority – Under Direct Tax Dispute Resolution Scheme, 2016

LETTER [F.NO.279/MISC/M-61/2016,]

Dated 1-6-2016

The Direct Tax Dispute Resolution Scheme 2016 (hereinafter referred to as the Scheme) introduced vide Finance Act, 2016 (28 of 2016), provides to the “declarant” a mechanism to resolve disputes pending before Commissioners of Income Tax (Appeals) as on 29-2-2016 and pertaining to “disputed tax” and/or “specified tax”.

2. The Scheme also provides for the notification of the “designated authority” by the Principal Chief Commissioners of Income Tax.

3. Considering the requirements of the scheme, administrative efficiency, convenience of tax payers and equitable distribution of work, the Principal Chief Commissioners of Income Tax addressed above will notify that the jurisdictional Principal Commissioner of Income Tax or the Commissioner of Income Tax, as the case may be, who exercises jurisdiction under section 120 of the Act, as notified by the CBDT from time to time over such “declarant”, shall be the “designated authority” as referred to in the Scheme.

4. It may be ensured that the notification is issued immediately and encompasses all Principal Commissioners of Income Tax (including Central) and Commissioners of Income Tax (TDS) & (Exemptions) in the Region. Compliance in this regard may be reported by 2-6-2016.

Narendra Modi likely to hold conference with top CBDT, CBEC brass : 01-06-2016


Prime Minister Narendra Modi is expected to hold a conference with the top brass of the IT department, Customs and Central Excise from across the country in June on a host of issues related to taxpayer services and effective implementation of taxation laws and government policies.

Officials said Modi, along with Finance Minister Arun Jaitley , is expected to hold the interaction with the Directors General and Principal Chief Commissioners of the two large departments working  under the Central Board of Direct Taxes (CBDT) and Central Board of Excise and Customs (CBEC) during their annual brainstorming and discussion conference in the national capital here on June 16-17.

This will be the first time that the two boards administering direct taxes (CBDT) and indirect taxes (CBEC) under the Finance Ministry will be holding their annual officers conference at the same time.

Earlier these two boards used to hold this separately with the chief guest being the Finance Minister.

While the itinerary and other fine details for the two-day conference are still being worked out, it is expected that Modi will be the keynote speaker to inaugurate the session at Vigyan Bhavan here, while Jaitley would be the lead speaker where he would talk to the top brass of the two boards.

The meetings, they said, have been planned in such a way that the sessions are divided into two broad subjects of government’s plans of financial inclusion and ensuring a transparent tax regime for businesses and foreign investors and the second being solution finding modules to issues and challenges being faced by the departments.

Modi, in his recent review meetings with the CBDT and CBEC has been reiterating the need to reduce taxpayers’ grievances and ensure a quick resolution  of these issues.

He is also expected to outline the government’s goals and aims vis-a-vis some flagship programmes like ‘Make in India’ and ‘Startup India’, they said.

Source : Business Standard

Non-financial companies hold key to corporate bond market: Crisil : 01-06-2016


Making it mandatory for non-financial companies to raise a portion of their funds from the sale of corporate bonds could help in developing the market , credit rating agency Crisil BSE 0.71 % said.

A conducive macro-economic environment , the passing of the Bankruptcy Act 2016, favourable regulations and elevated stress at public sector banks all support India’s corporate bond market. However, in order .

to develop the market needs more issuers beyond the financial sector, said Pawan Agrawal, chief analytical officer, Crisil.

“In many emerging economies, low inflation volatility, strong creditor rights, transitioning from bank loans to bonds and developing facilitative infrastructure have gone a long way in deepening corporate bond markets,” Crisil said.

India needs Rs 43 lakh crore (around $650 billion) for infrastructure building in the next five years to 2020, Crisil  estimated. Additionally, public sector banks need to raise Rs 1.7 lakh crore (around $25 billion) of Tier I capital by March 31, 2019, to conform to Basel III regulations adding that these needs augur well for the development of the corporate bond market.

However, public sector bank profitability has fallen due to rising non performing assets (NPAs) which means that their ability to raise money from the capital markets has diminished. “Additionally, higher provisioning has weakened  their ability to offer competitive interest rates, and if credit demand grows faster, their capital needs will be even higher,” Crisil said.

Source : PTI

Direct tax dispute resolution scheme kicks off today : 01-06-2016


A new dispute settlement scheme will kick in on Wednesday, providing companies such as Vodafone and Cairn that have been hit by retrospective amendment to India’s incometax law to tax indirect transfers an opportunity for resolution .

The Direct Tax Dispute Resolution Scheme, unveiled in this fiscal’s budget , allows for settlement of cases pending in various courts, tribunals, arbitration or mediation under the Bilateral Investment Protection Agreement (BIPA).

The scheme provides an opportunity for settlement of cases emanating from retrospective amendment of tax laws, with the companies required to pay just the basic tax demand and get a waiver on interest and penalty.

In his budget speech on February 29, finance minister Arun Jaitley had said, “To give an opportunity to the past cases, which are ongoing under the retrospective amendment, I propose ‘one time’ scheme of dispute resolution for them in which subject to their agreeing to withdraw any pending case in any court or tribunal or any proceeding for arbitration, mediation, etc under BIPA, they can settle the case by paying only the tax arrears in which case liability of the interest and penalty shall  be waived.”

A finance ministry statement said the one-time tax dispute resolution scheme shall come into force on June 1 and declarations under the scheme may be made on or before December 31.

The Central Board of Direct Taxes notified the rules and forms on May 26. Besides this scheme, a 6% equalisation levy on cross-border digital transactions will come into force on Wednesday.

These rules were notified by the revenue department earlier in the month, a CBDT statement said. The levy will apply only to business-to-business transactions.

Source : Economic Times

F. NO. B-1/19/2016-TRU


F. NO. B-1/19/2016-TRU
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF REVENUE
(TAX RESEARCH UNIT)
NEW DELHI

INSTRUCTION

Dated: May 31, 2016

Subject: - Enactment of Finance Bill, 2016 – reg.

The Finance Bill, 2016 received the assent of the President on 14.5.2016. Consequently, Finance Act (28 of 2016), 2016 has been published in the Gazette of India Extraordinary, Part II, Section 1. The same may be accessed at www.egazette.nic.in.

2. Certain amendments made in the Union Budget 2016-17 have come into force from the date when the Finance Bill, 2016 received the assent of the President of India. As a result, these amendments have come into effect from 14.5.2016. Some of these include notification Nos. 13/2016–ST, 14/2016–ST and certain entries in notification Nos. 9/2016–ST and 10/2016-ST, all dated 1.3.2016.

3. The above may be taken note of. This issues with the approval of the competent authority.

(Abhishek Verma)
Technical Officer (TRU)

No. F. No. B-1/19/2016 -TRU Dated: 31-5-2016


F. NO. B-1/19/2016-TRU
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF REVENUE
(TAX RESEARCH UNIT)
NEW DELHI

INSTRUCTION

Dated: May 31, 2016

Subject: - Enactment of Finance Bill, 2016 – reg.

The Finance Bill, 2016 received the assent of the President on 14.5.2016. Consequently, Finance Act (28 of 2016), 2016 has been published in the Gazette of India Extraordinary, Part II, Section 1. The same may be accessed at www.egazette.nic.in.

2. Certain amendments made in the Union Budget 2016-17 have come into force from the date when the Finance Bill, 2016 received the assent of the President of India. As a result, these amendments have come into effect from 14.5.2016. Some of these include notification Nos. 13/2016–ST, 14/2016–ST and certain entries in notification Nos. 9/2016–ST and 10/2016-ST, all dated 1.3.2016.

3. The above may be taken note of. This issues with the approval of the competent authority.

(Abhishek Verma)
Technical Officer (TRU)

Notification [F.NO.01/35/2013 CL-V (PT-I)] Dated: 31-05-2016


COMPANIES (AUTHORISED TO REGISTER) AMENDMENT RULES, 2016 – AMENDMENT IN RULES 1,2,3,4,5 AND SUBSTITUTION OF FORM NO. URC-1

NOTIFICATION [F.NO.1/35/2013 CL-V]DATED 31-5-2016

In exercise of the powers conferred by sub-sections (1) and (2) of section 469 read with section 366 of the Companies Act, 2013 (18 of 2013), Central Government hereby makes the following rules further to amend the Companies (Authorised to Registered) Rules, 2014, namely:—

1. (1) These rules may be called the Companies (Authorised to Register) Amendment Rules, 2016.

(2) They shall come into force from the date of their publication in the Official Gazette.

2. In the Companies (Authorised to Registered) Rules, 2014 (hcreinafter referred to as the principal rules),—

(a) in rule 1, for sub-rule (1), the following sub-rule shall be substituted, namely:—
“(1) Companies (Authorised to Register) Rules, 2014.”
(b) in rule 2, in sub-rule (1), after clause (f), the following clause shall be inserted, namely :—
(g) “firm” means a firm as defined in section 4 of the Indian Partnership Act, 1932 (9 of 1932);

3. In rule 3 of the principal rules, in sub-rule (2),—

(i) clause (a),
(A) in sub-clause (i), for the words “were partners of the Limited Liability Partnership”, the words “were partners of the Limited Liability Partnership or firm as the case may be” shall be substituted;
(B) in sub-clause (iv), for the words “addresses of the partners of the Limited Liability Partnership”, the words “addresses of the partners of the Limited Liability Partnership or firm as the case may be” shall be substituted;
(C) for sub-clause (v) the following sub-clause shall be substituted namely :—
“(v) in case of a firm, deeds of partnership, bye-laws or other instrument constituting or regulating the company and duly verified in the manner provided in sub-rule (4) and in case the deed of partnership was revised at any time in the past, copies of the principal and all subsequent deeds including the latest deed, along with the certificate of the registration issued by Registrar of firms, in case the firm is registered”.
(D) after sub-clause (viii), the following sub-clauses shall be inserted;
“(ix) an undertaking that the proposed directors shall comply with the requirements of Indian Stamp Act, 1899 (2 of 1899) as applicable;
(x) a statement of assets and liabilities of the Limited Liability Partnership or the firm, as the case may be, duly certified by a chartered accountant in practice made as on a date not earlier than thirty days of the filing of form no.URC-1;
(xi) a copy of latest income tax return of the Limited Liability Partnership or firm as the case may be.”
(ii) in clause (b),—
(A) in sub-clause (iv), for the words “addresses of the partners of the Limited Liability Partnership”, the words “addresses of the partners of the Limited Liability Partnership or firm as the case may be” shall be substituted;
(B) for sub-clause (v), the following sub-clauses shall be substituted, namely:—
“(v) a copy of instrument constituting or regulating the company and duly verified in the manner provided in sub-rule (4) and in case the deed of partnership was revised at any time in the past, copies of principal and all the subsequent deeds including the latest deed, along with the certificate of the registration issued by Registrar of firms if any”;
(C) after sub-clause (viii), the following sub-clauses shall be inserted;
“(ix) an undertaking that the proposed directors shall comply with the requirements of Indian Stamp Act, 1899 (2 of 1899);
(x) a statement of assets and liabilities of the Limited Liability Partnership or the firm, as the case may be, duly certified by a chartered accountant in practice which is made as on a date not earlier than thirty days of the filing of form no.URC-1;
(xi) a copy of latest income tax return of the Limited Liability Partnership or firm as the case may be.”

4. (i) in rule 3 of the principal rules, for sub-rule (3), the following sub-rules shall be substituted, namely;—

“(3) An undertaking, from all the members or partners providing that in the event of registration as a company under Part I of Chapter XXI of the Act, necessary documents or papers shall be submitted to the registering or other authority with which the company was earlier registered, for its dissolution as a firm”

(ii) in sub-rule (4) for the words “designated partners of the Limited Liability Partnership” the words “designated partners of theLimited Liability Partnership or authorised partners of the firm as the case may be” shall be substituted’

5. in rule 4 of the principal rules, in sub-rule (1), for the words “in a newspaper and in English and in the principal vernacular language of the district in which Limited Liability Partnership is in existence and circulated in that district” the words “in a newspaper in English and in any vernacular language, circulating in the district in which Limited Liability Partnership or the firm as the case may be is situate shall be substituted”.

6. in rule 5 of the principal rules,—

(A) for clause (i) the following clauses shall be substituted;
“(i) where a firm has obtained a certificate of registration under section 367, an intimation to this effect shall be given, within fifteen days of such registration to the concerned Registrar of firms under which it was originally registered, along with papers for its dissolution as a firm”;
(B) in clause (iii) for the words “concerned Registrar (LLP)” the words “Registrar of firms” and for the words “Registrar of Companies (LLP), the words “Registrar of Firms” shall be substituted;
(C) in clause (v) for the words “a statement of proceedings, if any, by or against the Limited Liability Partnership”, the words “a statement of proceedings, if any, by or against the Limited Liability Partnership or the firm as the case may be” shall be substituted;

7. for Form No.URC-1, the following Form No.URC-1 shall be substituted, namely:—

FORM NO. URC-1

Application by a company for registration under section 366 (conversion from firm into company, and LLP into company)

[Pursuant to rule 3(2) of the Companies (Authorised to Register) Rules, 2014 read with section 366 of The Companies Act, 2013]

 

Notification No : 39/2016 Dated: 31-5-2016


Income-tax (13th Amendment) Rules, 2016 – 39/2016 – Dated 31-5-2016 – Income Tax

 

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

(DEPARTMENT OF REVENUE)

(CENTRAL BOARD OF DIRECT TAXES)

NOTIFICATION NO. 39/2016

New Delhi, 31st May, 2016

S.O. 1923 (E) – In exercise of the powers conferred by section 200 read with section 295 of the Income-tax Act,  1961 (43 of 1961), the Central Board of Direct Taxes, hereby, makes the following rules further to amend theIncome-tax Rules, 1962, namely : -

1.            (1) Theses rules may be called the Income-tax (13th Amendment) Rules, 2016.

(2) They shall come into force form the 1st day of June, 2016.

2.  In the Income-tax Rules, 1962, in rule 29B, in rule 31A, in sub-rule (4A), for the words “seven days”, the words “thirty days” shall be substituted;

[F. No. 142/29/2015-TPL]

(R. LAKSHMI NARAYANAN)

UNDER SECRETARY, (TAX POLICY AND LEGISLATION

FM promises structural reforms, infra spending to boost growth : 31-05-2016


Wooing Japanese investors, Finance Minister Arun Jaitley today promised more structural and market-oriented reforms as well as stepping up infrastructure spending to accelerate economic growth beyond the current 7.6 per cent.

He also promised to reform the tax structure to make it simpler, predictable and stable.

Speaking at ‘The Future of Asia’ Conference organised by Nikkei Inc here, he said India has been the fastest growing major economy in the last two years despite global slowdown.

“We had a back to back 7.2 per cent and 7.6 per cent growth rate in the last two years. This was notwithstanding the global slowdown which has also adversely impacted the trade in India,” said Jaitley, who is on a six-day tour of Japan to attract investments.

The country has been able to perform despite adversities in two consecutive bad monsoons and some stress in the Indian private sector, the Finance Minister added.

“But then notwithstanding these adversities, a series of structural reforms, coupled with a large amount of enhanced public spending and a FDI, we maintained a reasonably respectable growth rate,” he said.

Jaitley said a very large number of reforms have taken place over the last few years. “The objective has been to bring about structural reforms in India, and I think the consistency of that direction has helped in restoring the credibility of the Indian economy,” he said.

In the last two years, 101 legislations have been passed in Parliament but there remain some which require a lot more time to build a larger consensus, he said alluding to the Goods and Services Tax (GST) Bill that is stuck in the Rajya Sabha for months now.

He expressed hope the GST Bill will be passed by the Upper House in the ensuing monsoon session of Parliament.

On things to come, he said, “The direction that I have indicated is of more structural reforms, more market-oriented reforms and the future direction of stepping up infrastructure spending, concentrating on rural areas and social security, I think this direction will consistently be maintained.”

While India started reforms in 1991, the second generation of reforms were unveiled when the BJP-led government came to power in 2014, he said. “We have opened out more sectors in the economy. While opening out to both international and domestic investments, we removed the unnecessary conditionalities, we eased the process of doing business in India. It is far easier than what it was years ago.” .

Source : The Hindu

Modi govt’s good luck with oil prices getting over? Here’s how crude impacts under-recoveries : 31-05-2016


A couple of years into its tenure, the Narendra Modi government seems to be losing the grace of its lucky stars, reports Siddhartha Saikia in New Delhi. Benign Brent crude has bountifully helped the government in fiscal management but last Thursday, when the government celebrated its second anniversary, the global benchmark went up 31 cents to go past the $50 per barrel mark, for the first time in 2016. Crossing this level is seen by many analysts as a signal that prices are rising. Brent crude, which touched $50.05 a barrel on Thursday morning, slid to $49.27 on Monday, but that was barely seen as a solace.

The budgeted petroleum subsidy of Rs 26,947 crore for 2016-7 will suffice to keep retail prices of subsidised LPG and kerosene at the current levels only if the average price of Indian basket of crude for the year is around $45 per barrel, analysts said.

(The price of the Indian basket of crude, according to the Petroleum Planning and Analysis Cell under the oil ministry, stood at $47.23 per barrel on Thursday, compared with $46.74 per barrel on the previous day.)

According to an estimate, if the Indian basket crude price is $50 a barrel (and assuming Rs 67 to a dollar), the annual subsidy required on domestic LPG would be Rs 17,000 crore at the current level of subsidised price and consumption; this would, however, more than double if crude touches $70. As for PDS kerosene, the subsidy figures corresponding to crude at $50 and $70 would be Rs 14,000 crore to Rs 19,000 crore, respectively. Put differently, every $1 per barrel rise in the price of the Indian basket of crude oil will inflate the oil marketing companies’ under-recovery on domestic LPG by Rs 7 a cylinder and PDS kerosene by 40 paise per litre.

During FY16, petroleum under-recovery stood at Rs 27,571 crore — Rs 16,056 crore on domestic LPG and Rs 11,496 crore on PDS kerosene. The finance ministry’s revised estimate of oil subsidy last year was higher at Rs 30,000 crore, as some arrears too were paid.

The silver lining is that unauthorised use of subsidised cooking gas has been substantially curbed. “While increase in crude oil price will put pressure on current account deficit and fiscal deficit, success of initiatives such as GiveItUp and direct benefit transfer of LPG would help government manage the subsidy outgo,” said Anish De, partner and head of oil and gas, KPMG in India.

The average Indian basket of crude price in FY16 was $42 a barrel, said K Ravichandran, senior VP and co-head, corporate sector ratings at Icra, adding, “Budgeted subsidy should be sufficient up to a crude price of $45 per barrel.”

Several hikes in excise duty on petrol and diesel effected last year would garner Rs 70,000 crore in the full year. In a recent interview to FE, revenue secretary Hasmukh Adhia said that the government could consider downward revision of excise duty on petrol and diesel if crude hardens.

This, he said, would help control the inflation.

Source : PTI

Government announces rules for equalisation levy : 31-05-2016


The government on Monday announced rules for equalisation levy — or ‘Google tax’ for taxation of payments for international digital services by India . businesses — that was introduced in the budget.

The specified services covered by the levy include online advertising, provision for digital advertising space and any other service to be notified by government. The rules come into effect from June 1.

Finance minister Arun Jaitley had  announced the equalisation levy, emanating out of OECD’s Base Erosion and Profit Sharing project, on payments made by businesses for specific digital services to a non-resident entity not having permanent establishment in India.

The idea is to indirectly tax internet giants for money they make from Indian advertisers, by imposing a levy on the payments these advertisers make.

The levy was structured based on recommendations of a panel set up the Central Board of Direct Taxes and included industry representatives.

Tax experts say businesses will have to start preparing now that the rules have been announced.

“Equalisation levy made various players sit up and take notice, especially since this is India’s first step to tax digital economy , and one of the first few internationally,” said Rakesh Nangia, managing partner at Nangia & Co.

“Now with rules in place, people need to start taking action, since the statement of specified services procured starting June 1, 2016 has to be  reported in the statement to be furnished by June 30, 2017,” he said.

Nangia said rules provide clarity as to how an assessee can appeal against the order of the assessing officer.

Source : Economic Times

No. 12/2016 Dated: 30-5-2016


Admissibility of claim of deduction of Bad Debt under section 36(1) (vii) read with section 36(2) of the Income-Tax Act, 1961 – Circular – Dated 30-5-2016 – Income Tax

Circular No. 12/2016

F. No. 279/Misc./140/2015-ITJ

Government of India

Ministry of Finance

Department of Revenue

Central Board of Direct Taxes

New Delhi, Dated: 30th May, 2016

Subject:- Admissibility of claim of deduction of Bad Debt under section 36(1) (vii) read with section 36(2) of the Income-Tax Act, 1961- reg.

Proposals have been received by the Central Board of Direct Taxes regarding filing of appeals/pursuing litigation on the issue of allowability of bad debt that are written off as irrecoverable in the accounts of the assessee. The dispute relates to cases involving failure on the part of assessee to establish that the debt is irrecoverable.

2. Direct Tax Laws (Amendment) Act, 1987 amended the provisions of sections 36(1)(vii) and 36(2) of the Income Tax Act 1961, (hereafter referred to as the Act) to rationalize the provisions regarding allowability of bad debt with effect from the 1st April, 1989.

3. The legislative intention behind the amendment was to eliminate litigation on the issue of the allowability of the bad debt by doing away with the requirement for the assessee to establish that the debt, has in fact, become irrecoverable. However, despite the amendment, disputes on the issue of allowability continue, mostly for the reason that the debt has not been established to be irrecoverable. The Hon’ble Supreme Court in the case of TRF Ltd. In CA Nos. 5292 to 5294 of 2003 vide judgment dated 9.2.2010 (available in NJRS 2010-LL-0209-8), has stated that the position of law is well settled. “After 1.4.1989, for allowing deduction for the amount of any bad debt or part thereof under section 36(1) (vii) of the Act, it is not necessary for assessee to establish that the debt, in fact has become irrecoverable; it is enough if bad debt is written off as irrecoverable in the books of accounts of assessee. ”

4. In view of the above, claim for any debt or part thereof in any previous year, shall be admissible under section 36(1)(vii) of the Act, if it is written off as irrecoverable in the books of accounts of the assessee for that previous year and it fulfills the conditions stipulated in sub section (2) of sub-section 36(2) of the Act.

5. Accordingly, no appeals may henceforth be filed on this ground and appeals already filed, if any, on this issue before various Courts/Tribunals may be withdrawn/not pressed upon.

6. This may be brought to the notice of all concerned.

(Sadhana Panwar)

DCIT (OSD) (ITJ),

CBDT, New Delh

Investment in farm infrastructure must for 100% FDI in food processing : 30-05-2016


Foreign players looking to invest in the food processing sector will have to mandatorily invest a portion of the funds in building infrastructure at the farm gate level for the benefit of farmers, food processing minister Harsimrat Kaur Badal has said.

Badal said she is pushing for 100% foreign direct investment (FDI) in the food processing sector with a purpose to raise farmers’ income.

“My intention behind proposing this policy was to create ‘swadeshi’ (local) infrastructure at the farm gate level with ‘videshi’ money (foreign investment),” Badal told PTI.

The policy was announced to address the requirements of farmers and food processing industry as lots of fruits and vegetables grown by farmers either do not fetch the right prices or fail to reach the market, she said.

“I feel there should be a rider in the policy to ensure that a certain percentage of FDI inflows is invested on infrastructure at the farm level, directly benefiting the farmers,” she said.

The investment could be on mechanised farming, latest irrigation technologies, seeds, among others, Badal said adding better quality of farm produce is good for processing.

Badal also said the FDI inflow in food processing sector is expected to cross $1 billion in the next two years, helped by reforms in FDI space and streamlining other regulations.

Finance minister Arun Jaitley in Budget 2016-17 had announced 100% FDI in food processing on the food which is produced and processed in India.

The food processing sector attracted FDIs worth $463 million during the April-February period of the last fiscal.

Source : PTI

CSR rules amended to widen canvas for India Inc : 30-05-2016


The Centre has broad-based the entities available for carrying out corporate social responsibility (CSR) activities.

India Inc can now get CSR implemented through a foundation or trust or society set up by the Centre, State government or any entity established under the Act of Parliament or State legislature.

This could be done without having to worry about existence of three year track record in undertaking similar projects or programmes.

“We have widened the canvas for corporates. They need not bother about floating their own foundations or trusts or society for undertaking CSR. They can now use the vehicles set up by the Central, State governments or entities set up by an Act of Parliament or State legislatures to carry out CSR,” a senior corporate affairs ministry (MCA) official said.

There are many States, which have floated charitable foundations pursuing objects enshrined in the CSR legal framework, and these vehicles could now be utilised by companies for CSR implementation.

The latest rule change may also be helpful for corporate houses to reach out to remote areas where government floated society or trust or foundations are already working.

Reacting to this latest MCA move, SN Ananthasubramanian, a Practising Company Secretary, said that this liberalisation is indeed a welcome step.

“It will facilitate companies to undertake permitted activities through State-established entities of repute in particular spheres. This will also further enhance innovative collaborations in hitherto unexplored areas leading to improved social impact,” Ananthasubramanian told BusinessLine.

Source : Business Line

FM Arun Jaitley to visit Japan to deepen bilateral economic ties : 28-05-2016


Finance Minister Arun Jaitley will meet investors in Japan during a six-day visit to the country beginning Sunday, aiming to enhance the bilateral economic engagement between the two Asian partners and boost cooperation among businesses from India and Japan.

The importance of the visit is underlined by a series of significant meetings which are expected to set the pace for an intensified dialogue between businesses on both sides.

Among these engagements are the CEO’s Roundtable on June 1 with the chief executives of Japanese companies and the meeting on the National Investment and Infrastructure Fund (NIIF) which will involve interaction with banks, insurance companies, asset management companies looking to expand their presence in India as well as discussion with Japan Post and pension funds regarding long-term investment in India.

On June 1, Jaitley will address and interact with the Indian diapsora at ‘The India Club’ at Kobe. The Finance Minister is also slated to deliver a lecture at the Osaka University and attend an India investment promotion seminar on June 2, being organised by CII.

The NIIF has been set up by the government in partnership with institutional investors from India and abroad to attract investments in commercially viable infrastructure projects in roads and highways, railways which has exciting plans to build dedicated freight corridors and logistics hubs, ports with the vast Indian coastline of over 7,000 km, renewable energy and smart cities .

The visit by the high-powered CEOs delegation accompanying Jaitley “comes at a time when India’s experience of strong economic growth, comfortable price situation, low current account deficit, and adherence to fiscal recovery path have projected her as an outpost of opportunity for global investors,” Ficci said.

The delegation will also attend a meeting with JETRO on the May 30, visit DIET, the Japanese Parliament and participate in the NIKKEI Conference. Jaitley will deliver an address on “India’s Economic Performance; An Engine for Growth” as part of the overarching theme of ‘The Future of Asia’.

The delegation will comprise representatives from industry bodies Ficci and CII along with business heads from diversified sectors and senior government officials

Source : PTI

CBDT begins consultation process with stakeholders on GAAR : 28-05-2016


Gearing up to roll out the General Anti-Avoidance Rule (GAAR) from April next to check tax evasion through overseas jurisdictions, the CBDT today initiated a consultation process with general public and all stakeholders on provisions of the new regime.

“The general public and stakeholders are therefore requested to provide their inputs on the provisions of GAAR in respect of which further clarity is required, from its implementation perspective,” said a Central Board of Direct Taxes (CBDT) statement.

GAAR, which seeks to check tax evasion, will come into effect from Assessment Year 2018-19 (Financial Year 2017-18), it said, adding the necessary procedures for application of GAAR and conditions under which it will not apply have already been enumerated in the Income Tax Rules, 1962. The GAAR provisions were incorporated in the Income Tax Act, 1961.

The CBDT, which had received representations from industry associations with regard to implementation of the GAAR, asked the stakeholders to seek clarification by June 30.

The industry wanted the CBDT to issue guidelines so that there is adequate clarity with regard to implementation of GAAR.

To make the whole exercise meaningful, the CBDT said that while seeking clarifications the stakeholders should avoid reference to hypothetical situations.

“If the input relates to interpretation of a specific real world structure or arrangement, the structure should be such… (which) commonly occurs in the sector and involves clarification of general principles of application.

“Further, in relation to such structure, the particular provision and apprehensions or doubts along with basis thereof may also be provided with all the relevant facts,” the CBDT statement said.

GAAR was introduced in his 2012-13 Budget speech by the then Finance Minister Pranab Mukherjee with a view to check tax evasion and avoidance. However, its implementation was repeatedly postponed because of the apprehensions expressed by foreign investors.

GAAR, which was originally to be implemented from April 1, 2014, will now come into effect from April 1 next year. Besides other things, GAAR contains provision allowing the government to prospectively tax overseas deals involving local assets.

The government had earlier proposed imposing GAAR for those claiming tax benefit of over Rs 3 crore. The rules are aimed at minimising tax avoidance for investments made by entities based in tax havens.

Source : Financial Express

FinMin eases reporting rules for FATCA : 28-05-2016


The finance ministry has eased certain rules in reporting by financial institutions to comply with an agreement between India and the US for implementing the Foreign Account Tax Compliance Act (FATCA).

Financial institutions had told the government it was difficult to take physical self-certification from the subscribers. Heeding to the complaint, the ministry allowed obtaining of self-certification through internet banking platform.

The ministry also did away with the requirement of TIN number if a person is in a country where that number is not provided.

There were also queries from financial institutions about valuation of custodial accounts maintained with depositories. The ministry clarified that valuation of securities might be done at the values regularly communicated by depositories to the depository participants and brokers.

“Hopefully, this should help reporting of unlisted securities,” said Bahroze Kamdin, partner, Deloitte Haskins & Sells.

FATCA requires foreign financial institutions (FFI) to report information about financial accounts held by US taxpayers. If the FFI does not comply, the IRS can impose a 30 per cent withholding penalty on US payments made to the FFI.

Source : Business Standard

No. Press Release Dated: 27-5-2016


Clarification for implementation of FATCA and CRS – Circular – Dated 27-5-2016 – Income Tax

Government of India

Ministry of Finance

Department of Revenue

Central Board of Direct Taxes

PRESS RELEASE

New Delhi, 27th May, 2016

Subject: Clarification for implementation of FATCA and CRS –regarding

An Inter-Governmental Agreement between India and USA was signed for implementation of Foreign Account Tax Compliance Act (FATCA). The Government of India has also joined the Multilateral Competent Authority Agreement (MCAA) for Automatic Exchange of Information as per Common Reporting Standard (CRS). To provide guidance for implementation of FATCA and CRS, A Guidance Note was released on 31st August 2015 which was subsequently updated on 31.12.2015. Further, a clarification was issued on 19th February, 2016.

Based on comments and feedback received from the financial institutions, a further clarification has been issued on 26th May, 2016.The same has been placed on the Income-tax website http://www.incometaxindia.gov.in.

(Meenakshi J Goswami)

Commissioner of Income Tax

(Media and Technical Policy)

Official Spokesperson, CBDT

No. 21/2016 Dated: 27-5-2016


Clarification regarding cancellation of registration u/s 12AA of the Income-tax Act, 1961 in certain circumstances – Circular – Dated 27-5-2016 – Income Tax

CIRCULAR NO. 21/2016

F.No.197/17/2016-ITA-I

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

DEPARTMENT OF REVENUE

CENTRAL BOARD OF DIRECT TAXES

New Delhi, the 27th May, 2016

Subject- Clarification regarding cancellation of registration u/s 12AA of the Income-tax Act, 1961 in certain circumstances – regarding

Sections 11 and 12 of the Income-tax Act, 1961 (‘Act’) exempt income of charitable trusts or institutions, if such income is applied for charitable purpose and such institution is registered under section 12AA of the Act.

2. Section 2(15) of the Act provides definition of “charitable purpose”. It includes “advancement of any other object of general public utility” provided it does not involve carrying on of any activity in the nature of trade, commerce or business etc. for financial consideration. The 2nd proviso to said section, introduced w.e.f 01-04-2009 vide Finance Act 2010, provides that in case where the activities of any trust or institution is of the nature of advancement of any other object of general public utility and it involves carrying on of any activity in the nature of trade, commerce or business; but the aggregate value of receipts from such commercial activities does not exceed ₹ 25,00,000/- in the previous year, the purpose of such trust/institution shall be deemed as “charitable” despite it deriving consideration from such activities. However, if the aggregate value of these receipts exceeds the specified cut-off, the activity would no longer be considered as charitable and the income of the trust/institution would not be eligible for tax exemption in that year. Thus an entity, pursuing advancement of object of general public utility, could be treated as a charitable institution in one year and not a charitable institution in the other year depending on the aggregate value of receipts from commercial activities. The position remains similar when the first and second provisos ofsection 2(15) get substituted by the new proviso introduced w.e.f. 01-04-2016 vide Finance Act, 2015, changing the cut-off benchmark as 20% of the total receipts instead of the fixed limit of ₹ 25,00,000/- as it existed earlier.

3. The temporary excess of receipts beyond the specified cut-off in one year may not necessarily be the outcome of alteration in the very nature of the activities of the trust or institution requiring cancellation of registration already granted to the trust or institution. Hence, section 13 of the Act has been amended vide Finance Act, 2012 by inserting a new sub-section (8) therein to provide that such organization would not get benefit of tax exemption in the particular year in which its receipts from commercial activities exceed the threshold whether or not the registration granted is cancelled. This amendment has taken effect retrospectively from 1st April, 2009 and accordingly applies in relation to the assessment year 2009-10 onwards.

4. In view of the aforesaid position, it is clarified that it shall not be mandatory to cancel the registration already granted u/s 12AA to a charitable institution merely on the ground that the cut-off specified in the provisoto section 2(15) of the Act is exceeded in a particular year without there being any change in the nature of activities of the institution. If in any particular year, the specified cut-off is exceeded, the tax exemption would be denied to the institution in that year and cancellation of registration would not be mandatory unless such cancellation becomes necessary on the ground(s) prescribed under the Act.

5. With the introduction of Chapter XII-EB in the Act vide Finance Act, 2016, prescribing special provisions relating to tax on accreted income of certain trusts and institutions, cancellation of registration granted u/s 12AA may lead to a charitable institution getting hit by sub-section (3) of section 115TD and becoming liable to tax on accreted income. The cancellation of registration without justifiable reasons may, therefore, cause additional hardship to an assesses institution due to attraction of tax-liability on accreted income. The field authorities are, therefore, advised not to cancel the registration of a charitable institution granted u/s 12AA just because the proviso to section 2(15)comes into play. The process for cancellation of registration is to be initiated strictly in accordance with section12AA(3) and 12AA(4) after carefully examining the applicability of these provisions.

6. The above may be brought to the notice of all concerned.

(Deepshikha Sharma)

Director to the Government of India

Notification No : 38/2016 Dated: 27-5-2016


EQUALISATION LEVY RULES, 2016 – 38/2016 – Dated 27-5-2016 – Income Tax

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

(DEPARTMENT OF REVENUE)

(CENTRAL BOARD OF DIRECT TAXES)

NOTIFICATION NO. 38/2016

New Delhi, 27th May, 2016

EQUALISATION LEVY RULES, 2016

S.O. 1905(E) - In exercise of the powers conferred by sub-section (1) and sub-section (2) of section 179 of theFinance Act, 2016 (28 of 2016), the Central Government hereby makes the following rules for carrying out the provisions of Chapter VIII of the said Act relating to Equalisation levy, namely:-

1.  Short title and commencement.

(1) These rules may be called the Equalisation levy Rules, 2016.

(2) They shall come into force on the 1st day of June, 2016.

2.  Definitions.  In these rules, unless the context otherwise requires,-

(a)  “Act” means the Finance Act, 2016 (28 of 2016);

(b) “Form” means Forms appended to these rules.

3.  Rounding off of consideration for specified services, equalisation levy, etc.   The amount of consideration for specified services and the amount of Equalisation levy, interest and penalty payable, and the amount of refund due, under the provisions of Chapter VIII of the Act shall be rounded off to the nearest multiple of ten rupees and, for this purpose any part of a rupee consisting of paise shall be ignored and thereafter if such amount is not a multiple of ten, then, if the last figure in that amount is five or more, the amount shall be increased to the next higher amount which is a multiple of ten and if the last figure is less than five, the amount shall be reduced to the next lower amount which is a multiple of ten.

4.  Payment of Equalisation levy.    Every assessee, who is required to deduct and pay equalisation levy, shall pay the amount of such levy to the credit of the Central Government by remitting it into the Reserve Bank of India or in any branch of the State Bank of India or of any authorised Bank accompanied by an equalisation levy challan.

5.  Statement of specified services.  (1) The statement of specified services required to  be furnished under sub-section (1) of section 167 of the Act shall be in Form No. 1, duly verified in the manner indicated therein, and may be furnished by the assessee in the following manner, namely:-

(i) electronically under digital signature; or

(ii) electronically through electronic verification code.

(2) The statement in Form No.1 in respect of all the specified services chargeable to equalisation levy during any financial year shall be furnished on or before the 30th June immediately following that financial year.

(3) The Principal Director-General of Income-tax (Systems) shall, for the purpose of  ensuring secure capture and transmission of data, lay down the specific procedures,  formats and standards and shall also be responsible for evolving and implementing  appropriate security, archival and retrieval policies in relation to furnishing the statement  under sub-rule (1).

Explanation: For the purposes of  this rule “electronic verification code” means a code generated for the purpose of electronic verification of the person furnishing the statement of specified services as per the data structure and standards laid down by the Principal Director- General of Income-tax (Systems).

6.  Time limit to be specified in the notice calling for statement of specified services. Where an assessee fails to furnish the statement within the time specified in sub-rule (2) of rule 5, the Assessing Officer may issue a notice to such person requiring him to furnish, within thirty days from the date of service of the notice, the statement in the Form prescribed in rule 5 and verified in the manner indicated therein.

7.  Notice of demand.    Where any levy, interest or penalty is payable in consequence of any order passed under the provisions of Chapter VIII of the Act, the Assessing Officer shall serve upon the assessee a notice of demand in Form No. 2 specifying the sum so payable:

Provided that where any sum is determined to be payable by the assessee under sub-section (1) of section 168 of the Act, the intimation under the said section shall be deemed to be a notice of demand.

8.  Form of appeal to Commissioner of Income-tax (Appeals). (1) An appeal under sub-section (1) of section 174 of the Act to the Commissioner of Income-tax (Appeals) shall be made in Form No. 3 in the following manner, namely:-

(i) electronically under digital signature; or

(ii) electronically through electronic verification code.

(2) The form of appeal referred to in sub-rule (1), shall be verified by the person who is authorised to verify the statement of specified services under rule 5, as applicable to the  assessee.

(3) Any document accompanying Form No.3 shall be furnished in the manner in which the  Form No.3 is furnished.

(4) The Principal Director General of Income-tax (Systems) shall-

i. lay down the procedure for electronic filing of Form No.3;

ii. lay down the data structure, standards and manner of generation of electronic verification code, referred to in sub rule-(2), for the purpose of verification of the person furnishing the said form; and

iii.  be responsible for formulating and implementing appropriate security, archival and retrieval policies in relation to the said form so furnished.

9.  Form of appeal to Appellate Tribunal.- An appeal under sub-section (1) or sub-section (2) of section 175 of the Act to the Appellate Tribunal shall be made in Form No.4, and where the appeal is made by the assessee, the form of appeal, the grounds of appeal and the form of verification appended thereto shall be signed by the person specified in Form No.4, as applicable to the assessee.

India seeks fresh treaties with 47 nations : 27-05-2016


India has written to 47 countries to nullify the existing bilateral investment agreements and ink fresh treaties that will make it mandatory for foreign investors to exhaust local judicial remedies before seeking arbitration.

The Narendra Modi-led NDA government has prepared a model draft which will serve as the template for all investment agreements in the future and also for reworking the current ones.

“We have written to 47 countries Treaties that have completed 10 years will be allowed to be lapsed so that a new text can be negotiated,” a government official told ET.

India seeks fresh treaties with 47 nations

Some of the countries that India has written to are European nations with whom treaties were signed earlier. Treaties that have been signed recently such as one with the United Arab Emirates will continue with the existing text and be revised later, the official said.

The Bilateral Investment Promotion Agreements (BIPA) seek to promote investment flows between two nations by assuring fair and equitable treatment on post-establishment basis through reciprocal provisions such as national treatment, most favoured nation treatment and mechanism for dispute resolution. The government amended the text after being dragged into international arbitration by as many as 17 companies or individuals including Deutsche Telekom of Germany , Vodafone International Holdings BV , Sistema of Russia , Children’s Investment Fund and TCI Cyprus Holdings . India even lost an international arbitration case involving White Industries BSE -2.41 % of Australia.

Source : PTI

Amid Swamy offensive, Raghuram Rajan meets PM Modi, FM Jaitley : 27-05-2016


Reserve Bank of India governor Raghuram Rajan met Prime Minister Narendra Modi on Wednesday. Before meeting the PM, the governor had also met finance minister Arun Jaitley, reports fe Bureau in New Delhi.

Official sources told FE that much should not be read in Rajan’s meeting with the PM as he routinely meets him and the finance minister. “The RBI governor meets the PM and FM every two months before the monetary policy is due as a courtesy meeting,” officials aware of the meeting said.

The monetary policy is due on June 7.

There’s widespread speculation in official and industry circles whether Rajan, whose term as the RBI governor ends in September, will be given an extension or not.

When asked, Jaitley on Wednesday had declined to comment. Rajan has recently been attacked by BJP leader Subramanian Swamy, who has accused him of wilfully wrecking the economy and alleging that he is “not fully Indian” since he has been renewing his US green card. Swamy has also written to the PM urging that he be sacked.

However, the BJP has officially distanced itself from Swamy’s comments.

In fact, Jaitley on Thursday told NDTV in an interview that he does not approve of “personal” attacks. “I don’t approve of personal comments against anyone, let alone the RBI governor,” he said when asked about the continuing attack on Rajan in the past few months and whether there was an effort on part of the government to ring-fence the governor.

Source : PTI

74 – 26-5-2016


EXPORT DATA PROCESSING AND MONITORING SYSTEM (EDPMS) – ADDITIONAL MODULES FOR CAUTION LISTING OF EXPORTERS, REPORTING OF ADVANCE REMITTANCE FOR EXPORTS AND MIGRATION OF OLD XOS DATA

A.P. (DIR SERIES 2015-16) CIRCULAR NO.74DATED 26-5-2016

Attention of AD Category – I banks is invited to paragraph number C.2, C.15, C.20, C.24 and C.28 of Master Direction No.16 dated January 1, 2016 on Export of Goods and Services.

2. To simplify the procedure for filing returns on a single platform and for better monitoring, it has been decided to integrate the returns related to (a) handling of shipping bills for caution listed exporters; (b) delayed utilisation of advances received for exports; and (c) exports outstanding with Export Data Processing and Monitoring System (EDPMS) which has been in operation since March 1, 2014.

3. Caution/De-caution Listing of Exporters

3.1 To streamline the procedure, cautioning/de-cautioning of exporters has been automated. The AD category – I banks can access the updated list of caution listed exporters through EDPMS on daily basis. The list of all caution listed exporters would also be made available to AD category – I banks through their registered e-mail. Criteria laid down for cautioning/de-cautioning of exporters in EDPMS are as under:

i. The exporters would be caution listed if any shipping bill against them remains open for more than two years in EDPMS provided no extension is granted by AD Category -I bank/RBI. Date of shipment will be considered for reckoning the realisation period.
ii. Once related bills are realised and closed or extension for realisation is granted, the exporter will automatically be de-caution listed.
iii. The exporters can also be caution listed even before the expiry of two years period based on the recommendation of AD banks. The recommendation may be based on cases where exporter has come to adverse notice of the Enforcement Directorate(ED)/Central Bureau of Investigation (CBI)/Directorate of Revenue Intelligence (DRI) /any such other law enforcement agency or the case where exporter is not traceable or not making any serious efforts for realisation of export proceeds. In such cases, AD may forward its findings to the concerned regional office of RBI recommending inclusion of the name of the exporter in the caution list.
iv. Reserve Bank will caution/de-caution the exporters in such cases based on the recommendation of AD Category – I banks.

3.2 AD Category – I banks should follow the procedure mentioned below while handling shipping documents in respect of caution listed exporters:

(a) They will intimate the exporters about their caution listing, giving the details of outstanding shipping bills. When caution listed exporters submit shipping documents for negotiation/purchase/discount/collection, etc., the AD Category – I bank may accept the documents subject to following conditions:-
i. The exporters concerned should produce evidence of having received advance payment or an irrevocable letter of credit in their favour covering the full value of the proposed exports;
ii. In case of usance bills, the relative letter of credit should cover full export value and also permit such drawings. Besides, the usance bills should also mature within prescribed realisation period reckoned from date of shipment.
iii. Except under the above mentioned conditions given in 3.2 (a) (i) and (ii), AD banks should not handle the shipping documents of caution listed exporters.
(b) AD Category – I banks should obtain prior approval of the Reserve Bank for issuing guarantees for caution-listed exporters.

4. Reporting of Advance Remittance for Exports

4.1 Presently the export data in EDPMS is being captured only from the shipping bills generated. It has now been decided to capture the details of advance remittances received for exports in EDPMS. Henceforth, AD Category – I banks will have to report all the inward remittances including advance as well as old outstanding inward remittances received for export of goods/software to EDPMS. Further, AD Category – I banks need to report the electronic FIRC to EDPMS wherever such FIRCs are issued against inward remittances.

4.2 A quarterly return is presently being submitted by AD Category – I banks for delay in utilization of advances received for export in terms of A. P. (DIR Series) circular No. 74 dated February 9, 2015. It has been decided that AD category – I banks will upload the particulars of all the overdue export advances into the system and discontinue submission of quarterly return henceforth.

5Export Outstanding Statement (XOS)

With effect from March 01, 2014, details of all export outstanding bills can be obtained from the EDPMS. AD category – I banks were, however, required to report the old outstanding bills prior to March 01, 2014 in XOS on half yearly basis as at the end of June and December every year. To reduce the reporting burden of AD Category – I banks, it is decided to migrate the XOS data reported by the AD banks for half year ended December 2015 onwards to EDPMS and discontinue separate reporting of XOS for the subsequent periods. AD category – I banks are required to mark off/close the XOS data pertaining to pre March 01, 2014 as and when amount has been realised.

6. The above proposed enhancements in EDPMS were demonstrated to the staff of AD Category -I banks and the necessary background documents were also shared with them via e-mail. All the message formats and documents relating to EDPMS enhancements are also available on the website (https://edpms.rbi.org.in).

7. AD category -I banks may carry out appropriate changes in their IT system/operating procedure immediately.

8. The above enhancements in the EDPMS will be effected from June 15, 2016. All subsequent transactions have to be reported in EDPMS as per revised message format. AD category -I banks may note to process the transactions only if they are appearing in the EDPMS.

9. AD Category – I banks may bring the contents of this circular to the notice of their constituents concerned.

10. Master Direction No. 16/2015-16 dated January 1, 2016 and Master Direction No. 18/ 2015-16 dated January 1, 2016 are being updated to reflect the changes.

11. The directions contained in this circular have been issued under sections 10(4) and 11(1) of the Foreign Exchange Management Act (FEMA), 1999 (42 of 1999) and are without prejudice to permissions/approvals, if any, required under any other law.

 

73 – 26-5-2016


FOREIGN EXCHANGE (COMPOUNDING PROCEEDINGS) RULES, 2000 – COMPOUNDING OF CONTRAVENTIONS UNDER FEMA, 1999

A.P. (DIR SERIES 2015-16) CIRCULAR NO.73, DATED 26-5-2016

Attention of Authorised Dealers is invited to paragraph number 7 and 8 of the Master Direction on Compounding of Contraventions under FEMA, 1999 issued vide FED Master Direction No.4/2015-16 dated January 1, 2016.

2. In terms of the Foreign Exchange (Compounding Proceedings) Rules, 2000, effective from June 1, 2000, Reserve Bank is empowered to compound contraventions relating to rule 7, 8 and 9 of and the third schedule to the Foreign Exchange Management (Current Account Transactions) (FEMCAT) Rules, 2000. With a view to providing comfort to individuals and corporate community by minimizing transaction costs and the same time taking a serious view of wilful, malafide and fraudulent transactions, the Reserve Bank was, vide GSR 609 (E) dated September 13, 2004 empowered to compound all the contraventions of Foreign Exchange Management Act, 1999 (FEMA) except section 3(a) of FEMA.

3. To ensure more transparency and greater disclosure, it has now been decided as hereunder:

I. Public disclosure of Compounding Orders

For disseminating the information pertaining to compounding orders, it has been decided to host the compounding orders passed on or after June 1, 2016 on the Bank’s website (www.rbi.org.in). The data on the website will be updated at monthly intervals in the following format:

Sr. No. Name of Applicant Amount imposed under the compounding order Whether the amount imposed has been paid Download order

Accordingly, a new sub-para no.8.6 is being added in the Master Direction on Compounding.

II. Public disclosure of guidelines on the amount imposed during compounding

As per provisions of section 13 of FEMA the amount imposed can be up to three times the amount involved in the contravention. However, the amount imposed is calculated based on guidance note given in the Annex. Now it has been decided to put the guidance note on the Bank’s website for information of general public. It may, however, be noted that the guidance note is meant only for the purpose of broadly indicating the basis on which the amount to be imposed is derived by the compounding authorities in Reserve Bank of India. The actual amount imposed may sometimes vary, depending on the circumstances of the case taking into account the factors indicated in paragraph 7.3 of the abovementioned Master Direction. This new provision is being inserted as sub-para 7.4 in the Master Direction on Compounding and the subsequent sub-paragraph renumbered accordingly.

4. Authorised Dealers may bring the contents of this circular to the notice of their constituents and customers concerned.

5. The directions contained in this circular have been issued under section 10 (4) and 11 (1) of the Foreign Exchange Management Act, 1999 (42 of 1999).

ANNEX

Guidance Note on computation of the amount imposed under the Foreign Exchange (Compounding Proceedings) Rules 2000

Ref : A.P. (DIR Series) Circular No. dated May 26, 2016

I. Computation Matrix

Type of contravention Existing Formula
[1] Reporting Contraventions Fixed amount : Rs10000/- (applied once for each contravention in a compounding application) + Variable amount as under:
(A) FEMA 20 Upto 10 lakhs: 1000 per year
Para 9(1)(A), 9(1)(B), part B of FC(GPR), FCTRS (Reg. 10) and taking on record FCTRS (Reg. 4) Rs.10-40 lakhs: 2500 per year
(B) FEMA 3 Rs.40-100 lakhs: 7000 per year
Non-submission of ECB statements Rs.1-10 crore 50000 per year
(C) FEMA 120 Rs.10 -100 Crore : 100000 per year
Non-reporting/delay in reporting of acquisition/setup of subsidiaries/step down subsidiaries /changes in the shareholding pattern Above Rs.100 Crore : 200000 per year
(D) Any other reporting contraventions (except those in Row 2 below)
(E) Reporting contraventions by LO/BO/PO As above, subject to ceiling of Rs.2 lakhs. In case of Project Office, the amount imposed shall be calculated on 10% of total project cost.
[2] AAC/ APR/ Share certificate delays Rs.10000/- per AAC/APR/FCGPR (B) Return delayed.
In case of non-submission/ delayed submission of APR/ share certificates (FEMA 120) or AAC (FEMA 22) or FCGPR (B) Returns (FEMA 20) Delayed receipt of share certificate – Rs.10000/-per year, the total amount being subject to ceiling of 300% of the amount invested.
[3] Rs.30000/- + given percentage:
A] Allotment/Refunds
Para 8 of FEMA 20/2000-RB (non-allotment of shares or allotment/ refund after the stipulated 180 days) 1st year : 0.30%
1-2 years : 0.35%
B] LO/BO/PO 2-3 years : 0.40%
(Other than reporting contraventions) 3-4 years : 0.45%
4-5 years : 0.50%
>5 years : 0.75%
(For project offices the amount of contravention shall be deemed to be 10% of the cost of project).
[4] All other contraventions except Corporate Guarantees Rs.50000/- + given percentage:
1st year : 0.50%
1-2 years : 0.55%
2-3 years : 0.60%
3-4 years : 0.65%
4-5 years : 0.70%
> 5 years : 0.75%
5] Issue of Corporate Guarantees without UIN/without permission wherever required /open ended guarantees or any other contravention related to issue of Corporate Guarantees. Rs.500000/- + given percentage:
1st year : 0.050%
1-2 years : 0.055%
2-3 years : 0.060%
3-4 years : 0.065%
4-5 years : 0.070%
>5 years : 0.075%
In case the contravention includes issue of guarantees for raising loans which are invested back into India, the amount imposed may be trebled.

II. The above amounts are presently subject to the following provisos, viz.

(i) the amount imposed should not exceed 300% of the amount of contravention
(ii) In case the amount of contravention is less than Rs. One lakh, the total amount imposed should not be more than amount of simple interest @5% p.a. calculated on the amount of contravention and for the period of the contravention in case of reporting contraventions and @10% p.a. in respect of all other contraventions.
(iii) In case of paragraph 8 of Schedule I to FEMA 20/2000 RB contraventions, the amount imposed will be further graded as under:
a. If the shares are allotted after 180 days without the prior approval of Reserve Bank, 1.25 times the amount calculated as per table above (subject to provisos at (i) & (ii) above).
b. If the shares are not allotted and the amount is refunded after 180 days with the Bank’s permission: 1.50 times the amount calculated as per table above (subject to provisos at (i) & (ii) above).
c. If the shares are not allotted and the amount is refunded after 180 days without the Bank’s permission: 1.75 times the amount calculated as per table above (subject to provisos at (i) & (ii) above).
(iv) In cases where it is established that the contravenor has made undue gains, the amount thereof may be neutralized to a reasonable extent by adding the same to the compounding amount calculated as per chart.
(v) If a party who has been compounded earlier applies for compounding again for similar contravention, the amount calculated as above may be enhanced by 50%.

III. For calculating amount in respect of reporting contraventions under para 1.1 above, the period of contravention may be considered proportionately {(approx. rounded off to next higher month ÷ 12) × amount for 1 year}. The total no. of days does not exclude Sundays/holidays.

IV. Illustrations in respect of few sample cases are appended.

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72 – 26-5-2016


MEMORANDUM OF PROCEDURE FOR CHANNELING TRANSACTIONS THROUGH ASIAN CLEARING UNION (ACU)

A.P. (DIR SERIES 2015-16) CIRCULAR NO.72DATED 26-5-2016

Attention of Authorised Dealer Category-I Banks is invited to the Memorandum containing detailed procedural instructions for channeling transactions through the Asian Clearing Union (ACU) (Memorandum ACM) issued on February 17, 2010, as amended from time to time. In terms of paragraph 11 of the Memorandum the minimum amounts and the multiples in which Reserve Bank receives and pays U.S. Dollar/Euro is $ 25,000/€ 25,000 and $ 1,000/€ 1,000, respectively.

2. In view of the understanding reached amongst the members of the ACU during the44rth Meeting of the ACU Board of Directors in June, 2015, it has been decided to revise the minimum amount and the multiples in which Reserve Bank will receive and pay for the purpose of funding or for repatriating the excess liquidity in the ACU Dollar and ACU Euro accounts to $ 500 /€ 500.

3. AD Category-I Banks may bring the contents of this circular to the notice of their constituents concerned.

4. The directions contained in this circular have been issued under section 10(4) and11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and are without prejudice to permissions/approvals, if any, required under any other law.

 

Notification No: 31/2016 Dated: 26-5-2016


Service Tax (Third Amendment) Rules, 2016 – 31/2016 – Dated 26-5-2016 – Service Tax

GOVERNMENT OF INDIA