Service  Tax & Income Tax Consultants Bangalore, Accounting Services, Audit Firm in India.

Service Tax & Income Tax Consultants Bangalore, Accounting Services, Audit Firm in India.

Service Tax & Income Tax Consultants Bangalore, Accounting Services, Audit Firm in India.

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Notification No. : S.O. 2836(E) Dated: 8-10-2015


Set up a sector specific Special Economic Zone for pharmaceuticals at Hassan in the State of Karnataka – S.O. 2836(E) – Dated 8-10-2015 – Special Economic Zone

MINISTRY OF COMMERCE AND INDUSTRY

(Department of Commerce)

NOTIFICATION

New Delhi, the 8th October, 2015

S.O. 2836(E).-Whereas, M/s. Karnataka Industrial Area Development Board, a fully owned State Industrial Promotion Organization in the State of Karnataka, 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 pharmaceuticals at Hassan in the State of Karnataka;

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 an area of 109.295 hectares at above Special Economic Zone vide Ministry of Commerce and Industry Notification Number S.O. 2161 (E) dated 18th December, 2007;

And, whereas, M/s. Karnataka Industrial Area Development Board has now proposed for de-notification of 58.64 hectares at the above Special Economic Zone;

And, whereas, the State Government of Karnataka has given its “No Objection” to the proposal vide letter No. VTPC/SEZ/KIADB-NOC/DD/2014-15, dated 13th July, 2015;

And, whereas, the Development Commissioner, Cochin Special Economic Zone has recommended the proposal for de-notification of an area of 58.64 hectares of the Special Economic Zone;

Now, whereas, the Central Government is satisfied that the requirements under sub-section (8) of section 3 of the said Act and other related requirements are fulfilled;

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 de-notifies an area of 58.64 hectares, thereby making resultant area as 50.655 hectares, comprising the survey numbers and the area given below in the table, namely:-

TABLE

S. No.

Name of the Village

Survey No.

Area to de-notified (in Hectares)

1.

Kaushika

325

1.214

2.

327

2.519

3.

328

24.231

4.

329

26.617

5.

330

1.042

6.

331

0.577

7.

332

1.214

8.

Chikkabasavanahalli

64

1.226

Total

58.64 hectares

Total Area of SEZ after above de-notification

50.655 hectares

[F. No. F.2/386/2006-SEZ]

Dr. GURUPRASAD MOHAPATRA, Jt. Secy

No. 21 Dated: 8-10-2015


Memorandum of Procedure for channeling transactions through Asian Clearing Union (ACU) – Circular – Dated 8-10-2015 – FEMA

RBI/2015-16/203

A. P. (DIR Series) Circular No. 21

October 08, 2015

To

All Authorised Dealer Category-I banks

Madam / Sir,

Memorandum of Procedure for channeling transactions  through Asian Clearing Union (ACU)

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 and the subsequent amendment to the same vide A.P. (DIR Series) Circular No.63 dated October 18, 2013.

2. In view of the understanding reached among the members of the ACU during the 44th Meeting of the ACU Board in June, 2015, it has been decided to permit the use of the Nostro accounts of the commercial banks of the ACU member countries, i.e., the ACU Dollar and ACU Euro accounts, for settling the payments of both exports and imports of goods and services among the ACU countries.

3. Consequently, payments for all eligible

a. export transactions may be made by debit to the ACU Dollar / ACU Euro account in India of a bank of the member country in which the other party to the transaction is resident or by credit to the ACU Dollar / ACU Euro account of the authorised dealer maintained with the correspondent bank in the other member country;

b. import transactions may be made by credit to the ACU Dollar / ACU Euro account in India of a bank of the member country in which the other party to the transaction is resident or by debit to the ACU Dollar / ACU Euro account of an authorised dealer with the correspondent bank in the other member country.

4. It is further reiterated that all eligible export/import transactions with other ACU member countries (except in the case of certain countries where specific exemptions have been provided by the Reserve Bank of India) shall invariably be settled through the ACU mechanism.

5. AD Category-I banks may bring the contents of this circular to the notice of their constituents concerned.

6. 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) and are without prejudice to permissions/approvals, if any, required under any other law.

Yours faithfully,

(A K Pandey)

Chief General Manager

No. 20 Dated: 8-10-2015


Risk Management & Inter-Bank Dealings: Booking of Forward Contracts – Liberalisation – Circular – Dated 8-10-2015 – FEMA

RBI/2015-16/201

A. P. (DIR Series) Circular No. 20

October 8, 2015

To,

All Authorised Dealer Category – I banks

Madam / Sir,

Risk Management & Inter-Bank Dealings: Booking of Forward Contracts – Liberalisation

Attention of Authorised Dealers Category-I (AD Cat-I) banks is invited to the 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) Circulars No. 15 dated October 29, 2007and 119 dated April 7, 2014 regarding Booking of Forward Contracts – Liberalisation, in terms of which resident individuals, firms and companies, to manage / hedge their foreign exchange exposures arising out of actual or anticipated remittances, both inward and outward, are allowed to book forward contracts, without production of underlying documents, up to a limit of USD 250,000 based on self-declaration.

2. As announced in the Fourth Bi-monthly Monetary Policy Statement (para. no. 39) on September 29, 2015, with a view to further liberalising the existing hedging facilities, it has been decided to allow all resident individuals, firms and companies, who have actual or anticipated foreign exchange exposures, to book foreign exchange forward and FCY-INR options contracts up to USD 1,000,000 (USD one million) without any requirement of documentation on the basis of a simple declaration. While the contracts booked under this facility would normally be on a deliverable basis, cancellation and rebooking of contracts are permitted. Based on the track record of the entity, the concerned AD Cat-I bank may, however, call for underlying documents, if considered necessary, at the time of rebooking of cancelled contracts. All other conditions as indicated in A.P. (DIR Series) circular no. 15 dated October 29, 2007including suitability & appropriateness (S&A) norms shall apply, mutatis mutandis. The amended application and reporting formats are provided in Annexes I and II, respectively, of this circular.

3. The existing facilities in terms of A.P. (DIR Series) Circular No. 15 dated October 29, 2007 for Small and Medium Enterprises (SMEs) shall remain unchanged.

4. AD Category – I banks 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 Section 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.

Yours faithfully,

(R Subramanian)

 Chief General Manager

Notification No. : 21/2015 Dated: 7-10-2015


CENVAT Credit (Fourth Amendment) Rules, 2015 – 21/2015 – Dated 7-10-2015 – Central Excise – Non Tariff

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

(Department of Revenue)

Notification No. 21/2015-Central Excise (N.T.)

New Delhi, the 7th October, 2015

G.S.R.     (E).- In exercise of the powers conferred by section 37 of the Central Excise Act,  1944  (1  of  1944)  and section  94  of  the  Finance  Act,  1994  (32  of  1994),  the  Central Government hereby makes the following rules further to amend the CENVAT Credit Rules, 2004, namely:–

1.         (1)   These rules may be called the CENVAT Credit (Fourth Amendment) Rules, 2015.

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

2.    In the CENVAT Credit Rules, 2004 (hereinafter referred to as the said rules), in rule 6, in sub-rule (6), after clause (viii) and the entries relating thereto, the following shall be inserted, namely:-

(ix) Ethanol produced from molasses generated from cane crushed in the sugar season 2015-16 i.e. 1st October, 2015 onwards, for supply to the public sector oil marketing companies, namely, Indian Oil Corporation Ltd., Hindustan Petroleum Corporation Ltd. or Bharat Petroleum Corporation Ltd., for the purposes of blending with petrol, in terms of the provisions of S.No.40A of the Table in notification No.12/2012-Central Excise, dated the 17th March, 2012, number G.S.R. 163(E), dated that 17th March, 2012.

[F. No. 354/78/2009-TRU (Pt.)]

(Anurag Sehgal)

Under Secretary to the Government of India

Note.-   The  principal  rules  were  published  in  the  Gazette  of  India,  Extraordinary,  Part II, Section 3, Sub-section (i), vide notification No.23/2004-Central Excise (N.T.) dated the 10th September,  2004 vide number  G.S.R.  600(E)  dated  the  10th September,  2004  and  last amended vide notification  No.14/2015-Central  Excise  (N.T.)  dated  19th May, 2015 published  in  the  Gazette  of  India,  Extraordinary,  Part  II,  Section  3,  Sub-section  (i),  by number G.S.R. 402(E), dated the 19th May, 2015.

No. F. No. 225/141/2015-ITA.II Dated: 6-10-2015


Validation of tax-returns through Electronic Verification Code – Order-Instruction – Dated 6-10-2015 – Income Tax

Government of India

Ministry of Finance

Department of Revenue

Central Board of Direct Taxes

North Block, New Delhi, the 6th of October, 2015

Order under section 119(1) of Income-tax Act, 1961

Subject: Validation of tax-returns through Electronic Verification Code-reg.-

The Central Board of Direct Taxes (‘CBDT’) vide Notification No. 41/2015 dated 15.04.2015 in cases of categories of ‘persons’ specified therein, had introduced Electronic Verification Code (‘EVC’) as one of the modes for validation of return of income pertaining to Assessment Year 2015-2016 which are filed electronically on or after 01.04.2015.

2. CBDT had further permitted validation of such returns of income through EVC in case of returns of income pertaining to Assessment Years 2013-2014 and 2014-2015 filed electronically (without digital signature certificate) between 01.04.2014 to 31.03.2015, vide its subsequent order dated 20.07.2015 for the convenience of the taxpayers. This order was applicable to those cases which were covered by Notification No. 1/2015 dated 10.07.2015 issued by the Pr. DGIT (Systems), CBDT wherein time-limit for submission of ITR-V to the CPC Bengaluru was extended till 31.10.2015.

3.  To further facilitate the process of validation of tax-returns, the CBDT, in exercise of the powers conferred undersub-section (1) of section 119 of the Income-tax Act, 1961 (‘Act’), hereby directs that returns of income which are filed on or after 01.04.2015 electronically (without digital signature certificate) pertaining to the Assessment Year 2014-2015 or returns filed in response to various statutory notices as prescribed under the Act or returns filed as a consequence of condonation of delay u/s 119 of the Act can also be validated through EVC.

F. No. 225/141/2015-ITA.II

(Ankita Pandey)

DCIT-OSD IT(A-II), CBDT

No. 17/2015 Dated: 6-10-2015


Measurement of the distance for the purpose of section 2(14)(iii)(b) of the Income-tax Act for the period prior to Assessment year 2014-15 – Circular – Dated 6-10-2015 – Income Tax

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

DEPARTMENT OF REVENUE

CENTRAL BOARD OF DIRECT TAXES

CIRCULAR NO. 17/2015

New Delhi, Dated October 06, 2015

Subject:-  Measurement of the distance for the purpose of section 2(14)(iii)(b) of the Income-tax Act for the period prior to Assessment year 2014-15

“Agricultural Land” is excluded from the definition of capital asset as per section 2(14)(iii) of the Income-tax Actbased, inter-alia, on its proximity to a municipality or cantonment board.   The method of measuring the distance of the said land from the municipality, has given rise to considerable litigation. Although, the amendment by theFinance Act  2013  w.e.f. 1.04.2014 prescribes the measurement of the distance to be taken aerially, ambiguity persists in respect of earlier periods.

2. The matter has been examined in light of judicial decisions on the subject. The Nagpur Bench of the Hon. Bombay High Court vide order dated 30.03.2015 in ITA 151 of 2013 in the case of Smt. Maltibai R Kadu has held that the amendment prescribing distance to be measured aerially, applies prospectively i.e. in relation to assessment year 2014-15 and subsequent assessment years. For the period prior to assessment year 2014-15, the High Court held that the distance between the municipal limit and the agricultural land is to be measured having regard to the shortest road distance. The said decision of the High Court has been accepted and the aforesaid disputed issue has not been further contested.

3.  Being a settled issue, no appeals may henceforth be filed on this ground by the officers of the Department and appeals already filed, if any, on this issue before various Courts/ Tribunals may be withdrawn/ not pressed upon.  This may be brought to the notice of all concerned.

[F. No. 279/Misc./140/2015-ITJ]

(D S Chaudhry)

CIT (A&J), CBDT,

New Delhi

No. 16/2015 Dated: 6-10-2015


Non-applicability of Rule 9A of the Income Tax Rules 1962 in the case of Abandoned Feature Films – Circular – Dated 6-10-2015 – Income Tax

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

DEPARTMENT OF REVENUE

CENTRAL BOARD OF DIRECT TAXES

CIRCULAR NO. 16/2015

New Delhi, Dated October 06, 2015

Subject:- Non-applicability of Rule 9A of the Income Tax Rules 1962 in the case of Abandoned Feature Films-

The deduction in respect of the cost of production of a feature film certified for release by the Board of Film Censors in a previous year is provided in Rule 9A of Income Tax Rules, 1962.

2. In the case of abandoned films, however, since certificate of Board of Film Censors is not received, in some cases no deduction was allowed by applying Rule 9A of the Rules or by treating the expenditure as capital expenditure.

3. The matter has been examined in light of judicial decisions on this subject. The order of the Hon. Bombay High Court dated 28.1.15 in ITA 310 of 2013 in the case of Venus Records and Tapes Pvt. Ltd. on this issue has been accepted and the aforesaid disputed issue has not been further contested. Consequently, it is clarified that Rule 9Adoes not apply to abandoned feature films and that the expenditure incurred on such abandoned feature films is not to be treated as a capital expenditure. The cost of production of an abandoned feature film, is to be treated as revenue expenditure and allowed as per the provisions of Section 37 of the Income-tax Act.

4. Being a settled issue, no appeals may henceforth be filed on this ground by the officers of the Department and appeals already filed, if any, already filed on this issue before various Courts/Tribunals may be withdrawn/not pressed upon. This may be brought to the notice of all Officers concerned.

F. No. 279/Misc./140/2015-ITJ

(D S Chaudhry)

CIT (A&J), CBDT,

New Delhi

No. 19 Dated: 6-10-2015


Investment by Foreign Portfolio Investors (FPI) in Government Securities – Circular – Dated 6-10-2015 – FEMA

RBI/2015-16/198

A.P. (DIR Series) Circular No 19

October 6, 2015

To,

All Authorised Persons

Madam/ Sir,

Investment by Foreign Portfolio Investors (FPI) in Government Securities

Attention of Authorized Dealer Category-I (AD Category-I) banks is invited to Schedule 5 to the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulations, 2000 notified videNotification No. FEMA.20/2000- RB dated May 3, 2000, as amended from time to time. The limits for investment by foreign portfolio investors (FPI) in Government securities were last increased to USD 30 billion vide A.P.(DIR Series) Circular No.111 dated June 12, 2013. Subsequently, the allocation of limits between long term investors1 and other FPIs was modified and the requirement of investment by FPIs in securities with minimum residual maturity of three years was put in place vide A.P. (DIR Series) Circular No.99 dated January 29, 2014 and A.P. (DIR Series) Circular No. 13 dated July 23, 2014.

2. Attention of AD Category-I banks is also invited to para 30 of the fourth bi-monthly Monetary Policy Statement for the year 2015-16 issued on September 29, 2015, in terms of which a Medium Term Framework (MTF) for FPI limits in Government securities was announced to provide a more predictable regime. The features of the MTF are as under:

The limits for FPI investment in debt securities will henceforth be announced/ fixed in Rupee terms.

The limits for FPI investment in the Central Government securities will be increased in phases to reach 5 per cent of the outstanding stock by March 2018. In aggregate terms, this is expected to open up room for additional investment of ₹ 1,200 billion in the limit for Central Government securities by March 2018 over and above the existing limit of ₹ 1,535 billion for all Government securities.

Additionally, there will be a separate limit for investment by all FPIs in the State Development Loans (SDLs), to be increased in phases to reach 2 per cent of the outstanding stock by March 2018. This would amount to an additional limit of about ₹ 500 billion by March 2018.

The effective increase in limits for the following two quarters will be announced every half year in March and September.

The existing requirement of investments being made in G-sec (including SDLs) with a minimum residual maturity of three years will continue to apply to all categories of FPIs.

Aggregate FPI investments in any Central Government security would be capped at 20% of the outstanding stock of the security. Investments at existing levels in the securities over this limit may continue but not get replenished through fresh purchases by FPIs till these fall below 20%.

3. Accordingly, for the current financial year, it has been decided to enhance the limit for investment by FPIs in Government Securities in two tranches from October 12, 2015 and January 1, 2016 respectively as under:

(₹ in billion)
Central Government securities State Development Loans Aggregate
For all FPIs Additional for Long Term FPIs Total For all FPIs
(including Long Term FPIs)
Existing Limits 1244 291 1535 Nil 1535
Revised limits with effect from October 12, 2015 1299 366 1665 35 1700
Revised limits with effect from January 1, 2016 1354 441 1795 70 1865

4. For the present, the security-wise limit for FPI investments will be monitored on a day-end basis and those Central Government securities in which aggregate investment by FPIs exceeds the prescribed threshold of 20% will be put in a negative investment list. No fresh investments by FPIs in these securities will be permitted till they are removed from the negative list. There will be no security-wise limit for SDLs for now.

5. All other existing conditions, including investment of coupons being permitted outside the limits and investments being restricted to securities with a minimum residual maturity of three years, will continue to apply.

6. Further operational guidelines relating to allocation and monitoring of limits will be issued by the Securities and Exchange Board of India (SEBI)

7. AD Category – I banks may bring the contents of this circular to the notice of their constituents and customers concerned.

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.

Yours faithfully,

(R. Subramanian)

Chief General Manager


1 FPIs registered with SEBI as Sovereign Wealth Funds (SWFs), Multilateral Agencies, Endowment Funds, Insurance Funds, Pension Funds and Foreign Central Banks.

World needs ‘additional shoulders’ to push economic growth: FM Arun Jaitley : 06-10-2015


The world needs “additional shoulders” other than China to push economic growth and this presents an opportunity for India, Finance Minister Arun Jaitley has said.

Addressing students and faculty at Columbia University here yesterday, Jaitley said the revolution of raising expectations in India is a good sign.

He reiterated that India has now reached a situation where it is no longer satisfied with a 6 to 8 per cent growth rate and most Indians believe that “my normal is eight plus (growth rate), probably closer to nine per cent” and higher.

“I see nothing wrong in the pressures being built on the decision makers that the faster you move the better it is for the government,” he said, adding that being placed in such a situation is an opportunity for India.

“One of the great shoulders the world was relying on (was) China. The world now needs some other additional shoulders to give a push to the growth rates.

“It is a great opportunity and if we continue to move in the direction in which we are, I see over the next few years with a more friendly environment in the world as far as the economic scenario is concerned, probably our growth rates will move up, our ability to grow will move up and our ability to fight poverty at least will also improve,” he said.

Jaitley delivered the keynote address at the inauguration of the Deepak and Neera Raj Centre on Indian Economic Policies at Columbia University’s School of International and Public Affairs.

Noting that India grew by about 7.3 per cent last year, Jaitley said that according to internal estimates, this year “we could do a shade better than that.”

He said that one of the main problems of credibility related to taxation issues.

“As far as the taxation issues are concerned, a lot needed to be done at our end and therefore in terms of direct taxes, we’d lost credibility with the world,” he said, adding that aggressive taxation did the country no good and does not bring taxes but it “brought us a bad name”.

“For anyone in the government, it would be a very serious challenge where assessment orders have been passed, can only be set aside by a judicial process and not by an executive decision,” he said, adding that to resolve each one of these issues has been one of his toughest challenges.

He, however, expressed satisfaction that one by one each of those issues related to direct taxes is now being put to rest. Jaitley said the government is “keeping all options open” to resolve the taxation issues either by judicial or executive process.

“I think the fears of retroactive taxation… by and large have been put to rest,” he said.

Starting with the 2016-17 year, the corporate tax rate will be brought down to a 25 per cent flat corporate tax.

He is also looking to put most of the exemptions, except those which encourage individual savings, to an end.

“Over the next four years this entire rate would come down to 25 per cent. And I will be removing each one of those exemptions one by one. I am shortly going to notify all the exemptions which are going to be rationalised this very year itself,” he said.

Pointing out the macroeconomic fundamentals, he said that inflation is broadly under control and the Central Bank has slowly but steadily in the last 16 months brought down the repo rate by almost 125 basis points while keeping inflation broadly under control.

Fiscal deficit is also under control and the country is on track to achieve its fiscal deficit target, he said.

“Having achieved these fundamentals and correct fiscal prudence, we are targeting to reach a three per cent fiscal deficit figure over the next 2-2.5 years and we are well on track to achieve that,” he said.

When asked about the Trans-Pacific deal reached between the US and 11 other partner countries and how India plans to counter such deals, Jaitley India would have to strengthen its own economy and it is in negotiations with various trade arrangements in various parts of the world.

“We obviously realise we cannot have an isolationist existence,” he said.

He pointed out that there was a time when India had an “agitational approach” to a lot of such international arrangements.

“We would go and attempt how do we block the whole arrangement but today there is a realisation that India is far past that stage and we have to be a central player in a large number of these actions,” he said.

Source : Financial Express

‘Service tax is leviable on services provided within taxable territory’ : 05-10-2015


I am working for a software company located abroad. It has no establishment in India. I am a contractor for that company, not an employee. For my services, I am paid in US dollars, which gets converted into rupees when the inward remittance is received. On behalf of that company I deliver services to its clients across the globe including India, to reputed companies. Am I required to pay service tax?
What service you provide is not clear and so, it is difficult to give you a categorical reply. But generally, service taxis leviable on services provided within the taxable territory (i.e. in India, except the state of Jammu and Kashmir). The Place of Provision of Services Rules, 2012 helps you determine whether the services are provided within the taxable territory. The general provision is given at Rule 3 of the said Rules and it says that the place of provision of a service shall be the location of the recipient of service. So, where receivers of your services are located in the taxable territory, service tax is payable. However, where the service receivers are located abroad, you may examine what the place of provision of your service is as per the said Rules and determine the obligation to pay service tax. It will depend on the nature of your service.

We hold ISO 9000 quality recognition and we have claimed double weightage for our exports in our application for recognition as an Export House. However, our recognition has not been granted on the grounds that we have not got the ISO quality recognition from an agency mentioned in Appendix 2-I of the Handbook of Procedures, Vol. 1 (HB-1). Is this correct?
As per Para 3.22 (a) (ii) of Foreign Trade Policy (FTP), double weightage is available for exports of manufacturing units having ISO/BIS. It does not say from whom you should have got your ISO recognition. However, Para 2.90 of HB-1 says that the list of agencies authorised to grant quality certification is given in Appendix-2-I and for ISO 9000 (Series) and for ISO 14000 (Series), agencies accredited with the National Accreditation Board for Certification Bodies (NABCB) under the Quality Council of India shall be deemed to be authorised under this Policy, and that the list of such accredited agencies is available on the web site www.qcin.org and also provided under Appendix 2-I.

We had purchased duty credit scrips issued under the Focus Product Scheme from the market but the Customs says that it is not valid, as it has been cancelled. We have no idea about its cancellation. The seller of the scrip is unwilling to take it back, as it is cancelled. What can we do?
On almost identical facts, the Gujarat High Court has held in the case of H. Kumar Gems Inc [2015 (323) ELT 142 (Guj)] that in the absence of a public notice regarding cancellation, utilisation cannot be denied unless the cancellation endorsement has been made on the licence.

Source : Business Standard

FDI policy to be simplified, FIPB to meet twice a month for faster nod : 05-10-2015


India is rolling out the red carpet for overseas investors with sweeping foreign investment policy reform and quicker approvals while Prime Minister Narendra Modi’s monthly review of projects is ensuring that delays are getting resolved quickly.

In his first interview after taking over as economic affairs secretary, Shaktikanta Das told ET that the Foreign Investment Promotion Board (FIPB) will now meet twice a month to speed up approvals, signaling the clear intent of the government to push ahead with reforms on a wide range of issues.

The foreign direct investment ( FDI) policy is being reviewed to make it simple and put the maximum possible sectors on the automatic route, obviating the need for government approval. The government is also responding to the Reserve Bank of India’s call for quicker transmission of monetary policy.

Das said small savings rates could be reset more frequently as opposed to yearly adjustments to align them to market rates more quickly to reduce their distortive effect. Besides this, the Cabinet note on the monetary policy committee would be moved soon for consideration by the government.

Das said Finance Minister Arun Jaitley was keeping tabs on disinvestment—the government has set itself a record Rs 69,500 crore from this in the current year—to see that it yields maximum revenue.

SPEEDY CLEARANCE

The FIPB currently meets an average of once every month and the entire approval process can take more than three months even for investments of a few crores of rupees. Timeconsuming procedures were among the issues that global CEOs brought up with Modi during his recent trip to the US.

“At present, there are too many conditionalities and the (FDI) document itself needs to be simplified. Sectoral caps need to be revised and the process of approval should be automatic unless there are security concerns or in sensitive sectors,” Das said. The current policy has sectors in which no investment is allowed while others are open to levels such as 26 per cent, 49 per cent, 74 per cent and 100 per cent, depending on how sensitive they are. The policy document, which is more than 120 pages long, has a number of conditions for every sector.

PM PUSH
Das said the PRAGATI (pro-active governance and timely implementation) video conference— which the PM holds on every fourth Wednesday of the month with all government of India secretaries and state chief secretaries— has had tremendous impact on ground in terms of getting things moving, addressing criticism that the administration’s execution was weak.

“A number of projects get listed, there may be many loose ends but when they come for the meeting most of the issues would have got sorted out… And, if any issues remain, timelines are fixed,” Das said. All implementing departments are keen to speed up resolution and avoid delays, given that the monitoring takes place at the highest level.

He expects the economy to grow at least 7.5 per cent in the current fiscal, better than the 7.4 per cent that the RBI has projected in its latest monetary policy, when it cut the policy rate by a deeper-thanexpected 50 basis points or half a percentage point.

“The RBI decision on rate cut and quick move by banks to transmit the cut will have impact on the overall economy, particularly in sectors such as housing, automobiles, consumer goods,” Das said. “It will lead to generation  of additional demand and aid growth.”

RBI governor Raghuram Rajan had called for quicker transmission of rate cuts by banks, which in turn said they were constrained from doing so because of better rates on small savings programmes.

As part of the small savings review, the rates could be set more frequently, Das said. Small savings schemes pay nearly 1.5 percentage points more than bank deposits of similar maturity. Currently, small savings rates are reset annually and pegged to government securities.

Das said vulnerable sections would however be protected. “Certain aspects will have to be kept in mind like senior citizens and small savers. Their interest has to be duly factored in,” Das said. The bureaucrat charged with the overseeing the economy rejected the observation of some rating agencies and multilateral lenders such as the Asian Development Bank that reforms hadn’t gained momentum.

LAND BILL, GST

He said the land bill amendment may not have got parliamentary approval but states were independently passing laws instead, pointing to Tamil Nadu as a good example.

“The point is that states have got over the problem in their own way through the legislative process. The fact that the land bill could not be passed cannot be termed as a stalled reform because the ultimate objective is being achieved,” Das said, adding that land availability  for industry was not a concern.

The goods and services tax (GST), scheduled to be rolled out on April 1 next year, remains a priority for the government.

“GST is very much on the table and the government is determined and committed to take it forward and the parallel administrative action is going on. The drafting of bills is going on,” he said.

Das said the government’s accelerated spending to revive the economy was not a cause for concern and it was committed to fiscal discipline. “The fiscal deficit roadmap is sacrosanct and it will be observed. The rest is a question of management of numbers, which will be done,” he said in response  to worries that the ‘onerank, one-pension’ initiative for servicemen and the pay commission award could derail government finances.

He said indirect tax collections are looking robust and should exceed the budgeted figure. On concerns about slow pace of disinvestment, he said government is looking to get the most value out of its stakes. “At this point of time, I would say we are working on a strategy to maximize the amount of disinvestment. The finance minister has reviewed internally  with all concerned,” Das said.

Source : PTI

No. F.No.225/207/2015/1TA.II Dated: 1-10-2015


Order under Section 119 of the Income-tax Act, 1961 – Order-Instruction – Dated 1-10-2015 – Income Tax

F.No.225/207/2015/ITA.II

Government of India

Ministry of Finance

Department of Revenue

Central Board of Direct Taxes

North Block, ITA.II Division

New Delhi dated the 1st of October, 2015

Order under Section 119 of the Income-tax Act, 1961

In supersession of orders under Section 119 of the Income-tax Act, 1961 (‘Act’) dated 30th September, 2015 vide file of even number, the Central Board of Direct Taxes, in exercise of powers conferred under Section 119 of theAct, hereby orders that the returns of income and audit reports u/s 44AB due for e-filing by 30th September, 2015 may be filed, across the country, by 31st  October, 2015.

(Rohit Garg)

Deputy Secretary to the Government of India

Notification No. : 77/2015 Dated: 30-9-2015


Agreement between the Government of the Republic of India and the Government of the United States of America for the Exchange of Information with respect to taxes – 77/2015 – Dated 30-9-2015 – Income Tax

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

(DEPARTMENT OF REVENUE)

(INCOME-TAX)

NOTIFICATION NO.  77/2015

New Delhi, the 30th September, 2015

S.O. …. (E).- Whereas, an Inter-Governmental Agreement and Memorandum of Understanding (MoU) between the Government of the Republic of India and the Government of the United States of America to improve International Tax Compliance and to implement Foreign Account Tax Compliance Act of the United States of America was signed at New Delhi on the 9th day of July, 2015 (hereinafter  referred to as the said Agreement and enclosed herewith as Annexure);

And whereas, the date of entry into force of the said Agreement is the 31st  day of August, 2015, being the date of notifications of completion of necessary internal procedures as required for entry into force of the said Agreement in accordance with Paragraph 1 of Article 10 of the said Agreement;

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 said Agreement between the Government of the Republic of India and the Government of the United States of America for the exchange of information with respect to taxes, as set out in the said Agreement, shall be given effect to in the Union of India with effect from the 31stAugust, 2015, that is, the date of entry into force of the said Agreement.

[F. No. 500/137/2011-FTD-I]

(Akhilesh Ranjan)

Joint Secretary

No. 186/5/2015 Dated: 5-10-2015


Service tax levy on services provided by a Goods Transport Agency – Dated 5-10-2015 – Service Tax

Circular No.186/5/2015-ST

F. No. 354/98/20015-TRU

Government of India

Ministry of Finance

Department of Revenue

Central Board of Excise & Customs

New Delhi, dated 5th October, 2015

To,

Principal Chief Commissioner / Chief Commissioner of Central Excise, Service Tax and Customs (All),

Director General of Service Tax

Director General of Audit

Director General of Central Excise Intelligence Principal Principal Commissioners of Service Tax (All)

Commissioners of Service Tax (All)

Commissioner (DPPR)

webmaster@cbec.gov.in

Sir/ Madam,

 Subject: – Service tax levy on services provided by a Goods Transport Agency -reg.

The All India Transport Welfare Association (AITWA) has represented regarding the difficulties being faced by the Goods Transport Agencies (GTAs) in respect of service tax levy on the services of goods transport. Doubts has been raised by the All India Motor Transport Congress (AIMTC) regarding treatment given to various services provided by GTAs in the course of transportation of goods by road.

2.  The issue has been examined.  Since July 1, 2012, service tax has shifted to a negative list regime, by which all the services except those covered in negative list as mentioned in section 66D of the Finance Act, 1994 or those exempted by notification are chargeable to service tax.

3.  Goods Transport Agency (GTA) has been defined to mean any person who provides service to a person in relation to transport of goods by road and issues consignment note, by whatever name called.  The service provided is a composite service which may include various ancillary services such as loading/ unloading, packing/unpacking, transshipment, temporary storage etc., which are provided in the course of transportation of goods by road. These ancillary services may be provided by GTA himself or may be sub-contracted by the GTA. In either case, for the service provided, GTA issues a consignment note and the invoice issued by the GTA for providing the said service includes the value of ancillary services provided in the course of transportation of goods by road. These services are not provided as independent activities but are the means for successful provision of the principal service, namely, the transportation of goods by road.

4.   A single composite service need not be broken into its components and considered as constituting separate services, if it is provided as such in the ordinary course of business. Thus, a composite service, even if it consists of more than one service, should be treated as a single service based on the main or principal service.   While taking a view, both the form and substance of the transaction are to be taken into account. The guiding principle is to identify the essential features of the transaction. The interpretation of specified descriptions of services in such cases shall be based on the principle of interpretation enumerated in section 66 F of the Finance Act, 1994. Thus, if ancillary services are provided in the course of transportation of goods by road and the charges for such services are included in the invoice issued by the GTA, and not by any other person, such services would form part of GTA service and, therefore, the abatement of 70%, presently applicable to GTA service, would be available on it.

5.   It is also clarified that transportation of goods by road by a GTA, in cases where GTA undertakes to reach/deliver the goods at destination within a stipulated time,  should be considered as ‘services of goods transport agency in relation to transportation of goods’ for the purpose of notification No. 26/2012-ST dated 20.06.2012, serial number 7, so long as (a) the entire transportation of goods is by road; and (b) the GTA issues a consignment note, by whatever name called.

6.   Pending disputes on the above issues may accordingly be decided expeditiously.

7.   Trade & field formations may be informed suitably.

8.   Hindi version will follow.

Yours faithfully,

(Dr. Ravindra Kumar

No. F. No. 275/46/2015-CX. 8A Dated: 1-10-2015


Jurisdiction of the settlement commission (customs, central Excise & service Tax) in respect of the cases of Gold Smuggling – Dated 1-10-2015 – Central Excise

F. No. 275/46/2015-CX. 8A

Ministry of Finance

Department of Revenue

Central Board of Excise & Customs

(Legal Cell)

‘C’ Wing, 5th Floor, HUDCO_VISHALA Building

Bhikaji Cama Place, R.K. Puram,

New Delhi-66 : dated the 01.10.2015

INSTRUCTION

To,

  1. All Chief Commissioners of Customs, Central Excise and Service Tax;
  2. All Director Generals of Customs, Central Excise and service Tax;
  3. <webmaster.cbec@icegate.gov.in>

Sub: Jurisdiction of the Settlement Commission (Customs, Central Excise & Service Tax) in respect of the cases of Gold Smuggling

Board has received references from the field formations in respect of the jurisdiction of the Settlement Commission in the settlement of the cases of gold smuggling. The Mumbai bench of the Settlement Commission had decided some cases holding that they have the jurisdiction even in respect of goods specified under Section 123 of theCustoms Act, 1962, and have accordingly allowed the settlement of cases of gold smuggling. However, a divergent view was taken by the Kolkata bench of the Settlement Commission.

2. The said issue has been considered by the Delhi High Court in case of Additional Commissioner of Customs vs Shri Ram Niwas Verma [W.P. (C) No. 7363/2014 & CM 17221/2014] vide its order dated 25th August 2015, holding that Settlement Commission has no jurisdiction to decide cases in relation to smuggling of the goods specified underSection 123 of Customs Act, 1962. A copy of the said order dated 25.08.2015 is attached for ready reference.

3.  In view of the said order of the Delhi High Court, it is clarified that Settlement Commission has no jurisdiction to entertain the matters in relation to the goods specified under Section 123 of the Customs Act, 1962 which include Gold. In case the Settlement Commission admits any such matter for settlement, the jurisdictional field formation should challenge the same in High Court by way of Writ, at the stage of admission.

4. Above instructions may be brought to the knowledge of all formations within your jurisdiction.

Yours faithfully

(Harsh Vardhan)

Senior Analyst

Tel : 011-26195405

No. Press Note No. 11 (2015 series) Dated: 1-10-2015


Foreign Direct Investment (FDI) upto 100% in White Label ATM Operations under automatic route. – FDI GUIDELINES – Dated 1-10-2015 – FEMA

Government of India

Ministry of Commerce and Industry

Department of Industry Policy & Promotion

Press Note No. 11 (2015 series)

Subject : Foreign Direct Investment (FDI) upto 100% in White Label ATM Operations under automatic route.

The Government of India has reviewed the extant FDI Policy and decided to allow Foreign Investment up to 100% in White Lable ATM Operations, under the automatic route. Accordingly, a new sub-para 6.2.18.8.3 in the paragraph 6.2.18.8 of the of the Consolidated FDI Policy Circular is added in the following g Manner –

6.2.18.8 Non-Banking Finance Companies (NBFC)

Sector/Activity % Equity/Foreign Investment Cap Entry Route
6.2.18.8.3White Labelled ATM Operations 100% Automatic
  1. Any non-bank entity intending to sep up WLAs should have a minimum net worth of ₹ 100 crore as per the latest financial year’s audited balance sheet, which is to be maintained at all times.
  2. In case the entity is also engaged in any other 18 NBFC activities, then the foreign investment in the company setting up WLA, shall also have to comply with the minimum capitalization norms for foreign investments in NBFC activities, as provided in Para 6.2.18.8.2
  3. FDI in the WLAO will be subject to the specific criteria and guidelines issued by RBI vide Circular No. DPSS CO PD No 2298/02 10 002/2011-2012 as amended from time to time

2.  The above decision will take immediate effect.

(Atul Chaturvedi)

Joint Secretary to the Government of India

Select services to attract lower GST rate to soften higher levy : 01-10-2015


With the goods and services tax likely to increase the tax rate for services and perhaps do the opposite for goods, the Centre and states want to soften the blow to a clutch of service industries that are in policy focus by keeping them under a lower-than-standard GST rate. While banking and insurance services, which are being encouraged to bolster financial inclusion, would surely be among the beneficiaries, policymakers, sources said, are drawing up a longer list of services that could attract the lower GST rate.

The standard rate of GST (including the central and state components) proposed by different agencies vary between 18% and 27%; while the finance minister has spoken of the need to keep the GST rate as low as possible for the proposed superior indirect taxation system to really meet the potential to spur economic growth, the Rajya Sabha select committee on GST said the rate should not exceed 20%.

The excise duty currently levied on manufacturing — 12.5% on most items — and the state-level value added tax (VAT) on sales — about 14.5% on most items — add up to 27% now. If the GST rate is fixed at around 20%, it could mean a reduction of the tax rate in the case of these goods. Additionally, the greater facility of input tax credit in the GST regime would reduce the real incidence of tax on goods even further in the proposed regime. However, the same GST rate would imply an increase in incidence of tax on services, given that the current service service tax rate of 14% is way below even the “low” GST rate of 20% proposed by the select panel.

With GST would come the states’ power to tax services. It would also expand the taxation power of the Centre beyond factory production (excise) to cover all subsequent sales till the end consumer, with credit at each stage for taxes paid previously.

Tax experts said the increase in applicable tax rate on services could be a problem for the end consumer but not for businesses as they use tax credit on input services and raw materials for meeting the tax liability on the output services provided to their clients.

“Levying a merit rate (lower than the most-in-currency rate) of GST on a host of services availed of by the end consumer could help avoid inflationary tendencies. These services should be well defined to avoid any classification dispute,” said R Muralidharan, senior director, Deloitte in India.

Official sources said GST on banking services would be applicable mainly on charges such as processing fee and guarantee fee, not on interest payments, which are the largest source of revenue for banks. In the case of insurance, GST would be applicable only on the risk premium, not on the premium that goes as investment part of the policy.

“Wherever GST has been introduced, an inflationary trend has been noticed in the short term. It would therefore be a good idea to levy a lower rate on certain business-to-consumer services such as banking, telecom and insurance,” said Pratik Jain, partner at KPMG.

Sources said central and state GST laws will have provisions to ‘unblock’ utilisation of input tax credit for the services industry that will to some extent mitigate the impact of an increase in the tax rate.

GST, which was slated to be implemented from April 1 next year, would apparently miss the deadline as there is no political consensus in Rajya Sabha on passing the Constitution (122ndAmendment) Bill. “Missing the April 2016 deadline does not mean GST could be introduced only in 2017. Unlike income tax, which applies from year to year, GST is a tax on transactions and can be introduced even in the middle of a year,” said an official.

Source : Business Standard

No. 18 Dated: 30-9-2015


Regularisation of assets held abroad by a person resident in India under Foreign Exchange Management Act, 1999 – Circular – Dated 30-9-2015 – FEMA

RBI/2015-16/195

A.P. (DIR Series) Circular No.18

September 30, 2015

To

All Category – I Authorised Dealer Banks

Madam / Sir,

Regularisation of assets held abroad by a person resident in India under Foreign Exchange Management Act, 1999

The Government of India has enacted The Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 (Black Money Act) on May 26, 2015 to address the issue of undisclosed assets held abroad. It provides for separate taxation of income and assets acquired abroad from income not disclosed but chargeable to tax in India.

2. To effectively deal with assets held abroad by persons resident in India in violation of the Foreign Exchange Management Act, 1999 (FEMA) for which declarations have been made and taxes and penalties have been paid under the provisions of the Black Money Act, Reserve Bank has issued the Foreign Exchange Management (Regularization of assets held abroad by a person resident in India) Regulations, 2015 notified though Notification No. FEMA 348/2015-RB dated September 25, 2015 vide G.S.R. No. 738 (E) dated September 25, 2015.

3. Accordingly, it is clarified that:

a) No proceedings shall lie under the Foreign Exchange Management Act, 1999 (FEMA) against the declarant with respect to an asset held abroad for which taxes and penalties under the provisions of Black Money Act have been paid.

b) No permission under FEMA will be required to dispose of the asset so declared and bring back the proceeds to India through banking channels within 180 days from the date of declaration.

c) In case the declarant wishes to hold the asset so declared, she/ he may apply to the Reserve Bank of India within 180 days from the date of declaration if such permission is necessary as on date of application. Such applications will be dealt by the Reserve Bank of India as per extant regulations. In case such permission is not granted, the asset will have to be disposed of within 180 days from the date of receipt of the communication from the Reserve Bank conveying refusal of permission or within such extended period as may be permitted by the Reserve Bank and proceeds brought back to India immediately through the banking channel.

4. AD Category – I banks 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 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.

Yours faithfully,

(B P Kanungo)

 Chief General Manager

No. F.No.225/207/2015/ITA.II Dated: 30-9-2015


Returns of income due to be E-filed by 30th September, 2015 may be filed by 31st October, 2015 in cases of Income-tax assessees of the State(s) of Punjab and Haryana and Union Territory of Chandigarh. – Order-Instruction – Dated 30-9-2015 – Income Tax

F. No. 225/207/2015/ITA.II

Government of India

Ministry of Finance

Department of Revenue

Central Board of Direct Taxes

North-Block, ITA.II Division

New Delhi dated the 30th of September, 2015

Order under Section 119 of the Income-tax Act, 1961

The Central Board of Direct Taxes, in compliance to the order of Hon’ble Punjab and Haryana High Court dated 28.09.2015 in case of Vishal Garg & Ors. vs. Union of India & Anr.; CWP 19770-2015 and in exercise of powers conferred under section 119 of the Income-tax Act, 1961 (‘Act’), hereby orders that the returns of income due to be E-filed by 30th September, 2015 may be filed by 31st October, 2015 in cases of Income-tax assessees of the State(s) of Punjab and Haryana and Union Territory of Chandigarh.

2.  This order shall be subject to the outcome of any further appeal/SLP which the CBDT may file against the said judgment.

(Rohit Garg)

Deputy-Secretary to the Government of India

No. F. No. 225/207/2015/ITA.II Dated: 30-9-2015


Returns of income due to be E-filed by 30th September, 2015 may be filed by 31st October, 2015 in cases of Income-tax assessees of the State of Gujarat. – Order-Instruction – Dated 30-9-2015 – Income Tax

F. No. 225/207/2015/ITA.II

Government of India

Ministry of Finance

Department of Revenue

Central Board of Direct Taxes

North-Block, ITA.II Division

New Delhi dated the 30th of September, 2015

Order under Section 119 of the Income-tax Act, 1961

The Central Board of Direct Taxes, in compliance to the order of Hon’ble Gujarat High Court dated 29 .09.2015 in case of All Gujarat Federation of Tax Consultants vs. CBDT; Special Civil Application No. 15075 of 2015 and in exercise of powers conferred under section 119 of the Income-tax Act, 1961 (‘Act’), hereby orders that the returns of income due to be E-filed by 30th September, 2015 may be filed by 31st  October, 2015 in cases of Income-tax assessees of the State of Gujarat.

2. This order shall be subject to the outcome of any further appeal/SLP which the CBDT may file against the said judgment.

(Rohit Garg)

Deputy-Secretary to the Government of India

Notification No. : 351/2015-RB Dated: 30-9-2015


Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) (Seventh Amendment) Regulations, 2015 – 351/2015-RB – Dated 30-9-2015 – Foreign Exchange Management

RESERVE BANK OF INDIA

(Foreign Exchange Department)

(CENTRAL OFFICE)

NOTIFICATION No. FEMA. 351/2015-RB

Mumbai, the 30th  September, 2015

Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) (Seventh Amendment) Regulations, 2015

G.S.R. 745(E)-In exercise of the powers conferred by clause (b) of sub-section (3) of Section 6 and Section 47 of the Foreign Exchange Management Act, 1999 (42 of 1999), the Reserve Bank of India hereby makes the following amendments in the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulations, 2000 (Notification No. FEMA.20/2000-RB dated 3rd May 2000), namely:-

1. Short Title & Commencement

(i) These Regulations may be called the Foreign Exchange Management (Transfer or Issue of Security by a person resident outside India) (Seventh Amendment) Regulations, 2015.

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

2. Amendment to Schedule 9:-

In the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulations, 2000 (Notification No. FEMA 20/2000-RB dated 3rd May 2000), in Schedule 9, in Para 7, after clause (iii), the following shall be inserted, namely:-

“(iv) All LLPs which have received Foreign Direct Investment in the previous year(s) including the current year shall submit to the Reserve Bank of India, on or before the 15th day of July of each year, a report titled ‘Annual Return on Foreign Liabilities and Assets’ as specified by the Reserve Bank from time to time”

[F. No. 1/25/EM/2015]

B. P. KANUNGO, Principal Chief General Manager

Notification No. : G.S.R. 744(E) Dated: 30-9-2015


Amendment to G.S.R.38( E) dated 19th January 2011 – G.S.R. 744(E) – Dated 30-9-2015 – Companies Law

Ministry of Corporate Affairs

NOTIFICATION

New Delhi, the 30th September, 2015

G.S.R. 744(E).- In exercise of the powers conferred by section 28A of the Chartered Accountants Act, 1949 (38 of 1949), the Central Government hereby makes the following further amendments in thenotification of the Government of India in the Ministry of Corporate Affairs, number G.S.R. 38(E), dated the 19th January, 2011 published in the Gazette of India, Extraordinary, Part-II, Section (i), dated the 19thJanuary, 2011.

2. In the said notification, for serial number (5) and entries relating thereto, the following serial number and entries shall be substituted namely;-

“(5) Shri P.K. Mishra, Director General (Commercial)-I, office of Comptroller and Auditor General of India, 9, Deen Dayal Upadhaya Marg, New Delhi-110124 – Member”

[F. No. 1/15/2010-PI]

MANOJ KUMAR, Jt.Secy.

Note;- The Principal notification was published in the Gazette of India, extraordinary, Part-II, Section 3, Sub-section (i) vide number G.S.R. 38(E), dated the 19th January, 2011 and subsequently amended videnumber G.S.R. 684(E), dated the 16th September, 2011, G.S.R. 441(E), dated the 12th June, 2012, number G.S.R. 131(E), dated the 1st March, 2014 number G.S.R. 569(E), dated 7th August 2014, G.S.R.837(E) dated 24th November, 2014, number and G.S.R. 563(E) dated 20th July, 2015.

No. 17 Dated: 29-9-2015


External Commercial Borrowings (ECB) Policy – Issuance of Rupee denominated bonds overseas – Circular – Dated 29-9-2015 – FEMA

RBI/2015-16/193

A.P. (DIR Series) Circular No.17

September 29, 2015

To,

All Authorised Dealer Category – I Banks

Madam/ Sir

External Commercial Borrowings (ECB) Policy – Issuance of Rupee denominated bonds overseas

Attention of Authorized Dealer Category – I (AD Category – I) banks is invited to the provisions contained in A.P. (DIR Series) Circular No. 5 dated August 01, 2005 as amended from time to time on External Commercial Borrowings (ECB).

2. In order to facilitate Rupee denominated borrowing from overseas, it has been decided to put in place a framework for issuance of Rupee denominated bonds overseas within the overarching ECB policy. The broad contours of the framework are as follows:

i. Eligible borrowers: Any corporate or body corporate as well as Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs).

ii. Recognised investors: Any investor from a Financial Action Task Force (FATF) compliant jurisdiction.

iii. Maturity: Minimum maturity period of 5 years.

iv. All-in-cost: All in cost should be commensurate with prevailing market conditions.

v. Amount: As per extant ECB policy.

vi. End-uses: No end-use restrictions except for a negative list.

3. The detailed guidelines for issuance of Rupee denominated bonds overseas are set out in the Annex.

4. All other provisions of extant ECB guidelines regarding reporting requirements (including obtaining Loan Registration Number (LRN) through submission of Form 83 where type of ECB is to be specifically mentioned as borrowing through issuance of Rupee denominated bonds overseas), parking of bond proceeds, security / guarantee for the borrowings, conversion into equity, corporates under investigation, etc., not appearing in the Annex will be applicable for borrowing by issuance of Rupee denominated bonds overseas.

5. AD Category-I banks may bring the contents of this circular to the notice of their constituents and customers.

6. 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) and are without prejudice to permissions / approvals, if any, required under any other law.

Yours faithfully

(B. P. Kanungo)

 Principal Chief General Manager

Notification No. : 76/2015 Dated: 29-9-2015


Income-tax (14th Amendment) Rules, 2015 – Format and Procedure for Self Declaration in form No.15G or 15H to Reduce the Cost of Compliance and Ease the Compliance Burden for both, the Tax Payer and the Tax Deductor, simplified – 76/2015 – Dated 29-9-2015 – Income Tax

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

(DEPARTMENT OF REVENUE)

(CENTRAL BOARD OF DIRECT TAXES)

NOTIFICATION NO. 76/2015

(INCOME-TAX)

New Delhi, the 29th September, 2015

S.O. 2663 (E).- In exercise of the powers conferred by section 295 read with section 197A 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) These rules may be called the Income-tax (14th Amendment) Rules, 2015.

(2) They shall come into force on the 1st day of October, 2015.

2. In the Income-tax Rules, 1962 (hereafter referred to as the said rules), for rule 29C, the following rule shall be substituted, namely:-

“29C. Declaration by person claiming receipt of certain incomes without deduction of tax.

- (1) A declaration under sub-section (1) or under sub-section (1A) of section 197A shall be in Form No. 15G and declaration under sub-section (1C) of section 197A shall be in Form No. 15H. (2) The declaration referred to in sub-rule (1) may be furnished in any of the following manners, namely:-

(a) in paper form;

(b) electronically after duly verifying through an electronic process in accordance with the procedures, formats and standards specified under sub-rule (7).

(3) The person responsible for paying any income of the nature referred to in sub-section (1) or sub-section (1A) or sub-section (1C) of section 197A, shall allot a unique identification number to each declaration received by him in Form No.15G and Form No.15H respectively during every quarter of the financial year in accordance with the procedures, formats and standards specified by the Principal Director-General of Income-tax (Systems) under sub-rule (7).

(4) The person referred to in sub-rule (3) shall furnish the particulars of declaration received by him during any quarter of the financial year along with the unique identification number allotted by him under sub-rule (3) in the statement of deduction of tax of the said quarter in accordance with the provisions of clause (vii) of sub-rule (4) of rule 31A.

(5) The person referred to in sub-rule (3) shall furnish the statement of deduction of tax referred to in rule 31A containing the particulars of declaration received by him during each quarter of the financial year along with the unique identification number allotted by him under sub-rule (3) in accordance with the provisions ofclause (vii) of the sub-rule (4) of rule 31A irrespective of the

fact that no tax has been deducted in the said quarter.

(6) Subject to the provisions of sub-rules (4) and (5), an income-tax authority may, before the end of seven years from the end of the financial year in which the declaration referred to in sub rule (1) has been received, require the person referred in sub-rule (3) to furnish or make available the declaration for the purposes of verification or any proceeding under the Act in accordance with the procedures, formats and standards specified by Principal Director General of Income tax (Systems) specified under sub-rule (7).

(7) The Principal Director General of Income-tax (Systems) shall specify the procedures, formats and standards for the purposes of furnishing and verification of the declaration, allotment of unique identification number and furnishing or making available the declaration to the income tax authority and shall be responsible for the day-to-day administration in relation to the furnishing of the particulars of declaration in accordance with the provisions of sub-rules (4) and (5).

(8) The Principal Director General of Income-tax (Systems) shall make available the information of declaration furnished by the person referred to in sub-rule (3) to the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner to whom the Assessing Officer having jurisdiction to assess the person who has furnished the declaration under sub-section (1) or under sub-section (1A) or under sub-section (1C) of section 197A is subordinate.”.

FM rings bell, formalises Sebi-FMC merger : 28-09-2015


In the first ever merger of two regulators, over 60-year-old commodities regulatory body FMC today merged with the capital markets watchdog Sebi with Finance Minister Arun Jaitley ringing the customary stock market bell to formalise the amalgamation.

The Securities and Exchange Board of India (Sebi) Chairman U K Sinha said that the commodities market entities would get a timeframe of up to one year to adjust to the new regulations as they would have to follow the same norms that are applicable to their peers in the equitysegment.

“In order to ensure that nothing is disrupted, there is no discontinuity… We are giving some timeframe so that they can adjust with the new regulations,” Sinha said.

The Sebi chief also said that the entire process has “all been very well thought out” and the regulator has also brought out a handbook for the benefit of all entities by making them aware about various rules and regulations.

Sebi’s whole-time member Rajeev Kumar Agarwal would oversee the commodities market regulation in the merged entity under the overall guidance of the Sebi Chairman.

At the event, Department of Economic Affairs Secretary Shaktikanta Das said, “Unleashing the process of reforms is a continuous process. We don’t wait for the Budget.”

Sebi was set up in 1988 as a non-statutory body for regulating the securities markets, while it became an autonomous body in 1992 with fully independent powers.

FMC, on the other hand, has been regulating commodities markets since 1953, but lack of powers has led to wild fluctuations and alleged irregularities remaining untamed in this market segment.

The commodities market has been known to be more prone to speculative activities compared to the better-regulated stock market, while illegal activities like ‘dabba trading’ have also been more frequent in this segment.

Besides, the high-profile NSEL scam has rocked this market in the recent past and the subsequent regulatory and government interventions in this case eventually led to the government announcing FMC’s merger with Sebi.

The announcement for the merger was made by the Finance Minister in his Budget speech earlier this year and he rung the customary bell today to formalise the merger.

This is the first major case of two regulators being merged, as against the relatively more frequent practice worldwide of creating new regulatory authorities, including by carving out new bodies from the existing entities.

At present, there are three national and six regional bourses for commodity futures in the country.

Together, all the exchanges clocked a turnover of nearly Rs 60 lakh crore in 2014-15, from over Rs 101 lakh crore in the previous fiscal.

Source : Business Standard

No. Minutes of the 66th meeting of the SEZ Dated: 27-8-2015


Minutes of the 66th meeting of the Board of Approval for SEZs held on 27th August 2015 to consider proposals for setting up Special Economic Zones and other miscellaneous proposals – Dated 27-8-2015 – SEZ

The Sixty sixth (66th) meeting of the Board of Approval (BoA) for Special Economic Zones (SEZ) was held on 27th August, 2015 under the Chairmanship of Ms. Rita Teaotia, Secretary, Department of Commerce, at 10.30 A.M. in Room No. 47, Udyog Bhawan, New Delhi, to consider proposals in respect of notified/approved SEZs. The list of participants is Annexed (Annexure-1).

Item No. 66.1: Requests for extension of validity of formal approvals

(i) Request of M/s. Gopalan Enterprises (India) Private Limited for further extension of the validity period of formal approval, granted for setting up of sector specific SEZ for IT/ITES at Mahadevapura & Kaggadaspura, K.R. Puram, Whitefield, Bangalore, Karnataka, beyond 2nd July, 2015

The Board after deliberations extended the validity of the formal approval up to 2nd July, 2016.

(ii) Request of M/s. Brooke Bond Real Estate Private Limited for further extension of the validity period of formal approval, granted for setting up of sector specific SEZ for IT/ITES/BPO/Electronic Hardware at “Brooke fields”, Village Kundalahalli, Hobli Krishnarajapuram, Taluk Bangalore South, Karnataka, beyond 31st March 2015

The Board after deliberations extended the validity of the formal approval up to 31st March, 2016.

(iii) Request of M/s. Adityapur Industrial Area Development Authority for further extension of the validity period of formal approval, granted for setting up of sector specific SEZ for Automobiles/Auto Components at Adityapur, Jamshedpur, beyond 13th June, 2015

The Board noted that DC, FSEZ had not recommended the proposal for further extension and after deliberations rejected the request of the developer to extend the validity of the formal approval.

(iv) Request of M/s. Gopalpur Special Economic Zone Ltd. for further extension of validity period of its formal approval for setting up a multi product SEZ at Gopalpur, District Ganjam, Odisha beyond 17th December, 2014 and change of name of the developer to Tata Steel Special Economic Zone Ltd.

The Board after deliberations extended the validity of the formal approval up to 17th December, 2015 and the developer should resolve all pending issues with Government of Orissa within that time frame.

 (v) Request for further extension of formal approval from M/s. HBS Pharma SEZ Pvt. Ltd. for setting up of Pharmaceutical SEZ at GIDC, Panoli Industrial Estate, Panoli, District Bharuch, Gujarat beyond 16th June, 2015

The Board after deliberations extended the validity of the formal approval up to 16th June, 2016.

(vi) Request for further extension of LoA from Gujarat Industrial Development Corporation (GIDC) for setting up an IT/ITES SEZ at Gandhinagar-Sarkhej Highway, Gandhinagar, Gujarat, beyond 6th January 2015

The Board after deliberations extended the validity of the formal approval up to 6th January, 2016.

(vii) Request of M/s. Calica Construction and Impex Pvt. Ltd. for further extension of the validity period of formal approval, granted for setting up of sector specific SEZ for IT/ITES at Village Ognaj, Taluka Dascroi, District Ahmedabad, Gujarat, beyond 6th May, 2015

The Board after deliberations extended the validity of the formal approval up to 6th May, 2016.

(viii) Request of Electronics Corporation of Tamil Nadu (ELCOT) for further extension of the validity period of formal approval, granted for setting up of sector specific SEZ for IT/ITES at Salem, Tamil Nadu, beyond 7th May, 2015.

The Board after deliberations extended the validity of the formal approval up to 7th May, 2016.

(ix) Request of Electronics Corporation of Tamil Nadu (ELCOT) for further extension of the validity period of formal approval, granted for setting up of sector specific SEZ for IT/ITES at Hosur-Viswanathapuram, Tamil Nadu, beyond 7th May, 2015

The Board after deliberations extended the validity of the formal approval up to 7th May, 2016.

(x) Request of Electronics Corporation of Tamil Nadu (ELCOT) for further extension of the validity period of formal approval, granted for setting up of sector specific SEZ for IT/ITES at Gangaikondan village, Tirunelveli, Tamil Nadu, beyond 7th May 2015

The Board after deliberations extended the validity of the formal approval up to 7th May, 2016.

(xi) Request of Electronics Corporation of Tamil Nadu (ELCOT) for further extension of the validity period of formal approval, granted for setting up of sector specific SEZ for IT/ITES at Vadapalanji, Madurai, Tamil Nadu, beyond 7th May, 2015

The Board after deliberations extended the validity of the formal approval up to 7th May, 2016.

 (xii) Request of M/s. Navi Mumbai SEZ Private Limited for extension of the validity period of formal approval, granted for setting up of multi product SEZ at Dronagiri, Navi Mumbai, Maharashtra, beyond 29th July 2015.

The Board after deliberations extended the validity of the formal approval up to 29th January, 2016 with the condition that the Developer shall submit a clear-cut development plan and action plan of the SEZ and approval of the State Government of Maharashtra within that time-frame. DC, Navi Mumbai SEZ was directed to verify the expenditure claimed by the developer to have incurred for the development of this SEZ alongwith progress made so far on ground.

(xiii) Request of M/s. Navi Mumbai SEZ Private Limited for extension of the validity period of formal approval, granted for setting up of sector specific SEZ for IT/ITES-A at Kalamboli, Navi Mumbai, Maharashtra, beyond 25th July 2015

The Board after deliberations extended the validity of the formal approval up to 25th January, 2016 with the condition that the Developer shall submit a clear-cut development plan and action plan of the SEZ and approval of the State Government of Maharashtra within that time-frame. DC, Navi Mumbai SEZ was directed to verify the expenditure claimed by the developer to have incurred for the development of this SEZ alongwith progress made so far on ground.

(xiv) Request of M/s. Navi Mumbai SEZ Private Limited for extension of the validity period of formal approval, granted for setting up of sector specific SEZ for Multi Services at Kalamboli, Navi Mumbai, Maharashtra, beyond 25th July 2015

The Board after deliberations extended the validity of the formal approval up to 25th January, 2016 with the condition that the Developer shall submit a clear-cut development plan and action plan of the SEZ and approval of the State Government of Maharashtra within that time-frame. DC, Navi Mumbai SEZ was directed to verify the expenditure claimed by the developer to have incurred for the development of this SEZ alongwith progress made so far on ground.

(xv) Request of M/s. Suyog Realtors Pvt. Ltd. for further extension of the validity period of formal approval, granted for setting up of sector specific SEZ for IT/ITES at Pot No. 1-4 (formally known as Plot-able land No. PL-23), IT Park Butibori, District Nagpur, Maharashtra, beyond 29th July 2010

The Board after deliberations condoned the delay and extended the validity of the formal approval up to 29th July, 2016.

(xvi) Request of M/s. Shantha Biotechnics Limited for further extension of the validity period of formal approval, granted for setting up of sector specific SEZ for Biotechnology and related activities at Muppireddypalli village, Toopran Mandal, Medak District, Andhra Pradesh, beyond 21st July 2015

The Board after deliberations extended the validity of the formal approval up to 21st July, 2016.

Item No. 66.2: Requests for extension of validity of in-principle approval

(i) Request of M/s. Chhindwara Plus Developers Limited for extension of the validity of in-principle approval, granted for setting up of Multi Product SEZ at Saurar Tehsil, Chhindwara District, Madhya Pradesh, beyond 29th July, 2015.

The Board noted that the Developer is in possession of 573.806 ha. of land area which fulfils the criteria of minimum land requirement of 500 ha. for setting up of a multi-product SEZ. The Board, after deliberations, extended the validity of the in-principle up to 29th January, 2016 and advised the Developer to submit an application along with the requisite documents for notification of the SEZ over an area of 573.806 ha.

Item No. 66.3 : Requests for extension of LoP beyond 3rd Year onwards

(i) Request of M/s. BEML Limited, a unit in KIADB SEZ, Bangalore for extension of LoP beyond 5th January, 2015

The Board after deliberations extended the validity of the LoP up to 5th January, 2016.

(ii) Request of M/s. Western Ghat Agricultural Products Processing Pvt. Ltd (WAPCO), a unit in KINFRA SEZ, (Agro based food processing) at Kakkanchery, Malappurma District, Kerala for extension of LoP beyond 22nd July, 2015

The Board after deliberations extended the validity of the LoP up to 22nd July, 2016.

(iii) Request of M/s. Pidilite Industries Limited a unit in Dahej SEZ, Bharuch for extension of LoP beyond 15th August, 2015,

The Board after deliberations extended the validity of the LoP up to 15th August, 2016.

(iv) Request of M/s. Shree Saibaba Petroleum, a unit in KASEZ for extension of LoP beyond 9th June 2012

The Board after deliberations extended the validity of the LoP up to 31st December, 2015.

(v) Request of M/s. Hangers Plus (India) Pvt. Ltd., a unit in Mahindra World City – Apparel and Fashion Accessories SEZ, Kancheepuram Distt, Tamil Nadu for extension of LoP beyond 31st March, 2015.

The Board after deliberations extended the validity of the LoP up to 31st March, 2016.

(vi) Request of M/s. Soncoya Solutions Pvt. Ltd., a unit in M/s. Mahindra World City (Jaipur) Ltd. for sector specific SEZ for IT/ITES at Village Kalwara, Tehsil Sanganer, District Jaipur, Rajasthan for extension of LoP beyond 1st February 2015

The Board after deliberations extended the validity of the LoP up to 1st February, 2016.

(vii) Request of M/s. Tech Mahindra Limited, a unit in MIHAN Multi-Product SEZ at Nagpur, Maharashtra, for extension of LoP beyond 27th July, 2015.

The Board after deliberations extended the validity of the LoP up to 27th July, 2016.

(viii) Request of M/s Artura Pharmaceuticals Pvt. Ltd., a unit in M/s. Sri City SEZ at Chittoor District, Andhra Pradesh for extension of validity period of its LoP beyond 4th July 2015

The Board after deliberations extended the validity of the LoP up to 4th July, 2016.

(ix) Request of M/s. Lanco Solar Private Limited, a unit in M/s. Lanco Solar Private Limited SEZ at Village Mehrumkhurd & Chawardhal, Rajnandgaon Dist., Chhastisgarh for extension of LoP beyond 28th June, 2015

The Board after deliberations extended the validity of the LoP up to 28th June, 2016.

(x) Request of M/s Shantha Biotechnics Limited, Unit-1 in M/s Shantha Biotechnics Ltd. SEZ at Muppireddypalli Village, Toopran Mandal, Medak District, Andhra Pradesh for extension of validity period of its LoP beyond 28th September, 2015

The Board after deliberations extended the validity of the LoP up to 28th September, 2016.

(xi) Request of M/s Anjani Udyog Pvt. Limited, a unit in multi-product SEZ developed by M/s Adani Port & SEZ at Mundra, Gujarat for extension of validity period of its LoP beyond 31st March 2015

The Board after deliberations extended the validity of the LoP up to 31st March, 2016.

Item No. 66.4 : Requests for co-developer

(a) In the 65th BoA meeting it was decided to approve co-developer proposals, subject to standard terms and conditions as per SEZ Act and Rules provided that the lease period is reduced to a period not exceeding 30 years (Renewable).

The BOA discussed a reference received from the Government of Kerala in which it was stated that the State Government of Kerala leases out land for industrial purposes for a period of 90 years, as per its policy and requested to permit for continuation of lease period as envisaged in the lease agreement. The Board noted that the Undertakings of Government of Kerala are the developers in Technopark, Infopark, Cyberpark and Kerala State IT Infrastructure Ltd. and after deliberations decided to restore the period of lease , as per the lease agreement signed between the Developer and Co-developer. However, this would be applicable in respect of the SEZ projects located in the State of Kerala only and in all other cases, the lease period will continue to be a period not exceeding 30 years (Renewable).

Approval of proposals for Co-developer

All approvals for co-developers are subject to the condition that particular terms and conditions of lease agreement/co-developer agreement will not have any bearing on the treatment of the income by way of lease rentals/down payment/premium etc., for the purposes of assessment under the Income Tax Act and Rules. The Assessing Officer, will have the right to examine the taxability of these amounts under the SEZ Act and Income Tax Act and Rules.

This is applicable to all cases of co-developers approved by the BoA in this meeting. The decisions of the BoA on the proposals listed in the agenda are as under:-

(i) Request of M/s. Thefra Technopark Pvt. Ltd. for co-developer in the sector specific SEZ for IT/ITES at Kakkanad, Village, Ernakulam District, Kerala, being developed by M/s. SmartCity (Kochi) Infrastructure Pvt. Ltd.

After deliberations, the Board approved the proposal of M/s. Thefra Technopark Pvt. Ltd. for co-developer for IT/ITES and supporting facilities such as food court, recreational facilities, fitness facilities, business centre etc for IT/ITES over an area of 6.28 acres, in accordance with the co-developer agreement entered into with the developer subject to standard terms and conditions as per SEZ Act and Rules.

(ii) Request of M/s. Virtus IT Services Private Limited for co-developer in the sector specific SEZ for IT/ITES at Attipra, Taluk and District Thiruvananthapuram, Kerala, being developed by M/s. Electronics Technology Parks – Kerala

After deliberations, the Board approved the proposal of M/s. Virtus IT Services Private Limited for co-developer for providing infrastructure facilities and development of IT sector industry, over an area of one acre in accordance with the co-developer agreement entered into with the developer subject to standard terms and conditions as per SEZ Act and Rules.

(iii) Request of M/s. Gopalan Enterprises for co-developer in the sector specific SEZ for IT/ITES at Bangalore, Karnataka, being developed by M/s. Gopalan Enterprises (India) Private Limited

After deliberations, the Board approved the proposal of M/s. Gopalan Enterprises for co-developer for electrification/DG Power Back up/Air-conditioning and warm shell completion, over an area of 1.015 hectares in accordance with the co-developer agreement entered into with the developer, subject to standard terms and conditions as per SEZ Act and Rules provided that the lease period is reduced to a period not exceeding 30 years (Renewable).

(iv) Request of M/s. Padiyath Innovationworld Private Limited for co-developer in the sector specific SEZ for IT/ITES at Puthencruz and Kunnathunade village, Taluk Kunnathaunadu, Ernakulam, Kerala, being developed by M/s. Infopark (Phase – II)

After deliberations, the Board approved the proposal of M/s. Padiyath Innovationworld Private Limited for co-developer for development & marketing of infrastructure facilities in the SEZ, over an area of 4.11 acres in accordance with the co-developer agreement entered into with the developer, subject to standard terms and conditions as per SEZ Act and Rules.

(v) Request of DC KASEZ for cancellation of co-developer status granted to M/s. Worlds Window Infrastructure & Logistics Pvt. Ltd. of FTWZ in Kandla SEZ.

After deliberations, the Board of Approval cancelled the co-developer status of M/s. Worlds Window Infrastructure & Logistics Pvt. Ltd. of FTWZ in Kandla SEZ and directed DC, KASEZ to issue show cause notice to M/s. Worlds Window Infrastructure & Logistics Pvt. Ltd for non-implementation of the project.

(vi) Request of M/s. Ashray Logistics India Private Limited for co-developer in the multi product SEZ at Nanguneri, Tirunelveli District, Tamil Nadu, being developed by M/s. AMRL Hitech City Ltd.

After deliberations, the Board approved the proposal of M/s. Ashray Logistics India Private Limited for co-developer status for Logistics Park including warehousing facilities and supply chain management, over an area of 9 hectares as per co-developer agreement dated 6th May, 2015, which has later been amended vide first amendment to co-developer agreement dated 26th June, 2015 in which land area has been increased to 10.49 hectares in accordance with the co-developer agreement entered into with the developer, subject to standard terms and conditions as per SEZ Act and Rules provided that the lease period be reduced to a period not exceeding 30 years (Renewable).

(vii) Request of M/s. Trustone Wegmans Developers Pvt. Ltd. for co-developer in the sector specific SEZ for IT/ITES at Plot No. 21, Sector-Techzone IV, Greater Noida, being developed by M/s. Artha Infratech Pvt. Ltd.

After deliberations, the Board approved the proposal of M/s. Trustone Wegmans Developers Pvt. Ltd. for co-developer status for constructing one tower of approximately 38000 sqm. super built up area over 0.4450 hectares of land in the processing area for IFSC and IT/ITES including Electronic Hardware and Software in accordance with the co-developer agreement entered into with the developer, subject to standard terms and conditions as per SEZ Act and Rules provided that the lease period be reduced to a period not exceeding 30 years (Renewable).

(viii) Request of M/s. Wockhardt Ltd. for co-developer in the sector specific SEZ for Pharmaceuticals at Shendre, Aurangabad District, Maharashtra, being developed by M/s. Wockhardt Infrastructure Development Ltd.

After deliberations, the Board approved the following proposal of M/s. Wockhardt Ltd. for co-developer status to construct, manage and operate a world class school in the non-processing area over an area of 77000 Sqm. as per mutual agreement and as recommended by DC, SEEPZ:-

(i) Increase in built up space upto approximately 16000 sqm. for setting up a school in non-processing area of pharmaceutical SEZ; and,

(ii) Dual use of infrastructure (School) in non-processing area, subject to NOC from State Government.

The approval is subject to the co-developer complying with all the conditions stipulated in Department of Commerce’s Notification GSR 5(E) dated 02.01.2015. The compliance report has to be submitted to Director General of Export Promotion alongwith the duty realized in this regard. The approval is further subject to standard terms and conditions as per SEZ Act and Rules provided that the lease period is reduced to a period not exceeding 30 years (Renewable).

 (ix) Request of M/s. Wipro Limited for co-developer in the sector specific SEZ for IT/ITES at Bhubaneswar, Odisha, being developed by M/s. Orissa Industrial Infrastructure Development Corporation (IDCO).

After deliberations, the Board approved the proposal of M/s. Wipro Limited for co-developer for site development, boundary wall, roads, installation of water supply & sanitation & sewage system, power distribution system, telecom facilities, air conditioning system, warehouse, welfare centre including a first aid centre and crèche & employee business stay facilities, cafeteria, fuel storage, software development of office building and other activity as may be required in processing area, over an area of 26 acres in accordance with the co-developer agreement entered into with the developer, subject to standard terms and conditions as per SEZ Act and Rules provided that the lease period be reduced to a period not exceeding 30 years (Renewable).

Item No. 66.5 : Proposals for setting up of SEZs

(i) Request of M/s. HCL IT City Lucknow Private Limited for setting up of a sector specific SEZ for IT/ITES at Village Kanjehara & Mastemau, Chack Gajaria Farms, Sultanpur Road, Lucknow, over an area of 40.469 hectares.

The Board noted that the Developer is in possession of the land. The Government of Uttar Pradesh had also recommended the proposal vide their letter dated 16.06.2015. Accordingly, the Board decided to grant formal approval to the proposal of M/s. HCL IT City Lucknow Private Limited, for setting up of a sector specific Special Economic Zone for IT/ITES at Village Kanjehara & Mastemau, Chack Gajaria Farms, Sultanpur Road, Lucknow, over an area of 40.469 hectares.

(ii) Request of M/s. M/s. North Mumbai International Commodity Township Pvt. Ltd. for in-principle approval for setting up of FTWZ at Kaman-Bhiwandi Road, District Thane, Maharashtra, over an area of 60.70 hectares.

The Board noted that the Developer is not in possession of the land. The Government of Maharashtra has conveyed its in-principle approval vide letter dated 12.05.2015. Accordingly, the Board decided to grant in-principle approval to the proposal of M/s. North Mumbai International Commodity Township Pvt. Ltd., for setting up of FTWZ at Kaman-Bhiwandi Road, District Thane, Maharashtra, over an area of 60.70 hectares subject to the conditions imposed by the State Government of Maharashtra vide its above mentioned letter dated 12.05.2015.

(iii) Request of M/s. M/s. Reliable Exports (India) Pvt. Ltd. for setting up of a sector specific SEZ for IT/ITES at Gat No. 31(B) at village Ilthan, Airoli, Thane Belapur Road Thane, Navi Mumbai, over an area of 2.48 hectares.

Board of Approval allowed withdrawal of the proposal in accordance with the request of M/s. Reliable Exports (India) Ltd. vide letter dated 20th August, 2015. DC concerned will take further action on the application received from M/s. Reliable Exports (India) Pvt. Ltd.

 (iv) Request of M/s. M/s. Loma IT Park Developers Pvt. Ltd. for setting up of a sector specific SEZ for IT/ITES at G-4/1, TTC Industrial Area, Ghansoli, Navi Mumbai, over an area of 6.5 hectares.

The Board noted that the Developer is in possession of the land. The Government of Maharashtra has also recommended the proposal vide their letter dated 12.05.2015. Accordingly, the Board decided to grant formal approval to the proposal of M/s. Loma IT Park Developers Pvt. Ltd., for setting up of a sector specific Special Economic Zone for IT/ITES at G-4/1, TTC Industrial Area, Ghansoli, Navi Mumbai, over an area of 6.5 hectares.

(v) Request for conversion of in-principle approval into formal approval for setting up of a sector specific Special Economic Zone for Electronic Hardware and Software including IT/ITES at Nanakramguda village, Gachibowli, Serilingampally Mandal, Ranga Reddy District, Telangana, by M/s. Mantri Developers Private Limited, over an area of 1.0504 hectares.

The Board noted that the Developer was in possession of the land. The Government of Telangana had also recommended the proposal for approval vide their letter dated 31.07.2015. Accordingly, the Board approved for conversion of in-principle approval into formal approval to the proposal of M/s. Mantri Developers Private Limited, for setting up of a sector specific Special Economic Zone for Electronic Hardware and Software including IT/ITES at Nanakramguda village, Gachibowli, Serilingampally Mandal, Ranga Reddy District, Telangana, over an area of 1.0504 hectares.

(vi) Request of M/s. M/s. Aqua Space Developers Pvt. Ltd. for setting up of a sector specific SEZ for IT/ITES at Raidurg village, Serilingampally Mandal, Ranga Reddy District, Telangana, over an area of 1.85 hectares.

The Board noted that the Developer is in possession of the land. The Government of Telangana has also recommended the proposal vide their letter dated 01.08.2015. Accordingly, the Board decided to grant formal approval to the proposal of M/s. Aqua Space Developers Pvt. Ltd., for setting up of a sector specific Special Economic Zone for IT/ITES at Raidurg village, Serilingampally Mandal, Ranga Reddy District, Telangana, over an area of 1.85 hectares.

Item No. 66.6 : Cases for ratification by the BoA

(i) Request of M/s. Lupin Ltd., a unit in Indore SEZ, M.P, for extension of Letter of Permission (LoP) beyond 12th June 2015

The Board after deliberations ratified the proposal for extension of validity period of LoP up to 12th June, 2016.

Item No. 66.7 : Miscellaneous Cases

(i) Request of M/s Torrent Energy Ltd. (co-developer in Dahej SEZ), for laying 813 MM Dia MS Raw Water Supply Pipeline from Dahej-II RWSR to their existing pipeline near Dahej-I RWSR for the Power Project in Dahej SEZ

The Board, after deliberations, approved the request of M/s. Torrent Energy Ltd. (co-developer in Dahej SEZ) for laying 813 MM Dia MS Raw Water Supply Pipeline from Dahej-II RWSR to their existing pipeline near Dahej-I RWSR for the Power Project in Dahej SEZ, subject to the condition that the duty benefits shall be restricted to the activities carried out inside the SEZ.

(ii) Request for de-notification of 2nd phase of SEZ for Apparel Sector at Ahmedabad over an area of 17.62 Hectares out of Notified area of 38.04 Hectares – Amendment of Rules

The Board noted the amendment in SEZ Rules 2006 with respect to the minimum area requirement stipulated in Annexure II, in serial number 3, for the State of Gujarat for Textile and Article of Textiles sector which has been reduced from 38 hectares to 20 hectares vide notification dated 16th July, 2015. After deliberations, the Board approved de-notification of 2nd phase of SEZ for Apparel Sector at Ahmedabad over an area of 17.62 Hectares out of notified area of 38.04 hectares subject to refund of duty benefit, if any, availed of by the developer and NOC from the State Government.

(iii) Request of M/s.IG3 Infra Ltd. sector specific SEZ for Textiles at Utukulli Village, Erode District, Tamil Nadu for enhancing the capacity of power generation

The Board after deliberations, approved the request of M/s. IG3 Infra Ltd. for enhancing the capacity of power generation from 40MW to 48 MW in the non-processing area as per the details given below:

S. No. Name of the authorized activity No. of units Area per unit (in sqm.) as per FSI/FAR norms a applicable
1. Enhancement of power project from 40 MW to 48 MW 2 20 acres

(iv) Request of M/s. Arshiya International Limited for FTWZ at Pune, Maharashtra for change of name of the developer from Arshiya International Limited to Arshiya Limited and change in shareholding pattern

After deliberations, the Board approved the request for change of name of the developer from Arshiya International Limited to Arshiya Limited, and change in shareholding pattern, subject to following conditions:-

(i) Seamless continuity of the SEZ activities with unaltered responsibilities and obligations for the altered developer entity;

(ii) Fulfillment of all eligibility criteria applicable to developers, including security clearances etc., by the altered developer entity and its constituents;

(iii) Applicability of and compliance with all Revenue / Company Affairs /SEBI etc. rules which regulate issues like capital gains, equity change, transfer, taxability etc.

(iv) Full financial details relating to change in equity/merger, demerger, amalgamation or transfer in ownership etc. shall be furnished immediately to Member (IT), CBDT, Department of Revenue and to the jurisdictional Authority.

(v) The Assessing Officer shall have the right to assess the taxability of the gain/loss arising out of the transfer of equity or merger, demerger, amalgamation, transfer and ownerships etc. as may be applicable and eligibility for deduction under relevant sections of the Income Tax Act, 1961.

(vi) The applicant shall comply with relevant State Government laws, including those relating to lease of land, as applicable.

(vii) The developer shall furnish details of PAN and jurisdictional assessing officer of the developer to CBDT.

(v) Proposal of M/s. GMR Aero Technic Limited, unit in M/s. GMR Hyderabad Aviation SEZ Limited SEZ in an Existing Airport at Mamidipalli village, Shamshabad Mandal, Ranga Reddy District, Telangana for approval for Establishing a Crash gate for Emergency vehicle entry to MRO Building

After deliberations, the Board approved the proposal of M/s. GMR Aero Technic Limited, unit in M/s. GMR Hyderabad Aviation SEZ Limited for establishing a Crash gate for Emergency vehicle entry to MRO Building subject to the condition that expenses on additional manpower for manning the new gate to be borne by the Developer.

(vi) Request of M/s.TSI Business Parks (Hyderabad) Pvt. Ltd., Co-developer in M/s. APIIC Ltd., sector specific SEZ for IT/ITES at Nanakramguda village, Serilingampally Mandal, Ranga Reddy District, Telangana for change in shareholding pattern

After deliberations, the Board approved the request of the co-developer for change of shareholding pattern of the company, subject to following conditions:-

(i) Seamless continuity of the SEZ activities with unaltered responsibilities and obligations for the altered co-developer entity;

(ii) Fulfillment of all eligibility criteria applicable to co-developers, including security clearances etc., by the altered co-developer entity and its constituents;

(iii) Applicability of and compliance with all Revenue / Company Affairs /SEBI etc. rules which regulate issues like capital gains, equity change, transfer, taxability etc.

(iv) Full financial details relating to change in equity/merger, demerger, amalgamation or transfer in ownership etc. shall be furnished immediately to Member (IT), CBDT, Department of Revenue and to the jurisdictional Authority.

(v) The Assessing Officer shall have the right to assess the taxability of the gain/loss arising out of the transfer of equity or merger, demerger, amalgamation, transfer and ownerships etc. as may be applicable and eligibility for deduction under relevant sections of the Income Tax Act, 1961.

(vi) The applicant shall comply with relevant State Government laws, including those relating to lease of land, as applicable.

(vii) The co-developer shall furnish details of PAN and jurisdictional assessing officer of the co-developer to CBDT.

(vii) Inclusion of simulators in the approved list of items for Industrial Licence already approved by BoA in its 61st meeting held on 3rd April, 2014 in respect of M/s Syrma Technology Pvt. Ltd., SEZ unit in Chennai.

The Board, after deliberations, approved the request of M/s. Syrma Technology Pvt. Ltd, to include simulators in the approved list of items for Industrial Licence subject to standard terms and conditions as prescribed by MoD/MHA.

Item No. 66.8 : Cancellation of Formal Approvals

The Board examined the 3 cases of the agenda for cancellation of formal approval /notification. The Board noted that the progress made by the developer is not satisfactory.

The Board, after deliberations, decided to cancel the formal approval/notification, as the case may be, in the following 3 cases. The approval is subject to the DC furnishing a certificate in the prescribed format certifying that the developer has not availed any tax/duty benefits including Service Tax Exemptions, if any, under SEZ Act/Rules, or has refunded any such benefits availed by it:-

Sr. No. Name of the Developer/co-developer Sector Date of formal approval Zone
1.

 

M/s. M.M. Tech Towers(Kozhencherry, Pathanmthitta, Kerala) IT/ITES 18.06.2009 CSEZ
2.

 

M/s. Emmar MGF Land Ltd. (ECE House, 28 Kasturba Gandhi Marg, New Delhi) IT related SEZ 18.06.2009 CSEZ
3.

 

M/s. Hindustan Newsprint Ltd. (Newsprint Nagar, District Kottayam, Kerala) Pulp & Paper 18.11.2009 CSEZ

Item No. 66.9 : Appeals before BoA

(i) Appeal of M/s. Jindal International against the order passed by the Development Commissioner of Kandla Special Economic Zone dated 29th May, 2015.

The Board heard the arguments made by Shri Satyen K. Vyas, Partner of the appellant.

The Board noted that the Unit could not carry out any operation since 2010 because of disputes amongst partners of the unit. The Board also noted that there are ₹ 46,27,002/- of rent outstanding against the said company. The Board further noted that the DC, KASEZ has directed the unit to start normal business activities in KASEZ subject to the condition that they have to pay 50% of rental arrears within 30 days and remaining arrears within 6 months.

After deliberations, the Board came to the conclusion that since the premises had continued to be in the possession of the appellant for the period for which the rents were not paid, the Order passed by DC, Kandla on 29th May, 2015 is just and correct. The applicant must clear his dues as per the directions of DC, KASEZ. The Board accordingly rejected the appeal.

(ii) Appeal of M/s. Comverse Network Systems Private Limited Unit-1 against the order passed by the UAC, NSEZ in its meeting held on 23rd June, 2015.

&

(iii) Appeal of M/s. Comverse Network Systems Private Limited Unit-2 against the order passed by the UAC, NSEZ in its meeting held on 23rd June, 2015.

The Board heard Shri Sanjeev Kumar Goel, Director (Finance) of the appellant Unit.

The Board noted that the appellant had submitted a proposal for transfer of its above said Units (I & II) to M/s. Amdocs Development Centre India Pvt. Ltd. under proviso third to Rule 19(2). The Board also noted that the Rule 19(2) is subject to provisions of Rule 74A.

Since the appellant company does not satisfy the provisions of Rule 74A, i.e., holding LOA for a period of five years on the date of transfer and to be operational for a minimum period of two years after the commencement of production as on the date of transfer, the BOA concluded that the order dated 23.06.2015 issued by the DC, NSEZ is just and correct. The Board accordingly rejected the appeal.

(iv) Appeal of M/s. Soyuz trading company limited against the order passed by the Development Commissioner of Noida Special Economic Zone dated 20th May, 2015.

The BOA heard Dy. General Manager of the said M/s. Soyuz Trading Company and after deliberations noted that Management Consultancy Services are covered within the term “Other Services” in Rule 76. With these findings, the BOA remanded the case back to UAC for appropriate decision after examining the business model and other relevant details of the applicant.

(v) Appeal of M/s. Pitambra Hardware & Metal Exports Pvt. Ltd. against the order passed by the DC, NSEZ dated 10th April, 2015.

The Board heard the arguments made by Shri Sunil Kumar Mangal, the Director of the said Unit.

The BOA deliberated on the matter and noted that the LOA of M/s. Pitambara had already expired on 23/04/2013. Besides, the appellant was non-functional since 2010-11.

The Board also noted that on the request of the Unit, the Approval Committee allowed them to exit from the SEZ Scheme in terms of Rule 74 of SEZ Rules, 2006. The Board also noted that Approval Committee also cancelled Plot Nos 166,168 and 169 and advised the Unit to handover the possession of the said plots at the earliest.

The BOA after deliberations concluded as follows:

(i) The Approval Committee has rightly decided for cancellation of allotment of Plot as LOA of the unit had already been expired on 23.04.2013 and the unit’s performance during last five years was Nil.

(ii) Appellant has also requested BOA for transfer of assets & liabilities under Rule 74A and it does not fulfill the conditions of Rule 74A (i) as LOA is not valid.

The Board, hence, rejected the appeal and directed the appellant to complete the exit formalities and surrender the Plot to NSEZ Authority.

(vi) Appeal of M/s. Etrastar Hardware & Exports (p) ltd against the order passed by the DC, NSEZ dated 10th April, 2015.

The Board heard the arguments made by Shri Sunil Kumar Mangal, the Director of the said Unit that thisUnit had held a valid LoA for more than 5 years and had done exports for several years and thus were eligible to exit from SEZ by transfer.

The Board noted that on the request of the Unit, the Approval Committee allowed them to exit from the SEZ Scheme in terms of Rule 74 of SEZ Rules, 2006. The Board also noted that Approval Committee also cancelled Plot Nos 166,168 and 169 and advised the Unit to handover the possession of the said plots at the earliest.

The BOA also noted that it was on the request of the appellant that the Approval Committee had allowed it to exit from the SEZ Scheme subject to fulfillment of relevant formalities in this regard.

The BOA after deliberations concluded as follows:-

(i) The Approval Committee has rightly decided for cancellation of allotment of Plot as LOA of the unit had already been expired on 28.04.2001 (Trading unit) & 08/08/2002 (manufacturing unit) and they had not made any export during the validity period of LOA.

(ii) Appellant has made a request to BOA for transfer of assets & liabilities under Rule 74A and it does not fulfill the conditions of Rule 74A in view of the following reasons:

1. LOA is not valid as on date.

2. The unit did not hold a valid Letter of Approval for a period of five years.

3. Unit has not been operational for a minimum period of two years after the commencement of production as on the date of transfer

The Board, hence, rejected the appeal and directed the appellant to complete the exit formalities and surrender the Plot to NSEZ Authority.

(vii) Appeal of M/s. Ess Ess Traders against the order passed by the DC, NSEZ dated 22nd April, 2015.

No representative of the Unit appeared for personal hearing.

The BOA noted that the LOA of the above Unit had expired on 31st March, 2013. The BOA also noted that the Unit had not made any physical exports since inception and had not been paying lease rentals.

After deliberations, the BOA rejected the appeal of the Unit.

(viii) Appeal of M/s. Bhartiya Industries against the order passed by the DC, NSEZ dated 16th April, 2015.

The Board heard the arguments made by Shri Balbir Singh, Proprietor of the appellant unit.

The BOA deliberated on the matter and noted that M/s. Bhartiya Industries has been issued LoA on 12/10/2006 for Manufacturing of (1) Leather Hard Goods, Leather Furniture, Leather & Iron Accessories (2) Items Made of Wood, Glass, Iron, Brass, Copper, Aluminium or from any other Metal. The unit commenced operation w.e.f 19th November 2007 and LoA was valid upto 18th November 2012. The BOA observed that the UAC in its meeting held on 18/09/2012 while monitoring the performance directed the unit to re-commence export activities before expiry of validity of LOA i.e. up to 18/11/2012, failing which their LOA would not be renewed. However, unit had neither made compliance with the above directions nor had applied for renewal of LOA. Besides, there is an outstanding lease rent to the tune of ₹ 978431/- against the unit. The BOA noted the dismal performance of the unit during the period 2007-08 to 2010-11.

The BOA held that the Approval Committee has rightly decided for cancellation of LOA as well as cancellation of allotment of Plot as LOA of the unit had already been expired on 18.11.2012 and the unit’s performance during last five years was dismal.

The Board found no merit in the contentions made by the appellant and, therefore, rejected the appeal.

(ix) Appeal of M/s. Sona Overseas, a unit in NSEZ against order dated 25th November, 2014 of the UAC.

Shri Mamohan Malhotra, Chartered Accountant appeared before the BOA and argued on behalf of the Unit.

The BOA noted that the case was listed for 65th BOA but since no representative of the said Unit had appeared from the appellant for personal hearing, the Board had given another opportunity of the Unit.

The Board noted that the Unit was issued LOA on 8.5.2003 and the Unit was functional upto the years 2010-11 and thereafter no business was carried out from the allotted plot. The LoA had lapsed on 10th January, 2014 and the premises had been lying unutilized since 2011-12 and a lease rent of ₹ 4,54,977/- is outstanding towards the Unit.

The BOA after deliberating on the facts mentioned above, rejected the appeal.

(x) Appeal of M/s. Indo Widecom International Ltd., a unit in NSEZ against order dated 17th October, 2014 of the UAC

Shri Manpreet Sood, Advocate appeared and argued the case on behalf of the appellant.

The BOA noted that the appeal was listed in the 65th BOA but since no representative of the appellant appeared for personal hearing, the BOA had then given another opportunity to the appellant.

The BOA noted that the Unit has been lying non-functional since 2009-10. The LOA has expired on 30.04.2013. During last five years block, unit has made export of ₹ 1.02 Lacs and achieved NFE of ₹ 12000/- only upto 31.3.2012. The unit has not submitted APRs on time. Lease rent of ₹ 18,27,758/- is outstanding against the Unit as on 5th November, 2012. In addition, the unit has not submitted rectified Bond-Cum-Legal-Undertaking and thus non-compliance of terms of LoA/SEZ Act/Rules.

After deliberating on the facts mentioned above, the BOA reverted the appeal to DC, NSEZ for verifying the contentions of the appellant from official records and decide the appeal accordingly.

 (xi) Writ Petitions 2622/2014 filed by M/s. Ellenbarrie Exim Limited v/s Union of India & ors. before Hon’ble High Court at Calcutta

Shri Mahendra Patri, Director and Shri R.K. Choudhary, Advocate appeared on behalf of the appellant unit. BoA heard the arguments made by the Director and the Advocate of the appellant Unit.

The BOA noted that the LOA of M/s. Ellenbarrie Exim Ltd. was cancelled on 25th February, 2014 by the Development Commissioner, FSEZ based on the decision taken by the UAC on 10th January, 2014 due to the following reason.

(i) The firm is a defaulter of rent and earlier SCN was also issued in this regard.

(ii) The firm failed to keep all their commitments with respect to rental dues clearance as given by them

(iii) The firm failed to realize an amount of ₹ 92,93,30,408.01 which is outstanding against their unit for the half year ended 30th June, 2013 for which a separate Show Cause Notice has been issued and proceedings underway.

Aggrieved by the decision of UAC, the unit preferred an appeal before the BoA for SEZs. The appeal was placed before the 62nd BoA meeting held on 24th July, 2014 and after examining the matter and hearing the appellant, the BoA decided to reject the appeal.

Aggrieved by the BoA’s decision, M/s. Ellenberrie Exim Ltd. has preferred a Writ Petition No. 2622/2014 before the Hon’ble Calcutta High Court. Vide its order dated 24.02.2015, Hon’ble high Court ordered that in its view since the appeal has been rejected by a one-sentence order without giving any reason, the order passed in the appeal cannot be sustained and is, thus, set aside and quashed. Accordingly petitioner was given an opportunity of hearing by the BoA for SEZs.

The appeal was considered in the 65th BoA held on 19th May, 2015. On the request of the appellant, BoA had deferred the appeal till next BOA meeting.

After deliberations, BOA came to the conclusion that in view of the huge rental arrears and outstanding realizations to the tune of over ₹ 92 crores against the said Unit, BOA was of the view that the Order dated 25.2.2014 passed by the DC was just and correct. BOA, therefore, rejected the appeal.

(xii) Appeal of M/s. Suchi Specialty Fasteners against the order passed by the Development Commissioner of Surat Special Economic Zone dated 25th February, 2015.

BOA after deliberations decided to remand the appeal back to DC to take appropriate decision on the request of the Unit after giving the opportunity for personal hearing.

Decision on Supplementary Agenda

Item No. 66.10 : Requests for extension of validity of formal approvals

(i) Request of M/s. Mittal Infratech Pvt. Ltd. for further extension of the validity period of formal approval, granted for setting up of sector specific SEZ for IT/ITES at Village Sewah, GT Road, District Panipat, Haryana, beyond 14th October, 2012

The Board after deliberations condoned the delay and extended the validity of the formal approval up to 23rd February, 2016.

(ii) Request of M/s. State Industries Promotion Corporation of Tamil Nadu Limited (SIPCOT) for further extension of the validity period of formal approval, granted for setting up of sector specific SEZ for Granite Processing industries at Bargur, Uthangarai and Pochampalli Taluk, Krishnagiri District, Tamil Nadu, beyond 10th March 2015.

The Board after deliberations extended the validity of the formal approval up to 10th March, 2016.

(iii) Request of M/s. Milestone Buildcon Pvt. Ltd. for further extension of the validity period of formal approval, granted for setting up of sector specific SEZ for IT/ITES at Chokkanahalli village, Bangalore, Karnataka, beyond 29th October 2015

The Board after deliberations extended the validity of the formal approval up to 29th October, 2016.

Item No. 66.11 : Requests for extension of in-principle approval

(i) Proposal of M/s. Avash Logistic Park Private Limited for extension of the validity of in-principle approval for setting up of a FTWZ at villages Mota Layaja, Godhara & Bayath Taluka – Mandvi, District Kutch, Gujarat, beyond 12th May 2015

The Board after deliberations extended the validity of the in-principle approval up to 12th May, 2016.

(ii) Proposal of M/s. Sealand Ports Private Limited for extension of the validity of in-principle approval for setting up of multi product SEZ at Villages – Layaja, Ratadiya, Godhra, Bayath & Undoth, Taluka – Mandvi, District-Kutch, Gujarat, beyond 12th May, 2015

The Board after deliberations extended the validity period of the in-principle approval up to 12th May, 2016.

Item No. 66.12 : Requests for extension of LoP beyond 3rd Year onwards

(i) Request of M/s. Kalyani Alstom Power Ltd., a unit of APSEZ at Mundra, Kutch, Gujarat for extension of Letter of Permission (LOP) beyond 2nd February 2015

The Board after deliberations extended the validity period of the LoP up to 2nd February, 2016.

Item No. 66.13 : Requests for co-developer

(i) Request of M/s. Adani Food and Agro-Processing Park Pvt. Ltd. for co-developer status in the multi product SEZ at Mundra, Kutch, Gujarat, being developed by M/s. Adani Port and Special Economic Zone Ltd

After deliberations, the Board approved the proposal of M/s. Adani Food and Agro-Processing Park Pvt. Ltd. for co-developer status to develop, operate and maintain a Mega Food Park and related infrastructure facilities, over an area of 57 acres, in accordance with the co-developer agreement entered into with the developer subject to formal approval by the Department of Food Processing Industries and provided the co-developer will not claim any duty benefits on expenditure on O&M. The approval is further subject to standard terms and conditions as per SEZ Act and Rules provided that the lease period is reduced to a period not exceeding 30 years (Renewable).

(ii) Request of M/s. Reliance Capital Ltd., Mumbai for co-developer in the multi service SEZ at Ratanpur, District Gandhinagar, Gujarat, being developed by M/s. GIFT SEZ Ltd.

After deliberations, the Board approved the proposal of M/s. Reliance Capital Ltd. for co-developer status for (i) infrastructure development of office building in processing area to undertake export of services, over an area of 3,00,000 sq.ft. and (ii) residential building in non-processing area for management, official staff and the workers of the SEZ units, over an area of 2,00,000 sq.ft., in accordance with the Draft lease-cum development agreement entered into with the developer subject to standard terms and conditions as per SEZ Act and Rules provided that the lease period is reduced to a period not exceeding 30 years (Renewable).

(iii) Request of M/s. HBS City Pvt. Ltd. a co-developer in the Pharmaceuticals SEZ at GIDC, Panoli Industrial Estate, Panoli, District Bharuch, Gujarat, being developed by M/s. HBS Pharma SEZ Pvt. Ltd., for additional area.

The Board, after deliberations, approved the request of M/s. M/s. HBS City Pvt. Ltd. for addition of an area of 56 acres of non-processing area in the SEZ in the already approved 50 acres of non-processing area for providing infrastructure facilities, construction of residential and commercial buildings, educational institute, health care, bank, etc. thereby increasing the total area of co-developer to 106 acres in accordance with the draft supplementary co-developer agreement entered into with the developer, subject to standard terms and conditions as per SEZ Act and Rules provided that the lease period is reduced to a period not exceeding 30 years (Renewable).

 (iv) Request of M/s. Geon Aircondition & Refrigeration Manufacturers Pvt. Ltd. for co-developer in the IT/ITES SEZ at Kanayannur Taluk, Ernakulam District, Kerala, being developed by M/s. Infopark SEZ

After deliberations, the Board approved the proposal of M/s. Geon Aircondition & Refrigeration Manufacturers Pvt. Ltd. for co-developer for providing infrastructure facilities and development of IT sector industry, over an area of 2.61 acres, in accordance with the co-developer agreement entered into with the developer subject to standard terms and conditions as per SEZ Act and Rules.

(v) Request of M/s. SJ Contracts Pvt. Ltd. for co-developer in the sector specific SEZ for Biotech at village Mahiri, Budruck, Taluka Haveli, District Pune, Maharashtra, being developed by M/s. SEZ Biotech Services Pvt. Ltd.

The Board observed that the proposal is not clear. After deliberations, the Board directed to DC, SEEPZ to discuss the matter with the client for understanding the business model of the applicant. Therefore, the proposal was deferred.

Item No. 66.14 : Miscellaneous Cases

(i) Request of M/s. Sanmina SCI Technology India Private Limited, Co-developer in M/s. SIPCOT, sector specific SEZ for Electronic Hardware and related Support Services including Trading and Logistics Operations at Orgadam, Sriperumbudur Taluk, Kancheepuram District, Tamil Nadu for transfer of shares

After deliberations, the Board approved the request of the co-developer for change of shareholding pattern of the company, subject to following conditions:-

(i) Seamless continuity of the SEZ activities with unaltered responsibilities and obligations for the altered co-developer entity;

(ii) Fulfillment of all eligibility criteria applicable to co-developers, including security clearances etc., by the altered co-developer entity and its constituents;

(iii) Applicability of and compliance with all Revenue / Company Affairs /SEBI etc. rules which regulate issues like capital gains, equity change, transfer, taxability etc.

(iv) Full financial details relating to change in equity/merger, demerger, amalgamation or transfer in ownership etc. shall be furnished immediately to Member (IT), CBDT, Department of Revenue and to the jurisdictional Authority.

(v) The Assessing Officer shall have the right to assess the taxability of the gain/loss arising out of the transfer of equity or merger, demerger, amalgamation, transfer and ownerships etc. as may be applicable and eligibility for deduction under relevant sections of the Income Tax Act, 1961.

(vi) The applicant shall comply with relevant State Government laws, including those relating to lease of land, as applicable.

(vii) The co-developer shall furnish details of PAN and jurisdictional assessing officer of the co-developer to CBDT.

 (ii) Request of M/s. Ascendas IT SEZ (Chennai) Pvt. Ltd. a co-developer in the IT/ITES SEZ of Mahindra World City SEZ, Chennai for change of name to M/s. Cyber Pearl Information Technology Park Private Limited

After deliberations, the Board approved the request for change of name of the co-developer from M/s. Ascendas IT SEZ (Chennai) Pvt. Ltd. to M/s. Cyber Pearl Information Technology Park Private Limited, subject to following conditions:-

(i) Seamless continuity of the SEZ activities with unaltered responsibilities and obligations for the altered co-developer entity;

(ii) Fulfillment of all eligibility criteria applicable to co-developers, including security clearances etc., by the altered co-developer entity and its constituents;

(iii) Applicability of and compliance with all Revenue / Company Affairs /SEBI etc. rules which regulate issues like capital gains, equity change, transfer, taxability etc.

(iv) Full financial details relating to change in equity/merger, demerger, amalgamation or transfer in ownership etc. shall be furnished immediately to Member (IT), CBDT, Department of Revenue and to the jurisdictional Authority.

(v) The Assessing Officer shall have the right to assess the taxability of the gain/loss arising out of the transfer of equity or merger, demerger, amalgamation, transfer and ownerships etc. as may be applicable and eligibility for deduction under relevant sections of the Income Tax Act, 1961.

(vi) The applicant shall comply with relevant State Government laws, including those relating to lease of land, as applicable.

(vii) The co-developer shall furnish details of PAN and jurisdictional assessing officer of the co-developer to CBDT.

(iii) Request of M/s. Sterling Enterprises for setting up a new unit in NSEZ, Noida for providing services to the foreign buyers/Indian companies

The Board, after deliberations approved the proposal of M/s. Sterling Enterprises for setting up a new unit in NSEZ, Noida for providing services to the foreign buyers/Indian companies.

Decision on Table Agenda

Item No. 66.15 : Proposal for setting up of SEZs

(i) Request of M/s. Wardha Sakhar Karkhana Ltd. for setting up of a sector specific SEZ for Biotechnology including Bio-Plastics or other Bio based or Bio-degradable Environment Friendly Products, Pharmaceuticals and Chemical sector at Mouza: Jamner and Kharassi, Tehsil Arvi, District Wardha, Maharashtra, over an area of 86.15 hectares.

The Board noted that the Developer is in possession of the land. The Government of Maharashtra has conveyed its in-principle approval vide their letter dated 10.08.2015. Accordingly, the Board decided to grant in-principle approval to the proposal of M/s. Wardha Sakhar Karkhana Ltd., for setting up of a sector specific SEZ for Biotechnology including Bio-Plastics or other Bio based or Bio-degradable Environment friendly Products, Pharmaceuticals and Chemical sector at Mouza: Jamner and Kharassi, Tehsil Arvi, District Wardha, Maharashtra, over an area of 86.15 hectares. The approval is subject to compliance of the following conditions by the developer:-

(i) Developer has taken a loan of ₹ 151.80 crores by mortgaging the land to Andhra Bank a nationalized Bank, as per the Central Govt. guidelines land should be free from all encumbrances by the developer.

(ii) The land location layout plan submitted by the developer indicates that land is (86.15 ha.) not contiguous. However developer confirms the minimum area i.e. 50 hectares land for sector specific SEZ is contiguous. Hence subject to satisfying the criteria of minimum land requirement of 50 hectares contiguous to be ensured.

(iii) Developers should fulfill the provisions of State Government Act and Rules in respect of purchase of Agricultural land for Industrial Purposes.

The developer must ensure at the time of formal approval that:-

(i) The land should be free from all encumbrances by the developer; and,

(ii) The entire area for which sector specific SEZ should be formally approved should be contiguous.

The meeting ended with a vote of thanks to the Chair.

………

 

Annexure – 1

List of Participants for the Meeting of the Board of Approval for Special Economic Zones held on 27th Auguat, 2015 under the Chairmanship of Commerce Secretary, Department of Commerce

1. Ms. Rita Teaotia, Chairman, BoA & Commerce Secretary, Department of Commerce

2. Shri John Joseph, DGEP, Department of Revenue, Ministry of Finance

3. Dr. Tejpal Singh, ADGEP, Department of Revenue, Ministry of Finance

4. Ms. Deepshikha Sharma, Director (ITA-1), CBDT, Department of Revenue, Ministry of Finance

5. Shri Pravir Kumar, DG, DGEP

6. Ms. Apurva Chandra, Principal Secretary (Industries), Government of Maharashtra

7. Shri K. Biswal, Joint Secretary & Legislative Counsel, M/o of Law & Justice, Legislative Department, Government of India

8. Shri D.C. Singh, Deputy Secretary, Ministry of Shipping

9. Shri Pawan Kumar Katyal, Managing , (PSIEC), Government of Punjab

10. Shri A.K. Misra, Research Assistant TCPO, Ministry of Urban Development, Vikas Bhawan, I.P. Estate, New Delhi

11. Shri Zakaria Khan Yusufzai, Sr. Development Officer, DIPP

12. Shri O P Sharma, Joint Industrial Adviser, Department of Chemical & Petrochemicals

13. Shri Rajendra Kumar Tiwari, Principal Secretary, IT & Electronic, Govt. of UP

14. Shri Georgekutty Cherian, O/o Resident Commissioner, Govt. of Kerala

15. Shri Suresh Kumar Dudani, Secretary, AIADA, Jamshedpur, Govt of Jharkhand

16. Dr. S.K. Sahoo, Dy Director (EP), O/o DC(MSME), M/o MSME, Nirman Bhawan, New Delhi.

17. Shri A.K. Dham, Liaison Officer, IDCO, Govt. of Odisha

18. Ms. Rina Mohapatra, Deputy Resident Commissioner, Govt. of Odisha.

LIST OF DEVELOPMENT COMMISSIONERS

19. Dr. L.B. Singhal, Development Commissioner, Noida SEZ

20. Dr. Safeena AN, Development Commissioner, CSEZ

21. Shri Sanjeev Nandwani, Development Commissioner, Falta, Kolkata

22. Shri N.P.S. Monga, Development Commissioner, SEEPZ SEZ

23. Shri A.K. Choudhary, Development Commissioner, Sri City SEZ

24. Shri Upendra Vashisht, Development Commissioner, KASEZ

25. Ms. Sobhana K.S. Rao, Development Commissioner, VSEZ

26. Shri M.K. Shanmuga Sundaram, Development Commissioner, MEPZ-SEZ

27. Shri K.L. Sharma, Development Commissioner, Sterling SEZ, Gujarat

28. Smt. Lata Shukla, Development Commissioner, Mundra SEZ

29. Shri Vijay N. Shewale, Development Commissioner, Surat SEZ

30. Shri Ishwar Singh, Joint Development Commissioner, Indore SEZ

LIST OF PARTICIPANTS FROM DEPARTMENT OF COMMERCE

31. Dr. Guruprasad Mohapatra, Joint Secretary, Department of Commerce

32. Shri Madhup Vyas, Director, Department of Commerce

33. Shri S.S. Kumar, Under Secretary, Department of Commerce

34. Shri Kabiraj Sabar, Under Secretary, Department of Commerce

35. Shri V.P. Rajvedi, Section Officer, Department of Commerce

36. Shri K.C. Biswal, Section Officer, Department of Commerce

Notification No. : 348/2015-RB Dated: 25-9-2015


Foreign Exchange Management (Regularization of assets held abroad by a person resident in India) Regulations, 2015 – 348/2015-RB – Dated 25-9-2015 – Foreign Exchange Management

RESERVE BANK OF INDIA

Foreign Exchange Department

Central Office

Mumbai- 400 001

Notification No. FEMA. 348/2015-RB

Dated: September 25, 2015

Foreign Exchange Management (Regularization of assets held abroad by a person resident in India) Regulations, 2015.

G.S.R. 738 (E) - In exercise of the powers conferred by section 47 of the Foreign Exchange Management Act, 1999 (42 of 1999), the Reserve Bank makes the following regulations relating to regularization of assets held abroad by a person resident in India, namely:-

1. Short title and commencement:-

i. These regulations may be called the Foreign Exchange Management (Regularization of assets held abroad by a person resident in India) Regulations, 2015.

ii. They shall come into force from the date of their publication in the Official Gazette.

2. Definitions:-

In these Regulations unless the context otherwise requires, -

i. ‘Act’ means the Foreign Exchange Management Act, 1999 (42 of 1999);

ii. ‘Black Money Act’ means The Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 (22 of 2015);

iii. The words and expressions used but not defined in these Regulations shall have the same meanings respectively assigned to them in the Act

3. Save as otherwise provided in these regulations or with the general or special permission of Reserve Bank, no person resident in India shall continue to hold an asset located outside India for which a declaration has been made under section 59 of the Black Money Act.

4. Regularization of assets held abroad by persons resident in India -

No proceedings shall lie under the provisions of the Act, against a person resident in India who has made a declaration under section 59 of the Black Money Act, in respect of any undisclosed asset located outside India and has paid the tax and penalty in accordance with the provisions of Chapter VI of the Black Money Act.

Provided that where the declarant intends to continue to hold the asset so declared, he shall apply to the Reserve Bank within 180 days from the date of declaration, for permission under the relevant provisions of the Act, or rules and regulations framed thereunder, if such permission is necessary as on the date of application.

Provided further that where the declarant does not intend to hold the asset so declared or the permission to hold such asset is refused by the Reserve Bank, as the case may be, the declarant shall dispose of the said asset within 180 days from the date of making such declaration or the date of receipt of the communication from the Reserve Bank conveying refusal of permission or within such extended period as may be permitted by the Reserve Bank and bring back the proceeds to India immediately through the banking channel.

(Indira Nanu)

Chief General Manager

Notification No. : 20/2015 Dated: 24-9-2015


100 EOU – DTA Clearance – conditions, safeguards and procedures for supply of items like tags, labels, printed bags, stickers, belts, buttons and hangers for the purpose of their exportation out of India – 20/2015 – Dated 24-9-2015 – Central Excise – Non Tariff

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

(DEPARTMENT OF REVENUE)

NOTIFICATION  No. 20/2015 -CENTRAL EXCISE (N.T.)

New Delhi, the 24th September, 2015

G.S.R…(E).- In exercise of the powers conferred by sub-rule (3) read with sub-rule (2) of rule 19 of the Central Excise Rules, 2002, the Central Board of Excise and Customs hereby notifies the conditions, safeguards and procedures for supply of items like tags, labels, printed bags, stickers, belts, buttons and hangers (hereinafter referred as “specified goods”) produced or manufactured in an Export Oriented Undertaking (hereinafter referred to as “EOU) and cleared without payment of duty to a Domestic Tariff Area (hereinafter referred to as “DTA) unit in terms of Para 6.09 (g) of Foreign Trade Policy, 2015-20, for the purpose of their exportation out of India (hereinafter referred as “specified purpose”), namely:-

1.  Conditions:-

(i)   the EOU shall furnish a general bond in the Form specified in Annexure-I to the Ministry of Finance (Department of Revenue) notification No. 42/2001-Central Excise (N.T.), dated the 26th June, 2001, as amended from time to time, to the jurisdictional Deputy or Assistant Commissioner of Central Excise in a sum equal to the duty chargeable on the specified goods, with 5% Bank Guarantee or as cash security;

(ii)   the specified goods after being used for the specified purpose shall be exported within six months from the date on which such goods cleared from EOU or within such extended period as the Deputy or Assistant Commissioner of Central Excise may in any particular case allow;

(iii)   the shipping bill filed by the DTA exporter shall contain the name and I.E. Code of the DTA exporter along with the name and I.E. Code of the EOU as supporting manufacturer;

(iv)   the DTA exporter shall apply for export incentives based on the Freight On Board (FOB) value of the consignment exported minus the value of specified goods.

2. Procedure to be followed by EOU manufacturing the specified goods:-

(i)    after furnishing a bond alongwith Bank Guarantee or cash security, as the case may be, EOU is permitted to clear goods without payment of duty to DTA manufacturer or as the case may be, processer;

(ii)   the EOU shall ensure that the debit in bond account does not exceed the credit available therein at any point of time;

3.  Export of goods:-

(i)     the DTA exporter shall export specified goods as part of export goods. The shipping bill filed by DTA exporter for export shall also contain name and address of the EOU as supporting manufacturer, details of the specified goods, like their description, quantity, value, etc., and reference of invoice number under which the said specified goods were received from the EOU. The value of the specified goods should not be less than the value of these goods removed by EOU:

Provided that in case of shipping bill filed claiming the benefits under any export promotion scheme, the FOB value of consignment exported shall exclude the value of specified goods procured from EOU for the purpose of claiming such benefits;

(ii)    the EOU will submit attested photocopy of the shipping bill (EP copy), Customs attested copy of invoice and self-attested photocopy of bill of lading or air way bill to the jurisdictional Central Excise and Customs Superintendent for verification of export of the specified goods. The said Superintendent of Central Excise having jurisdiction over EOU shall verify the details of export of the specified goods with reference to the document submitted by exporter;

(iii)   the proof of export should be submitted by the EOU to the jurisdictional Central Excise Office within a period of six months from the date of clearance of goods from the EOU;

(iv)   on submitting certification of export of specified goods and proof of payment received for the exported goods in which the said specified goods were contained such supplies of specified goods shall be taken into account for counting towards discharge of export obligation of the EOU by the Development Commissioner.

4.  Recovery of duty in certain cases:-

Where the specified goods are not received by the DTA Unit or are not exported by the DTA exporter within the specified period or the extended period as permitted by the Assistant or Deputy Commissioner in charge of EOU, the EOU shall be liable to pay the duty leviable on such specified goods alongwith interest and penalty, if any, in accordance with the provisions of the Central Excise Act, 1944 (1 of 1944).

Explanation 1.- For the removal of doubts, it is hereby clarified that the specified goods shall be deemed not to have been used for the specified purpose even if any of the quantity of the subject goods is lost or destroyed by natural causes or by unavoidable accidents or for any other reasons during transport from the place of procurement to the DTA exporter and no wastage of the specified goods shall be allowed and duty on such goods lost or destroyed shall be payable by the EOU, alongwith interest and penalty, if any,  in accordance with provisions of Central Excise Act, 1944 (1 of 1944).

Explanation 2.- For the purpose of this notification,-

(i)  “Export Oriented Undertaking” has the same meaning as assigned to “hundred per cent. export oriented undertaking” in clause (ii) to the Explanation of sub-section (1) of section 3 of the Central Excise Act, 1944 ( 1 of 1944);

(ii)   “Domestic Tariff Area” means India except Special Economic Zone and hundred per cent. export oriented undertakings;

(iii)  ‘Foreign Trade Policy, 2015-20’ means Foreign Trade Policy, 2015-20 notified by the Central Government in the Ministry of Commerce and Industry vide Notification No. 1/2015-2020, dated the 1st April, 2015 and as amended from time to time;

(iv)  “Development Commissioner” means Development Commissioner of Special Economic Zone.

(F. No. DGEP/EOU/04/2015)

(Theodore Tigga)        

Under Secretary to Govt. of India

No. 16 Dated: 24-9-2015


Processing and settlement of import and export related payments facilitated by Online Payment Gateway Service Providers – Circular – Dated 24-9-2015 – FEMA

RBI/2015-16/185

A.P. (DIR Series) Circular No.16

September 24, 2015

To

All Category – I Authorised Dealer Banks

Madam / Sir,

Processing and settlement of import and export related payments facilitated by Online Payment Gateway Service Providers

Attention of Authorised Dealer Category-I (AD Category-I) banks is invited to the A. P. (DIR Series) Circular No.109 dated June 11, 2013 read with A.P. (DIR Series) Circular No.17 dated November 16, 2010 in terms of which AD Category-I banks have been permitted to offer the facility to repatriate export related remittances by entering into standing arrangements with Online Payment Gateway Service Providers (OPGSPs) in respect of export of goods and services.

2. To facilitate e-commerce, it has been decided to permit AD Category-l banks to offer similar facility of payment for imports by entering into standing arrangements with the OPGSPs. The revised consolidated guidelines on such imports and exports are as under:

General:

2.1 AD Category-I banks desirous of entering into such an arrangement/s should report the details of each such arrangement as and when entered into to the Foreign Exchange Department, Central Office, Reserve Bank of India, Mumbai. For operationalising such arrangements, AD Category-I banks shall:

(i) carry out the due diligence of the OPGSP;

(ii) maintain separate Export and Import Collection accounts in India for each OPGSP;

(iii) satisfy themselves as to the bonafides of the transactions and ensure that the related purpose codes reported to the Reserve Bank are appropriate;

(iv) submit all the relevant information relating to any transaction under such arrangements to the Reserve Bank, as and when advised to do so; and

(v) conduct the reconciliation and audit of the collection accounts on a quarterly basis.

2.2 Foreign entities, desirous of operating as OPGSP, shall open a liaison office in India with the approval of the Reserve Bank before operationalising the arrangement with any AD category-I bank. It would be incumbent upon the OPGSP to:

(i) ensure adherence to the Information Technology Act, 2000 and all other relevant laws / regulations in force;

(ii) put in place a mechanism for resolution of disputes and redressal of complaints;

(iii) create a Reserve Fund appropriate to its return and refund policy and

(iv) onboard sellers, Indian as well as foreign, following appropriate due diligence procedure.

Resolution of all payment related complaints in India shall remain the responsibility of the OPGSP concerned.

2.3 Domestic entities functioning as intermediaries for electronic payment transactions in terms of the guidelines stipulated by our Department of Payment and Settlement Systems and intending to undertake cross border transactions shall maintain separate accounts for domestic and cross border transactions.

3. Import transactions

(i) The facility shall only be available for import of goods and software (as permitted in the prevalent Foreign Trade Policy) of value not exceeding USD 2,000 (US Dollar Two Thousand) only.

(ii) The balances held in the Import Collection account shall be remitted to the respective overseas exporter’s account immediately on receipt of funds from the importer and, in no case, later than two days from the date of credit to the collection account.

(iii) The AD Category –I bank will obtain a copy of invoice and airway bill from the OPGSP containing the name and address of the beneficiary as evidence of import and report the transaction in R-Return under the foreign currency payment head.

(iv) The permitted credits in the OPGSP Import Collection account will be:

a. collection from Indian importers for online purchases from overseas exporters electronically through credit card, debit card and net banking and

b. charge back from the overseas exporters.

(v) The permitted debits in the OPGSP Import Collection account will be:

a. payment to overseas exporters in permitted foreign currency;

b. payment to Indian importers for returns and refunds;

c. payment of commission at rates/frequencies as defined under the contract to the current account of the OPGSP; and

d. bank charges

4. Export transactions

As already notified vide our A. P. (DIR Series) Circular No.109 dated June 11, 2013 and A.P. (DIR Series) Circular No.17 dated November 16, 2010referred to earlier:

(i) the facility shall only be available for export of goods and services (as permitted in the prevalent Foreign Trade Policy) of value not exceeding USD 10,000 (US Dollar ten thousand) per transaction.

(ii) AD Category-I banks providing such facilities shall open a NOSTRO collection account for receipt of the export related payments facilitated through such arrangements. Where the exporters availing of this facility are required to open notional accounts with the OPGSP, it shall be ensured that no funds are allowed to be retained in such accounts and all receipts should be automatically swept and pooled into the NOSTRO collection account opened by the AD Category-I bank.

(iii) The balances held in the NOSTRO collection account shall be repatriated to the Export Collection account in India and then credited to the respective exporter’s account with a bank in India immediately on receipt of the confirmation from the importer and, in no case, later than seven days from the date of credit to the NOSTRO collection account.

(iv) The permitted debits to the OPGSP Export Collection account maintained in India will be:

a. payment to the respective Indian exporters’ accounts;

b. payment of commission at rates/frequencies as defined under the contract to the current account of the OPGSP; and

c. charge back to the overseas importer where the Indian exporter has failed in discharging his obligations under the sale contract.

(v) The only credit permitted in the same OPGSP Export Collection account will be repatriation from the NOSTRO collection accounts electronically.

5. AD Category-I banks may bring the contents of this circular to the notice of their constituents and customers concerned.

6. The directions contained in this circular have been issued under Section 10 (4) and Section 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.

Yours faithfully,

(A. K. Pandey)

 Chief General Manager

No. 15 Dated: 24-9-2015


Opening of foreign currency accounts in India by ship-manning / crew-management agencies – Circular – Dated 24-9-2015 – FEMA

RBI/2015-16/184

A.P. (DIR Series) Circular No.15

September 24, 2015

To

All Category – I Authorised Dealer Banks

Madam / Sir,

Opening of foreign currency accounts in India by ship-manning / crew-management agencies

Attention of Authorised Dealer Category-I (AD Category – I) banks is invited to Regulation 6 of Foreign Exchange Management (Foreign Currency Accounts by a person resident in India) Regulations, 2000 notified vide Notification No. FEMA 10/2000-RB dated May 3, 2000, as amended from time to time, and A.P. (DIR Series) Circular No. 48 dated April 30, 2007, in terms of which general permission is available to ship-manning / crew managing agencies that are rendering services to shipping/airline companies incorporated outside India, to open, hold and maintain non-interest bearing foreign currency account with an AD Category – I bank in India for meeting the local expenses in India of such shipping or airline company.

2. With a view to ensuring strict compliance, our guidelines on the operations in such foreign currency accounts opened with AD Category-I banks by foreign shipping or airline companies or their agents in India are reproduced below:

a. Credits to such foreign currency accounts would be only by way of freight or passage fare collections in India or inward remittances through normal banking channels from the overseas principal. Debits will be towards various local expenses in connection with the management of the ships / crew in the ordinary course of business.

b. No credit facility (fund based or non-fund based) should be granted against security of funds held in such accounts.

c. The bank should meet the prescribed ‘reserve requirements’ in respect of balances in such accounts.

d. No EEFC facility should be allowed in respect of the remittances received in these accounts.

e. These foreign currency accounts will be maintained only during the validity period of the agreement.

3. AD Category – I banks may bring the contents of this circular to the notice of their constituents and customers concerned.

4. 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) and are without prejudice to permissions / approvals, if any, required under any other law.

Yours faithfully,

(A. K. Pandey)

 Chief General Manager

Will FM Arun Jaitley present a ‘People’s Budget’ in February 2016? : 24-09-2015


Given that the NDA government has failed to break the parliamentary logjam and pass critical reform Bills like the Land Acquisition and goods and services tax (GST), it is obvious that Prime Minister Narendra Modi and Finance Minister Arun Jaitleywould like to turn the Budget for next financial year into a platform to push people-friendly policy measures.

Though, normally, the last two budgets of any government at the centre are populist, the situation this time is different and PM Modi is expected to go beyond the promises of ‘Acchhe Din’ and deliver now.

This is why the budget preparation exercise this time, which has already been advanced by two months, is going to be PM Modi-style.

The finance ministry has invited suggestions for the Budget from the general public through http://mygov.nic.in Portal ‘in order to infuse more transparency into budget making exercise and to have people as partners in the process of budget making’.

While this is fine, FM Arun Jaitley’s has a challenge of presenting one of the toughest Budget of all times next year.

He has promised to reduce the income tax rate for companies from 30 per cent to 25 per cent in the next four years that would require phasing out of exemptions and this needs to be tackled carefully.

Then, the additional burden of Pay Commission award for the government employees and also for the defence personnel on account of the one rank one pension scheme (OROP) has to be factored in.

Simultaneously, the finance minister is also required to find ways to cut subsidies and enhance public expenditure to push growth.

In this backdrop, he will have limited resources to announce any other measure that would mean taking a revenue hit.

So, will the exercise of seeking suggestions from the general public for the Budget remains just a symbolic one or will it yield any result, is an open question.

The first few suggestions which have come to the portal, though, indicate that, if taken seriously, this will certainly allow the government to sense the general mood of the public which can be a vital input.

“While I appreciate your efforts in bringing the Black Money back from overseas, I’m sure you would agree that much is stuffed in the Domestic Economy too. To deal with this issue of Domestic Black Money, I suggest you bring down the Direct Taxes for Individuals and Corporates (especially Individual) drastically and in turn increase Indirect Taxes in the proportion that it covers your revenue foregone from Direct Taxes,” says Amit Arora.

The views also reflect that those working on the ground probably have a better idea of what is required to be done than those sitting in the government offices.

Varun Goyal has written to the government that, “for promoting local Manuf & boost Growth, pls do
1)Check Excise Duty’s system on import(corruption @ there, allow other countries item sell here @low cost)
2)For manuf. give elec,land, etc. @ low cost for Small scale Comp.
3)GST/Tax should be min. & forcefully implement, so everybody wish to do work in white.
4)Income/property/etc. Direct tax should be min. to work in white money only
5)Only Big currency & cheque sys is good.
6)Public friendly law, min tax, promote white money to come”.

Suchitra Raghavachari is of the view that, “self employment / entrepreneurship has to be given a fillip if discontent among the youth is to be prevented. Technical education, basic skill training, apprenticeships should be given incentives for both institutes & mentorees. Banks should be sensitised towards better disbursement of education / personal – business loans. Focus should be on the MSME / SME sector, tribal area development & seed fund for tech start ups. Tax breaks, SEZ’s, Tech parks & e-retail opportunities will help”.

Clearly, the whole exercise will be fruitful if FM Arun Jaitley collates these views and presents a report along with the Budget on the suggestions the government received from the general public and how far he has been able to accommodate them.

Source : Business Standard

Notification No. : F.No. 01/34/2013-CL-V- Part-I Dated: 24-9-2015


Companies (Management and Administration) Second Amendment Rules, 2015 – F.No. 01/34/2013-CL-V- Part-I – Dated 24-9-2015 – Companies Law

GOVERNMENT OF INDIA

MINISTRY OF CORPORATE AFFAIRS

Notification

New Delhi, the 24th September, 2015

G.S.R.  (E)- In exercise of the powers conferred by sections 88, 89, 91, 92, 93, 94, 101, 105, 108, 109, 110, 115,117, 118, 119, 120 and 121 read with 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 (Management and Administration) Rules, 2014, namely:-

1. Short title and commencement.--

(1) These rules may be called the Companies (Management and Administration) Second Amendment Rules, 2015.

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

2.  In the Companies (Management and Administration) Rules, 2014, in Form No. MGT-7, In paragraph 1, under serial number (i), after “Global Location Number (GLN) of the Company”, the following shall be inserted, namely:-

“Permanent Account Number (PAN) of the Company          ”

             [F. No. 01/34/2013-CL-V- Part-I]

(AMARDEEP S. BHATIA, Jt. Secy.)

Note:-The principal notification was published in the Gazette of india, vide No. G.S.R. 260(E), dated the 31st March, 2014, subsequently amended vide No. G.S.R. 415(E), dated the 23rd June, 2014, vide No. G.S.R. 537(E) dated 24.07.2014 and lastly amended vide No. G.S.R. 669 (E) dated 28.08.2015.

Notification No. : 75/2015 Dated: 23-9-2015


Income-tax (Thirteenth Amendment) Rules, 2015 – 75/2015 – Dated 23-9-2015 – Income Tax

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

(DEPARTMENT OF REVENUE)

(CENTRAL BOARD OF DIRECT TAXES)

NOTIFICATION NO. 75/2015

New Delhi, the 23th September, 2015

S.O.  (E)- In exercise of the powers conferred by section 295, read with clause (14) of section 10 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) These rules may be called the Income-tax (Thirteenth Amendment) Rules, 2015.

(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 2BB, in sub-rule (2), in the Table, against serial number 11, in the entry under column (2) relating to “name of allowance”, after the words “who is blind”, the words “or deaf and dumb” shall be inserted.

F.No.142/02/2015-TPL

(Arju Garodia)

Under Secy. (TPL)

Note.- The principal rules were published in the Gazette of India vide notification number S.O. 969(E), dated the 26th March, 1962, and last amended by vide Notification number S.O. 2290(E) dated 17th August, 2015.

Notification No. : 74/2015 Dated: 22-9-2015


Notification u/s. 10(6C) of the Income-tax Act, 1961 – Notified royalty or fees for technical services – 74/2015 – Dated 22-9-2015 – Income Tax

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

(DEPARTMENT OF REVENUE)

(CENTRAL BOARD OF DIRECT TAXES)

NOTIFICATION NO. 74/2015

New Delhi, the 22th September, 2015

S.O. (E). - In exercise of the powers conferred by clause (6C) of section 10 of the Income -tax Act, 1961 (43 of 1961), the Central Government hereby declares that any income arising to M/s Thales Systemes Aeroportes SAS, having its office at S.A. an capital de 81 007 176 Euros RCS Paris B 712 042, by way of royalty or fees for technical services received in pursuance of the agreement vide General Contract No. Air HQ/96102/2/ASR- DA, dated the 29th July, 2011 entered into between Thales Systemes Aeroportes (“Thales”) and M/s Dassault Aviation and the Government of India for undertaking retrofitting of fifty-one defence aircrafts connected with security of India, shall not be included in computing the total income of a previous year of the said company under the said Act.

(F.No.200/18/2014-ITA-I)

(Deepshikha Sharma)

Director to the Government of India

FM Arun Jaitley promises more reforms; sees better growth this fiscal : 22-09-2015


India’s economic growth is expected to improve despite unfavourable global winds as the government continues with several reform programmes, Finance Minister Arun Jaitley said today.

Emphasising that India has the potential to be the bright spot in the gloomy global economic scenario, Jaitley said fiscal deficit is coming down and inflation is very much under control.

“I see the road ahead with regard to several reform programmes of the government continuing. Economic reforms will be an ongoing activity. There is no finishing line for that,” Jaitley said while addressing global investors here.

A significant change that is taking place is that the reforms are moving in forward direction consistently and states have also realised that they have a great role in this growth story, he added.

Jaitley said the Goods and Services Tax (GST) is one of the most important taxation reforms and the government has also opened many sectors, including defence manufacturing.

“Bankruptcy law is ready to be taken up in Parliament, laws for resolution of contracts, allocation of public contracts and public procurement, are being pursued.”

Assuring foreign investors, he said putting tax issues to rest is certainly a “high priority” for the government.

About growth prospects, the Finance Minister said he thinks India has the potential to be the bright spot even in somewhat gloomier situation. “We grew by 7.3 per cent last year and I am sure we will improve on that front this year.”

“I am conscious of adversities that come our way. India ended last year with 7.3 per cent. We had good fiscal figures. Fiscal deficit is gradually coming down and we are now aiming to bring it down in the next 2-3 years to 3 per cent.

“Current account deficit is down to 1.2 per cent, foreign exchange reserves are very high, inflation is very much under control and therefore macroeconomic indications seem to be positive,” the Finance Minister said.

Observing that these numbers have come in the midst of a global slowdown, Jaitley said, “Global headwinds are not helping us and at times are creating adversities, particularly the external factors have impacted our exports and in favourable global conditions we can improve on the growth rate of 7.3 per cent in a significant way.”

Source : PTI

No. Press Note No. 10 (2015 series) Dated: 22-9-2015


Streamlining the Procedure for Grant of Industrial Licenses – FDI GUIDELINES – Dated 22-9-2015 – FEMA

Government of India

Ministry of Commerce and Industry

Department of Industry Policy & Promotion

Udyog Bhavan, New Delhi.

Press Note No. 10 (2015 series)

STREAMLINING THE PROCEDURE FOR GRANT OF INDUSTRIAL LICENSES

The initial validity of Industrial License for Defence Sector, as per Press Note 5 (2015 series), is presently seven years, further extendable up to 10 years.

2. In partial modification of the above mentioned Press Note, the initial validity of Industrial License for Defence Sector is being revised to 15 years, further extendable up to 18 years for existing as well as future Licenses. However, in case a license has already expired, the Licensee has to apply afresh for issue of license. This is being done as a measure to further promote ease of doing business, in view of the long gestation period of Defence contracts to mature.

(Shubhra Singh)

Joint Secretary to the Government of India

Corporate tax exemptions phase-out may end MAT : 22-09-2015


The Minimum Alternate Tax (MAT) could be phased out after some years, if and when all corporate tax exemptions and deductions are phased out.

This could take at least seven or eight years. If it happens, experts agree, it would reduce tax litigation.

finance ministry official said MAT might become redundant in seven years or more and could be removed. “For now, it will remain in the Income Tax Act, even if it does not affect people. If there are no substantial deductions that reduce the income to below 18.5 per cent, MAT will not be applicable. In seven to 10 years, as MAT becomes redundant, it will be removed,” he said.

MAT THROUGH THE YEARS
  • 1987-88: Rajiv Gandhi introduces Section 115J in I-T Act to tax zero tax companies at at least 15% of book profits
  • 1990-91: Madhu Dhandvate Abolishes it
  • 1996-97: P Chidambaram re-introduces section 115 JA. MAT rate at 12.5% of total book profit.
  • 2000-01: Yashwant Sinha amends and makes  it 115 JB. Rate at 7.5%. Continues even today. Simplifies rules
  • 2006-07: 7.5%, but long capital gains taken into account to compute book profit
  • 2009-10: 10%
  • 2010-11: 15%
  • 2011-12: 18%
  • 2012-13: 18.5%
  • 2013-14: 18.5%
  • 2014-15: 18.5%
  • 2015-16: 18.5%

The government is also looking at setting a sunset date for most open-ended tax concession schemes, alongside a five percentage point reduction in the corporate tax rate in four years. The rate is 30 per cent, but is close to 23 per cent, on account of a large number of exemptions and deductions. The revenue forgone in 2012-13 on account of deductions in this regard was Rs 68,000 crore.

In the next financial year, the corporate tax rate might be around 29 per cent, after a cut, part of a plan to align Indian taxation levels to global standards. “As the government progressively reduces the rate to 25 per cent and phases out exemptions and deductions, the need for MAT goes away. It will simplify a lot of things,” said Sudhir Kapadia, national tax leader, EY.

The finance ministry will issue a discussion paper on phasing out the exemptions and deductions. It is likely to announce the road map in the Budget.

MAT is levied at 18.5 per cent and was meant for large companies that showed book profits but took advantage of legal provisions to avoid paying corporate tax, via dividend payments and other legal deductions to stated income. As of now, 38 corporate tax deductions apply to industry, including benefits for units set up in Special Economic Zones (SEZs), the northeast states, hilly states and so on. Besides, tax incentives are offered for expenditure on scientific research, funding charitable trusts and institutions and the like. Deductions are also offered to sectors such as power, telecommunications, and infrastructure.

“As the corporate tax rate is reduced to 25 per cent, MAT will also not make sense, as the two rates anyway come close,” said  Rajesh H Gandhi, partner, Deloitte Haskin and Sells.

Rahul Garg, leader, direct taxes, PwC, said the government should look at replacing corporate tax with MAT. The effective corporate tax was 23.4 per cent, he explained, while that of MAT was close to 22 per cent. “If the government simply increases the MAT rate by one percentage point, collections will go up. With this, the government could get rid of all disputes,” he said.

SEZs lost sheen after then finance minister Pranab Mukherjee in 2011-12 imposed MAT on the book profits of these developers and units inside one.

That and a dividend distribution tax of 10 per cent made these  enclaves unattractive. Only 192 of the 388 notified SEZs are operational, meaning at least one functional export unit. There are 588 approved SEZs.

Exports from SEZs fell 7.6 per cent in 2014-15. The department of commerce has been pressing the finance ministry for the withdrawal of MAT but the latter has not obliged. The Budget for 2015-16 has  exempted foreign portfolio investment from MAT and the government has also accepted the A P Shah panel recommendation to do away with past cases of MAT on foreign institutional investors. A change to the law is on its way, while tax officials have been instructed not to pursue notices, issued against foreign instituional investors. However, applicability of MAT on foreign companies without permanent establishment remains. A case relating to this involving Castleton Investments is pending in the Supreme Court.

Source : The Economic times

No. 12/2015 Dated: 17-9-2015


Custody of Refund Vouchers – Order-Instruction – Dated 17-9-2015 – Income Tax

INSTRUCTION NO. 12/2015

DATED 17-9-2015

Kindly refer to AST Instruction No. 136 dated 10-7-2015 placing restriction on issuance of manual refunds by Assessing Officers. As per the said Instruction, no manual refund should be issued in a case which has been processed on AST other than in exceptional circumstances as provided for in paras 4 & 5 of the said instruction.

2. The safeguards to be followed in issuance of manual refunds as laid out in AST Instruction No.136 include that all manual refunds upto ₹ 1 lakh are to be issued with the approval of Range Head, and in cases involving refund amount of more than ₹ 1 lakh, with the approval of Pr.CIT/CIT. In view of the same, the Board has directed that Refund Vouchers should be kept in the custody of respective Range Heads only, who shall be responsible for the safe custody and proper use of the Refund Vouchers.

3. The above Instruction be brought to the notice of all officers working under your jurisdiction for necessary and strict compliance.

[F.NO.312/101/2015-OT]

No. 13/2015 Dated: 21-9-2015


Implementation of the administrative recommendations of the Committee for drafting the new TRO Manual – reg. – Order-Instruction – Dated 21-9-2015 – Income Tax

Instruction No. 13/2015

No.380 (4)/2012-IT (B)

Government of India

Ministry of Finance

Department of Revenue

(Central Board of Direct Taxes)

North Block, New Delhi

21st September, 2015

To

All the Principal CCIT (CCA)

Subject:  Implementation of the administrative recommendations of the Committee for drafting the new TRO Manual – reg.

Sir,

I am directed to refer to the above mentioned subject and to say that on the administrative suggestions made by the Committee on updation of extant TRO Manual, the Board has decided the following:

(i)  A senior ITO with seniority of not less than 03 years should be posted as TRO with a minimum tenure of two years, extendable to three years. Similar tenure should be given to officials in TRO’s office. Officers/Officials with unsavory past and dubious reputation should not be posted for recovery work.

(ii)  Pr. Commissioner of Income Tax should take a review meeting of AOs and TROs once every quarter. Further in order to ensure proper maintenance of registers and close monitoring of TRO’s work, the Principal Commissioner of Income Tax (Pr. CIT) be directed to annually inspect the TRO’s office.

2.   In view of the above, you are requested to take note of these instructions for compliance under your jurisdiction.

3.  This issues with the approval of Chairperson, CBDT.

Yours faithfully,

(Sandeep Singh)

Under Secretary to the Govt. of India

No. F.No.96/90/2015-CX.1 Dated: 21-9-2015


Clarification regarding binding nature of circular and instructions – Dated 21-9-2015 – Central Excise

F.No.96/90/2015-CX.1

Government of India

Ministry of Finance, Dept. of Revenue

Central Board of Excise and Customs

New Delhi

dated the 21.09.2015

To

Principal Chief Commissioner / Chief Commissioner of Central Excise, Service Tax and Customs (All),

Principal Commissioner of Central Excise, Service Tax and Customs (holding charge of Chief Commissioner) (All),

Web-master, CBEC

Madam/sir,

Subject: – Clarification regarding binding nature of circular and instructions. 

A large number of judgements have been delivered by the Hon’ble Supreme Court on various aspects of Central Excise, Service Tax or Customs consequent upon the constitution of special bench on 28.02.2015 to expeditiously decide appeals in Indirect taxes. However, there may be Board circulars on some of these issues which are contrary to the judgement delivered by Hon’ble Supreme Court. The issue is whether the field officers are bound by such circulars, during the period the circular has not been rescinded.

2.  In this regard, attention is invited to the judgement of Hon’ble Supreme Court dated 14th October 2008 [2008(231) E.L.T.22(SC)/2008-TIOL-104-SC-CX-CB] in case of M/s Ratan  Melting & Wire Industries Vs Commissioner of Central Excise, Bolpur. In the said judgement Hon’ble Supreme Court has held at para 6 & 7 that-

6. Circular and instructions issued by the Board are no doubt binding in law on the authorities under the respective statutes, but when the Supreme Court or the High Court declares the law on the question arising for consideration, it would not be appropriate for the court to direct that the circular should be given effect to and not to a view expressed in a decision of this court or the High Court. So far as the clarification/circulars issued by the central Government and of the state Government are concerned they represent merely their understanding of the statutory provisions. They are not upon the court. It is for the court to declare what the particular provision of statute says and it is not for the Executive. Looked at from other angle, a circular which is contrary to the statutory provisions has really no existence in law…

7….. to lay content with the circular would mean that the valuable right of challenge would be denied to him and there would be no scope for adjudication by the High Court or the Supreme Court. That would be against very concept of majesty of law declared by  Supreme Court and the binding effect in terms of Article 141 of the Constitution’’

3. Therefore, it is clarified that Board Circulars contrary to the judgements of Hon’ble Supreme Court become non-est in law and should not be followed. Reference of such circulars should be made to the Board so that further action of rescinding these circulars can be expeditiously taken up. Board may also initiate such action suo-moto. All pending cases on the issue, including those in the Call-Book, decided after the date of the judgement should, confirm to the law laid by the Hon’ble Supreme Court or High Court, as the case may be, irrespective of whether the circular has been rescinded or not.

4. The above direction would also apply to the judgements of Hon’ble High Court where Board has decided that no appeal would be filed on merit. However where appeal has been filed by revenue against the High Court’s order, pending adjudication should be transferred to the Call-Book and such appeals should be kept alive.

5. Difficulty experienced, if any, in implementing the circular should be brought to the notice of the Board.  Hindi version would follow.

(Santosh Kumar Mishra)

Under Secretary to the Government of India

Govt confident of GST rollout next year: Jaitley : 21-09-2015


Promising a simple and globally competitive tax regime, Finance Minister Arun Jaitley today said the government is confident of the new GST regime to roll out from the next fiscal and expressed confidence about an early resolution of pending disputes on direct taxes front.

While expressing confidence that GST would be passed in the Rajya Sabha as well in the next session, he said it’s not necessary to implement it from April 1, 2016, itself as it is a transactional tax and can come into effect from the first date of any other month as well.

“The Congress party is trying to delay the new tax, but you must remember, it is a transactional tax and not an income tax.

“So, it can come up on the first of any month. Delay from April 1 does not mean that it will go to April 1 of the next year. That only happens in income tax,” Jaitley said here at a press conference on the last day of his four-day visit to Singapore and Hong Kong.

On direct taxes and the pending disputes regarding some foreign companies, including Vodafone, Jaitley said most of the past issues have been resolved either by expeditious judicial adjudication process or by asking expert panels.

“I cant tell you the exact process that we will follow, but my objective is to have a resolution.”

Promising an easy tax regime, he also dismissed the suggestions that the government has been trying to resolve this issue for a long time, but has not been able to do so.

“For the future, retrospective is over. MAT is over. Transfer pricing has been resolved. It is not that we have been only talking about these things, we have been acting on it,” he said.

On the government’s failure to get the controversial land law amended, Jaitley said, “Land is a concurrent subject and therefore, states have now said they want to bring changes after getting them approved by the Centre. We have agreed to that. This is an easier course.”

On investors demanding labour reforms and whether there are difficulties on that front, Jaitley said, “We have amended some labour laws. The states have also amended some labour laws.”

“There are many areas where some changes are taking place on their own because of technology, such as in banking. As and when it is necessary, we consult the unions, we consult the states and then the changes are made. It is not the case that nothing has been done.”

On impact from Chinese slowdown, he said, “Of course, it will impact the stock markets. Any change in Chinese currency will impact the currency market.

“That apart, there are some good reasons why India does not get impacted adversely. China’s entire production or supply chain… We are not any significant partner there. Second, the impact of oil and commodities goes to our advantage. Third, investors would have to look elsewhere also and there we have the best opportunity.”

He also said Chinese investments are very much welcome in India.

“We welcome them and they have invested in many sectors, including in infrastructure. They are setting up telecom equipment facilities,” he added.

He also said the rupee has performed much better than most global currencies.

“The rupee was the only one to withstand the pressure from a strong dollar. It is only after devaluation in China it suffered for some period. Let’s wait and watch. In the last few days, it came back again,” he added.

Jaitley also said it was the decision of the US Federal Reserve whether and when to hike rates, but speculation continues on that front for now.

Source : Business Standard

No. 11/2015 Dated: 16-9-2015


Reference to Transfer Pricing Officer in Specified Domestic transaction cases reg.- – Order-Instruction – Dated 16-9-2015 – Income Tax

Instruction No 11/2015

Government of India

Ministry of Finance

Department of Revenue

Central Board of Direct Taxes

North Block, IT (A-II) Division

New-Delhi, dated the 16th of September, 2015

Subject:  Reference to Transfer Pricing Officer in Specified Domestic transaction cases reg.-

Clarifications have been sought from the Board as to which authority will function as Transfer Pricing Officer (‘TPO’) for the purposes of determining Arms Length Price (‘ALP’) in respect of Specified Domestic Transactions (‘SDTs’) as per the provisions of section 92CA of the Income-tax Act, 1961(‘Act’).

2. The Board has considered the matter and it is hereby clarified that such cases involving SDTs shall continue to be handled by the TPOs working under the Commissioner (Transfer-Pricing). The Board, under section 120 of the Act, has already issued Notification No.(s)  58 & 59/2014 (F.No.  187/29/2014/ITA.I) dated 03.11.2014 effect.

3. This may be brought to the notice of all concerned. Enclosure: as above

(copy enclosed) to this

(Rohit Garg)

Deputy Secretary to the Government of India

F. No.    225/187/2014-ITA-II

NOTIFICATION NO 58/2014 Dated the 3rd November, 2014 - Section 120(1) and (2) of the Income-tax Act, 1961 – Jurisdiction of income-tax authorities (Transfer Pricing Officers)

NOTIFICATION NO. 59/2014, Dated the 3rd November, 2014 - Jurisdiction of Income tax Authorities Supersession of Notification No. S.O. 994(E), dated the 9th September, 2004. – 59/2014 – Dated 3-11-2014

Notification No. : 18/2015 Dated: 18-9-2015


All Principal Commissioners who have been given additional charge of a Chief Commissioner can exercise the powers of The Chief Commissioner – 18/2015 – Dated 18-9-2015 – Service Tax

[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

CENTRAL BOARD OF EXCISE AND CUSTOMS

Notification No.18/2015-Service Tax

New Delhi, the 18 September, 2015

27, Bhadrapada, 1936 Saka

G.S.R. 722(E).- In exercise of the powers conferred by clause (b) of section 2 of the Central excise Act, 1944 (1 of 1944),read with clause (55) of section 65B of the Finance Act, 1944 (32 of 1944), rule 3 of the Central excise Rules, 2002, and rule 3 of the Service Tax rules, 1944, the Central Board of Excise and Customs hereby invests the officers specified in column (1) of the Table below, with the powers of the Central Excise Officer of the rank specified in column (2) of the said Table, in the jurisdiction specified in Notification No. 20/2014-Service Tax, dated the 16th September, 2014   published in the Gazette of India, part-II, section 3, Sub-Section(i), vide G.S.R.  648 (E), dated the 16th September, 2014, namely:-

TABLE

Central Excise Officer

Rank of the Central Excise Officer whose powers is to be exercised

(1)

(2)

All Principal Commissioners who have been given additional charge of a Chief Commissioner vide Office Order of the Central Board of Excise and Customs No.126/2015, dated the 20th August, 2015 The Chief Commissioner

[F. No. 390/Review/36/2014-JC] 

 (M.R. Farooqui)

Under Secretary to the Government of India

Notification No. : 19/2015 Dated: 18-9-2015


All Principal Commissioners who have been given additional charge of a Chief Commissioner can exercise the powers of The Chief Commissioner – 19/2015 – Dated 18-9-2015 – Central Excise – Non Tariff

[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

CENTRAL BOARD OF EXCISE AND CUSTOMS

Notification  No.19/2015-Central Excise (N.T.)

 New Delhi, the18 September, 2015

27, Bhadrapada, 1936 Saka

G.S.R. 723(E).- In exercise of the powers conferred by clause (b) of section 2 of the Central Excise Act, 1944 (1 of 1944), read with rule 3 of the Central Excise Rules, 2002, the Central Board of Excise and Customs hereby invests the officers specified in column (1) of the Table below, with the powers of the Central Excise Officer of the rank specified in column (2) of the said Table, in the jurisdiction specified in Notification No. 27/2014-Central Excise, dated the 16th September, 2014 published in the Gazette of India, part-II, section 3, Sub-Section(i), vide G.S.R.  651 (E), dated the 16th September, 2014, namely:-

TABLE

Central Excise Officer

Rank of the Central Excise Officer whose powers is to be exercised

(1)

(2)

All Principal Commissioners who have been given additional charge of a Chief Commissioner vide Office Order of the Central Board of Excise and Customs No. 126/2015, dated the 20th August, 2015 The Chief Commissioner

[F. No. 390/Review/36/2014-JC]

(M.R. Farooqui)

Under Secretary to the Government of India

No. F. No. 280/45/2015-CX. 8A Dated: 17-9-2015


Streamlining the process of adjudication – Dated 17-9-2015 – Central Excise

F. No. 280/45/2015-CX. 8A

Ministry of Finance

Department of Revenue

Central Board of Excise & Customs

(Legal Cell)

‘C’ Wing, 5th Floor, HUDCO_VISHALA Building

Bhikaji Cama Place, R.K. Puram,

New Delhi-66 : dated the 17.09.2015

INSTRUCTION

To,

  1. All Chief Commissioners and Directors General under the Central Board of Excise and Customs;
  2. <webmaster.cbec@icegate.gov.in>

Sub : Streamlining the process of adjudication

It has come to the notice of the Board that Hon’ble High Court of Bombay in its judgment dated 15.07.2015 in the case of Lanvin Synthetics Pvt. Ltd. and another  Vs  Union of India in W.P. No. 1536 of 2014[2015-TIOL-1668-HC- MUM-CUS] has quashed the Show Cause Notice dated 13.03.1997 and prohibited the department from passing any adjudication order as the Show Cause Notice was not adjudicated for 17 long years as no records were available. The High Court in its order at para 12 has observed:

“If law postulates early end to such proceedings and there is no period of limitation prescribed, does not mean that the proceedings initiated could be concluded at the sweet will and fancies of the department.”

2.  The High Court in para 11  of said order has further quoted Hon’ble Supreme Court in the case of Citedal Fine Pharmaceuticals [2002-TIOL-680-SCCX] where the Apex Court was pleased to hold that in the absence of any period of limitation, it is settled law that every authority should exercise the power within a reasonable period.

3.  It is painful to note that in spite of various monitoring mechanisms in existence, such occurrence could not be avoided. The matter has been viewed seriously and all the adjudicating authorities are directed to pass adjudication orders within time limits as prescribed, so that the above said instance is not repeated in future.

4.  Further, I am directed to refer to Board letter F. No. 275/17/2015-CX.8A dated 11.03.2015 (copy available on CBEC website), on the subject of ‘Steps needed to be taken to improve tax administration;, wherein the need for passing the adjudication order within the specified time has been emphasised.

5. All the Commissioners should also explore the possibility of scanning and digitization of all papers connected with adjudication and litigation matters.

6. Any other suggestion in this regard may be forwarded to this office.

7. The above should be brought to the notice of the field formations under your charge for scrupulous compliance.

Yours faithfully

(Harsh Vardhan)

Senior Analyst

Tel : 011-26195405

Notification No. : 41/2015 Dated: 17-9-2015


Seeks to further amend Notification No.12/2012-Central Excise dated 17.03.2012 – 41/2015 – Dated 17-9-2015 – Central Excise – Tariff

[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. 41/2015 – Central Excise

New Delhi, the 17th September, 2015

G.S.R.    (E). - 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 number G.S.R.163(E), dated the 17th March, 2012,namely: -

In the said notification, in the ANNEXURE, in Condition No. 52, under the column heading “Conditions”,-

(a)  for clause (iii), the following clause shall be substituted, namely:-

(iii) such ships or vessels carry containerised cargo namely, export-import cargo or empty containers or domestic cargo, between such ports;”;

(b)  for clause (iv), the following clause shall be substituted, namely:-

(iv) such ships or vessels file an import manifest (IGM) or an export manifest (EGM), as the case may be, in each leg of the voyage;”.

[F. No. 354/126/2014-TRU]

(Akshay Joshi)

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.39/2015-Central Excise, dated the 21st July, 2015 published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R.573(E), dated the 21st July, 2015.

Notification No. : F. No. A-12011/02/2014-Ad.ED Dated: 16-9-2015


Central Government authorised the officers of the Directorate of Enforcement – F. No. A-12011/02/2014-Ad.ED – Dated 16-9-2015 – Foreign Exchange Management

MINISTRY OF FINANCE

(Department of Revenue)

NOTIFICATION

New Delhi, the 16th September, 2015

G.S.R. 702(E).-In exercise of the powers conferred by sub-section (1) of section 37A of the Foreign Exchange Management Act, 1999 (42 of 1999), the Central Government hereby authorises, the officers of the Directorate of Enforcement, not below the rank of Assistant Director, to act as the Authorised Officer.

[F. No. A-12011/02/2014-Ad.ED]

SANTOSH KUMAR, Under Secy

No. 14 Dated: 16-9-2015


Exim Bank’s GoI supported Line of Credit of USD 26.24 million to the Government of Republic of Nicaragua – Circular – Dated 16-9-2015 – FEMA

RBI/2015-16/177

A.P. (DIR Series) Circular No.14

September 16, 2015

To

All Category – I Authorised Dealer Banks

Madam / Sir,

Exim Bank’s GoI supported Line of Credit of USD 26.24 million to the Government of Republic of Nicaragua

Export-Import Bank of India (Exim Bank) has entered into an Agreement dated March 25, 2015 with the Government of Republic of Nicaragua, for making available to the latter, a Government of India supported Line of Credit (LOC) of USD 26.24 million (USD Twenty Six million and Two Hundred and Forty Thousand) for financing building of Carlos Fonseca substation, 95 km transmission lines and expansion of three substations (Villa El Carmen, Las Colinas & San Rafael del Sur) in the Republic of Nicaragua. 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.

2. The credit agreement under the LOC is effective from August 10, 2015 and the date of execution of agreement is March 25, 2015. The last date for opening of letters of credit and disbursement will be 48 months from the scheduled completion date of contract in the case of project exports and March 24, 2021 (72 months from the execution date of the credit agreement) in the 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.

Yours faithfully,

(A. K. Pandey)

Chief General Manager

Notification No. : F. No. A-12011/02/2014-Ad.ED Dated: 16-9-2015


Central Government prescribes the mandatory threshold of the aggregate value of Foreign Exchange, Foreign Security or any immovable property, situated outside India as not less than rupees one crore – F. No. A-12011/02/2014-Ad.ED – Dated 16-9-2015 – Foreign Exchange Management

MINISTRY OF FINANCE

(Department of Revenue)

NOTIFICATION

New Delhi, the 16th September, 2015

G.S.R. 701(E).-In exercise of the powers conferred by the proviso to sub-section (1) of Section 37A of the Foreign Exchange Management Act, 1999 (42 of 1999), the Central Government hereby prescribes the mandatory threshold of the aggregate value of Foreign Exchange, Foreign Security or any immovable property, situated outside India as not less than rupees one crore.

[F. No. A-12011/02/2014-Ad.ED]

SANTOSH KUMAR, Under Secy

No. 13/2015 Dated: 16-9-2015


Extension for a period of one month for the High Level Committee on CSR – reg. – Dated 16-9-2015 – Companies Law

General Circular No. 13/2015

F. No.05/09/2014-CSR Government of India

Ministry of Corporate Affairs

5th Floor, A-Wing, Shastri Bhawan

Dr. Rajendra Prasad Road,

New Delhi-110001.

Dated:  16/09/2015

OFFICE MEMORANDUM

Subject: Extension for a period of one month for the High Level Committee on CSR – reg.

A High level Committee was constituted to suggest measures for improved monitoring of the implementation of Corporate Social Responsibility policies by the companies under Section 135 of the Companies Act, 2013, vide OM of even no. dated 03.02.2015. The Committee has been granted extension of another one month with the approval of Hon’ble Union Minister for Corporate Affairs to submit its report by 22.09.2015.

2. This issues with the approval of Hon’ble Union Minister for Corporate Affairs.

(Seema Rath)

Deputy Director CSR

Tel: 23384657

Transfer of right to use brand name – deemed sale or service : 16-09-2015


Taxindiaonlinelogo-jpgBy S Sivakumar, LL.B., FCA, FCS, MBA, ACSI, Advocate

ONE of the most controversial tax subjects that has not found an ideal solution has been the one involving the transfer of right to use the brand or the brand name. As is well known, large and well known Industrial Groups allow their Group outfits as also their franchisees to use the Group brand or name by collecting a fee which is largely based on the sales turnover achieved by the users of the brand. The definition of ‘goods’ as contained in the various State VAT Acts as well as the CST Act clearly include patents, intellectual property, brand names, etc., and the VAT Authorities have only been too eager to subject these transactions to the levy of VAT considering these as ‘deemed sale’ transactions. Not to be left behind insofar as the tax potential of these transactions is concerned, the Central Government has incorporated Section 66E(c) with effect from 1-7-2012, in terms of which, a ‘temporary transfer or permitting the use of enjoyment of any intellectual property right’ is a declared service. We have had multiple decisions of the Supreme Court as well by the High Courts that has led to a fair amount of confusion surrounding this subject.

Before we consider the impact arising out of the decision rendered in Tata Sons - 2015-TIOL-345-HC-MUM-CTit would do us good to recall Para 98 of the BSNL decision - 2006-TIOL-15-SC-CT-LB, viz.

Quote :

98. To constitute a transaction for the transfer of the right to use the goods, the transaction must have the following attributes :

a. There must be goods available for delivery;

b. There must be a consensus ad idem as to the identity of the goods;

c. The transferee should have a legal right to use the goods-consequently all legal consequences of such use including any permissions or licenses required there for should be available to the transferee;

d. For the period during which the transferee has such legal right, it has to be the exclusion to the transferor this is the necessary concomitant of the plain language of the statute – viz. a “transfer of the right to use” and not merely a licence to use the goods;

e. Having transferred the right to use the goods during the period for which it is to be transferred, the owner cannot again transfer the same rights to others.

Unquote:

While admitting that the concepts involving delivery, etc. might not be relevant for brand name etc., the pre-requisite for levy of sales tax/VAT, as per the BSNL decision, would be that the transferee should have been given an exclusive right to use the brand name by way of a legal right and a mere license to use the brand cannot be treated as a deemed sale.

The recent decision of the Bombay High Court in the Tata Sons case - 2015-TIOL-345-HC-MUM-CThas rekindled interest in the subject matter. The question that arose before the High Court was whether the royalty received by Tata Sons Ltd from its group subsidiary companies for use of the ‘Tata’ brand name can be said to be a ‘service’ or a ‘deemed sale’ to attract sales tax under Section 2 of the Transfer of Right to use any Goods for any Purpose Act, 1985( popularly known as Maharashtra Lease Act) . After elaborate arguments and after discussing the binding precedent in the form of the Apex Court’s decision in the BSNL case, the Bombay High Court held that such royalty received for permitting usage of the brand name is to be subjected to the levy of sales tax under the said Act, notwithstanding the fact that service tax was already being paid on such transaction.

While trying to apply the ratio laid down in this decision, one must appreciate the fact that, this decision was rendered in the context of the Transfer of Right to use any Goods for any Purpose Act, 1985, a special Act covering levy of sales tax on leasing transactions. Most States do not have such an Act and the levy of lease tax is sought to be covered under their existing sales tax / VAT laws.

Be that as it may, the Bombay High Court has, in Para 40 of the order observed that Transfer of Right to use any goods for any purpose Act, 1985 does not give any indication that the right to use the incorporeal / intangible goods should be exclusively transferred in favour of the transferee. This, to my mind, is the key differentiating factor between the law prevailing in Maharashtra and in other States which do not have similar provisions.

It seems surprising that the decision of the Kerala High Court, in Malabar Gold Private Limited, Calicut v Commercial Tax Officer, Kozhikode and Others - 2013-TIOL-512-HC-KERALA-ST,wherein it had been held that, based on the terms of the franchise agreement, the mere permission granted by the owner of a registered brand name/trade mark to a franchisee, cannot be treated as a transaction involving transfer of right to use the brand name, was not considered by the Bombay High Court.

Another very relevant case that has not been considered is that of the Karnataka High Court in Indus Towers Limited, Bangalore v The Deputy Commissioner of Commercial Taxes, Enforcement I, South Zone, Bangalore and others (2012) 56 VST 369 (Karn.), wherein, it was held that the owner of a property has a bundle of rights, namely, right to possess, right to use and enjoy, right to usufruct, right to consume, to destroy, to alienate, transfer, etc. and therefore, to constitute a deemed sale under Article 366 (29-A)(d) of the Constitution of India, it is only such transactions wherein under a contract, all the bundle of rights are transferred by the owner of goods, except the title, the transaction constitutes deemed sale of transfer of right to use goods.

The Tata Sons decision, while referring to the RINL case, has stated that the RINL caseState of Andhra Pradesh and Another vs Rashtriya Ispat Nigam Ltd - 2002-TIOL-560-SC-CT dealt with goods, while, in the instant case, it was one of transfer of intangible property. In my humble view, the concept related to ‘effective control’ is applicable, in equal measure, to intangible goods.

Be that as it may, it is interesting to note that the Bombay High Court, in a subsequent decision, viz. Commissioner of Sales Tax v. M/s General Cranes, reported in 2015-TIOL-1214-HC-MUM-CT has taken the view that, in the case of leasing of tangible goods, in order to constitute a transaction for the transfer of the right to use the goods, it is necessary that there must be a consensus ad idem as to the identity of the goods and that, after having transferred the right to use the goods during the period for which it is to be transferred, the owner cannot again transfer the same rights to others.

It would then seem that, notwithstanding any issue that might arise vis-à-vis the Tata Sons decision, the fundamental requirement that, a transfer of right to use goods, whether tangible or intangible, on a non-exclusive basis cannot attract sales tax/VAT (at least, in States other than Maharashtra) remains intact. With specific reference to the licensing, franchise agreements, etc., wherein, the brand name, etc. is transferred for use by the transferee on a non-exclusive basis, for a consideration referred to as license fee, royalty, branding fee, etc., on a non-exclusive basis, VAT/sales tax cannot be levied. More so, when such activity has been declared to be a service under Section 66E(c) of the Finance Act, 1994 and when the Courts have not struck down this entry as being unconstitutional.

Before concluding

Vis-à-vis the Tata Sons case if VAT is held to be leviable on the royalty received for use of the brand name, it is obvious that service tax cannot be levied on such fee. It might have been wiser to rope in the Central Government as a Respondent, considering Section 66E(c) of the Finance Act, 1994. Ultimately, the States and the Central Government would need to fight such cases in the Courts, as to which of these Governments is entitled to levy tax.Above all, the taxpayer cannot be made to suffer.

No. 10/2015 Dated: 16-9-2015


U/s 268A of the Income Tax Act 1961 – Re-Fixation of Monetary Limits for various Income-Tax Authorities – Order-Instruction – Dated 16-9-2015 – Income Tax

INSTRUCTION NO. 10/2015

DATED 16-9-2015

In view of the very large number of Dossier cases (about 1,55,000) requiring periodic reporting and review by various Income Tax Authorities and the fact that the monetary threshoid for classification of a case of outstanding demand as a Dossier case has not been revised in last about 30 years, it has been decided to raise the primary threshold for Dossier cases from ₹ 10 lakh to ₹ 30 lakh and re-adjust intermediate thresholds for focused monitoring and rationalization of workload.

2. After the re-structuring of the Department in 2014, a new post of Principal Chief Commissioner of Income Tax (Pr.CCIT) has been created. It has been decided to give a supervisory role in Dossier cases to the Pr.CCsIT as well for greater focus on the critical area of recovery of outstanding taxes.

3. Accordingly, the revised jurisdiction of the Income Tax Authorities in respect of Dossier cases is as under:

Monitoring Authority

Current Jurisdiction

Revised Jurisdiction

Range Head Up to ₹ 10 lakh Up to ₹ 301akh
Pr. CIT Above ₹ 10 lakh to Rs.l crore Above ₹ 30 lakh to ₹ 3 crore
CCIT Above Rs. l crore to ₹ 10 crore Above ₹ 3 crore to Rs.l5 crore
Pr. CCIT New post Above Rs.l5 crore to ₹ 25 crore
Pr.DGIT (Admin) Above ₹ 10 crore to ₹ 25 crore All dossiers above ₹ 25 crore by DGIT (Admin) with assistance of ADG (Recovery).Pr.DGIT (Admin) to monitor specific very high demand cases on the directions of Member (Revenue) with assistance of ADG (Recovery).
Member (Revenue), CBDT Above ₹ 25 crore

4. All other guidelines for reporting and review of Dossier cases issued from time to time shall remain the same.

5. These instructions may be kindly brought to the notice of all Income Tax Authorities under your jurisdiction.

This issues with the approval of Chairperson, CBDT.

[F. NO. 404/02/2015-ITCC]

Notification No. : F.No 1/8/2013-CL-V Dated: 15-9-2015


The Companies (Acceptance of Deposits) Second Amendment Rules, 2015. – F.No 1/8/2013-CL-V – Dated 15-9-2015 – Companies Law

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

Government of India

Ministry of Corporate Affairs

Notification

New Delhi, dated, the 15th September, 2015

G.S.R.(E). - In exercise of the powers conferred by sections 73 and 76 read with sub-section (1) of section 469 of the Companies Act, 2013 (18 of 2013), the Central Government hereby makes the following rules further to amend the Companies (Acceptance of Deposits) Rules, 2014, namely:-

1. (1) These rules may be called the Companies (Acceptance of Deposits) Second Amendment Rules, 2015.

(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 said rules), in rule 2, in sub-rule (1), in clause (c), for sub-clause (viii), the following shall be substituted, namely:-

“(viii) any amount received from a person who, at the time of the receipt of the amount, was a director of the company or a relative of the director of the private company:

Provided that the director of the company or relative of the director of the private company, as the case may be, from whom money is received, furnishes to the company at the time of giving the money, a declaration in writing to the effect that the amount is not being given out of funds acquired by him by borrowing or accepting loans or deposits from others and the company shall disclose the details of money so accepted in the Board’s report;”.

3. In the said rules, in rule 3,

(a) for the words “paid-up share capital and free reserves”, wherever they occur, the words “paid-up share capital, free reserves and securities premium account” shall be substituted;

(b) in sub-rule (8), in the Table, for item (e) and entries relating thereto the following shall be substituted, namely:-

“(e) Brickwork Ratings India Pvt. Ltd. (Brickwork) BWR FBBB”.

[File No 1/8/2013-CL-V]

Amardeep Singh Bhatia

Joint Secretary

Note. – The principal rules were published in the Gazette of India, Extraordinary, Part II, Section 3, sub-section (i) vide number G.S.R. 256(E), dated the 31st March, 2014 and were subsequently modified vide number G.S.R. 386(E), dated the 6th June, 2014 and G.S.R. 241(E), dated the 31st March, 2015.

No. Press Note No. 09 (2015 Series) Dated: 15-9-2015


Review of the existing Foreign Direct Investment policy on Partly Paid Shares and Warrants. – FDI GUIDELINES – Dated 15-9-2015 – FEMA

Investment policy

FM Arun Jaitley pledges ‘fairest predictable tax regime’ ahead of India-US dialogue in Washington : 15-09-2015


Finance minister Arun Jaitley has promised “fairest and predictable taxation regime” while inviting US businesses to invest in the country.

Speaking at the 11th Indo-US Economic Summit organised by the Indo-American Chamber of Commerce ahead of the India-US Strategic and Commercial Dialogue (SACD) in Washington later this month, Jaitley on Monday said the government has tried to “put each one of these (taxation) issues to rest so that from the regime, which had earned an adverse  reputation we can evolve into fairest and predictable taxation regime in India”.

The finance minister said India’s fundamentals are sound even amidst an ongoing global turmoil and that the government is working to strengthen the real economy by focusing on quick decision making, stable policy regime, predictable taxation system and improving on ease of doing business. “The last two are work in progress,” he said, adding that these initiatives ill help make India an investment  destination. Earlier this month the income tax department had issued a circular asking its officials not to levy minimum alternate tax on foreign portfolio investors, an issue that had again brought India’s tax administration in focus. The government had also decided not to appeal a transfer pricing case that was adjudicated in the favour of telecom major Vodafone.

Jaitley said the government has tried to resolve the legacy issue through governmental decisions, legislation or even by accepting judicial mandate. He expressed optimism that Indo-US bilateral trade would rise five times to $500 billion in the next few years — a goal set by Prime Minister Narendra Modi and US President Barack Obama — despite the world passing through a turmoil. “While the US has the financial capital and advanced technology, India has a large body of trained manpower,  natural resources and a large market,” Jaitley said.

Addressing the summit, US Ambassador to India Richard Verma said Modi’s forthcoming visit to the US, especially to the Silicon Valley, had generated lot of interest. Modi would be the second Indian prime minister to visit California after Jawaharlal Nehru.

Source : Business Standard

No. File No. 12/15/2009-FC-1 Dated: 15-9-2015


Clarification on FDI Policy on Facility Sharing Arrangements between Group Companies – FDI GUIDELINES – Dated 15-9-2015 – FEMA

Government of India

Ministry of Commerce & Industry

Departmental of Industrial Policy & Promotion

Clarification on FDI Policy on Facility Sharing Arrangements between Group Companies  

 

This Department has received certain references on the issue as to whether entering into facility sharing agreement through leasing/sub-leasing arrangements within group companies for the larger purposes of business activities would be constructed to mean ‘real estate’ business within the provisions of Consolidated FDI Policy Circular of 2015.

2. In this regard it is hereby clarified that:

“Facility sharing agreements between group companies through leasing/sub-leasing arrangements for the larger interest of business will not be treated as ‘real estate business’ within the provisions pf the Consolidated FDI Policy Circular of 2015, provided such arrangements are at arm’s length price in accordance with relevant provisions ofIncome Tax Act, 1961 and annual lease rent earned by the lessor company does not exceed 5% of its total revenue.”

(R.D. Diwakar)

Under Secretary to the Government of India

D/o IPP File No. 12/15/2009-FC-1 dated 15th September, 2015

Income Tax refunds to be sent to taxpayers in 7-10 days : 14-09-2015


In what could be a good news for hundreds of thousands of taxpayers, the income tax department will process and send refunds in 7-10 days as its latest technology upgrade of electronic and Aadhaar-based ITR verification has begun on a successful note.

The department’s latest initiative to verify an income tax return (ITR) by Aadhaar or other bank database has received a positive response from ITR filers because of which the taxman, for Assessment Year 2015-16, was able to process and send the refunds to bank accounts of eligible taxpayers in less than 15 days.

“The days are gone when getting an I-T refund used to take months or in some cases even a few years. The new electronic verification e-filing system has proved to be very customer-friendly and as a token of thanks to the taxpayers, the department is working to ensure their refunds are sent in a week’s time or a maximum of ten days.

“This is surely the way forward in the administration of tax affairs in the country,” a top officer of the department said.

According to latest statistics, the department received 2.06 crore returns on its e-filing portal as on September 7, 2015 (last date for ITR filing), which is an increase of 26.12 per cent over the last year when 1.63 crore returns were filed online.

The department’s Central Processing Centre (CPC) as on September 7 processed 45.18 lakh returns and issued refunds to 22.14 lakh tax payers relating to assessment year 2015-16, it added.

During this period, the department electronically verified over 32.95 lakh e-returns.

The data added that peak filing rate touched 3,475 returns per minute this time as compared to 2,901 returns per minute last year.

As per some testimonials received by the department from taxpayers, also accessed by PTI, many have reported that they received their refunds in only 11 or 13 days time from the day of filing their ITR.

Source : PTI

GST rollout: Central officials prepare for delay : 14-09-2015


With the rollout of national goods and services tax (GST) set to miss the April 1, 2016, deadline, the government is readying for a later date.

Parliamentary Affairs Minister Venkaiah Naidu had on Saturday spoke of advancing the winter session ofParliament if the Congress party was amenable. However, senior officials say although the revenue department of the finance ministry is administratively prepared for GST, it will take at least two Parliament sessions, even after passage of the pending Constitutional amendment to enable it, before the uniform indirect tax regime can be set in motion.

Once Parliament does approve the amendments to the Constitution, at least half the state legislatures have to ratify these amendments. Then, the Lok Sabha and Rajya Sabha have to each pass the actual GST Bill, after which state has to pass its own Bill in this regard, on the same principles.

The empowered committee of state finance ministers is set to meet here on Tuesday to discuss these legislations – the central GST, states’ GST and integrated GST. The drafts of all three are said to be complete.

Officials say mid-year implementation of the globally tracked reform will not be a hurdle, administratively. For, there are other indirect tax measures, including changes in excise duty, service tax and customs duty, that are made mid-year. In fact, the value-added tax regime was implemented in phases across the country, with some states coming on board later.

“There will simply be no hurdles related to accounting as far as mid-year implementation of GST is concerned. However, with passage of the Constitution amendment Bill for GST in Rajya Sabha delayed further, rollout by April 1 does not look likely at all, for now,” said an official, adding, “There is also a provision for partial rollout from April 1 but it does not look feasible, given the complexity of GST.”

There is also a belief that as GST is one of the biggest tax reforms ever attempted; it could also be feasible to delay the rollout date by an entire year. There is a view among policymakers that it would be convenient for the Centre, states and businesses if it is rolled out from the beginning of a financial year.

“If not April 2016, then April 2017 should be seen as a more feasible time. It might be difficult for the government and businesses to come into a new tax regime in the middle of a financial year,” said another official. Last week, NITI Aayog Vice-Chairman Arvind Panagariya had said he was hopeful that the legislation could come into force by October 1, 2016, if not the proposed deadline of April 1. “If there is consensus, the government is willing to advance the winter session of Parliament for passage of the GST Bill,” Naidu said, on the sidelines of an event on Saturday. One of the issues still to be sorted, apart from passage of Bills, is of a revenue-neutral rate. All sorts of rates have been discussed, from 18-27 per cent, even as a panel has been formed under Chief Economic Advisor Arvind Subramanian to look into it.

Source : Business Standard

No. 13 Dated: 10-9-2015


Trade Credit Policy – Rupee (INR) Denominated trade credit – Circular – Dated 10-9-2015 – FEMA

RBI/2015-16/175

A.P. (DIR Series) Circular No.13

September 10, 2015

To,

All Authorised Dealer Category – I Banks

Madam/ Sir

Trade Credit Policy – Rupee (INR) Denominated trade credit

Attention of Authorized Dealer Category – I (AD Category – I) banks is invited to Schedule III to the Foreign Exchange Management (Borrowing or Lending in Foreign Exchange) Regulations, 2000 notified vide Notification No. FEMA 3/2000-RB dated May 03, 2000 read with Regulation 6(3) of the said Regulations regarding raising of trade credit (buyers’ credit / suppliers’ credit) from overseas supplier, bank and financial institution for import of capital and non-capital goods into India.

2. With a view to providing greater flexibility for structuring of trade credit arrangements, it has been decided that the resident importer can raise trade credit in Rupees (INR) within the following framework after entering into a loan agreement with the overseas lender:

i. Trade credit can be raised for import of all items (except gold) permissible under the extant Foreign Trade Policy

ii. Trade credit period for import of non-capital goods can be upto one year from the date of shipment or upto the operating cycle whichever is lower

iii. Trade credit period for import of capital goods can be upto five years from the date of shipment

iv. No roll-over / extension can be permitted by the AD Category – I bank beyond the permissible period

v. AD Category – I banks can permit trade credit upto USD 20 mn equivalent per import transaction

vi. AD Category – I banks are permitted to give guarantee, Letter of Undertaking or Letter of Comfort in respect of trade credit for a maximum period of three years from the date of shipment

vii. The all-in-cost of such Rupee (INR) denominated trade credit should be commensurate with prevailing market conditions

viii. All other guidelines for trade credit will be applicable for such Rupee (INR) denominated trade credits

3. Overseas lenders of Rupee (INR) denominated trade credits will be eligible to hedge their exposure in Rupees through permitted derivative products in the on-shore market with an AD Category – I bank in India. Necessary guidelines for hedging will be issued separately.

4. AD Category – 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 Section 10(4) and 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and are without prejudice to permissions / approvals required, if any, under any other law.

Yours faithfully

(B. P. Kanungo)

 Principal Chief General Manager

No. 12 Dated: 10-9-2015


Guidelines for Grant of Authorisation for Additional Branches of FFMC/AD Cat. II – Circular – Dated 10-9-2015 – FEMA

RBI/2015-16/174

A.P. (DIR Series) Circular No.12

September 10, 2015

To

All Authorised Persons

Madam/Sir,

Guidelines for Grant of Authorisation for Additional Branches of FFMC/AD Cat. II

Attention of FFMC/AD Cat. II licence holders is invited to paragraph (B) of Annex- I to A.P. (DIR Series) Circular No. 57 dated March 9, 2009 on Memorandum of Instructions governing money changing activities, wherein guidelines for grant of authorization for additional branches had been given.

2. As part of further simplification of the guidelines, it has now been decided to incorporate the changes in the guidelines in respect of submission of documents by the applicant FFMC/AD Cat. II while applying for authorization for an additional branch. The existing guidelines in respect of required documents and revised position are provided in the table below:–

Sr. No.

Documents required to be submitted as per existing guidelines

Revised Position

1

Copy of latest audited accounts with a certificate from Statutory Auditors regarding position of NOF as on date of application. Only a certificate from Proprietor/Partner/Director /CFO of the entity as regards the position of NOF is required to be submitted.

2

Confidential Report from applicant’s banker. This requirement shall be dispensed with.

3

Declaration to the effect that no proceedings have been initiated or are pending with DoE/DRI The declaration has to be submitted every time an application for authorisation of a new branch is made, as per existing instructions.

4

A copy of KYC/AML/CFT policy framework existing in the company Only a declaration to be submitted that there is no change in the KYC/AML/CFT policy framework since its last submission to RBI. However, in case there is a change, a copy of the revised/latest version of the policy shall be required to be submitted.

5

Brief write-up on the internal control systems, including internal and external audit. Only a declaration to be submitted to the effect that there is no change in the internal control systems including internal and external audit since submission of the last write-up to RBI. However, in case there is a change, the revised/latest write-up shall be required to be submitted.

3. The revised guidelines will come into force with immediate effect.

4. The directions contained in this circular have been issued under Section 10(4) and Section 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.

Yours faithfully,

(B. P. Kanungo)

 Principal Chief General Manager

No. 11 Dated: 10-9-2015


Exchange Earners’ Foreign Currency (EEFC) Account- Discontinuation of Statement pertaining to trade related loans and advances – Circular – Dated 10-9-2015 – FEMA

RBI/2015-16/173

A.P. (DIR Series) Circular No.11

September 10, 2015

To

All Category – I Authorised Dealer Banks

Madam / Sir,

Exchange Earners’ Foreign Currency (EEFC) Account- Discontinuation of Statement pertaining to trade related loans and advances

Attention of Authorized Dealers Category –I (AD Category –I) banks is invited to A.P. (DIR Series) Circular No.78 dated February 14, 2003 in terms of which transactions relating to loans/ advances from EEFC account may be reported by the AD banks on a quarterly basis to the Regional Office of Reserve Bank.

2. With a view to liberalizing the procedure, it has now been decided to dispense with the above-mentioned statement with immediate effect.

3. The directions contained in this circular have been issued under Section 10(4) and Section 11(1) of the FEMA, 1999 (42 of 1999) and are without prejudice to permissions/ approvals, if any, required under any other law.

Yours faithfully,

(A K Pandey)

 Chief General Manager

Restaurants seek clarity on service tax on home delivery orders : 11-09-2015


The National Restaurant Association of India (NRAI) has written to the Finance Ministry seeking clarification on levying of service tax on home delivery, drive-away and take-away orders.

This came after the NRAI came to know that a notice has been issued by the Central Excise & Service Tax Division, Chandigarh, stating that service tax is not liable to be charged on pick-up and home deliveries for food by restaurants. This note went viral and got a lot of attention on social media.

With several restaurant chains earning a large chunk of revenues from home delivery formats, this has created problems for the industry with customers in some instances refusing to pay service tax for such orders.

The association had first asked the Ministry to issue a clarification on the issue in 2013. However, it did not receive any response.

Source : Business Standard

Notification No. : F.No.1/5 /2001-CL-V (Part V) Dated: 10-9-2015


[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY,

PART-II, SECTION 3, SUB-SECTION (ii)]

GOVERNMENT OF INDIA

MINISTRY OF CORPORATE AFFAIRS

Notification

New Delhi, the 10th September 2015;

S.O. (E) :- In exercise of the powers conferred by sub-section (1) of section 210A of the Companies Act, 1956 (1 of 1956) the Central Government hereby makes the following further amendments in the notification of the Government of India, Ministry of Corporate Affairs number S.O. 2425 (E) dated the 18th September, 2014 published in the Gazette of India, Extraordinary, Part-II, Section 3, Sub-section (ii) dated the 18th September, 2014, namely:-

2.   In the said notification, in paragraph 1, for serial numbers there to, the following shall be substituted namely:-

“(2) Shri Pramod Kumar Bhattad,

President, nominee of The Institute of Cost Accountants of India

Member,

[nominated under clause (b) of sub-section (2) of section 210A]
(4) Shri Manoj Fadnis, President,

Nominee of The Institute of Chartered Accountants of India

Member,

[nominated under clause (b) of sub-section (2) of section 210A]
(7) Director General (Commercial),

Nominee of Comptroller and Auditor General of India

Member,

[nominated under clause (e) of sub-section (2) of section 210A].”

3. In the said notification, in paragraph 2, for the words “one year” the words “two years” shall be substituted.

[F.No.1/5 /2001-CL-V (Part V)]

AMARDEEP SINGH BHATIA, Jt. Secy.

Note: The principal notification was published in Gazette of India, Extraordinary, Part-II, Section 3, Sub-section (ii) vide numbers   S.O. 2425(E) dated the 18th September, 2014, and subsequently amended vide  S.O. 1319(E) dated the 18th May, 2015.

PM Narendra Modi hits back at Sonia Gandhi’s ‘hawa baazi’ jibe, says ‘hawala baaz’ are worried : 10-09-2015


Prime Minister Narendra Modi on Thursday hit back at Congress chief Sonia Gandhi’s ‘hawabaazi’ jibe, saying the ‘hawalabaaz’ (corrupt) were worried over reforms like black money rules because of which they stalled Parliament.

Countering Gandhi’s statement on Tuesday that the PM’s election promises were “nothing more than hawabaazi (empty talk)”, the PM said, “Hawalabaaz are scared that the ground beneath their feet is slipping. They can sense the impending danger.”

The PM was addressing a huge gathering of party workers in Bhopal. He is here to inaugurate the 10th World Hindi Summit that will end on September 12.

Slamming Congress’s tactic of disruption, Modi said the Congress was the only party that did not agree to let the House function.

“We had hoped the Congress would work with us and help Parliament enforce reforms but it is the only one that does not agree. I appeal to those who have been rejected by the people to work with us for  the pride of democracy and fend off economic dangers,” the PM said, adding that his party and government was firm on the reforms stand despite global economic scenario. “This opportunity should be taken advantage of and parties should allow Parliament to function.”

The PM said Congress is yet to digest 2014 national poll verdict but the BJP has always tried to learn from its mistakes.

“We didn’t criticise others but introspected and corrected our mistakes instead and today the people of the nation have given a government with full majority.”

Source : The Economic Times

Will ensure free trade pacts are mutually beneficial: Govt : 09-09-2015


India will not ‘indiscriminately’ enter into free trade agreements (FTAs) and ensure that such deals are mutually beneficial, Finance Minister Arun Jaitley said today.

Domestic industry and exporters have raised concerns over these pacts saying they have benefited India’s trading partners more.

“We are certainly going to look at trade deals which are mutually beneficial to both the trading partners. Trade deal merely because it is part of economic diplomacy is not essential,” he said.

Jaitley was replying to questions on FTAs and India’s decision to defer negotiations with the European Union (EU) on the proposed trade pact at ‘India Summit 2015′.

“We have entered into large number of trade deals but entering indiscriminately into (free) trade agreements and then having concerns a few years later is not the wise thing. I think its better to move carefully but surely,” he added.

Expressing disappointment and concern over EU’s banning the sale of around 700 pharma products clinically tested by GVK Biosciences, India last month deferred talks with the EU on the proposed free trade agreement.

Chief negotiators of India and the EU were scheduled to resume the negotiations on the Broadbased Investment and Trade Agreement (BTIA) last month.

Jaitley said the government has received lot of grievances from the domestic industry on the number of FTAs that the country had signed in the past.

“Therefore a trade policy and foreign policy operate in different directions. One need not necessarily dictate the other,” he added.

Domestic steel players have been demanding withdrawal of the commodity from the free trade pact with Japan and South Korea. India has also implemented with Asean and Singapore.

Jaitley said the country needs trade and manufacturing and “therefore India is not going to lag behind as far as trade deals are concerned”.

The country is negotiating over a dozen pacts including with Australia, New Zealand, Israel and Indonesia.

Source : PTI

Finance Minister Arun Jaitley fears missing GST roll out from April 1 : 09-09-2015


Finance Minister Arun Jaitley has said that it is only a matter of time before GST is passed as almost all parties are supporting it

Finance Minister Arun Jaitley on Wednesday expressed fears that the main opposition party Congress may obstruct the constitutional amendment bill on Goods and Services Tax (GST) in the upper house of Parliament, hurting the government’s plan to roll out the new tax from April 1 next year.

”I would like to see GST being implemented by April 1, 2016. But if this kind of obstructionism remains, then perhaps the Congress party will succeed in hurting India’s economy and delaying it for some time,” Jaitley said.

This is for the first time, a senior minister of the Narendra Modi government has dropped hints that Congress party may not have come on board to support the Bill if the Parliament is reconvened later this month.

On August 12, Parliament’s monsoon session was adjourned sine die without a consensus on the GST bill, after failing to reach an agreement with the Congress party and the Left Front. The ruling National Democratic Alliance, which lacks numbers in the Rajya Sabha, needed the support of opposition parties to get the Bill approved. The government has a comfortable majority in the Lok Sabha. Constitutional amendment bills need to be approved by the both the houses of Parliament by a two-third majority.

So far, the Congress party has thrown a spanner in the government’s plans to convene a reconvene the session of Parliament to push through the bill by sticking to its demand for action against External Affairs Minister Sushma Swaraj and Chief Ministers of Rajasthan and Madhya Pradesh for their alleged misconduct.

Analysts say India badly needed GST to simplify and rationalise the complex structure of taxes at the Centre and state levels to boost economic activity in the country.

Below are the highlights from his speech

-Only a matter of time before GST is passed; almost all parties are supporting it
– India doing reasonably well in global turmoil and can embark on a much higher growth
– NPAs in banking sector matter of concern, but there is no ground to panic as solution to the problem in sight
– Examining steps to prevent dumping in the steel sector
– Black money is a problem confined to a few individuals
– Govt will not be soft on black money; it is the fundamental right of a country to get the black money into the banking system
-Less than 1% of those individuals who file taxes face scrutiny
– Govt has no intention of retrospective taxation. It’s been put to rest

Source : The Hindu

List of tax exemptions to be phased out in few days: Arun Jaitley : 09-09-2015


Finance Minister Arun Jaitley today said the government in the next few days will bring out a list of tax exemptions to be phased out as part of the exercise to reduce corporate tax rate to 25 per cent in four years.

The minister also said measures to protect domestic steel sector from dumping by overseas manufacturers are being examined.

Stating that every tax demand cannot be termed as tax terrorism, he said, the government will not relent on pursuing black money in India or abroad.

As regards his Budget announcement of reducing corporate tax rate to 25 per cent, Jaitley said, “over the next few days we will come out with list of exemptions, which we intend to phase out in the first place. Over the next four years corporate tax will come down by 5 per cent and lot of exemptions will get phased out.

“Therefore slowly we will bring taxation levels to global standards and make taxation assessment and return simpler by just eliminating a lot of exemptions.”

Jaitley was speaking at ‘India Summit 2015′ organised by UK-based Economist magazine.

The finance minister in his 2015 Budget had announced that the government would reduce the rate of corporate tax from 30 per cent to 25 per cent over the next four years to align the rates with competing countries.

In view of surge in import of various categories of steel, the Directorate General of Safeguards (DGS) has already initiated an inquiry into the imports of steel from China, Korea, Japan and Russia.

Observing that the government is balancing the interest of steel consuming industry and domestic producers, Jaitley said the current problem in the sector was on account of external factors.

“It’s an external issue. We have marginally increased our tariffs (on steel imports) twice. We are looking and seriously examining other steps so that we can address the problem which can be defencive against dumping of steel,” he added.

On account of surge in imports, the market share of domestic producers has been declining since 2013-14 and is likely to fall from 45 per cent to 37 per cent in 2015-16, a government report had said.

Answering questions on the black money, Jaitley said the problem is confined to few individuals and the government will not go soft on the issue as it needs to bring all its resources within the banking system.

“It is extremely legitimate for any country to say my resources must come within the system, they must not remain parked outside the system. We were reasonable enough to put people on notice and gave them a fair opportunity to bring them in,” he said.

To deal with the problem of unaccounted assets stashed outside the country, the government came up with a black money law. Under the law, a 90-day compliance window has been provided to such people to declare overseas assets, pay 60 per cent tax and penalty and come clean.

The compliance window ends on September 30 and after that harsh provisions, which include 120 per cent tax and penalty and jail term up to 10 years will come into play.

Nobody can claim a fundamental right to keep and deal in black money, Jaitley said adding “no economy can survive on that basis. And therefore I can only tell that those who disagree on black money issue, well we will agree to differ, but this is not an issue which we are going to go soft on.” Jaitley said that expansion of banking, introduction of payments banks and other schemes, which are being considered by the government were aimed at brining in all the resources into the banking system.

“I must tell you with great sense of discomfort that I have delegations coming to me saying please go easy on domestic black money because this is at least adding to economic activity. Now, no economy can indefinitely sustain an argument of this kind,” he said.

On whether the tough stance on black money is hurting the real estate, he said, “the construction sector went slow because of economic reasons, there may be other reasons, land can be a reason, interest can be a reason…”

Answering questions on the implementation of Goods and Services Tax (GST) from April 2016, Jaitley said, “the date today doesn’t seem to be under my control because of obstructionism of Congress, but hopefully sooner or later it will be passed and we will have a much easier indirect tax regime.”

Although the government has proposed to roll out the GST from April 1, the amendment to the Constitution Amendment Bill is being held up because of political logjam in the Rajya Sabha where the ruling NDA does not have a majority.

He further said that it would be wrong to describe all tax demands as “tax terrorism”.

“Nobody is happy to make large amount of taxes and therefore every tax demand is not tax terrorism. Most tax demands are legitimate. Out of about 3.5 crore people only 2 lakh accept these scrutinising reports. This new system that they (revenue department) are following is not coercive,” Jaitley added.

Stressing that the government’s taxation roadmap was very clear, Jaitley said, “we have substantially put the whole idea of retrospective taxation to rest. Government has no intention.”

The government, he added, was trying to resolve all major taxation issues outside the judicial system barring one (Vodafone tax case) which would be resolved through the judicial process.

“Of the major legacies issues, only one or two are left. I do not see much time before they are put to rest. The instability in tax administration is now being slowly (resolved),” the minister said.

Source : Business Standard

No. F. No. 221/09/2015-CX.6 Dated: 1-9-2015


Implementation of the provisions of Cigarettes and other Tobacco products (Prohibition of Advertisement and Regulation of Trade and Commerce, Production, Supply and Distribution) Act, 2003 (COTPA) and the Cigarettes and Other Tobacco Products (Packaging and Labelling) Rules, 2008 – Dated 1-9-2015 – Central Excise

F. No. 221/09/2015-CX.6

Government of India

Department of Revenue

Central Board of Excise & Customs

New Delhi, dated the 1st September, 2015

To

Pr. Chief Commissioners/ Chief Commissioners of Central Excise (All)

Pr. Chief Commissioners/ Chief Commissioner of Central Excise and Service Tax (All)

Sub: Implementation of the provisions of Cigarettes and other Tobacco products  (Prohibition  of Advertisement  and  Regulation of Trade and Commerce,  Production, Supply and Distribution) Act, 2003 (COTPA) and the Cigarettes and  Other Tobacco Products (Packaging and Labelling) Rules, 2008-reg.

Madam/ Sir,

Kind attention is invited to Rule 3(1)(a) of the Cigarettes and Other Tobacco Products (Packaging and Labelling) Rules, 2008 which stipulates that every package of cigarettes and other tobacco products produced/ manufactured/ imported after 31st May, 2009 shall carry Specified Health Warning in the manner as prescribed in the said Rules.

2.  The undersigned is directed to inform that Board, vide letter F. No. 267/50/2007-CX.8 dated 02.06.2009, had brought to the notice of the field formations instructions issued by Ministry of Health and Family Welfare on the above issue. A circular no. 896/16/2009-CX dated 01.09.2009 was also issued by the Board regarding implementation of said rules.

3.  In order to sensitize the field formations regarding the need to monitor and ensure that no tobacco products are cleared from the premises registered with the Central Excise department without bearing the specified health warnings and other requisites as prescribed in the said rules, relevant instructions issued in the past, on the above subject, are enclosed herewith. Copies of said instructions may be circulated to formations under your jurisdiction for necessary compliance.

4.  This issues with the approval of Member (Central Excise).

Yours faithfully,

(Rohan)

Under Secretary (CX. 6)

Notification No. : F. No. 1/19/2013-CL-V Dated: 9-9-2015


Companies (Filing of documents and forms in XBRL) Rules, 2015 – F. No. 1/19/2013-CL-V – Dated 9-9-2015 – Companies Law

[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY,

PART II, SECTION 3, SUB SECTION (i)]

Ministry of Corporate Affairs

Notification

New Delhi, the 09th September, 2015

G.S.R. (E). – In exercise of the powers conferred by sub-sections (1) and (2) of section 469 read with section 398 of the Companies Act, 2013 (18 of 2013), and in supersession of the Companies (Filing of Documents and Forms in Extensible Business Reporting Language) Rules, 2011, except as respects things done or omitted to be done before such supersession, the Central Government hereby makes the following rules, namely:

1. Short title and commencement:- (1) These rules may be called the Companies (Filing of Documents and Forms in Extensible Business Reporting Language) Rules, 2015.

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

2. Definitions: - (1) In these rules, unless the context otherwise requires,-

(a) “Act” means the Companies Act, 2013.

(b) “Annexure” means annexures appended to these rules;

(c) “Documents and forms” means the documents and forms required to be filed with any authority as specified under the Act or rules or regulations made thereunder;

(d) “Extensible Business Reporting Language” (XBRL), means a standardised language for communication in electronic form to express, report or file financial information by the companies under the Act;

(e) “Taxonomy” means in XBRL, an electronic dictionary for reporting the business data as approved by the Central Government in respect of any documents or forms indicated in these rules.

(2) Words and expressions used in these rules but not defined and defined in the Act or in the Companies (Specification of definitions details) Rules, 2014 shall have the meanings respectively assigned to them in the Act and said rules.

3. Filing of financial statement with Registrar:- The following class of companies shall file their financial statement and other documents under section 137 of the Act, with the Registrar in e-form AOC-4 XBRL given in Annexure-I for the financial years commencing on or after 1st  April, 2014 using the XBRL taxonomy given in Annexure II, namely:-

(i) all companies listed with any Stock Exchange(s) in India and their Indian subsidiaries; or

(ii) all companies having paid up capital of rupees five crore or above;

(iii) all companies having turnover of rupees hundred crore or above; or

(iv)  all companies which were hitherto covered under the Companies (Filing of Documents and Forms in Extensible Business Reporting Language) Rules, 2011:

Provided that the companies in Banking, Insurance, Power Sector and Non-Banking Financial companies are exempted from XBRL filing.

4. Filing of cost audit report   A company required to furnish cost audit report and other documents to the Central Government under sub-section (6) of section 148 of the Act and rules made there under, shall file such report and other documents using the XBRL taxonomy given in Annexure-III for the financial years commencing on or after 1stApril, 2014 in e-Form CRA-4 specified under the Companies (Cost Records and Audit) Rules, 2014.

 

PM Narendra Modi to meet India Inc, is he going Manmohan way? : 08-09-2015


What will Prime Minister Narendra Modi tell the top industrialists Mukesh Ambani, Cyrus Mistry, KM Birla and Sunil Mittal among others who will attend a meeting called by him in whichRBI Governor Raghuram Rajan, top bankers, economists and senior government ministers and officials will also be present?

Will he explain them why he has failed to push the critical reform statutes like the GST and the Land Bill, why has his government failed to clean up the tax and arbitration mess, and also why is he not able to take a decision on gas pricing or cutting the subsidies — and, seek their ritualistic support in driving investment which is not going to happen till the NDA government succeeds in improving the business environment — or, he will present a plan to capitalise on the global turmoil to attain higher growth?

The industry’s confidence on PM Modi about a turnaround in the government’s functioning and decision-making is waning fast, and these kind of meetings resembling the ones of  former Prime Minister Manmohan Singh at the peak of policy paralysis during the UPA regime may not be of much help unless they are supported by concrete actions on the ground.

The 15-month record of Prime Minister Modi has been high on promises but low on delivery. The big-ticket plans — Make-in-India, Digital India, Smart Cities among others that have been announced — need policy support. How can a Digital India succeed until there is adequate spectrum support and also infrastructure to enhance broadband penetration?

Similarly, for Make-in-India to succeed, the government will have to find ways to improve electricity supply, land acquisition, tax administration and clearance processes both at the Central as well as the state level by working out a joint strategy through the co-operative federalism that he has talked about.

The reality is that the much-hyped co-operative federalism is yet to take off. If the prime minister is interested in change, he must start fixing timelines for various policy measures.

Thanks to the government’s say in the running of the public sector banks, the Jan Dhan scheme has succeeded in delivering impressive results despite strict timelines. Opening of about 18 crore bank accounts within 12 months of its start and over 40% of them getting seeded with Aadhaar is laudable, but this experience needs to be utilised to the full in delivery of the social sector spending and must be replicated in other areas.

Finance Minister Arun Jaitley has started the FY17 budget making process early and he has the opportunity to turn it into a package for removing bottlenecks for the industry and investment, and he might get good inputs from the Prime Minister’s meeting today.

There is no doubt that the Chinese slowdown and fears of foreign investors running away from the emerging markets need to be tackled on an urgent basis, but, this has also presented an opportunity for India to grow faster than other countries.

It would be interesting to see whether this meeting also turns out to be just a ritual or throws up solutions to grab this opportunity.

Source : The Financial Express

Firms with annual turnover of Rs 25 lakh might not attract GST : 08-09-2015


Companies with an annual turnover up to Rs 25 lakh might be exempted from the proposed national goods and services tax (GST). The Centre and states are likely to settle for this threshold as they finalise the GST laws.

According to finance ministry officials, the draft of these laws is expected to be ready by the end of this month. The Centre and states are working on a mechanism to avoid dual scrutiny of companies by them. “The thinking now is that all legal entities with an annual turnover of up to Rs 25 lakh will be completely exempt. This will be applicable to one TIN (Taxpayer Identification Number),” said a ministry official.

The government is looking to reconvene Parliament’s monsoon session to get the Constitutional amendment Bill on GST passed in the Rajya Sabha. Three Bills – on the Centre’s GST (CGST), states’ GST and Integrated GST -would come up after the Constitutional Bill is cleared. Work on the drafts is on.

States wanted a threshold of Rs 10 lakh to protect their revenue, while the Centre has assured them full compensation for five years. Besides, firms with an annual turnover between Rs 25 lakh and Rs 75 lakh will have an option to pay a flat rate of one per cent or GST rate. If they decide to opt for one per cent rate, firms will not get input credits because of which many, particularly dealers, may choose the GST rate.

Firms with annual turnover of Rs 25 lakh might not attract GST

The exemption limit from value added tax and service tax across states – except the North-East – is close to Rs 10 lakh turnover. “There will be an impact on revenue but it will depend on how many under the Rs 25 lakh to Rs 75 lakh annual turnover bracket opt for the one per cent rate. If 60-70 per cent opt for it, there will be loss of revenue for states but they will also get compensated by the Centre,” said Bipin Sapra, tax partner, EY. From the manufacturing point of view, it was important to keep the exemption limit higher, he added.

While these are likely to be part of the GST laws, a final decision on this is to be taken by the yet-unformed GST Council. This is to be constituted within two months of enacting the Constitution amendment. It would comprise the Union and state finance ministers and will be empowered to take key decisions on GST.

The idea is that entities with a turnover of up to Rs 75 lakh will not attract any checks or audits from either the state or the Centre. The Centre will give states a free run on compliance checks for companies with annual turnover above Rs 75 lakh and up to Rs 1.5 crore. “Here, the Centre will only do online scrutiny. And, if states detect non-compliance with respect to CGST, only the Centre will issue a notice. States cannot issue a notice on our behalf,” said an official. However, in case of companies with annual turnover of more than Rs 1.5 crore, there will be concurrent audits by both the state government and the Centre.

“The government is still discussing a mechanism of a risk-based selection so that the checks by Centre and states do not overlap,” said the official.

The government on Sunday made a renewed appeal to Opposition parties to help pass the Constitutional amendment through an extended monsoon session. It is vital that this be cleared at the earliest for the government to stick to the GST implementation timeline of April 1, 2016. The three draft legislations will lay down the fine print of the uniform indirect tax regime.

Source : Business Standard

Last date for Monthly Payment of Service Tax for assessees other than individual, Proprietory Firm and Partnership Firm (electronic payment through internet banking manadatory w.e.f.01-10-2014)


Title: Last date for Monthly Payment of Service Tax for assessees other than individual, Proprietory Firm and Partnership Firm (electronic payment through internet banking manadatory w.e.f.01-10-2014)
Date: 2015-09-07

India-Africa Summit: 35 of 54 heads of state confirm participation : 07-09-2015


As many as 35 heads of state or governments from 54 African nations have so far confirmed their participation at the third edition of India-Africa Summit on October 29 in what would be the biggest international summit meet that Delhi would host since 1983 NAM Summit and Commonwealth meeting.

In what is being billed as the Modi government’s biggest international show of strength so far the number of African heads of state or governments participating at the Summit could increase to over and above 40, officials indicated to ET. Remaining could be represented at the level of Foreign Minister or any other senior ministers or Special Envoys, officials hinted. Invites have now been delivered to almost all countries in the continent. Besides diplomatic channels several Ministers were sent as Special Envoys to invite African leaders as a rare gesture and to display significance of the Summit.

An uphill task will be to accommodate all the visiting African heads  of state or governments in the speaking slot on October 29 and arrangements are being put in place to ensure a smooth run, officials informed. Most of these visiting leaders would hold separate bilateral meetings with PM on October 29 and 30. A declaration on the plan of action for increasing engagements will be issued at the end of the Summit negotiations for which are expected to be smooth, officials hinted.

Both the first and second India-Africa Summits in Delhi and Addis Ababa  respectively witnessed restricted format of not more than 15 leaders. But experts on African affairs point out that Summit is also about show of strength to underline growing importance of the continent for India in its quest for an emerging power status.

Source : The Hindu

Service Tax department to focus on 5 evasion prone sectors : 07-09-2015


Faced with lower-than-expected growth in Service Tax collection, the revenue department has decided to focus on five key sectors, including telecom and renting of property, where the possibility of tax evasion is high.

Faced with lower-than-expected growth in Service Tax collection, the revenue department has decided to focus on five key sectors, including telecom and renting of property, where the possibility of tax evasion is high.

The sectors, according to the Service Department, which have been identified as evasion prone include aviation operations, manpower recruitment and security agencies, works contract and construction.

“With a view to improve collection, the Service Tax department has prepared sector specific profile of five sectors which are prone to evasion,” a senior official told PTI.

The profiling is being done with an aim to help in service tax audit and scrutiny of returns, the officer said.

“Senior officials will be entrusted with the task of profiling of each of the five sectors,” the official added.

Sector specific profiling would be in addition to the manual scrutiny of service tax returns of assesses based on risk parameters which has been initiated from August 1.

The detailed manual return scrutiny would be conducted in respect of such assesses whose total tax paid for 2014-15 is below Rs 50 lakh.

The government has budgeted to collect over Rs 2.09 lakh crore from service tax in the current fiscal, a growth of 25 per cent over the last financial year.

During April-July of the current fiscal, the service tax revenues rose by 20.1 per cent to Rs 60,925 crore. The rate of growth was, however, less that 75.4 per cent in case of excise and 21 per cent in case of customs.

Source : PTI

CBEC to expedite adjudication of high-value cases : 07-09-2015


The finance ministry has decided to expedite adjudication of 532 high-value cases, involving a total service taxdemand of Rs 38,000 crore. These are in the insurance, civil aviation and consumer durables sectors, among others, in Delhi and Mumbai. The aim is to bring these to closure by the end of next month. It has also started a manual scrutiny of small service taxpayers.

In the former exercise, only those high-value service tax cases would be considered where the tax demand raised is at least Rs 10 crore, officials said. Closure of these cases could give the government a revenue gain of more than Rs 20,000 crore, it is estimated.

The Central Board of Excise and Customs (CBEC) believes the exercise would ease the business environment. “It is important to bring closure to cases. You can’t keep them hanging,” said a senior official. Most of these cases are pending for the past two to three years.

Though officials refused to specify the cases, among the companies facing service tax adjudication are Jet Airways, Kingfisher Airlines and Sony. There are tax demands of Rs 280 crore on Jet, Rs 370 crore on Kingfisher and Rs 268 crore on Sony. An adjudication order has already been passed against Tata AIG for Rs 248 crore. The move is among the first tasks initiated under the newly-formed Directorate of Taxpayer Services under CBEC, set up to simplify and improve customer experience. It was set up in line with the recommendations of the Tax Administration Reforms Commission headed by Parthasarathi Shome.

“One of the key strategies to meet the high service tax collection growth target is to speed adjudication of pending cases,” the official said.

CBEC is in the process of filling many vacancies in the commissionerates. “As an interim measure, we have authorised officials outside their roles to look into these cases, till the vacant positions get filled. We have also posted a few new commissioners in Delhi and Mumbai,” said the official. CBEC has also initiated scrutiny of small taxpayers, which paid service tax of less than Rs 50 lakh in 2014-15. “The focus at the moment is to ensure better compliance and thereby improve revenue collections. We want to strengthen revenue scrutiny. The smaller cases will be scrutinised on a risk assessment basis,” the official said.

Experts lauded the department’s move to expedite adjudication cases as translating into revenue gains. However, they cautioned against one-sided orders. “There will be a need for application of mind in such cases, to avoid another level of adjudication, which arises if the assessee goes to the tribunal (Customs Excise and Service Tax Appellate Tribunal),” said Saloni Roy of Deloitte.

Service tax collections
The Union Budget has targeted close to 25 per cent growth in service tax collection, at Rs 2.09 lakh crore for 2015-16 against the revised estimate of Rs 1.68 lakh crore for the previous year. Projections for the current financial year are still lower than the initial Budget Estimates (BE) for Rs 2.15 lakh crore for 2014-15. Service tax revenue expanded 20 per cent in the first four months (starting April 1) of the financial year to Rs 60,925 crore, 29 per cent of the full year’s BE. It should be noted that the service tax rate was raised from 12.36 per cent to 14 per cent from June.

India’s indirect tax collections rose 37 per cent in the first four months of this financial year and over 14 per cent without accounting for the additional measures such as rise in excise duty on petroleum products in four phases since October last year and withdrawal of excise duty concessions to the automobile industry.

Source : The Economic Times

FE exclusive: Govt appears proactive in solving legacy tax issues : 05-09-2015


Justice AP Shah, in an extensive conversation with Santosh Tiwari and Gireesh Chandra Prasad, said that the government appears to be serious now to put in place a stable and predictable tax regime in the country.

With the government accepting the recommendations of the Justice AP Shah panel on the inapplicability of minimum alternate tax (MAT) on FIIs prior to April 1, 2015, there is heightened expectation now that it will have a similar approach towards handling other controversial tax issues, including retrospective tax amendments. Justice Shah, in an extensive conversation with Santosh Tiwari and Gireesh Chandra Prasad, said that the government appears to be serious now to put in place a stable and predictable tax regime in the country. Excerpts:

Do you think the government delayed in taking a decision on the applicability of MAT on FIIs?

The controversy erupted in December last year. After the notices were sent, the committee was appointed in May and it gave its report in July. After deliberations with the CBDT, a revised report was submitted to the government. So, I don’t think there has been a delay on the part of the government in taking action.

The CBDT erred by sending notices to FIIs basing its action on Authority for Advance Rulings (AAR) judgment in the Castleton case. Isn’t it?

The Castleton case was some sort of a dilemma for the department. In this case, the authority held that the earlier judgment in Timken and Praxair were incorrect. So, the Castleton judgment was the only one which remained in the field. This judgment interpreted that all foreign companies, whether they had a permanent establishment (PE) or a place of business in India or not, were liable to pay MAT. An appeal was filed against this judgment, which remained pending for a long time. By that time, the department’s claims started getting time-barred, so it started issuing notices to FIIs. Although the Castleton case was not about FIIs, it was about a foreign company which didn’t have PE or a place of business in India and the company relied on the earlier judgments, Timken and Praxair. The department also accepted those judgments, but AAR took a different view. The diametrically opposite views of the authority led to this problem and issuing of notices to FIIs.

The Castleton case is in the Supreme Court now. You have cleared FIIs’ part. What about companies?

The reference made to the committee was about the applicability of MAT on FIIs prior to April 1, 2015. We found that a foreign company which is not governed by the regulatory regime of the Companies Act would not be covered. Companies Act provisions would apply to a company which has a place of business in India. Since FIIs do not have a place of business in India, the Companies Act is not attracted to them and they do not need to submit accounts as per the Act, and MAT cannot be applied on them. The other reason why we said that MAT was not applicable to FIIs is that there is a separate tax regime for them with different tax rates for different types of transactions, and the application of MAT will be contrary to this.

Will the Castleton case be weak now in view of your report and the government action on it?

It is not a question of weakening of the case. In view of the fact that the government has accepted this report, it would mean that a foreign company which is not having a PE or a place of business in India will not be liable to pay MAT here. If Castleton is a company having no PE or having no place of business, that’s the end of the matter—Castleton would not be liable. I don’t think much would survive in the case now because the government has accepted the report. They (Castleton) claim that they don’t have a PE or a place of business in India.

The government has made its intentions clear to refer all legacy tax issues to your panel. Do you think it will refer retrospective tax demands and also Vodafone and Cairn cases to the panel so that by the next budget it could resolve all legacy tax cases?

The committee’s terms of reference cover legacy issues. It has a term of one year and it is likely that some other issues may be referred to it, including the retrospective taxation matter. When such issues come before the committee, we will listen to all the stakeholders and give a report to the government. We have said in our first report that India should move towards certainty in tax regime. Inconsistent judgments and positions taken by the tax department create fear in the minds of investors. It is, therefore, necessary for the tax regime to be certain and consistent.

Fortunately, the current government is keen to bring these reforms in tax laws, and I can see its commitment. Immediately after the controversy erupted, it set up the committee, and no sooner the report was submitted, it was accepted. The government’s intention is to move towards an objective, certain and predictable tax regime.

The uncertainty created by the retrospective tax demand on companies such as Vodafone still continues. How do you look at that scenario?

Unfortunately, even the MAT controversy was seen as an attempt to levy tax retrospectively. It is not a retrospective tax demand. It is really reopening of the assessments. But the outside world perceived it as another attempt at levying tax retrospectively. This is an important issue but I do not wish to make a comment. The government may decide to refer it to the committee in the future. If it comes, the committee will review the matter and give a report.

Income tax arrears are more than the direct tax collection target for the current financial year despite the income tax department’s record in winning cases. Then, you have Rs 2.64 lakh crore of transfer pricing adjustments since FY06. Don’t you think a change in this attitude is necessary?

It is true that there are complaints about unjustified tax notices or the large list of pending litigation. That is a matter I cannot comment on. But by accepting the committee’s recommendation on the FPI-MAT issue, the government has avoided huge litigation. Even these cases could have dragged on for a long time and nobody can predict the outcome. I think, gradually, these issues would be resolved.

In the FPI-MAT issue, where did you see the real problem—at the level of field officers or at the top brass of the tax administration?

In this issue at least, I found the problem was with inconsistent judgments of AAR, and not with field officers. Of course, field officers did add to the confusion by saying that FIIs conducting the business here itself constituted a place of business in India. We rejected that position. Conflicting judgments create confusion which are best avoided.

Do you think it was appropriate for the government to decide to amend the law in favour of the taxpayer when the dispute was still pending before the Supreme Court, notwithstanding the fact that it was the court’s domain to interpret the law?

If the government had waited, it would have been blamed for delay, and there was little guarantee that the government would get the desired result at the apex court. There were AAR rulings as well as the committee’s report before the government and it took a decision. This is the appropriate thing to have done. All issues cannot be left for the courts to decide. The government has to be proactive in tax matters. Investors were very worried about the inconsistency in taxation. FIIs are structured in a typical way. Investors come and go. When tax demands are raised years after some investors have left, who will bear that tax liability? If taxation is predictable, they can decide with certainty whether to invest or not. The government is right in taking a proactive step in granting relief to FIIs by going for a simple clarificatory amendment in the law.

The relief granted from MAT on trading gains is limited to FPIs. What about trading gains of companies?

If the company has a branch or a place of business in India to do regular business, then I think that company may be liable to pay MAT. That is the taxation scheme all around the world. There is nothing wrong in India taking the same position. I think the CBDT is happy with this position as they have been taxing foreign companies with a permanent establishment in India, which they would not like to upset.

What if any third-party approaches the Supreme Court on the FPI-MAT issue as in the case of the Azadi Bachao Andolan where the government’s circulars on India-Mauritius tax treaty were challenged?

You cannot stop people from filing public interest litigation. The Azadi Bachao Andolan case is one example of a high court striking down the circular related to the treaty but finally the Supreme Court upheld it. Ultimately, matters of taxation—whom to tax and whom not to tax—rest with the government, unless a decision in these matters, per se, is mala fide. I don’t think there is any cause for attributing any motive to the government.

Do you think the government decided to give relief to FPIs only because the tax demand involved was just Rs 603 crore?

I really do not know. My perception is that the government wants to send the right signals to investors and tell them that the legacy issues will be taken care of and that there would be certainty in taxation. An investor doesn’t mind paying more taxes, but wants certainty with respect to taxation.

Source : Financial Express

Jaitley promises ease of doing biz, tax reforms : 05-09-2015


Promising a rational tax regime and easier business environment, Finance Minister Arun Jaitley today asked Turkish industry leaders to invest in India including in smart cities, textiles, food processing and renewable business sectors.

In an interactive session with them on the sidelines of the G20 Meeting of Finance Ministers and Central Bank Governors, he said the government has made significant progress in improving ease of doing business in India.

“We have made significant progress on ease of doing business, although I would not say as yet that we have perfected it,” Jaitley said. Committing himself to rationalising the taxation regime, both in terms of direct and indirect taxes, he said a number of initiatives that offer significant investment opportunities have been announced for global investors including from Turkey.

“We are in the process of rationalising our tax structures, both direct and indirect taxes… We have very large natural resources… we have expedited the clearances and more and more laws are being liberalised,” Jaitley said while listing out the steps being taken by the government.

The Finance Minister said India has benefited significantly from the decline in global oil prices. While a part of these benefits have been passed on to consumers and has helped reduce inflation, such benefits have also led to greater funding for infrastructure. Still, the requirement for funds remains huge in the infrastructure space, where foreign investors can play a significant role, he added. Jaitley said the infrastructure space, including the recently announced 98 smart cities, offer significant opportunities for companies from Turkey, which has a large number of entities in this business.

The Turkish delegation, which included a number of companies from the construction, as also from the textiles, food processing and renewable energy sectors, expressed keen interest in doing business in India.

Food processing push

Jaitley said that food processing also offers significant opportunities to Turkish businesses as India has very high production of foodgrains and milk products, but it does not have as yet the necessary processing infrastructure.

At the meeting organised by business chamber CII, Jaitley also suggested that the Turkish construction companies can form a consortium and explore business opportunities in India with the help of the Indian industry body and the Turkish Indian Chamber of Commerce, whose key functionaries were also present there.

CII President Sumit Mazumder also listed the various steps taken by the new government to improve ease of doing business and to attract investments.

Source : Business Line

Very disappointed GST Bill was not passed in Monsoon session, says Jayant Sinha : 04-09-2015


The Government on Thursday appealed to opposition parties to extend support for the passage of GST Bill in Parliament.

“I am deeply disappointed that the Constitution amendment Bill for GST introduction was not passed in the Monsoon session”, Jayant Sinha, Minister of State for Finance said at the 55th Annual Session of Automotive Component Manufacturers of India here.

Stating that GST would be hugely beneficial for the automobile and automotive component industry, Sinha urged industry and opposition leaders to work with Government in ushering this tax reform.

On its part, the Government is ready to support the efforts of the automotive components industry in scaling new heights, he added.

Source : The Economic Times

No. 10 Dated: 3-9-2015


Deferred Payment Protocols dated April 30, 1981 and December 23, 1985 between Government of India and erstwhile USSR – Circular – Dated 3-9-2015 – FEMA

RBI/2015-16/169

A.P. (DIR Series) Circular No.10

September 03, 2015

To

All Category – I Authorised Dealer Banks

Madam / Sir,

Deferred Payment Protocols dated April 30, 1981 and December 23, 1985  between Government of India and erstwhile USSR

Attention of Authorised Dealer Category-I (AD Category-I) banks is invited to A.P. (DIR Series) Circular No. 105 dated May 28, 2015 wherein the Rupee value of the Special Currency Basket was indicated as ₹ 77.6331180 effective from May 06, 2015.

2. AD Category-I banks are advised that a further revision has taken place on August 24, 2015 and accordingly, the Rupee value of the Special Currency Basket has been fixed at ₹ 81.3268160 with effect from August 27, 2015.

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) 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.

Yours faithfully,

(A K Pandey)

 Chief General Manager

No. 15/2015 Dated: 3-9-2015


Clarifications on Tax Compliance for Undisclosed Foreign Income and Assets – Circular – Dated 3-9-2015 – Income Tax

Circular No. 15 of 2015

Government of India

Ministry of Finance

Department of Revenue

Central Board of Direct Taxes

(TPL Division)

Dated 3rd September, 2015

Clarifications on Tax Compliance for Undisclosed Foreign Income and Assets

The Black Money (Undisclosed Foreign Income and Assets) and Imposition of  Tax Act, 2015 (hereinafter referred to as ‘the Act’) has introduced a tax compliance provision under Chapter VI of the Act. The Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Rules, 2015 (hereinafter referred to as ‘the Rules’) have been notified. In this regard, circular No. 13 of 2015 dated 611, July, 2015 issued by the Board provided clarifications to 32 queries. Subsequently, further queries have been received from the public about the tax compliance provisions under Chapter VI of the Act. The Board has considered the same and the following clarifications are issued.-

Question No.1: A person, while being a non-resident, earned foreign income, not chargeable  to  tax  in  India, (exempt  income)  which  was deposited in a foreign bank account. The person became resident in India in F.Y. 2013-14 and since then only interest is being  credited to the account. Such income including interest income has not been offered to tax in India. In such case what should be the disclosure under the tax compliance?

Answer: As stated the person was non-resident for the year F.Y. 2012-13 and earlier years, and the foreign income for such years was not  chargeable to tax in India. For the F.Y. 2013-14 and subsequent  years, while he is resident in India, the person’s global income is taxable in India. Accordingly, the declaration of foreign bank  account in this case, which has been made partially out of undisclosed income chargeable to tax, may be made. In this case, the  value  of  undisclosed  foreign  bank  account  shall  be computed as per rule 3(1)(e) of the Rules and a deduction as per section 5 of the Act shall be allowable. Therefore, the value of such account shall be the sum of all credits in the bank account as reduced by income not chargeable to tax in India (exempt income), which has been credited into such account. In this case, exempt income would be the foreign income deposited in the bank account upto the F.Y. 2012-13. Therefore, in effect the value of bank account in this case would be the sum of interest credits into the account since 01.04.2013.

Question No.2:  A person was a riots-resident froth F.Y. 1996-97 to 2010-11 during which lie was employed in a foreign country. The person received salary which was taxable in the foreign country and credited into a foreign batik account. The person also received contributions to his pension account from his employer. The person became a resident in India in F.Y. 2011-12. Whether the person is required to declare his pension account udder the tax compliance?

Answer: As stated, the salary and pension received before F.Y. 2011-12 was not chargeable to tax in India. However, on or after  01.04.2011  when the person became resident in India any accretion to the pension account (in the form of interest,  dividend, capital gain or any other sum) is chargeable to tax in India. Therefore, declaration of such account may be made under Chapter VI of the Act. The value of such account shall be the accretions to the account since 01.04.2011.

Further, the details of such account are required to be reported in Schedule FA of the return of income and from assessment year 2016-17 onwards non-declaration of such account may attract penalty under the Act.

Question No.3: A person was employed in a foreign country during the F.Y.1996-97 to 2010-11 in which lie received salary which was taxable its the foreign country. From F.Y. 2011-12 onwards lie is receiving pension from his ex-employer. The person became a resident in India from F.Y. 2014-15 onwards. The salary and pension was deposited in his foreign batik account. Due taxes have been deducted on the salary acid pension by the ex-employer in the foreign country. No taxes have been paid its India on pension received. Whether the person is required to disclose such batik account acid if yes, what should be its valuation?

Answer: As stated the person was non-resident upto the F.Y. 2013-14 and the salary and pension received for services rendered outside India was not chargeable to tax in India. However, from F.Y. 2014-15 onwards, the pension received is chargeable to tax in India. In this case, the person may declare his foreign bank account under Chapter VI of the Act. The valuation for the purpose of declaration shall be the sum of credits into the account from 01.04.2014 onwards. The person is not entitled for any credit of taxes paid, if any, in the foreign country.

Question No.4:  A private trust was created outside India by a settlor out of undisclosed income chargeable to tax in India. The trust has set up a company holding 100% shares. What are the options for declaration under Chapter VI of the Act in such case?

Answer: In this case, the settlor is the beneficial owner of the assets held under the trust. Therefore, declaration under Chapter VI of the Act may be made by such settlor in the capacity of a beneficial  owner in respect of the assets of the trust. Alternatively, the trustee of the trust holding assets on behalf of beneficiaries may make the declaration of the assets of the trust in the capacity of a representative assessee. The trustee is eligible for declaration even where he is a non-resident. In respect of the assets declared under Chapter VI of the Act, immunity shall be available to the settlor, trustee and the beneficiary.

Further, where the settlor of the trust has passed away, the beneficiary of the trust may make a declaration in respect of his share in the assets of the trust. In case the beneficiary is a minor, his guardian may file the declaration on behalf of the minor.

The assets of the trust shall be valued as per the Rule 3(1)(g) as in the case of AOP. In this case first the valuation of shares of the company is to be made as per rule 3(1)(c) and then the value of net assets of the trust shall be determined.

Where the assets of the trust have been declared under Chapter VI of the Act and tax alongwith penalty has been paid, the value of the asset so declared shall not be chargeable to tax in the event of distribution of such assets to the beneficiaries.

Question No.5: A person has a foreign batik account since year 2000 made out of undisclosed income chargeable to tax in India. However, lie does not have the bank statement prior to year 2011. The bank has also not provided the bank statement to him despite all attempts made by him. In such case how will the value of the account be computed for the purpose of declaration under Chapter VI of the Act?

Answer: For the purpose of declaration under Chapter VI of the Act, the person may compute the value of the bank account for which the statement is available as per rule 3 of the Rules. For the period prior to year 2011 for which the statement is not available, the person may compute the value for such period on best estimate basis. However, he has to furnish a certificate of the bank or any other evidence to the effect that the details are not available with or obtainable from the bank. Further, in such case, later if it is found that the value of the bank account is different from what has been declared, the immunity under the Act shall be available only upto the extent of declaration made under Chapter VI of the Act. Moreover, any excess payment of tax under the declaration on the basis of determination of the value of asset on a higher side shall not be refundable.

It may also be mentioned that in an event it is found that the person has filed a declaration of a foreign bank account on an estimate basis despite the fact that he had a bank statement and  the value of such declaration is lower than the value as per the bank account, it will amount to misrepresentation of facts under section 68 of the Act and such declaration shall be void.

Question No.6: A person was a resident in India as well as a foreign country in F.Y. 2011-12. However, after applying the provisions of the Double Taxation Avoidance Agreement (DTAA) under the tie breaker rules the person became resident of the foreign country. Whether such person needs to file a declaration under Chapter VI of the Act in respect of assets acquired/ made out of foreign income earned during F.Y. 2011-12 in which lie was non-resident in India as per the DTAA?

Answer: As per section 59 of the Act, a declaration may be made in respect of any undisclosed asset located outside India and acquired from income chargeable to tax under the Income-tax Act for any assessment year prior to assessment year beginning on 01.04.2016. In this case, since the foreign income of F.Y. 2011-12 was not chargeable to tax in India under the Income-tax Act as the assessee was a non-resident as per DTAA, the same is not required to be declared under Chapter VI of the Act.

Question No.7:  A person has a foreign bank account made out of undisclosed income chargeable to tax in India. Over a past several years, the person invested in securities which were funded from such account. Some of the securities were sold and the proceeds were deposited into the same account. Some expenditure has also been  made from  the  bank  account.  What  would  be  the declaration in such case under Chapter VI of the Act?

Answer: In this case, the valuation of bank account (BA1) and securities (say, S1, S2 etc.) is to be made separately and it is to be computed as per rule 3(1)(e), 3(2) and 3(3) of the Rules. The valuation of the assets in such case will be as per the illustration below.-

Bank Statement of BA1                                                      USD

Debit Credit Balance
  By clearing/ transfer 10,000 10,000
To clearing/ transfer 4000

(purchase of 1000 shares of S1)

  6000
To clearing/ transfer 5000 (purchase of 500 bonds of S2   1000
  By clearing/ transfer  2500

(sale of 500 shares of S1)

3500
To clearing/ transfer 3000

(purchase of 100 shares of S3)

  500
  By clearing/ transfer 50

(interest on bonds)

550
  By clearing/ transfer  7000

(sale of 500 bonds of S2)

7550
To clearing/ transfer 4000

(purchase of 400 shares of S4)

  3550
  By clearing/ transfer 3000

(sale of 400 shares of S4)

6550
To credit card 1000

(payment of credit card bill)

  5550
To clearing/ transfer 500

(purchase from store)

  5000
To clearing/ transfer 1500  (transfer to other bank account BA2)   3500
To Bank Charges 10   3490

Valuation of assets for the purpose of declaration shall be as follows.-

Value of 500 shares of S1 Sold = (higher of 2000 and 2500)  – 2500

[amount deposited in the bank

account; refer rule 3(3)] = Nil

Value of 500 shares of S1 held  as  on  valuation

Date

= Fair market value of 500 shares of

S1 as  on  valuation  date  i.e.

01.07.2015

Value of 500 bonds of S2 Sold = (Higher of 5000 and 7000) – 7000 [amount   deposited   in   bank account; refer rule 3(3)] = Nil
Value of 100 shares of S3 held  as  on  valuation

Date

= Fair market value of 100 shares of

S3 as  on  valuation  date  i.e.

01.07.2015

Value of 400 shares of S4 Sold = (Higher of 4000 and 3000) – 3000

[amount deposited in bank account (new

asset); refer rule 3(3)] = 1000

Value^ of bank account (BA1) = {10000 + 2500 + 50 + 7000 + 3000}

- {4000  + 5000  + 3000  + 4.000}

[acquisition of new asset; refer rule 3(3)]

-  1500*  [transferred to another bank

account BA2 (new asset); refer rule 3(3)]

= 5050

^The reduction from the gross deposits in the bank account is available in respect of those withdrawals which have been made for acquisition of a new asset or deposit in another bank account as that new asset/ bank account is being separately declared under Chapter VI of the Act.

*The amount of 1500 CSD transferred to bank account (BA2) shall be considered (while adding credits) in the valuation of BA2.

Question No.8:  A person holds an undisclosed brokerage account in a foreign country which holds within itself shares, mutual funds as well as cash. The shares and mutual funds in the brokerage account have had multiple trades over a period of time. Further, dividend and interest has been credited to the account. Whether the brokerage account can be declared as one asset under Chapter VI of the Act or separate disclosure in respect of shares, mutual funds and cash is required to be made?

Answer: The rules read with the Act provides for different computational mechanism for valuing shares, mutual funds and cash holding in  a  bank  account.  Therefore,  a  composite  valuation  of  brokerage account cannot be made and separate valuation of shares, mutual funds and cash holding is required to be made. Further, the declaration shall consist of different assets with different valuations. The valuation of such assets shall be similar to what has been explained in answer to Question No. 7.

Question No.9:  A person has declared an undisclosed foreign bank account after computing its value as per the Rules. At the time of declaration, Will the declarant be expected to explain the basis of working of the value of the account or required to explain the details of entries in the account?

Answer: While filing the declaration in respect of a bank account, the declarant is expected to provide a broad computation where the value of the account is different from the sum of all credits in the account. For example – if the person has purchased 50 shares over past several years out of funds in the account which is represented by debits to the account, the person is expected to provide a computation in the declaration showing the amount of reduction in respect of cost of such 50 shares from the value of account as per rule 3(3) of the Rules as mentioned in Form 6. Further, he has to compute the value of shares. Apart from this, the declarant will not be required to explain the details of entries in the account at the time of declaration.

Question No.10: A resident has an immovable property in a foreign country out of which rental income is received. As per the DTAA, the taxation right on such rental income is exclusively with such foreign country in which the property is situated. The rentals were deposited in an undisclosed foreign bank account. For the purpose of declaration under Chapter VI of the Act, will the value of the bank account include such rental income deposited in the account?

Answer: If the DTAA entered with any country provides that the rental income ‘shall’  be taxed only in the country in which the property is situated, then the taxation right in this respect will exclusively be with that country. In such case where property is outside India, the rental income is not chargeable to tax in India as per the Income-tax Act read with DTAA. Thus while working the value of undisclosed foreign bank account the deduction of rental income (in this case it is exempt income) will be made from the value of foreign bank account computed as per rule 3 of the Rules.

Question No.11:  A person has an undisclosed property situated outside India in the name of his spouse. The funds for acquisition of the property were provided by such person. In this case, whether the person can make a declaration under Chapter VI of the Act in his own name?

Answer: In this case, the person is treated as a beneficial owner of the property and he may file a declaration of the undisclosed asset in his name, being a beneficial owner. The immunity in respect of the asset declared shall be available to both the person and his spouse.

Question No.12:  Where a partner of partnership firma files a declaration in respect of undisclosed foreign assets held by the firth, then whether immunity would be available to partners of the firm?

Answer: Yes, the partners of the partnership firm shall not be liable for any offence under the Income-tax Act, Wealth-tax Act, FEMA, Companies  Act  and  the  Customs  Act  in  respect  of  the  declaration made in the name of the partnership firm.

Question No.13: An undisclosed foreign asset was acquired in F.Y. 2012-13 relating to A.Y. 2013-14. The assessment order for A.Y. 2013-14 has been passed on 10th August, 2015 in which such undisclosed foreign asset was not examined and consequently went untaxed. Can a declaration of such asset be made under Chapter VI of the Act?

Answer: Yes, declaration of such undisclosed foreign asset can be made under the Chapter VI of the Act.

Question No.14: Will the declarations made under Chapter VI of the Act be kept confidential?

Answer: The  Act incorporates the provisions  of section 138 of the Income-tax Act relating to disclosure of information in respect of  assessees. Therefore, the information in respect of declaration made is confidential as in the case of return of income filed by assessees.

Question No.15:  A person received salary in a foreign country from his employer who is a resident in India. The salary was deposited in a foreign bank account and was chargeable to  tax in India.  If a declaration of the foreign bank account is made by the person, which includes salary deposited in  the account,  will  the employer be liable for consequences under the Income-tax Act for non-deduction of tax at source on the salary paid by the employee?

Answer: Where the employee has declared an undisclosed asset made out of income received from his employer, the employer shall not be deemed to be an assessee in default under section 201(1) of the Income-tax Act for non-deduction of TDS on such income. However, the employer shall be liable for other consequences under the provisions of the Income-tax Act, such as payment of interest under the provisions of section 201(1A) of the Income-tax Act from the date on which the tax was deductible on such income upto the date of payment of tax by the declarant. Penalty under section 271C of the Income-tax Act will also be attracted unless he proves that there was a reasonable cause for such failure as per the provisions of section 273B of that Act.

Question No.16: A person (said, A) has an undisclosed foreign bank account made out of income chargeable to tax in India. From such account he has transferred money to his spouse’s/child’s (say, B) account from time to time. There are no independent credits into the spouse’s account except for such transfers. Whether in this case both the person and the spouse need to declare the undisclosed foreign bank account under Chapter VI of the Act?

Answer: In a case where there is only transfer of money from the account of the individual to his spouse or child and there are no independent credits in the account of the spouse or child and the  individual  has declared the undisclosed foreign bank account under Chapter VI of the Act, the spouse and the child are not required to make any separate declaration in respect of the account in their names. However, if the transfer of money is made as a consideration for supply of goods, services etc. and tax has not been paid on such income by the spouse/child, the bank account with such balance needs to be declared by the spouse/child. Besides, any accretion to the account of the spouse/child in the nature of interest etc. may also be required to be declared by the spouse/child.

Question No.17: In respect of undisclosed foreign asset declared under Chapter VI of the Act, is it mandatory to include such asset in the books of account of the person?

Answer: It is expected/ required that the declarant will show the asset so declared in his books of accounts and if he is not required to maintain books of account, he shall maintain the record of such asset. Further, if he continues to hold such asset he shall be required to report such asset in schedule FA of the return of income.

Question No.18:  As per rule 3(1)(e), for the purpose of valuation of bank account, any deposit made from the proceeds of any withdrawal from the account shall not be taken into consideration while computing the value of the account. Does this mean that only redeposit of cash withdrawn is covered for this purpose or it would cover withdrawal used for funding cost of investment where proceeds are subsequently deposited on sale of investments?

Answer: The proviso to rule 3(1)(e) in respect of valuation of bank account covers only amount withdrawn in cash and redeposited into the same bank account. In case amount is transferred from  first bank account and deposited into second bank account then provisions of rule 3(3) shall apply and the value of first bank account shall be reduced by the amount deposited in the second bank account and the value of second bank account shall be in accordance with rule 3(1)(e).

Question No.19:  Is it necessary to file a valuation report of an undisclosed foreign asset along with the declaration under Chapter VI of the Act?

Answer: It  is  not  mandatory  to  file  the valuation report  of the undisclosed foreign asset along with the declaration. However, the declarant should have either the valuation report or any other document for arriving at the value of the asset. While e-filing the declaration on the departmental website a facility for uploading the documents is available.

Question No.20:  If a query has been sent by the competent authority in respect of  a foreign asset of a person to a Government of any country or territory outside India but no information has been received  upto 30.06.2015 can such asset be declared under Chapter VI of the Act?

Answer: Such asset shall not be hit by section 71(d)(iii) of the Act and can be declared if other provisions contained in section 71 are not applicable.

Question No.21: What shall be the exchange rate for the purpose of conversion of foreign currency into Indian currency?

Answer: As per rule 3(4) of the Rules, the value of the undisclosed foreign asset may be determined in the foreign currency in accordance with rule 3 of the Rules and the same is to be converted into Indian currency as per the reference rate of RBI  for 01.07.2015.

Question No.22:  A person maintains an e-wallet/virtual card account online on a website hosted in a foreign country which was initially funded by income chargeable to tax in India on which tax has not been paid. The person plays online games/poker through the fiends lying in the e-wallet/virtual card and has earned some money which was credited to the e-wallet/virtual card account. Can a declaration be made in respect of e-wallet/virtual card? If yes, what shall be the valuation of the e-wallet/virtual card?

Answer: The e-wallet/virtual card account is similar to a bank account where inward and outward cash movement takes place from the account. Therefore, the valuation and declaration of an e-wallet account may be made as in the case of a bank account.

Question No.23:  Where a public limited company makes a disclosure under Chapter VI of the Act  then  whether the Directors of the company be granted immunity against prosecution launched by shareholders under the SEBI Act/ Regulations or Indian Penal Code (IPC)?

Answer: The Act does not provide immunity against offence punishable under the SEBI Act/Regulations or under IPC.

Question No. 24 A person acquired  an  immovable  property in a foreign country for USD 50,000 out of which investment of USD 10,000 was made out of his own undisclosed income chargeable to tax in India and balance USD 40,000 was made out of loan acquired from a bank. The fair market value of the property as on 01-07-2015 is USD 100,000. Whether the property can be declared under Chapter VI of the Act and if yes, what would be the value of declaration in such case?

Answer: The property was partially acquired from undisclosed income and partially from amount not chargeable to tax. The property can be declared under Chapter VI of the Act and in such case while computing the value of the undisclosed asset, deduction as per section 5(2) of the Act in respect of income not chargeable to tax shall be available from the fair market value of the property. The value of such immovable property shall be,-

FMV as on 01-07-15:      USD 100,000

Deduction under

section 5(2):       USD(100,000 x 40,000 / 50,000)=USD 80,000

Value of the undisclosed

asset to be declared

under Chapter VI :           USD (100,000 80,000) = USD 20,000

Since the declaration is in respect of 20% of the value of the property, the declarant shall be issued an acknowledgement in Form 7 only in respect of such portion of the immovable property.

Further, in such case it may be ensured that the mortgage payments to the bank have not been/are not being paid out of undisclosed income chargeable to tax in India. However, if the mortgage payments are made out of a foreign bank account made out of undisclosed income chargeable to tax in India then such account is also required to be declared under Chapter VI of the Act.

Question No. 25:  A person has an undisclosed foreign asset, being a bank account in joint names, say A and B. Should the disclosure of such account is to be made by both A and B or anyone can make the declaration?

Answer: Where the funds in the bank account have been contributed only by A the disclosure is to be made by A. However, where  the   funds   have  been  contributed   by   both  A  and   B independently, the declaration is to be made by both A and B in respect of the funds contributed by them into the bank account.

Question No.26:  As per answer to question no. 23 of Circular No. 13 dated 06-07-2015, a person being a non-resident can file a declaration under Chapter VI of the Act in respect of asset acquired out of income chargeable to tax earned when he was resident in India in the past. However, para 3 of the Explanatory Circular No. 12 dated 02-07-2015 states that a declaration may be filed by a person, being a resident in India. Are these positions contradictory?

Answer: Para 3 of the Explanatory Circular No. 12 dated 02-07-2015 provides that a resident may file a declaration under Chapter VI of the Act. It does not say that a non-resident who was earlier  resident in India cannot file a declaration in respect of asset  acquired out of income chargeable to tax in India earned when he was a resident. Answer to question no. 23 of Circular No. 13 dated 06-07-2015 says that a person may make a declaration under section 59 of the Act in respect of an undisclosed foreign asset acquired by him in the year in which he was resident in India. Thus a specific situation has been dealt in answer to question no. 23 of Circular No. 13 dated 06-07-2015 which answers the query clearly.

Question No.27:  A person acquired an immovable house property in the year 2012-13  located outside India out of undisclosed income chargeable to tax in India. A notice under section 143(2) for assessment year 2013-14 (relevant to previous year 2012-13) has been issued prior to 30-06-2015 and the assessment proceeding is  pending  before  the  assessing officer.  As  clarified in Question No. 8 of Circular dated 06-07-15 the assessee is not eligible for declaration under Chapter VI of the Act in respect of this asset, however, he shall inform the assessing officer about  the  acquisition  of  such  asset  in  the  assessment proceedings and the same shall be assessable under the provisions of the Income-tax Act. Whether the provisions of section 72(c)  of the Act will apply in this case and the Assessing Officer may proceed to assess the undisclosed asset under the Act?

Answer: Section 72(c) is applicable where any undisclosed foreign asset has been acquired prior to commencement of the Act and no  declaration in respect of such asset has been made. In such case the same shall be assessable under the Act. In the present case since  scrutiny  proceedings  under  the  Income-tax  Act  are pending, the person is not eligible to declare such asset under Chapter VI of the Act. Therefore, it is hereby clarified that where the undisclosed foreign asset has been acquired during the previous year for which scrutiny assessment proceedings are pending as on 30-06-2015 and the assessing officer has been informed   during  the  assessment  proceedings  about  the investment made in such undisclosed foreign asset, the same shall be assessable under the provisions of the Income-tax Act. However, where the assessing officer has not been informed in the pending scrutiny assessment proceedings under the Income-tax Act about such undisclosed foreign asset and it is not assessed under that Act, the same shall be liable for assessment under the provisions of the new Act when it comes to the notice of the Assessing Officer.

(R. Lakshminarayanan)

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. Media Co-ordinator and Official spokesperson of CBDT.

7. Web manager for posting on the departmental website.

Notification No. : F. No. 1/19/2013/CL.V Dated: 4-9-2015


Notification regarding sub-section (1) of section 467 of the Companies Act, 2013 (18 of 2013) – F. No. 1/19/2013/CL.V – Dated 4-9-2015 – Companies Law

[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY,

PART II, SECTION 3, SUB SECTION (i)]

GOVERNMENT OF INDIA

Ministry of Corporate Affairs

Notification

New Delhi, the 04th September, 2015

GSR .- (E) - In exercise of the powers conferred by sub-section (1) of section 467 of the Companies Act, 2013 (18 of 2013), the Central Government hereby makes the following  further alterations  in  Schedule  III (hereinafter  referred  to  as  said Schedule) to the said Act, namely:-

2. In the said Schedule, in Part I- Balance Sheet,-

(i) Under the heading “Equity and Liabilities”, in para (4), for “(b) Trade payables” the following shall be substituted, namely:-

“(b) Trade Payables:-

(A) total outstanding dues of micro enterprises and small enterprises; and

(B) total outstanding dues of creditors other than micro enterprises and small enterprises.”.

(ii) Under the heading “Notes: General Instructions for preparation of Balance Sheet”, in para 6, after sub-para F the following shall be inserted, namely:-

“FA. Trade Payables

The following details relating to Micro, Small and Medium Enterprises shall be disclosed in the notes:-

(a)  the  principal  amount  and  the  interest due thereon  (to  be  shown separately) remaining unpaid to any supplier at the end of each accounting year;

(b) the amount of interest paid by the buyer in terms of section  16 of the Micro, Small and Medium Enterprises Development Act, 2006, along with the amount of the payment made to the supplier beyond the appointed day during each accounting year;

(c) the amount of interest due and payable for the period of delay in making payment (which have been paid but beyond the appointed day during the year) but without adding the interest specified under the Micro, Small and Medium Enterprises Development Act, 2006;

(d) the amount of interest accrued and remaining unpaid at the end of each accounting year; and

(e) the amount of further interest remaining due and payable even in the succeeding years, until such date when the interest dues above are actually paid to the small enterprise, for the purpose of disallowance of a deductible expenditure under section 23 of the Micro, Small and Medium Enterprises Development Act, 2006.

Explanation.-The   terms   ‘appointed   day’,   ‘buyer’,   ‘enterprise’,   ‘micro enterprise’, ‘small enterprise’ and ‘supplier’, shall have the same meaning assigned to those under clauses (b), (d), (e), (h), (m) and (n) respectively of section  2  of the Micro, Small and Medium Enterprises Development Act, 2006. “.

3.  This notification shall come into force on the date of its publication in the Official Gazette.

[F. No. 1/19/2013/CL.V]

AMARDEEP SINGH BHATIA

Joint Secretary

Notification No. : F. No.1/19/2013-CL-V-Part Dated: 4-9-2015


Companies (Accounts) Second Amendment Rules, 2015 – F. No.1/19/2013-CL-V-Part – Dated 4-9-2015 – Companies Law

[To be published in the Gazelle of India, Extraordinary,

Part II, section 3, sub-section (i)]

MINISTRY OF CORPORATE AFFAIRS

Notification

New Delhi, the 4th September, 2015

G.S.R…(E). - In exercise of the powers conferred under sub-sections (1) and (3) of section 128, sub-section (3) of section 129, section 133, section 134, sub-section (4) of section 135, sub-section (1) of section 136, section 137and section 138 read with section 469 of the Companies Act, 2013, the Central Government hereby makes the following rules further to amend the Companies (Accounts) Rules, 2014, namely:-

1.  (1) These rules may be called the Companies (Accounts) Second Amendment Rules, 2015.

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

2.  In the Companies (Accounts) Rules, 2014,

(i) in rule  2, in sub-rule (1), after clause (d), following shall be inserted, namely:-

“(da) “Indian Accounting Standards” means the Indian Accounting Standards referred to in rule 3 and Annexure to the Companies (Indian Accounting Standards) Rules, 2015;”

(ii) after rule 4 the following rule shall be inserted, namely:-

“4A.  Forms and items contained in financial statements.- The financial statements shall be in the form specified in Schedule III to the Act and comply with Accounting Standards or Indian Accounting Standards as applicable:

Provided that the items contained in the financial statements shall be prepared in accordance with the definitions and other requirements specified in the Accounting Standards or the Indian Accounting Standards, as the case may be.”.

(iii) in rule 8, in sub-rule (3), the following proviso shall be inserted at the end, namely:-

“Provided that the requirement of furnishing information and details under this sub-rule shall not apply to a Government company engaged in producing defence equipment.”.

(iv) in rule 12, for sub-rule (1) the following sub-rule shall be substituted, namely:-

“(1) Every company shall file the financial statements with Registrar together with Form AOC-4 and the consolidated financial statement, if any, with Form AOC-4 CFS.”.

No. F.No.328/08/2015-WT Dated: 4-9-2015


Return of Wealth – Extend the due date for e-filing returns of income from 31st August, 2015 to 7th September, 2015 – Circular – Dated 4-9-2015 – Income Tax

LETTER [F.No.328/08/2015-WT], DATED 4-9-2015

A clarification was issued vide letter of even number dated 27-7-2015 stating that in view of extension of due date for filing return of income in respect of assessees falling under clause (c) of explanation 2 to sub-section (1) of section 139 of the Income-tax Act from 31-7-2015 to 31-8-2015, the due date of filing return of wealth by such assessees for assessment year 2015-16 also stands extended from 31-7-2015 to 31-8-2015.

2. In view of CBDT order F.No. 225/154/2015/ITA-II dated 2-9-2015 issued under section 119 of the Income-tax Act, extending the due date for e-filing returns of income from 31st August, 2015 to 7th September, 2015 in respect of all taxpayers who were required to e-file their returns of income by 31st August, 2015, the ‘due date’ for filing return of wealth by such assessees for assessment year 2015-16 also stands extended from 31st August 2015 to 7th September 2015.

3. This issues with the approval of Chairperson, CBDT.

Notification No. : F. No. 1/19/2013-CL-V-Part Dated: 4-9-2015


Notification regarding sub-section (6) of section 129 of the Companies Act, 2013 (18 of 2013) – F. No. 1/19/2013-CL-V-Part – Dated 4-9-2015 – Companies Law

[To be published in the Gazette of India, Extraordinary,

Part II, Section 3, Subsection (ii)]

GOVERNMENT OF INDIA

MINISTRY OF CORPORATE AFFAIRS

Notification

New Delhi, dated 04th September, 2015

S.O. (E). - In exercise of the powers conferred by the sub-section (6) of section 129 of the Companies Act, 2013 (18 of 2013), the Central Government hereby, in public interest, directs that paras 5 (ii) (a) (1), 5 (ii) (a) (2), 5(ii) (e), 5 (iii), 5 (viii) (a), 5 (viii) (b), 5 (viii) (c) and 5 (viii) (e) relating to Additional Information of the General Instructions for preparation of Statement of Profit and Loss in Schedule III of the Companies Act, 2013 shall not apply to government companies producing Defence Equipment including the Space Research subject to fulfilment of following conditions, namely:-

Conditions:

A. The Board of Directors of the Company has given consent with regard to non-disclosure of information relating to paras 5(ii)(a)(1), 5(ii)(a)(2), 5(ii)(e), 5(iii), 5(viii)(a), 5(viii)(b), 5(viii)(c)  and 5(viii)(e),  as may be applicable;

B. The Company shall disclose in the Notes forming part of the balance sheet and profit and loss account, the fact of grant of exemption under this notification;

C. The company shall comply with the prescribed Accounting Standards;

D. The company shall ensure that its financial statements represent a true and fair state of affairs of its finances; and

E.  The company shall maintain and file such information as may be prescribed or called for or required by the government or the Reserve Bank of India or any other regulator.

2. This notification shall be applicable in respect of financial statement prepared in respect of the financial years ending on or after the 31st March, 2016.

[F. No. 1/19/2013-CL-V-Part]

AMARDEEP SINGH BHATIA

Joint Secretary

Notification No. : 04/2015 Dated: 4-9-2015


Procedure for registration and submission of report as per clause (k) of sub section (1) of section 285BA of Income-tax Act, 1961 read with Sub rule (7) of Rule 114G of Income-tax Rules, 1962 – 04/2015 – Dated 4-9-2015 – Income Tax

F. No. DGIT(S)/DIT(S)-2/ITWG on Financial Sector Reporting/12/2015

Government of India

Ministry of Finance

Central Board of Direct Taxes

Directorate of Income Tax (Systems)

Notification No 4/2015

New Delhi, 4th September, 2015

As per Sub rule (9)(a) of Rule 114G of the Income Tax Rules, 1962 (hereunder referred as the Rules), the statement referred to in sub-rule (7) of Rule 114G shall be furnished through online transmission of electronic data to a server designated for this purpose under the digital signature in accordance with the data structure specified in this regard by the Principal Director General of Income-tax (Systems). Further as per sub rule (9)(b) of Rule 114GPrincipal Director General of Income Tax (Systems) shall specify the procedures, data structures and standards for ensuring secure capture and transmission of data, evolving and implementing appropriate security, archival and retrieval policies.

2. In exercise of the powers delegated by Central Board of Direct Taxes (‘Board’) under Sub rule (9)(a) and 9(b) of Rule 114G of the Income tax Rules 1962, the Principal Director General of Income-tax (Systems) hereby lays down the procedures, data structure and standards for ensuring secure capture and transmission of data, evolving and implementing appropriate security, archival and retrieval policies as under:

a) Registration of the reporting financial institution: The reporting financial institution is required to get registered with the Income Tax Department by logging in to the e-filing website with the log in ID used for the purpose of filing the Income Tax Return of the reporting financial institution. A link to register reporting financial institution has been provided under “My Account”. The reporting financial institution is required to submit registration details on the screen. A reporting financial institution may submit different registration information under different reporting financial institution categories. Once registered, the reporting entity will have an option to deregister.

b) Submission of Form 61B: Once the reporting financial institution gets registered successfully, it is required to submit the Form 61 B or Nil statement. The designated director is then required to login to the e-filing website with the log in ID used for the purpose of filing his/her own Income Tax Return. The prescribed schema for the reportunder form 61B can be downloaded from the e-filing website. Under “e-File” menu, an option “Submit 61 B/nil statement” will be available to the designated director. The designated director will be required to submit the PAN of the reporting financial institution, calendar year for which report is to be submitted and the reporting entity category for which the report is to be submitted. The designated director will then be provided the options to upload the Form 61 B/Nil statement. If the designated director chooses the option “Form 61B” then form shall be submitted using a Digital Signature Certificate of the designated director.

c) Submission of Nil statement: In case nil statement is to be submitted, the option to submit Nil statement is required to be selected. The designated director will then be required to submit a declaration with respect to pre-existing accounts (As defined in Rule 114H(2)(h) of Income Tax Rules, 1962) and new accounts (As defined in Rule 114H(2)(d) of Income Tax Rules, 1962). The declaration is required to be submitted using a Digital Signature Certificate.

3. In view of the changes mentioned above, the procedures prescribed in Notification 3 dated 25th August, 2015stands withdrawn forthwith. The registration and submission of Nil statement already completed under the procedures prescribed in Notification 3 dated 25th August, 2015 shall continue to be valid.

 (Nishi Singh)

Pr. DGIT (Systems), CBDT

Foreign companies without permanent establishment in India should not attract MAT: A P Shah : 03-09-2015


Former law commission chairman A P Shah, who headed the committee that recommended doing away with past cases of minimum alternate tax (MAT) on foreign institutional investors (FIIs), says if MAT is imposed on FIIs, an anomalous situation will arise where minimum tax is higher than long-term capital gains tax. He tells Dilasha Seth and Indivjal Dhasmana that the panel’s recommendations were also applicable to foreign companies with no place of business in India, because they are not governed by the regulatory regime of the Companies Act. Edited excerpts:

Your panel has recommended two alternatives to the government to do away with past cases of MAT onFIIs - legislative amendment or a circular by theCentral Board of Direct Taxes (CBDT). The government has preferred the legislative route. Is the government’s move in the right direction?

I would say the legislative route is definitely preferable, as it will put to rest this controversy and a simple clarification to Section 115 JB would serve the purpose. With a CBDTcircular, there may be issues about its enforceability. But just with one simple clarificatory amendment, this MAT issue could be put to rest as far as FIIs are concerned.

You have based your recommendation of doing away with past MAT cases on FIIs, on the fact that they are not companies under the Companies Act. Is it a valid argument?

FIIs are foreign companies, but they are not covered under the Companies Act under Sections 591 to 594. A foreign company having a place of business in India is supposed to file profit and loss accounts in accordance with the Companies Act. As an FII doesn’t have a place of business, surely it is not going to file accounts in accordance with the Companies Act. If you see the scheme of 115JB (dealing with MAT), it talks about company filing accounts in accordance with the Companies Act and laying it before the annual general meetings, etc. But if there is no guidance for filing the accounts or there is no legislative framework for this, this would lead to some anomalous results: Which accounts to be filed by FIIs – the global account or the India-related account; how will this be bifurcated, etc. For this, there is no guidance in the Section. So the committee’s finding is if a company is not governed by the regulatory regime of the Companies Act, it will not be covered by Section 115JB.

Also, for FIIs, there is a self-contained code in 115AD of the IT Act. This provision was brought into force much before 115JA (earlier version of 115JB) was reinvented in 1998. If MAT becomes applicable, just see the consequences. For a long-term capital gains on which the securities and transaction tax (STT) is paid by the FIIs, tax is nil under Section 115AD, but if 115JB is held to be applicable, tax will be 18.5 per cent and so on and so forth. Minimum tax cannot be more than the maximum tax. That is completely illogical. So 115JB doesn’t override provisions of 115AD. These provisions must be construed harmoniously.

Are the panel’s recommendations also applicable to foreign companies not having a permanent establishment (PE) or a place of business?

Naturally; as our reasoning is based on this reading of the law. Therefore, a foreign company which doesn’t have a PE or a place of business in India will not be liable to pay MAT. We have also indicated the international regime, where broadly the same scheme works.

Will it be applicable to Castleton also? The case is coming up in the Supreme Court later this month?

I am not sure how it will play out in the courts, but at least by the committee’s report, if Castleton has no PE or a place of business in India, it would be entitled to the same relief.

Was the ruling by Authority for Advance Rulings (AAR) on Castleton erroneous?

The committee has opined that Castleton case was erroneously decided. We have approved AAR’s earlier rulings in Timkin and Paxair cases.

What’s your take on divergent judgment of AARs on MAT?

An AAR ruling is binding on a party seeking the ruling and does not bind the department. Strictly speaking, the AAR ruling will cover only that particular case and not other cases. But the Supreme Court has said these rulings have persuasive value. In my opinion, as far as possible, consistency needs to be maintained.

In larger perspective, how do you see the practice by the government to change the tax policy in between, as happened in the case of MAT?

We took note of the concerns of foreign investors that they would expect predictability and certainty in the tax regime. We have stated that the tax certainty should be the goal. As a result of Castleton ruling, the department was almost forced to issue notices, as it was the only judgment in the field. My belief is this government is committed to bringing certainty and predictability in the tax regime.

The finance minister has said the government will also refer other legacy issues to your panel. Have those issues been referred?

There may be other legacy issues. As and when they are referred to the committee, it will look at those. The committee’s tenure is one year. So if the government decides to refer any further issues to the committee, it will certainly consider them.

Why did the panel give two reports on the same topic of MAT to the finance ministry?

CBDT expressed some concerns about the impact of the report on the foreign companies having PE or place of business. In the meeting chaired by the finance minister and attended by all three members and the CBDT officials, we made it clear we have not expressed any opinion on foreign companies with PE or place of business. Then the committee again met, and in order to remove any ambiguity, made slight modifications to the report. But the conclusion remains the same.

Do you think your panel’s recommendations would restore foreign investors’ confidence in the Indian economy?

I am not an expert on this issue, so I won’t be able to comment. The good thing is that the government has avoided huge litigation with 68 notices and the right signal has gone to the investors.

But markets have not reacted to the report positively.

Frankly, the committee is not concerned about the fluctuations in the stock market. A legal issue was referred to the committee and it was answered.

Source : PTI

No. 09/2015 Dated: 2-9-2015


Report on applicability of Minimum Alternate Tax (MAT) on FIIs/FPIs for the period prior to 01.04.2015 and acceptance of the Government thereof- reg. – Order-Instruction – Dated 2-9-2015 – Income Tax

Instruction No. 9/2015

Government of India

Ministry of Finance

Department of Revenue

Central Board of Direct Taxes

North Block, IT (A-II) Division

New-Delhi, dated the 2nd of September, 2015

Subject: Report on applicability of Minimum Alternate Tax (MAT) on FIIs/FPIs for the  period prior to 01.04.2015 and acceptance of the Government thereof- reg.-

A Committee on Direct Tax Matters chaired by Justice A.P. Shah, was constituted to examine the issue ofapplicability of Minimum Alternate Tax (‘MAT’) on FIIs/FPIs for the period prior to 01.04.2015. The Committee has submitted its final report to the Government on 25.08.2015. The Committee has recommended that section 115JBof the Income-tax Act, 1961 (‘Act’) may be amended to clarify the inapplicability of the provisions of section 115JB to FIIs/FPIs having no permanent establishment (PE)/place of business in India. The Government has accepted the said recommendation and it has been decided to carry out appropriate amendment in the Act so as to prescribe that MAT provisions will not be applicable to FIIs/FPIs not having a place of business/permanent establishment in India, for the period prior to 01.04.2015.

The field authorities are accordingly advised to take into consideration the above position and keep in abeyance, for the time-being, the pending assessment proceedings in cases of FIIs/FPIs involving the above issue. They are further advised not to pursue the recovery of outstanding demands, if any, in such cases.

[ F. No. 225/237/2015-ITA-II]

(Rohit Garg)

Deputy Secretary to the Government of India

Copy to:-

1. PS to F.M./OSD to FM/PS to MOS(R)/OSD to MOS(R)

2. PS to Secretary (Revenue)

3. Chairperson (DT), All Members, Central Board of Direct Taxes.

4. All Pr.CCsIT/CCsIT/Pr.DsGIT/DsGIT

5. All Joint Secretaries/CsIT, CBDT

6. Directors/Deputy Secretaries/Under Secretaries of Central Board of Direct Taxes

7. DIT (RSP&PR)/Systems, New Delhi, for appropriate publicity by putting it on departmental website

8. The C&AG of India (30 copies)

9. The JS & Legal Advisor, Min. of Law & Justice, New Delhi

10. The Institute of Chartered Accountants of India, IP Estate, New Delhi-110003

11.  All Chambers of Commerce

12. CIT (OSD), Official Spokesperson of CBDT

 (Rohit Garg)

Deputy- Secretary to the Government of India

Govt sides with Shah panel; MAT on FIIs history : 02-09-2015


The finance ministry on Tuesday formally accepted the recommendations of a committee on retrospective cases of Minimum Alternate Tax (MAT), headed by Law Commission chairman A P Shah. With this, the government will withdraw all past cases of MAT on foreign institutional investors (FIIs).

The move came on a day when jittery investors offloaded shares, leading to a fall of about two per cent in the BSE Sensex.

The government would modify a contentious provision of the Income Tax Act to make it more transparent and move amendments in this regard in the winter session of Parliament, Finance Minister Arun Jaitley said. “I have accepted the A P Shah panel report submitted on Aug 25, 2015 … It said MAT would not be leviable on FIIs … a necessary amendment in provisions in section 115 JB of the I-T Act would be required and hopefully, we will bring that out in the winter session, or whenever the next Parliament session is held,” he said.

“We will issue instructions to field formations till the I-T Act is amended. The amended I-T Act will be more transparent,” Jaitley added.

A report by the Shah panel had suggested the government move towards certainty and predictability in the tax regime. “FIIs are mostly open-ended investment funds, which permit their investors to enter and exit daily, based on the NAV (net asset value) of the fund, unanticipated tax liability (or the fear thereof) relating to previous years, which would have to be borne by the current investors, maybe a sufficient trigger for the investors to exit,” it said.

In the 19 years since MAT was introduced (1996), it had never been levied on FIIs and foreign portfolio investors (FPIs). Instead, these entities were governed by the beneficial tax scheme under section 115AD.

The Shah committee said having an ‘established place of business’ was different from merely carrying on a business in India.

On Tuesday, Shah said the finance ministry’s move to accept the panel’s recommendations would send a positive signal to investors abroad. “There is commitment towards certainty in taxation. The fact that the government appointed this committee indicates it is committed to bringing clarity and certainty in the tax regime, and the report has now been accepted,” he said.

“This development will definitely cheer the investor community and help promote India as a favourable investment destination,” said Suresh Swamy, partner (tax & regulatory practice), PwC India.

Rajesh H Gandhi, partner, Deloitte Haskins & Sells, said the decision would help further the government’s position that it discouraged tax terrorism and welcomed foreign investment in India.

Earlier, the income tax department had sent notices to 68 FIIs, demandingRs  602 crore as MAT dues for past years. The issue relates to cases prior to April 1 this year. In Budget 2015-16, the government provided relief to FPIs prospectively, from this financial year.

Initially, the finance ministry was firm on retrospective MAT notices, saying India wasn’t a tax haven. However, in April, the government diluted MAT provisions, saying those coming from countries with which India had double-taxation avoidance agreements would be spared such notices. As the government persisted with other notices, five FIIs, including, BNP Paribas and London-based National Westminster Bank, moved the Bombay High Court against these notices in May. About 95 per cent of FIIs who received MAT notices from the income tax department approached the dispute resolution panel for relief.

On Tuesday, Jaitley said the legal recourse by certain FIIs would have been time-consuming. “We are of the considered opinion that the alternative course suggested by the Shah panel, that a necessary amendment in the Income Tax Act would be required … (would be pursued),” he said.

Industry had argued provisions of MAT under the I-T Act were aimed at taxing companies that had to prepare profit-and-loss accounts according to the Companies Act. Foreign investors, it said, didn’t have a fixed place of business in India and, therefore, didn’t have to maintain books of accounts, in line with the Companies Act.

In 2012, the Advance Authority Ruling (AAR), Delhi, directed Castleton to pay MAT in India on its book profits. This followed the company transferring shares from a Mauritius entity to one in Singapore. An earlier AAR ruling had, however, said there was no case for MAT on FIIs.

Shah said AARs should be more consistent in their rulings. “Inconsistent rulings by AAR created a controversy about levying MAT on FIIs. When giving rulings, an AAR has to be more consistent and considerate.”

The Shah panel’s report would be made public soon, Jaitley said.

Source : Business Standard

Notification No. : 01/2015 Dated: 14-8-2015


Constitution of Bench at Allahabad – 01/2015 – Dated 14-8-2015 – Central Excise – Tariff

Notification No. 1/2015

Dated 14/08/2015

Subject :  Constitution of Bench at Allahabad.

In exercise of powers conferred by Section 129C of the Customs Act, 1962 (52 of 1962) read with Section 35D of the Central Excise Act, 1944 (1 of 1944), Section 86 of the Finance Act, 1994, Section 9C of the Customs Tariff Act, 1975 and all other enabling provisions; and in terms of the decision of the Union Cabinet dated 21-3-2013 as conveyed by the letter F. No. 27/06/07-Ad.IC (CESTAT), dated 13-11-2013 of the Government of India, Ministry of Finance, Department of Revenue, the President of the Customs, Excise & Service Tax Appellate Tribunal hereby orders that there shall be Regional Bench at Allahabad, State of Uttar Pradesh.

In terms of the jurisdiction specified in the letter dated 13-11-2013 of the Government of India, the Regional Bench, Allahabad shall deal with all matters arising within its jurisdiction as specified in the table below and such other matters as may be transferred to it by a general or special order of the President.

The jurisdiction of the Regional Bench, Allahabad shall be as set out in the table below :

Title of the Bench Location Jurisdiction
Regional Bench, Allahabad Allahabad Appeals arising from territories within the State of Uttar Pradesh.

The Registry of the Regional Bench, Allahabad shall start functioning w.e.f. 1-9-2015 at the following address :

Room No. 210 & 220, 2nd Floor

Office of the Commissioner of Central Excise,

Customs & Service Tax, 38, M.G. Marg, Allahabad-211001

No. 12/2015 Dated: 1-9-2015


Extension of time for filing of cost audit report to the Central Government for the Financial Year 2014-2015 in form CRA-4 – reg. – Dated 1-9-2015 – Companies Law

General Circular No.12/2015

No.52/22/CAB/2015

Government of India

Ministry of Corporate Affairs

5th Floor, ‘A’ Wing, Shastri Bhawan,

New Delhi: 110001

Dated:  1st September, 2015

To

All Regional Directors,

All Registrar of Companies,

All Stakeholders.

Subject: Extension of time for filing of cost audit report to the Central  Government for the Financial Year 2014-2015 in form CRA-4 – reg.

Sir,

In continuation to General Circular No. 08/2015 dated 12.06.2015, the last date of filing of Form CRA-4  without any penalty/late fee is hereby extended upto 30th September, 2015.

2.  This issues with the approval of competent authority.

Yours faithfully,

(K.M.S. Narayanan)

Assistant Director

Tel No. 23387263

Copy to: File No.1/40/2013/CL-V

No. F.No.137-2011-FTTR-III Dated: 31-8-2015


Guidance Notes on Implementation of Reporting Requirements under Rules 114F to 114H of the Income Tax Rules – Circular – Dated 31-8-2015 – Income Tax

Guidance_note_on_reporting_requirements_under_FATCA

No. 08/2015 Dated: 31-8-2015


Compulsory manual selection of cases for scrutiny during the Financial Year 2015-2016-regd: – Order-Instruction – Dated 31-8-2015 – Income Tax

Government of India

Ministry of Finance

Department of Revenue (CBDT)

North-Block, IT (A-II) Division

New Delhi the 31st of August, 2015

Instruction No. 08/2015

To

All Pr. Chief-Commissioners of Income-tax/Chief-Commissioners of Income-tax All Pr. Directors-General of Income-tax/Directors-General of Income-tax

Sir/Madam

Subject: Compulsory manual selection of cases for scrutiny during the Financial Year 2015-2016-regd:-

1. In supersession of earlier Instructions on the above subject, the Board hereby lays down the following procedure and criteria for manual selection of returns/cases for scrutiny during the financial-year 2015-2016:-

a) Cases involving addition in an earlier assessment year in excess of ₹ 10 lakhs on a substantial and recurring question of law or fact which is either confirmed in appeal or is pending before an appellate authority.

b) Cases involving addition in an earlier assessment year on the issue of transfer pricing in excess of ₹ 10 crore or more on a substantial and recurring question of law or fact which is either confirmed in appeal or is pending before an appellate authority.

c)  All assessments pertaining to Survey under section 133A of the Income-tax Act, 1961 (‘Act’) excluding those cases where books of accounts, documents etc. were not impounded and returned income (excluding any disclosure made during the Survey) is not less than returned income of preceding assessment year. However, where assessee retracts the disclosure made during the Survey, such cases will not be covered by this exclusion.

d) Assessments in search and seizure cases to be made under section(s) 158B,  158BC,  158BD, 153A & 153C read with section 143(3) of the Act and also for the returns filed for the assessment year relevant to the previous year in which authorization for search and seizure was executed u/s 132 or 132A of the Act.

e) Returns filed in response to notice under section 148 of the Act.

f) Cases where registration u/s 12AA of the IT Act has not been granted or has been cancelled by the CIT/DIT concerned, yet the assessee has been found to be claiming tax-exemption under section 11 of the Act. However, where such orders of the CIT/DIT have been reversed/set-aside in appellate proceedings, those cases will not be selected under this clause.

g) Cases where the approval already granted u/s 10(23C)/35(1)(ii)/35(1)(iii)/10(46) of the Act has been withdrawn by the Competent Authority, yet the assessee has been found claiming tax-exemption/benefit under the aforesaid provisions.

h) Cases in respect of which specific and verifiable information pointing out tax-evasion is given by Government Departments/Authorities. The Assessing Officer shall record reasons and take prior approval from jurisdictional Pr. CCIT/CCIT/Pr. DGIT/DGIT concerned before selecting such a case for scrutiny.

2. Computer Aided Scrutiny Selection (CASS): Cases are also being selected under CASS on the basis of broad based selection filters. List of such cases shall be separately intimated in due course by the Pr.DGIT(Systems) to the jurisdictional authorities concerned.

3.  It is reiterated that the targets for completion of scrutiny assessments and strategy of framing quality assessments as contained in Central Action Plan document for Financial-Year 2015-2016 have to be complied with and it must be ensured that all scrutiny assessment orders including the cases selected under the manual criterion are completed through the AST system software only. Further, in order to ensure the quality of assessments being framed, Pr. CCsIT/CCsIT/Pr. DsGIT/DsGIT should evolve a suitable monitoring mechanism and by 30th April, 2016, such authorities shall send a report to the respective Zonal Member with a copy to Member (IT) containing details of at least 50 quality assessment orders from their respective charges. In this regard, IT Authorities concerned must ensure that cases selected for publication in ‘Let us Share’ are picked up only from the quality assessments as reported.

4. These instructions may be brought to the notice of all concerned.

5.  Hindi version to follow.

(Rohit Garg)

Deputy-Secretary to the Government of India

F.No. 225/ 201/ 2015/ITA.II

Notification No. : F. No. 01/34/2013-CL-V-Part-I Dated: 28-8-2015


Companies (Management and Administration) Amendment Rules, 2015 – F. No. 01/34/2013-CL-V-Part-I – Dated 28-8-2015 – Companies Law

To be published in the Gazette of India, Extraordinary, Part II,

Section 3, Sub-section (i)]

GOVERNMENT OF INDIA

MINISTRY OF CORPORATE AFFAIRS

Notification

New Delhi, the 28th August, 2015

G.S.R. (E).-In exercise of the powers conferred sub-section (1) of section 88, sub-section (4) of section 88, sub-section (1) of section 89, sub-section (2) section 89, sub-section (6) of section 89, sub-section (1) of section 91, sub-section (2) of section 92, sub-section (3) of section 92, section 93, sub-section (1) of section 94, sub-section (4) of section 100, sections 101,, 102, 105, 108, sub-section (5) of section 109, Sections 110, 112, 113 sub-section (2) of section 114, section 115, sub-section (1) of section 117, sub-section (1) of section 118, sub-section (2) of section 119, section 120 and sub-section (1) of section 121 and sub-section (3) of section 186, read with 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 (Management and Administration) Rules, 2014, namely:-

1. Short title and commencement.-(1) These rules may be called the Companies (Management and Administration) Amendment Rules, 2015.

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

2. In the Companies (Management and Administration) Rules, 2014,-

(i) in rule  23, in sub-rule (1) for the words “not more than five lakh rupees”, the words ‘not less than five lakh rupees’ shall be substituted.

FinMin to start Budget consultations from Sept 4 : 27-08-2015


Finance Ministry will start consultations on 2016-17 Budget with different ministries and government departments from September 4.

The Finance Ministry has already started the budgetary exercise in mid-August, two months ahead of schedule, in order to have wider consultations with stakeholders.

Beginning with Commerce, Textile and External Affairs Ministries on September 4, the consultations with different government departments would conclude on September 28.

The consultations would focus on expenditure proposals for 2016-17 and revised estimates for 2015-16.

The Budget division of the Finance Ministry has also issued the detailed guidelines for firming up the expenditure proposals for the next fiscal.

The Budget exercise, which normally starts in later part of October, involves consultations with several interest groups like industry, traders’ bodies and trade unions.

In addition, various government departments make expenditure proposals to the Finance Ministry.

The Union Budget is traditionally presented on the last working day of February.

Source : PTI

GST bill: Government ready for second part of the monsoon session, seeks Congress support : 26-08-2015


The government said on Tuesday that it was prepared to convene the second part of the monsoon session to pass crucial legislation, most importantly the goods and services tax bill, and appealed to the Congress-led Opposition to cooperate in “national interest” and the current economic situation.

Parliamentary affairs minister M Venkaiah Naidu held a press interaction to underline that the NDA government has made all efforts to reach out to all the Opposition parties and incorporated  their views in important bills. Despite this, some parties, especially the Congress, have refused to cooperate and created roadblocks in passage of bills which is affecting the growth of the economy, he said.

“I once again appeal to all political parties to please think in national interest… This is very important in the backdrop of the current financial situation across the globe,” Naidu said.

Earlier, Naidu met the Leader of the Congress in Lok Sabha, Mallikarjun Kharge, at the latter’s residence and also talked to Ghulam Nabi Azad, Leader of the Opposition in Rajya Sabha, over the phone to seek support on The Constitution (One Hundred and Twenty Second) Amendment Bill. Sources said the Congress had not promised any support to the bill but conveyed to the government that convening the session was up to it.

Naidu sought to pin the blame for the deadlock on the  Congress president and vice-president and alleged that this adamant attitude was harming the economy.

The government is worried that further delay in the passage of the GST bill — which would also require the nod of half of the states — will force further delay and failure to meet the April 1, 2016, deadline for the implementation of GST.

The minister, flanked by his deputies Mukhtar Abbas Naqvi and Rajiv Pratap Rudy, said on a previous occasion he had even visited Congress chief Sonia Gandhi and was willing to do so again. Asked why he had not reached out to Rahul Gandhi when Union ministers had openly said that it was the Congress vice-president who was against any cooperation, Naidu said he was in touch with the Congress and its two leaders — Kharge and Azad — who lead the party in the two Houses.

While the government is working on convening a three-day session of Parliament around the second week of September, it is also working on a strategy to isolate the Congress and charge it with blocking the crucial GST bill, sources said.

Source : PTI

No. 07/2015 Dated: 26-8-2015


Guidelines for Grant of Reward to Informants leading to Recovery of Irrecoverable Taxes, 2015. – Order-Instruction – Dated 26-8-2015 – Income Tax

Instruction No. 07/2015

F.No.385/21/2015-IT(B)

Government of India

Ministry of Finance

Department of Revenue

Central Board of Direct Taxes

North Block, New Delhi

26th August, 2015

To

All the Pr. CCsIT/ CCsIT/Pr. DGsIT/DGsIT

Subject: Guidelines for Grant of Reward to Informants leading to Recovery of Irrecoverable Taxes, 2015.

Madam/Sir,

In supercession of the guidelines for Grant of Reward to Informants, 2007, I am directed to say that the following guidelines will regulate the grant of reward to informants leading to recovery of taxes of tax defaulters whose names have been published in the public domain under section 287 of the Income-tax Act, 1961.

1. Short title

These guidelines may be called the ‘Guidelines for Grant of Rewards to Informants leading to Recovery of Irrecoverable Taxes 2015′.

2. Application of Guidelines

(i) These guidelines will regulate the grant and payment of reward to informants  who  provide specific   and credible information   of the whereabouts/assets of persons, on or after 31.03.2015, which results in the collection of taxes, penalties, interest or other amounts (hereinafter “tax”) already levied under the Income Tax Act, 1961 and the Wealth Tax Act, 1957. Grant and payment of reward for information provided before 31.03.2015 will continue to be regulated by ‘Guidelines for Grant of Rewards to Informants 2007′.

(ii) These guidelines will be applicable if the jurisdictional Pr. Chief Commissioner/Chief Commissioner is satisfied that the  tax could not be recovered despite all possible efforts having been made by the Department to trace the defaulter assessee or his assets and the information provided by the informant has resulted in recovery of tax.

3. Reward Amount

i.  Individuals will be eligible for rewards based on the tax collected as a result of any administrative or judicial action resulting from the information provided. The quantum of tax collected will  be determined only after all assessments have become final and no appeal/revision/other litigation is pending.

ii.  The reward would not exceed 10% of the tax, recovery of which is directly attributable to the information/documents supplied by the informant, subject to a ceiling of ₹ 15 lakh. The full Board may relax the ceiling of ₹ 15 lacs on the basis of recommendation of the Committee mentioned in paragraph 4 below.

iii.  Reward should be processed and granted in respect of recoveries directly attributable to the information furnished by the informant which was not in the knowledge of the department. Any proposal to this effect must be mooted after recoveries have been made of irrecoverable taxes and there is no further litigation. Reward will be only with reference to taxes recovered in the case of a taxpayer about whom information is given.

iv.  Reward in accordance with these guidelines is discretionary and will be in the nature of ex-gratia payment which, subject to these guidelines, will be granted in the absolute discretion of the authority competent to grant rewards. No representation or petition against any decision regarding grant of rewards will be entertained from either the informant or any person on his behalf and the outcome of the claim cannot be disputed in Court.

v.   The reward under these guidelines is in the nature of ex-gratia payments and accordingly, no assignment thereof made by the informants will be recognized. The authority competent to  grant rewards may however; grant reward to heirs or nominees of an informant of an  amount not exceeding the amount that would have been payable to the informant, had he not  died.

4. Authorities Competent to Grant Reward

The authority competent to grant reward will be the Pr. Chief Commissioner of Income Tax/ Chief Commissioner of Income Tax in whose charge the arrears, from which recovery is made, are recorded However, where the amount of reward in any given case exceeds ₹ 1,00,000/-, the same should be approved by a Committee of three officers comprising the Pr. Chief Commissioner (Pr.CCIT) of the region as Chief Commissioner concerned and one other Chief Commissioner of Income Tax nominated by the Pr. CCIT.  In case Pr. Chief Commissioner of Income Tax is also the Chief Commissioner of Income tax concerned, he/she shall nominate one more Chief Commissioner as member of the committee.

5. Informants for the purpose of the guidelines:

i.  A person will be considered to be an informant eligible for reward in accordance with these guidelines if he furnishes specific information in relation to assets/untraceable assessees concerning irrecoverable taxes. However, the claim of reward shall be confined to cases where action is actually taken in pursuance of the information. The information provided must be supported by facts/documents and should not be speculative, vague, of general nature or an “educated guess”.

ii.  In the cases where the documents or supporting evidence are known to the informant but are not in his possession, the informant should describe these documents and identify their location to the best of his ability.

iii. The information can be submitted to the jurisdicational Pr.CCIT/CCIT/Pr.CIT of the assesse as mentioned vide publication of his name in public domain or in the office of any other Pr.CCIT/CCIT to the officers designated as nodal officers( not below the rank of Addl/Jt.CIT)  for  receiving  the  information. Information  received  by  any  other Pr.CCIT/CCIT will be forwarded within 15 days to the jurisdictional Pr.CCIT/CCIT.

iv. The jurisdictional Pr.CIT will be act as the Nodal Authority to examine and decide the nature of actionable information as provided in Annexure-A,

6. Statement of informant

Where any information or evidence is furnished by any person in the expectation of a reward, he will be required to furnish a written statement as per Annexure  B to these guidelines. Such a statement should be signed by the informant in the presence of the Nodal Officer, to whom the information is furnished. Where any information is received by post intimating that the information is given with a view to claim reward, the informant should appear before and sign the written statement in the presence of such authority. The original statement in all cases should be kept in the custody of the jurisdictional Pr. CIT No reward shall be admissible if the informant refuses to give the written statement as referred to above.

7. Written undertaking of the informant

At the time an informant furnishes, in the expectation of a reward, any information or documents, an undertaking should be taken from him to the effect: -

a) That he is aware that the information or documents furnished by him do not ipso facto confer on him the right to any reward and that he would be bound by the decision of the competent  authority in this regard.

b) That he is aware that the extent of reward depends on the precision of the information and usefulness of the documents furnished by him;

c) That the reward would pertain only to as much of the taxes recovered/realized as are directly  attributable to the information supplied by him;

d) That the provisions of section 182 of the Indian Penal Code have been read by him or explained to him and he is aware that if the information furnished by him is found to be false he would be liable to prosecution;

e) That he accepts that the Government is under no obligation to enter into any correspondence  regarding the details of any taxes realized as a result of his information and;

f) That he accepts that payment of reward is ex-gratia in the absolute discretion of the authority competent to grant rewards and he has no right to dispute the correctness of the decision in any court of law.

8. Circumstances to be kept in view in determining the amount of reward

In determining the reward amount, the authority competent to grant the reward will keep the following in view:

a)  The accuracy of the information given by the informant.

b) The extent and nature of the help rendered by the informant.

c) The risk and trouble undertaken and the expense and odium incurred by the informant in securing and furnishing the information and documents.

d)  The quantum of work involved in utilizing the information furnished and the facility with which such tax could be recovered as a result of the information.

e)  The quantum of tax recovered which is directly attributable to the information and documents supplied by the informant.

f)  The quantum of reward already given in terms of Guidelines for Grant of Rewards to Informants, 2007 where the proceeding or action for levy of tax was originally initiated on the basis of information provided by the same informant.

9. Secrecy of the identity of the informant

The identity of the informant shall be kept secret if so desired by him by giving him a number. No information relating to informants or the rewards paid to them shall be disclosed to any authority except in accordance with any law for the time being in force.

10.  Certificate from the Internal Audit Party

When the amount of reward is ₹ 1 lakh or more, the Pr.CCIT or CCIT concerned shall, before the grant of reward, get the case checked and obtain a certificate from the concerned Pr. CIT regarding the correctness of the taxes recovered.

11.  Prohibition of rewarding in certain cases

No reward shall be granted if-

i.  The informant is a Government servant who furnishes information or evidence obtained by him in the course of his normal duties as a Government Servant.

Explanation: A person employed as an employee by the Central or any State or any Union Territory Government or a nationalized bank or any local authority or any public sector undertaking, corporation, body, corporate or establishment, set up or owned by the Central Government or any State Government or any Union Territory Administration shall be deemed to be a Government Servant for the purposes of this paragraph; or

ii. The informant is required by law to disclose the information to the Department; or

iii. The informant has access to the information on the basis of a contract with the Government

iv  The Scheme should be confined to only cases where;

(a) assessee is not traceable,

(b) there are no/inadequate assets for recovery,

(c) self assessment tax is outstanding for more than 6 months,

(d) TDS has been deducted but not deposited for more than 6 months.

and their names have been published in public domain under section 287 of the Income Tax Act, 1961.

12. Maintenance of record of each informant and not taking cognizance of Information furnished by certain informant.

The Authority competent to obtain information, evidence or documents from informant will maintain record of each informant, giving in brief his antecedents, the details of cases in which he has furnished information and the extent to which information has been found reliable. In case it is found that the antecedents of the informant, the nature of the information furnished by him in the past and his conduct justify ignoring the information, evidence and documents furnished by him, the case should be referred by such authority to the Pr. CCIT/CCIT concerned, and if approved by him, it would be open for such authority not to take cognizance of the information furnished by such an informant.

13. Drawing of the bill

The orders of the authority competent to grant reward in cases where such authority is himself competent to grant reward and in case in which the decision vests with the Committee referred to in paragraph 4 are applicable, sanction of the Committee referred to therein, will constitute sufficient authority for drawing the bill on the treasury against the sanctioned allocation.

14.  Control and audit expenditure relating to rewards

The control and audit of the expenditure for reward will be governed by the instructions specifically issued for the purpose from time to time.

15. Hindi version shall follow.

(Sandeep Singh)

Under Secretary to the Government of India

Notification No. : 03/2015 Dated: 25-8-2015


Procedure for registration and submission of report as per clause (k) of sub section (1) of section 285BA of Income-tax Act, 1961 read with Sub rule (7) of Rule 114G of Income-tax Rules. 1962 – 03/2015 – Dated 25-8-2015 – Income Tax

F. No. DGIT(S)/DIT(S)-2/ITWG on Financial Sector Reporting/12/2015

Government of India

Ministry of Finance

Central Board of Direct Taxes

Directorate of Income Tax (Systems)

Notification No 3/2015

New Delhi, 25th August, 2015

Procedure for registration and submission of report as per clause (k) of sub section (1) of section 285BA of Income-tax Act, 1961 read with Sub rule (7) of Rule 114G of Income-tax Rules. 1962:

As per Sub rule (9)(a) of Rule 114G of the Income Tax Rules, 1962 (hereunder referred as the Rules), the statement referred to in sub-rule (7) of Rule 114G shall be furnished through online transmission of electronic data to a server designated for this purpose under the digital signature in accordance with the data structure specified in this regard by the Principal Director General of Income-tax (Systems). Further as per sub rule (9)(b) of Rule  114GPrincipal Director General of Income Tax (Systems) shall specify the procedures, data structures and standards for ensuring secure capture and transmission of data, evolving and implementing appropriate security, archival and retrieval policies.

2.  In exercise of the powers delegated by Central Board of Direct Taxes (‘Board’) under Sub rule (9)(a) and 9(b) of Rule 114G of the Income tax Rules 1962, the Principal Director General of Income-tax (Systems) lays down the procedures, data structure and standards for ensuring secure capture and transmission of data, evolving and implementing appropriate security, archival and retrieval policies as under:

a)  Registration of the reporting financial institution: The reporting financial institution is required to get registered with the Income Tax Department by logging in to the e-filing website with the log in ID used for the purpose of filing the Income Tax Return of the reporting financial institution. A link to register reporting financial institution has been provided under “My Account”. The reporting financial institution is required to submit registration details on the screen. A reporting financial institution may submit different registration information under different reporting financial institution categories.

b) Submission of Form 61B: Once the reporting financial institution gets registered  successfully, it is required to submit the Form 61B or Nil statement under “e-File”  menu. The prescribed schema for the report under form 61B can be downloaded  from the e-filing website. The reporting financial institution will be required to  submit the calendar year for which report is to be submitted and the reporting entity  category for which the report is to be submitted. The reporting financial institution will then be provided the options to upload the Form 61B. The form is required to be submitted using a Digital Signature Certificate.

c)  Submission of Nil statement: In case nil statement has to be submitted by the reporting financial institution, the option to submit Nil statement is required to be selected. The reporting financial institution will then be required to submit a declaration with respect to pre-existing accounts (As defined in Rule 114H(2)(h)of Income Tax Rules, 1962 and new accounts (As defined in Rule 114H(2)(d) of Income Tax Rules,  1962.The declaration is required to be submitted using a Digital Signature Certificate.

d)  Digital signature certificate: In case if the designated director (as reported in registration details submitted by the reporting financial institution as per para 2(a) above) is same as the person authorised to verify the return of income of the reporting financial institution as per the provisions of section 140 of theIncome-tax Act, 1961, the Form 61B or Nil statement is required to be submitted with the digital signature certificate of the person authorised to sign the return of income of the reporting financial institution.  In other cases, the procedure will be notified separately.

(Nishi Singh)

Pr. DGIT (Systems), CBDT

Copy to:-

1. PPS to the Chairman and Members, CBDT, North Block, New Delhi.

2. All Chief Commissioners/ Director General of Income Tax   with a request to circulate  amongst all officers in their regions/ charges.

3. JS (TPL)-1 &II/ Media coordination and Official spokesperson of CBDT

4. DIT (IT)/ DIT (Audit)/ DIT (Vig.)/ ADG (System) 1, 2, 3, 4, 5 / DIT (CPC) Bangalore, DIT  (CPC-TDS) Ghaziabad.

5. ADG (PR, PP&OL) with a request for advertisement campaign for the Notification

6. TPL and ITA Divisions of CBDT.

7. The Institute of Chartered Accountants of Indian, IP Estate, New Delhi.

8. Web Manager, “incometaxindia.gov.in” for hosting on the website.

9. Database cell for uploading on  www.irsofficersonline.gov.in and in DGIT (S) Corner.

10. ITBA publisher for uploading on ITBA portal.

(Sanjeev Singh)

ADGIT (Systems)-2 CBDT

CBEC gets ready for GST, sets up new directorate : 25-08-2015


The stalemate over the passage of the Goods and Services Tax-related Constitution Amendment Bill in Parliament has not deterred the Central Board of Excise and Customs (CBEC) from gearing up for its implementation. Among other things, it has set up an exclusive directorate and is also training officials.

Inaugurating a two-day conference of Chief Commissioners and Director-General of CBEC here on Monday, Finance Minister Arun Jaitley said the Revenue Department, in consultation with the Empowered Committee, is keeping all the laws to be enacted by the Centre and States in readiness.

“The Revenue Secretary did mention that the IT infrastructure necessary to support is also kept in readiness and, therefore, as soon as we are able to have the legislation approved, we should be in a position to take the necessary follow-up actions in terms of ordinary legislations and executive actions required for its support itself,” he said. The indirect tax body has created a new directorate for GST and has also provided training to around 500 officers who, in turn, will train others. It also plans to use Large Taxpayers Units (LTU) for registration of services that are pan-India in nature, such as banking, insurance and telecommunications.

Draft legislations

Besides, these officers are also involved in preparing three draft legislations – Central GST, State GST and Integrated GST.

Revenue Secretary Shaktikanta Das said the three draft legislations are being prepared by three different committees that include senior CBEC officers, officers of department of revenue and of the finance and taxation department of State governments. One panel has already finalised the draft, and the other two are expected to finish by September 15, he said. Das also urged CBEC to analyse service tax collections sectorally.

“We need to analyse why service tax growth hovers around 16 per cent. I feel the potential for service tax growth is higher. I would expect it to grow at least 20-22 per cent, if not more,” he said. On the indirect tax collection target this fiscal, he said the Budget estimate is “very realistic.”

CBEC Chairman Najib Shah said between April and July, the department collected over ₹2.10 lakh crore at a growth rate of over 37 per cent, which is 32 per cent of the full-year’s Budget estimates.

Source : Business Line

8-10% growth rate achievable: Jaitley : 24-08-2015


Amid global slowdown, Finance Minister Arun Jaitley today expressed confidence that 8-10 per cent growth rate is achievable on the back of increased investments and right mix of policies.

“I do believe it is (8 per cent and above growth) achievable… if we take right steps in right direction and hopefully we don’t have too many adverse global trend. It could be reasonably achievable. In order to achieve, it is extremely important that we open ourselves for investments,” he said.

In his address at the Indian Chamber of Commerce event here, Jaitley said that the roadmap for phasing out of exemptions to corporates will be announced soon.

India has to accept that higher direct taxes are not in larger interest of the economy, he said.

“I have announced in Budget with effect from next year and over next few years, I will bring down the rate of corporate tax from 30 per cent to 25 per cent. I stand by that commitment. Simultaneously, even though the rate is 30 per cent, the effective rate is 22. The reason is there are a large number of exemptions,” he said.

So, slowly a number of these exemptions are going to be phased out, he said.

“Very, shortly I will be putting the first set of exemption to be phased out in public domain for discussion.

And therefore returns will become simpler,” he said.

On growth potential, he said: “Even between 6-8 per cent growth, the thinking India believes that this is not our potential. The entire battle in terms of policy battle is to evolve ourselves from this 6-8 per cent growth to 8 per cent growth upwards towards a double-digit.”

Source :

Notification No. : 73/2015 Dated: 24-8-2015


Jurisdiction of Additional Commissioners of Income-tax or the Joint Commissioners of Income-tax under Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 – 73/2015 – Dated 24-8-2015 – Income Tax

[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)

[Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax]

NOTIFICATION NO. 73/2015

New Delhi, 24th August 2015

S.O. (E). -  in exercise of the powers conferred by clause (b) of sub-section (4) of section 120 of the Income-tax Act, 1961 (43 of 1961) read with section 6 of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 (22 of 2015), the  Central Board of Direct Taxes hereby directs that the Additional Commissioners of Income-tax or the Joint Commissioners of  Income-tax, as the case may be, shall exercise the powers and perform the functions of the Assessing Officers under the said Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, in respect of territorial areas or persons or classes of persons or incomes or classes of incomes or cases or classes of cases, in respect of which such Additional Commissioners of Income-tax or Joint Commissioners of Income-tax have been authorised by the Principal Chief Commissioner of Income-tax or the Chief Commissioner of Income-tax or the Director General of Income-tax or the Principal Commissioner of Income-tax or the Commissioner of Income-tax in pursuance to the directions of the Board under sub-section (1) and (2) of section 120 of the said Income-tax Act, 1961

[F. No. 187/13/2015 (ITA.I)]

DEEPSHIKHA SHARMA

Director, Govt. of India

Notification No. : 72/2015 Dated: 24-8-2015


The Press Trust of India Limited, New Delhi, notified as a news agency for the purposes of Section 10(22B) of the Income-tax Act, 1961 for the A.Y. 2016-17 to 2018-19 – 72/2015 – Dated 24-8-2015 – Income Tax

 [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  NO. 72/2015

New Delhi, the 24th August, 2015

(Income Tax)

S.O. (E).- In exercise of the powers conferred by the clause (22B) of section 10 of the Income-tax Act. 1961 (43 of 1961), the Central Government hereby specifies the Press Trust of India Limited, New Delhi as a news agency set up in India solely for collection and distribution of news, for the purpose of the said clause for three assessment years 2016-17 to 2018-19.

2.  The notification is subject to the condition that the news agency applies its income or accumulates it for application solely for collection and distribution of news and does not distribute its income in any manner to its members.

[F. No. 165/5/2014-ITA-I]

(Deepshikha Sharma)

Director, Government of India

Notification No. : S.O. 2438(E) Dated: 21-8-2015


Set up a sector specific Special Economic Zone for Gems and Jewellery at Ichhapor, Surat, in the State of Gujarat – S.O. 2438(E) – Dated 21-8-2015 – Special Economic Zone

MINISTRY OF COMMERCE AND INDUSTRY

(Department of Commerce)

NOTIFICATION

New Delhi, the 21st  August, 2015

S.O. 2438(E).-Whereas, M/s. Gujarat Hira Bourse, a fully private organization of the State of Gujarat, 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 Gems and Jewellery at Ichhapor, Surat, in the State of Gujarat;

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 Zone Rules 2006, had notified an area of 73.87.97 hectares vide Ministry of Commerce and Industry Notification Number S.O. 1185(E) dated 20th July, 2007;

And, whereas, M/s. Gujarat Hira Bourse has proposed to de-notify the entire area of 73.87.97 hectares of the above Special Economic Zone;

And, whereas, the State Government of Gujarat has given its “No Objection” to the proposal vide letter no. IC/Infra/SEZ-Cell/1045774 dated 24th February, 2015.

And, whereas, the Development Commissioner, Falta Special Economic Zone has recommended the proposal for de-notification of the entire area of 73.87.97 Hectares of the Special Economic Zone;

Now, therefore, in exercise of the powers conferred by first proviso to rule 8 of the Special Economic Zones Rules 2006, the Central Government hereby rescinds the above notification except as respects things done or omitted to be done before such rescission.

[F. No. F. 2/10/2004-SEZ]

Dr. GURUPRASAD MOHAPATRA, Jt. Secy.

No. 09 Dated: 21-8-2015


Foreign Direct Investment – Reporting under FDI Scheme on the e-Biz platform – Circular – Dated 21-8-2015 – FEMA

RBI/2015-16/157

A.P. (DIR Series) Circular No. 9

August 21, 2015

To

All Category – I Authorised Dealer Banks

Madam / Sir,

Foreign Direct Investment – Reporting under FDI Scheme on the e-Biz platform

Attention of Authorised Dealers Category-I (AD Category – I) banks is invited to the provisions of the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulations 2000, notified by the Reserve Bank vide Notification No. FEMA 20/2000-RB, dated 3rd May 2000, as amended from time to time. Attention of AD Category – I banks is also invited to A.P. (DIR Series) Circular No.6 dated July 18, 2014.

2. With a view to promoting the ease of reporting of transactions under foreign direct investment, the Reserve Bank of India (RBI), under the aegis of the e-Biz project of the Government of India has enabled online filing of the Foreign Currency Transfer of Shares (FCTRS) returns for reporting transfer of shares, convertible debentures, partly paid shares and warrants from a person resident in India to a person resident outside India or vice versa.

3. The design of the reporting platform enables the customer to login into the eBiz portal, download the reporting form (FCTRS), complete and then upload the same onto the portal using their digitally signed certificates. The Authorised Dealer Banks (ADs) will be required to download the completed forms, verify the contents from the available documents and if necessary, call for additional information from the customer and then upload the same for RBI to process and allot the Unique Identification Number (UIN). The FCTRS services of RBI will be made operational on the e-Biz platform from August 24, 2015. The user manual for this service is Annexed to this Circular.

4. It may be noted that for the present, the online reporting on the e-Biz platform is an additional facility to the Indian residents to undertake their FCTRS reporting and the manual system of reporting as prescribed in terms of A.P. (DIR Series) Circular No.6 dated July 18, 2014 would continue till further notice.

5. The ADs will be required to access the e-Biz portal [which is hosted on the National Informatics Centre (NIC) servers] using a Virtual Private Network (VPN) Account obtained from NIC. ADs may refer to A.P. (DIR Series) Circular No.95 dated April 17, 2015 for financial aspects of obtaining/using the VPN accounts.

6. AD Category-I banks may bring the contents of this circular to the notice of their customers / constituents concerned. They are advised to extend due cooperation/assistance to their constituents for uploading the abovementioned forms on the e-Biz platform.

7. 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.

Yours faithfully,

(B P Kanungo)

 Principal Chief General Manager

FM Jaitley pitches for good conventions to get through reforms legislation : 19-08-2015


Finance Minister Arun Jaitley called for Parliamentarians to rise to a level of “statesmanship” to end the logjam that is delaying vital legislation needed to accelerate economic expansion and defended the government’s efforts to end the black money menace despite some industrialists lobbying against the measures.

Evolving changes at state-level would lead to a different arithmetic in the Rajya Sabha by the beginning of the next fiscal and there are alternatives to overcome Parliamentary hurdles by recasting legislation in the form of Money Bills which require passage only by the Lok Sabha or by calling joint sessions, said Jaitley.

But public displeasure with the politics of obstruction should grow dramatically which would make parties give up such practice, he said.

“Indian parliament will also have to rise to a certain level of statesmanship,” Jaitley said at the launch of State Bank of India’s 2nd Economics Conclave in Mumbai on Tuesday. “In this battle between growth and obstruction, public opinion has to create a sense of revulsion against obstruc tion. It is only then when political cost of obstruction is  very high that you will find obstruction being knocked out as a political strategy.”

The minister’s lament follows the complete washout of the monsoon session of the Parliament when the opposition parties led by the Congress stalled legislation seeking re signation of the External Affairs Minister Sushma Swaraj. They did so for her role in enabling former cricket boss Lalit Modi, who is being investigated by agencies such as Enforcement Directorate, secure travel documents  from the British government.

What was lost during the obstruction was not just legislation on the goods and services tax ( GST), but also others that would have eased decision making by state-run enterprises, said Jaitley.

Among the planned legislation is an amendment to the Prevention of Corruption Act, which would have done away with a clause that at present treats even erroneous decision by a government servant as an act of corruption. That would have giv en assurance to government staff that there won’t be a witch hunt.

“In the last few years there were decisions which were not corrupt decisions, but erroneous decisions,” said Jaitley. “For a government to take 10 decisions and one to go wrong, or  decide on 20 accounts and one of them go wrong, the consequence can’t be a criminal prosecution.”

A number of proposals, including a Bankruptcy Act and setting up of Debt Recovery Tribunals are in the works, he said.

The minister was also critical of a section of the industry which have been clamouring for dilution of efforts to unearth black money saying it would drive away investments.

“The problem with taxation is people don’t like to pay taxes,” said Jaitley. “I’m always disappointed when I see even thinking leaders of the industry come out with absurd propositions such as I am against black money, but I am also against steps being taken to curb black money. In fact, you want the whole system to perpetuate. I think this odd argument of rationalising dishonesty by just paraphrasing in this manner is no longer going to be acceptable to India, at least not to the government it self.”

Source : The Economic Times

Notification No. : File No. 1/30/2013-CL.V – Part-I Dated: 19-8-2015


Finalized National Company Law Tribunal service condition Rules of President and Members – yet to be notified – File No. 1/30/2013-CL.V Part-I – Dated 19-8-2015 – Companies Law

[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY,

PART II, SECTION 3, SUB-SECTION (i)]

Ministry of Corporate Affairs

Notification

New Delhi, the 19th August 2015

G.S.R. ….(E).- In exercise of the powers conferred by section 469 read with section 414 of the Companies Act, 2013 (18 of 2013), the Central Government hereby makes the following rules, namely:-

1. Short title and commencement.- (1) These rules may be called the National Company Law Tribunal (Salary, Allowances and other Terms and Conditions of Service of President and other Members) Rules, 2015.

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

2. Definitions.– (1) In these rules, unless the context otherwise requires, -

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

(b) “President” means the President of the Tribunal appointed under section 408 of the Act;

(2) Words and expressions used in these rules and not defined, but defined in the Act shall have the meanings respectively assigned to them in the Act.

3. Pay.- (1) The President shall be entitled to a monthly pay of ₹ 80,000/- (fixed) and other allowances as are admissible to a Government Servant in the Apex grade of ₹ 80,000 (fixed).

(2) A Judicial Member and Technical Member shall be paid salary in the pay scale of ₹ 67000-79000/- (annual increment at 3%) and other allowances as are admissible to a Government Servant in Higher Administrative Grade of ₹ 67000-79000/-.

(3) In case a person appointed as the President or a Judicial Member or a Technical Member, as the case may be, is in receipt of any pension, the pay of such person shall be reduced by the gross amount of pension drawn by him.

4. Pension, Gratuity or Provident Fund. – (1) In case a serving judge of a High Court or a person in the service of the Government is appointed to the post of President or Judicial Member or Technical Member, as the case may be, the service rendered by him in the Tribunal shall count for pension, to be drawn in accordance with the rules of the service or office to which he belongs, and he shall also be governed by the provisions of the General Provident Fund (Central Services) Rules, 1960.

(2) In all other cases, the Members shall be governed by the provisions of the Contributory Provident Fund (India) Rules, 1962.

(3) Additional pension and gratuity shall not be admissible for service rendered in the Tribunal.

5. Leave. – (1) The President and every other Member shall be entitled to thirty days of Earned Leave for every year of service.

(2) The payment of leave salary during leave shall be governed by rule 40 of the Central Civil Services (Leave) Rules, 1972.

(3) The President and Members shall be entitled to encashment of leave in respect of the Earned Leave standing to his credit, subject to the condition that maximum leave encashment, including received at the time of retirement from previous service shall not in any case exceed the prescribed limit under the Central Civil Service (Leave) Rules, 1972.

6. Leave sanctioning authority. - In the case of the President, the competent authority to sanction the leave shall be the President of India and in the case of Members, the President shall be the leave sanctioning authority.

7. Travelling allowances.- (1) The President while on tour within India or on transfer (including the journey undertaken to join the Tribunal or on the completion of his tenure with the Tribunal to proceed to his home town) shall be entitled to travelling allowance, daily allowance, transportation of personal effects and other similar matters at the same rates as are applicable to the officers of the Central Government in Apex Grade (Rupees eighty thousand (fixed)).

(2) The Members while on tour within India or on transfer (including the journey undertaken to join the Tribunal or on the completion of his tenure with the Tribunal to proceed to his home town) shall be entitled to the travelling allowance, daily allowance, transportation of personal effects and other similar matters at the same rate as are applicable to the officers of the Central Government in Higher Administrative Grade (Rs. 67000-79000).

8. Official visits abroad. – (1) Official visits abroad by the President shall be undertaken in accordance with orders issued by the Central Government and he shall be entitled to draw such allowances in respect of such visits as are applicable to officers of the Central Government in Apex Grade (Rupees eighty thousand-fixed).

(2) Official visits abroad by Member shall be undertaken in accordance with orders issued by the Central Government and he shall be entitled to draw such allowances in respect of such visits as are applicable to officers of the Central Government in Higher Administrative Grade ₹ 67000-79000.

9. Leave Travel Concession. – (1) The President shall be entitled to Leave Travel Concession on the same terms as applicable to officers of the Central Government in Apex Grade (Rupees eighty thousand (fixed)).

(2) The Members shall be entitled to Leave Travel Concession on the same terms as are applicable to officers of the Central Government in Higher Administrative Grade (Rs. 67000-79000).

10. Facility for medical treatment. - The President and other Members shall be entitled to the medical facilities as provided in the Central Service (Medical Attendance) Rules, 1944.

11. Accommodation. - The President and Members shall have the option of claiming house rent allowance in accordance with the rates prescribed by the Central Government for Group ‘A’ officers of equivalent grade pay or scale:

Provided that he shall not be eligible for house rent allowance in case he is declared eligible for General Pool Residential Accommodation and occupy Government accommodation allotted to him.

12. Facility of conveyance. - The President and Members shall be entitled to the facility of staff car for journeys for official and private purposes in accordance with the facilities provided to Government servants in the corresponding pay grade as per Staff Car Rules, as amended from time to time.

13. Telephone facility.- The President and Members shall be eligible for telephone facilities as admissible to a Group ‘A’ officer of the Central Government drawing an equivalent pay.

14. Conditions of service of President.- Where a serving or retired judge of a High Court is appointed as President, the service conditions, unless specifically provided in these rules, shall be as contained in the High Court Judges (Salaries and Conditions of Service) Act, 1954 and the rules made thereunder.

15. Conditions of service of Judicial Member. - Where a serving Judge of a High Court is appointed as a Judicial Member, the service conditions, unless specifically provided in these rules, shall be as contained in the High Court Judges (Salaries and Conditions of Service) Act, 1954 and the rules made thereunder:

Provided that the service conditions, other than specifically provided in these rules, after his due date of retirement from service as a Judge of the High Court or expiry of the lien period, whichever is later, for the remaining period of his term of office shall be same as may, for the time being, be applicable to other employees of the Government of India of a corresponding status.

16. Applicability of rules:- Chairman and Members of the Company Law Board, who fulfill the qualifications and requirements provided under the Act for being appointed respectively as the President and Members of the Tribunal shall be so appointed after following the selection procedure for these posts in the manner laid down in section 412 of the Act.

17. Oath of office and secrecy. - (1) Every person appointed as the President or Member, as the case may be, shall, before entering upon his office, make and subscribe an oath of office and secrecy respectively, in Form I and Form II annexed to these rules.

18. Declaration of financial or other interest.- Every person, on his appointment as the President or Member, as the case may be, shall give a declaration in Form III annexed to these rules, to the satisfaction of the Central Government, that he does not have any such financial or other interest as is likely to affect prejudicially his functions as President or Member.

19. Residuary provisions. – Matters relating to the terms and conditions of service of the President and Members with respect to which no express provision has been made in these rules, shall be same as may, for the time being, be applicable to other employees of the Government of India of a corresponding status.

20. Powers to relax.- The Central Government shall have power to relax any provision of these rules with respect to any class or category of persons.

Notification No. : File No. 1/30/2013-CL.V – Part -II Dated: 19-8-2015


Finalized National Company Law Appellate Tribunal service condition Rules of Chairperson and Members – yet to be notified – File No. 1/30/2013-CL.V Part -II – Dated 19-8-2015 – Companies Law

[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY,

PART II, SECTION 3, SUB-SECTION (i)]

Ministry of Corporate Affairs

Notification

New Delhi, the 19th August 2015

G.S.R. ….(E).- In exercise of the powers conferred by section 469 read with section 414 of the Companies Act, 2013 (18 of 2013), the Central Government hereby makes the following rules, namely:-

1. Short title and commencement:- (1) These rules may be called the National Company Law Appellate Tribunal (Salaries, Allowances and other Terms and Conditions of Service of Chairperson and other Members) Rules, 2015.

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

2. Definitions:-

(1) In these rules, unless the context otherwise requires, -

(a) ‘Act’ means the Companies Act, 2013 (18 of 2013);

(b) ‘Chairperson’ means the Chairperson of the Appellate Tribunal appointed under sub-section (1) of section 412 of the Act;

(2) Words and expressions used in these rules and not defined, but defined in the Act shall have the meanings respectively assigned to them in the Act.

3. Pay. - (1) The Chairperson shall be entitled to a monthly pay of ₹ 90,000/- (fixed) and such other allowances as are admissible to an officer in the Cabinet Secretary’s Scale of ₹ 90,000/- (fixed).

(2) A Judicial Member and Technical Member shall be paid salary in the pay scale of ₹ 80,000/- (fixed) and such other allowances as are admissible to an officer in the Apex Scale of ₹ 80,000/-(fixed).

(3) In case a person appointed as the Chairperson or a Member, as the case may be, is in receipt of any pension, the pay of such person shall be reduced by the gross amount of pension drawn by him.

4. Pension, Gratuity or Provident Fund. – (1) In case a serving Judge of the Supreme Court or a High Court, or a serving Judicial Member of the Tribunal or a person in the service of the Government is appointed to the post of Chairperson or Judicial Member or Technical Member, as the case may be, the service rendered in the Appellate Tribunal shall count for pension to be drawn in accordance with the rules of the service to which he belongs and he shall be governed by the provisions of the General Provident Fund (Central Services) Rules, 1960.

(2) In all other cases, the Members shall be governed by the provisions of the Contributory Provident Fund (India) Rules, 1962.

(3) Additional pension and gratuity shall not be admissible for service rendered in the Appellate Tribunal.

5. Leave. – (1) The Chairperson and every other Member shall be entitled to thirty days of Earned Leave for every year of service.

(2) The payment of leave salary during leave shall be governed by rule 40 of the Central Civil Services (Leave) Rules, 1972.

(3) The Chairperson and Members shall be entitled to encashment of leave in respect of the Earned Leave standing to his credit, subject to the condition that maximum leave encashment, including received at the time of retirement from previous service shall not in any case exceed the prescribed limit under the Central Civil Service (Leave) Rules, 1972.

6. Leave sanctioning authority. - In the case of the Chairperson, the competent authority to sanction the leave shall be the President of India and in the case of Members, the Chairperson shall be the leave sanctioning authority.

7. Travelling allowances.- (1) The Chairperson while on tour within India or on transfer (including the journey undertaken to join the Appellate Tribunal or on the completion of his tenure with the Tribunal to proceed to his home town) shall be entitled to the travelling allowance, daily allowance, transportation of personal effects and other similar matters at the same rates as are admissible to the officer of the Central Government in the equivalent grade of ₹ 90,000/- (fixed).

(2) The Member while on tour within India or on transfer (including the journey undertaken to join the Appellate Tribunal or on the completion of his tenure with the Appellate Tribunal to proceed to his home town) shall be entitled to the travelling allowance, daily allowance, transportation of personal effects and other similar matters at the same rate as are admissible to the officer of the Central Government in the Apex Scale of ₹ 80,000/-(fixed).

8. Official visits abroad. – (1) Official visits abroad by the Chairperson shall be undertaken in accordance with orders issued by the Central Government and he shall be entitled to draw such allowances in respect of such visits as are applicable to the officer of the Central Government in the equivalent grade of ₹ 90,000 (fixed).

(2) Official visits abroad by Member shall be undertaken in accordance with orders issued by the Central Government and he shall be entitled to draw such allowances in respect of such visits as are applicable to officers of the Central Government in the Apex Scale of ₹ 80,000/-(fixed).

9. Leave Travel Concession. – (1) The Chairperson shall be entitled to Leave Travel Concession on the same terms as are applicable to officers of the Central Government in the equivalent pay grade of ₹ 90,000 (fixed).

(2) The Member shall be entitled to Leave Travel Concession on the same terms as are applicable to officers of the Central Government in the Apex Scale of ₹ 80,000/-(fixed).

10. Facility for medical treatment.- The Chairperson and other Members shall be entitled to the medical facilities as provided in the Central Services (Medical Attendance) Rules, 1944.

11. Accommodation.- The Chairperson or Judicial Member or Technical Member shall have the option of claiming house rent allowance in accordance with the rates prescribed by the Central Government for Group ‘A’ officers of equivalent grade pay or scale:

Provided that he shall not be eligible for house rent allowance in case he is declared eligible for General Pool Residential Accommodation and occupy Government accommodation allotted to him.

12. Facility of conveyance.- The Chairperson or a Judicial Member or Technical Member shall be entitled to the facility of staff car for journeys for official and private purposes in accordance with the facilities provided to Government servants in the corresponding pay grade as per Staff Car Rules, as amended from time to time.

13. Telephone facility- The Chairperson, Judicial Member and Technical Member shall be eligible for telephone facilities as admissible to a Group ‘A’ officer of the Central Government drawing an equivalent pay.

14. Conditions of service of Chairperson.- Where a serving or retired judge of the Supreme Court or a serving or retired Chief Justice of a High Court is appointed as the Chairperson, the service conditions unless specifically provided for in these rules, shall be as contained in the Supreme Court Judges (Salaries and Conditions of Service) Act, 1958, or the High Court Judges (Salaries and Conditions of Service) Act, 1954, as the case may be, and the rules made thereunder.

15. Conditions of service of Judicial Member.- Where a serving judge of a High Court is appointed as a Judicial Member, the service conditions, unless specifically provided for in these rules, shall be as contained in the the High Court Judges (Salaries and Conditions of Service) Act, 1954, as the case may be, and the rules made thereunder:

Provided that the service conditions, other than specifically provided in these rules , after his due date of retirement from service as a Judge of the High Court or expiry of the lien period, whichever is later, for the remaining period of his term of office shall be same as may, for the time being, be applicable to other employees of the Government of India of a corresponding status.

16. Oath of office and secrecy: - Every person appointed as the Chairperson or a Member, as the case may be, shall, before entering upon his office, make and subscribe an oath of office and secrecy, in Form-I and Form-II annexed to these rules.

17. Declaration of financial or other interest:-Every person, on his appointment as the Chairperson or Member, as the case may be, shall give a declaration in Form-III annexed to these rules, to the satisfaction of the Central Government, that he does not have any such financial or other interest as is likely to affect prejudicially his functions as Chairperson or Member.

18. Residuary provisions. – Matters relating to the terms and conditions of service of the President and Members with respect to which no express provision has been made in these rules, shall be same as may, for the time being, be applicable to other employees of the Government of India of a corresponding status.

19. Powers to relax:-The Central Government shall have power to relax any provision of these rules with respect to any class or category of persons.

Notification No. : 71/2015 Dated: 17-8-2015


Central Government notifies the following districts of the State of Bihar as backward areas u/s 32 and 32AD – 71/2015 – Dated 17-8-2015 – Income Tax

[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 No. 71/2015

New Delhi, the 17th August, 2015

S.O. (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 State of Bihar as backward areas under the first proviso to clause (iia) of sub-section (1) of section 32 and sub-section (1) of section 32AD, namely :-

1.  Patna

2.  Nalanda

3.  Bhojpur

4.  Rohtas

5.  Kaimur

6.  Gaya

7.  Jehanabad

8. Aurangabad

9. Nawada

10. Vaishali

11.  Sheohar

12. Samastipur

13. Darbhanga

14. Madhubani

15.  Purnea

16. Katihar

17. Araria

18. Jamui

19. Lakhisarai

20. Supaul

21. Muzaffarpur

2.  This notification shall come into force on the date of its publication in the Official Gazette.

[F. No. 142/13/2015-TPL]

(RAJESH KUMAR BHOOT)

DIRECTOR (TAX POLICY & LEGISLATION

Notification No. : 70/2015 Dated: 17-8-2015


 

Income-tax (Twelfth Amendment) Rules, 2015 – 70/2015 – Dated 17-8-2015 – Income Tax

 

 

[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

 

Notification No. 70/2015

 

New Delhi, the 17th August, 2015

 

S.O. 2240(E).- In exercise of the powers conferred by Explanation 2 to clause (1) of section 6 read with section 295of 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 (Twelfth Amendment) Rules, 2015.

 

(2) They shall come into force with retrospective effect from the 1st day of April, 2015.

 

2. In the Income-tax Rules, 1962, in Part XV, after rule 125, the following rule shall be inserted, namely:-

 

‘126. Computation of period of stay in India in certain cases. - (1). For the purposes of clause (1) of section 6, in case of an individual, being a citizen of India and a member of the crew of a ship, the period or periods of stay in India shall, in respect of an eligible voyage, not include the period computed in accordance with sub-rule (2).

 

(2). The period referred to in sub-rule (1) shall be the period beginning on the date entered into the Continuous Discharge Certificate in respect of joining the ship by the said individual for the eligible voyage and ending on the date entered into the Continuous Discharge Certificate in respect of signing off by that individual from the ship in respect of such voyage.

 

Explanation: For the purposes of this rule,-

 

(a) “Continuous Discharge Certificate” shall have the meaning assigned to it in the Merchant Shipping (Continuous Discharge Certificate-cum- Seafarer’s Identity Document) Rules, 2001 made under the Merchant Shipping Act, 1958 (44 of 1958);

 

(b) “eligible voyage” shall mean a voyage undertaken by a ship engaged in the carriage of passengers or freight in international traffic where-

 

(i) for the voyage having originated from any port in India, has as its destination any port outside India; and

 

(ii) for the voyage having originated from any port outside India, has as its destination any port in India.’.

 

[F.No.142 /12/2015-TPL]

 

(Amit Katoch)

 

Under Secretary (Tax Policy and Legislation)

 

Note. – The principal rules were published vide notification S.O. 969 (E), dated the 26th March, 1962 and last amended vide notification S.O. 2155(E), dated the 7th August, 2015.

 

With GST in mind, Modi government planning special Parliament session in September : 18-08-2015


Government is mulling over calling a special session of Parliament sometime in the second week of September to pass the Constitution (One Hundred and Twenty Second) Amendment Bill, 2015- or the Goods and Services Tax Bill- and is in talks with all political parties to get the requisite 2/3 majority in Rajya Sabha where the NDA is in a minority.

The Cabinet Committee on Parliamentary Affairs, headed by Home Minister Rajnath Singh, had decided against proroguing the monsoon session of  Parliament to keep the option open of holding a special session at short notice to pass the crucial Bill.

“The session is likely to be called after the first week of September and will be a two and a half day or three day affair. The GST constitutional amendment Bill will be passed by the Rajya Sabha incorporating some of the amendments suggested by the Opposition and then cleared by the Lok Sabha again in its new form,” a senior minister told ET.

Meanwhile, government is in the process of reaching out to political parties to win their support for the Bill. Once the government is sure of the 2/3 majority of those present and voting, the CCPA would be convened to fix the dates, sources said. BJP leaders did not rule out the possibility of Prime Minister Narendra Modi having solicited AIADMK support for the Bill when he met Tamil Nadu Chief Minister J Jayalalithaa last week.

AIADMK has 11 members and has expressed its dissent against theGST Bill as it feels Tamil Nadu will suffer due to the uniform tax system as it is a manufacturing state. The Centre has promised to address its concern.

Congress- which had initiated the GST Bill in 2006- is strongly opposed to it in the present form and is insisting on three key amendments, including capping the tax at 18% and removing the one percent additional tax. Finance Minister has ruled out incorporating these changes and said these are an “afterthought” of the main   opposition aimed only at stalling the Bill. With 68 members, Congress would be the biggest stumbling block in passage of the Bill.

It is not clear if JD (U)- having 12 members in the Upper House- will support the Bill.

The other political parties are amenable to supporting the GST Bill. Government is keen on meeting the April 1, 2016 deadline for the implementation of the landmark tax system that would arguably increase the country’s GDP by one to 1.5%. After both Houses of  Parliament clear the constitutional amendment, half of the states will have to pass it.

With Rajya Sabha at present having a total strength of 244, 163 members will constitute a 2/3 majority if all are present and voting. Government would have to bank on some parties staging a walkout to get the numbers. Union ministers have been tasked with mustering the numbers before the special session is convened, sources said.

The Bill has already gone through a Select Committee of the Rajya Sabha but could not be passed as the Opposition forced a virtual washout of the session on the Lalit Modi and Vyapam controversies.

Source : PTI

FinMin advances Budget prep by over 2 months : 18-08-2015


The Budget-making exercise for 2016-17 is set to start in a day or so, about two months early compared to previous years, the finance ministry said on Monday.

“In consonance with the objective of the government of India to have wider consultations with various stakeholders as well as to provide more time for planners, it has been decided to start the Budget exercise by middle of August for the forthcoming financial year,” the ministry said in an official statement

“The Budget circular, which marks the beginning of the Budget formulation exercise, is being issued by the Budget division, department of economic affairs (DEA) and ministry of finance (MoF). This advances the process by over two months,” it stated.

Traditionally, the Budget making exercise begins from mid-October, and picks up steam mid-December onwards, with the MoF being shut to outsiders and the media from January onwards, till the day of the Budget.

Source : Business Standard

No. F.No. 137/46/2015-Service Tax Dated: 18-8-2015


Clarification regarding the provisions of Section 73, 76 and 78 of the Finance Act, 1994 and Section 11AC of the Central Excise Act, 1944 – Dated 18-8-2015 – Service Tax

F.No.137/46/2015-Service Tax

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

DEPARTMENT OF REVENUE

CENTRAL BOARD OF EXCISE & CUSTOMS

SERVICE TAX WING

New Delhi, dated 18th August, 2015

To

All Principal Chief Commissioners of Central Excise

All Chief Commissioners of Central Excise/ Service Tax

Principal Directors General of Goods & Services Tax/ Systems/Central Excise Intelligence

Director General of Audit

All Principal Commissioners of Central Excise/Service Tax

All Commissioners of Central Excise/Service Tax

All Principal Commissioners/Commissioners LTU

Joint Secretary TRU-1/TRU-II/Review

Commissioner Central Excise/ Service Tax/Legal/PAC

Madam/Sir

Subject: Clarification regarding the provisions of Section 73, 76 and 78 of the Finance Act, 1994 and Section 11AC of the Central Excise Act, 1944 after amendments made vide Finance Act. 2015

Consequent to the amendments made to section 73, 76 and 78 of the Finance Act, 1994 and section 11AC of theCentral Excise Act, 1944, vide Finance Act, 2015 with effect from 14.05.2015, field formations have sought certain clarifications with regard to detections made during audit, investigation or scrutiny. Keeping in mind the need to reduce litigation as well as paperwork and compliance formalities, I am directed to convey the following clarifications.

2.0    Issuance of a Show Cause Notice (SCN)

Doubt: Does a SCN have to be issued in a case involving the extended period of limitation, where the assessee pays the tax/duty, interest and 15% penalty as prescribed?

2.1  In a case involving the extended period of limitation, if an assessee pays the service tax/central excise duty, interest and penalty equal to 15% of the tax/duty and makes a request in writing that a written SCN may not be issued to them, then in such cases the SCN can be oral and the representation (if he desires) against it also oral. In other words, an assessee can request for an informed waiver of a written SCN. The Supreme Court in the case ofCommissioner of Customs, Mumbai versus Virgo Steels reported in 2002(141) E.L.T 598 (S. C.)  has held that:

“14. From the ratio laid down by the Privy Council and followed by this Court in the above cited judgments, it is clear that even though a provision of law is mandatory in its operation if such provision is one which deals with the individual rights of person concerned and is for his benefit, the said person can always waive such a right.

15. Bearing in mind the above decided principle in law, if we consider the mandatory requirement of issuance of notice under Section 28 of the Act, it will be seen that that requirement is provided by the Statute solely for the benefit of the individual concerned, therefore, he can waive that right. In other words, this Section casts a duty on the Officer to issue notice to the person concerned of the proposed action to be taken. This is not in the nature of a public notice nor any person other than the person against whom the proceedings are initiated has any right for such a notice. Thus, the right of notice being personal to the person concerned the same can be waived by that person.

16. If the above position in law is correct, which we think it is. M/s Virgo Steels, having specifically waived its right for a notice, cannot now be permitted to turn around and contend that the proceedings initiated against them are void for want of notice under Section 28 of the Act, so as to frustrate the statutory duty of the Revenue to demand and collect customs duty which M/s Virgo Steels had intentionally evaded.”

Although this decision is in relation to section 28 of the Customs Act, 1962. the principles laid down are equally applicable to SCNs issued under other statutes. Hence, an assessee can waive the requirement of a written SCN.

2.2    Further, section 124 of the Customs Act, 1962 provides, inter alia, that no order confiscating any goods or imposing any penalty on any person shall be made unless the owner of the goods or such person is given a notice in writing, an opportunity of making a representation in writing and a reasonable opportunity of being heard. The section also provides that the notice and the representation may, at the request of the person concerned, be oral. This provision has been made applicable to the Central Excise Act, 1944 vide notification number 68/63-Central Excise dated 04,05.1963 issued under section 12 of the Central Excise Act. 1944. The said section of the Central Excise Act is also applicable to service tax vide section 83 of the Finance Act, 1994.

2.3    If the grounds on which the department feels that there has been short/non-payment of tax/duty are intimated to the assessee orally with its quantification and the assessee indicates in writing that he has been informed about such grounds and he accepts the grounds and the quantification and is waiving the requirement of a written SCN, then a written SCN need not be issued.

2.4    Further, clause (i) of the second proviso to section 78 of the Finance Act, 1994 and clause (d) of sub-section (1) of section 11AC of the Central Excise Act. 1944 refer to a thirty day period, from the date of service of the notice, within which the assessee may make the payment of tax/duty, interest and reduced penalty of 15%. In case the assessee makes a written request for waiver of a written SCN, the thirty day period can be computed from the date of receipt of such a letter by the department.

2.5   There is no bar on an assessee making the payment of tax/duty, interest and reduced penalty of 15% even before the date of receipt of such a letter by the department. Such an assessee cannot be placed on a worse footing than one who pays tax/duty, interest and reduced penalty of 15% within 30 days of the receipt of the SCN/receipt of letter by the department.

3.0    Conclusion of proceedings

Doubt: Who is competent to order conclusion of proceedings if the conditions meriting conclusion of proceedings are fulfilled?

3.1    Conclusion of proceedings may be approved by an officer equal in rank to the officer who is competent to adjudicate such cases. The cases can be closed by officers of DGCEI/Executive Commissionerate/Audit Commissionerate, as the case may be. If multiple issues involving different monetary values arise from the same proceedings, then the sum total involved in all the issues arising from the same proceedings should be considered for conclusion of proceedings. The conclusion of proceedings should invariably be intimated to the assessee in writing. There is no need to issue an adjudication order. Further, there is no need to undertake review of such conclusion of proceedings.

3.2   It is further clarified that as per section 73(3) of the Finance Act, 1994, in cases not involving fraud, suppression of facts, etc, if the assessee pays the tax and interest thereon, on the basis of his own ascertainment or that ascertained by the department, no penalty is payable and no show cause notice shall be served under sub-section (1) of section 73 in respect of the amount so paid. Further, as per provisions of clause (i) of proviso tosection 76, in such cases not involving fraud, suppression of facts, etc, if the tax and interest thereon is paid within 30 days of the issuance of SCN, no penalty shall be payable and the proceedings shall be deemed to be concluded. These two provisions have to be read harmoniously to conclude that in cases not involving fraud, suppression of facts, etc, if the assessee pays the tax along with interest, either within 30 days of issuance of SCN or before the issuance of SCN, then in such cases proceedings shall be deemed to be concluded. Legal provisions for similar closure in central excise are present in clause (a) of sub-section (1) of section 11 AC of the Central Excise Act, 1944.

Yours faithfully

(Himani Bhayana)

Under Secretary (Service Tax

Notification No. : 65/2015 Dated: 13-8-2015


Section 10(46) of the Income-tax Act, 1961 Central Government notifies Telangana State Electricity Regulatory Commission , a Commission constituted by the Government of Telangana in respect of the certain specified income arising to the said Commission – 65/2015 – Dated 13-8-2015 – Income Tax

 [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 No. 65/2015

New Delhi, the 13th August, 2015

S.O. (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, “Telangana State Electricity Regulatory Commission”, a Commission constituted by the Government of Telangana in respect of the following specified income arising to the said Commission, namely:-

(a) all fees received by the Commission under the Electricity Act, 2003 (36 of 2003);

(b) grant and loans received from the government of Telangana; and

(c) interest earned on the amount deposited in the banks.

2.  This notification shall be effective subject to the conditions that Telangana State Electricity Regulatory Commission -

(a) shall not engage in any commercial activity;

(b) files return of income in accordance with the provision of clause (g) of sub-section (4C) of section 139 of the Income-tax Act, 1961; and

(c) its activities and the nature of the specified income remain unchanged throughout the financial years.

3.  This notification shall be applicable for the financial years 2014-15 to 2018-19

[F.No.196/03/2015-ITA-I]

DEEPSHIKHA SHARMA

Director to the Government of India

No. 14/2015 Dated: 17-8-2015


Clarification on certain issues related to grant of approval and claim of exemption u/s 10(23C)(vi) of the Income-tax Act, 1961. – Circular – Dated 17-8-2015 – Income Tax

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

DEPARTMENT OF REVENUE

CENTRAL BOARD OF DIRECT TAXES

CIRCULAR NO. 14/2015

North Block, New Delhi

August 17th, 2015

Sub: Clarification on certain issues related to grant of approval and claim of exemption u/s 10(23C)(vi) of the Income-tax Act, 1961.

Sub-clause (vi) of clause (23C) of Sec 10 of the Income-tax Act, 1961 (‘Act’) prescribes that income of any university or other educational institutions, existing solely for educational purposes and not for purposes of profit, shall be exempt from tax if such entities are approved by the prescribed authorities. Such approval is not required in cases of university or educational institutions wholly or substantially financed by the Government [sub-clause (iiiab)] or if their aggregate annual receipts do not exceeds ₹ 1 Crore [sub-clause (iiiad) r.w. rule 2BC]. Thus, while granting approval to entities covered under sub-clause (vi), the prescribed authority has to ensure that the applicant institution must exist “solely for educational purposes and not for purposes of profit”. These are several Provisos toclause (23C) of section 10 and prescribe, inter alia, various monitoring conditions subject to fulfillment of which only, the exemption can be availed.

These monitoring conditions include mode and manner of application of funds, maintenance and audit of books of accounts in certain situations etc. Some other Provisos prescribe the manner of making application u/s 10(23C)(vi)and the circumstances when an approval granted earlier can be withdrawn.

Representations have been received seeking clarification on certain issues related to operation of section 10(23C)(vi). These have been examined by the Board and following clarifications are made-

1. Scope of enquiry while granting approval-

1.1 Clarification has been sought on the scope of enquiry that can be made by the prescribed authority while granting approval u/s 10(23C)(vi), i.e., whether it would be sufficient for the prescribed authority to consider the nature, existence for non-profit purposes and genuineness of the applicant institution or the conditions prescribed under various Provisos are also required to be considered at the stage of granting approval.

1.2 In this connection, attention is drawn to the decision of Hon’ble Supreme Court in case of American Hotel and Lodging Association Educational Institute vs. CBDT [301 ITR 86] 2008 in which it has been held that at the time of granting approval u/s 10(23C)(vi), the prescribed authority is to be satisfied that the institution existed during the relevant year solely for educational purposes and not for profit. Once the prescribed authority is satisfied about fulfillment of this criteria i.e. the threshold pre-condition of actual existence of an educational institution undersection 10(23C)(vi), it would not be justifiable, in denying approval on other grounds, especially where the compliance depends on events that have not taken place on the date on which the application for grant of approval has been made.

1.3 However, the prescribed authority is eligible to grant approval u/s 10(23C) (vi), subject to such terms and conditions as deemed necessary including those falling within the framework of various Provisos to the said clause of section 10. It has also been clarified in the said judgment that the compliance of prescribed conditions can be gauged while monitoring the case and in case of any breach thereof, the approval can be withdrawn. It is, therefore, clarified that the principle laid down by the Apex Court in American Hotels case (supra) must be followed while considering the applications filed seeking approval for exemption u/s 10(23C)(vi).

2. Necessity for registration u/s 12AA while seeking approval/claiming exemption u/s 10(23C)(vi).

2.1 Section 10(23C)(vi) does not prescribe any stipulation which makes registration u/s 12AA a mandatory pre or post condition. In fact, provisions of section 11 and 10(23C) are two parallel regimes and operate independently in their respective realms although some of the compliance criteria may be common to both. Hence obtaining prior registration before granting approval u/s 10(23C) cannot be insisted upon.

2.2 However, in case of a trust or an institution having obtained registration u/s 12AA as well as approval u/s 10(23C)(vi), if registration is withdrawn at some point of time due to certain adverse findings, the withdrawal of approval u/s 10(23C)(vi) shall not be automatic but will depend upon whether these adverse findings also impact the conditions necessary to keep approval u/s 10(23C)(vi) alive.

3. Generation of surplus out of gross receipts

A doubt has been raised whether generation of surplus out of gross receipts would necessarily ‘breach’ the threshold condition that the educational institution should exist ‘solely for educational purpose and not for the purpose of profit’. Perusal of prescribed provisions clearly reveal that mere generation of surplus cannot be a basis for rejection of application u/s 10(23C)(vi) on the ground that it amounts to an activity of the nature of profit making. In fact, the third Proviso to the said clause clearly provides that accumulation of income is permissible subject to the manner prescribed therein provided such accumulation is to be applied “wholly and exclusively to the objects for which it is established”. Hence, it is clarified that mere generation of surplus by educational institution from year to year cannot be a basis for rejection of application u/s 10(23C)(vi) if it is used for educational purposes unless the accumulation is contrary to the manner prescribed under law.

4. Collection of amounts under different heads of fee from students –

It has been brought to the notice that collection of small amounts from students by way of application fee, examination fee, fee for issuing transfer certificate, subscription fee for library etc. is being treated by some Assessing Officers as profit making activity resulting in denial of exemption u/s 10(23C)(vi). Collection of small and reasonable amounts under different heads of fee, which are essentially in the nature of fee connected with imparting education and do not violate any Central or State regulation does not, in general, represent a profit making activity. Hence, there in no justification for treating the charging of small amounts under different heads of fee as profit making activity unless the amount in the nature of ‘capitation fee’ is charged directly or indirectly.

5. Impact of extraordinary powers of the Managing Trustees to appoint remove or nominate other trustees.

5.1 Doubt has been expressed whether extraordinary powers to the Managing Trustees to appoint or remove other trustees and also to nominate their successor affect the nature of charitable activity of the trust and whether in such an eventuality, exemption can be denied.

5.2 There is no provision under the Act which calls for denial of exemption merely on account of appointment or removal of trustees. Although answer to such a situation would normally depend on the factual implication of such arrangement, the same should generally not be a ground for denying exemption unless nature of activities of the trust or institution get changed or modified or no longer remain to exit ‘solely for educational purpose and not for purposes of profit’. Hence denial of exemption would not be justifiable only on the ground of induction of new trustees or removal of existing ones.

6. Field authorities are advised to keep the above position in mind while dealing with the matters of approval/exemption u/s 10 (23C)(vi). Similar principles would also apply to cases covered u/s 10(23C)(via) of theAct.

[F.No.197/38/2015-ITA-I]

(Deepshikha Sharma)

Director to the Government of India

In run-up to GST, Fin Min rechristens Service Tax directorate : 17-08-2015


Even as the Modi government is yet to cross the Parliamentary hurdle before it can roll out a uniform tax regime, it has rechristened Mumbai-based Directorate General of Service Tax as Directorate General of Goods and Service Tax (DGGST), and shifted it to Delhi.

The move follows a decision by Central Board of Excise and Customs (CBEC), the apex policy making body for Indirect Taxes. “It has been decided that DGST will henceforth be renamed DGGST with effect from August 1, 2015,” an order issued by the Finance Ministry said. It has also been decided that the headquarter of DGGST will be shifted to Delhi from Mumbai along with the post of Principal Director General, it said.

“All records of DGST, Mumbai, will continue to be maintained in the existing office till instructions regarding their transfer are issued,” the order said.

The order said, “It is decided that the staff in the DGST, since their services are being placed on loan basis to other formations, will continue to draw their salaries from DGST.” The services of the employees in DGST, Mumbai, Kolkata and Chennai are to be placed at the disposal of respective Chief Commissioners for one year. “The officers posted at DGST, New Delhi will be treated as the officers posted to DGGST, New Delhi with effect from August 1, 2015,” the Finance Ministry said. Goods and Services Tax (GST), billed as the biggest tax reform post-Independence, proposes to create a uniform tax rate across the country by subsuming excise, service tax and other local levies.

The Constitutional Amendment Bill on GST is still awaiting the nod of Rajya Sabha, which could hardly transact any business in the recently-concluded monsoon session due to uproar over Lalitgate and Vyapam issues.

GST is estimated to boost India’s GDP by 1-2 per cent. The government has proposed to introduce it from April next year.

Source : Business Standard

Notification No. : 69/2015 Dated: 17-8-2015


Amendment in Notification No. S.O. 359, dated 30-3-1988 – 69/2015 – Dated 17-8-2015 – Income Tax

[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 No. 69/2015

New Delhi, the 17th August, 2015

S.O. (E) - In exercise of the powers conferred by section 118 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following further amendments to the Notification of the Government of India, Ministry of Finance (Department of Revenue), (Central Board of Direct Taxes), number S.O. 359(E), dated the 30th March, 1988 published in the Gazette of India (Extraordinary), Part II, section 3, sub-section (ii) with effect from the date of its publication in the Official Gazette, namely :-

In the said notification,-

(i)    for clause (a), the following clause shall be substituted, namely:-

“(a) Principal Directors General), Principal Chief Commissioners, Directors General of Income-tax (Investigation), Chief Commissioners of Income-tax (Central), Director General of Income-tax (I and CI) and Chief Commissioner of Income-tax (Exemptions) shall be subordinate to the Central Board of Direct Taxes;”;

(ii)    after clause (a), the following clause shall be inserted, namely :-

“(aa) Directors General or Chief Commissioners shall be subordinate to the Principal Director Generals or Principal Chief Commissioners within whose jurisdiction they perform their functions;”.

[F. NO.187/30/2014 (ITA.I)]

Notification No. : 01/2015 Dated: 14-8-2015


Constitution of Bench at Allahabad – 01/2015 – Dated 14-8-2015 – Central Excise – Tariff

Notification No. 1/2015

Dated 14/08/2015

Subject :  Constitution of Bench at Allahabad.

In exercise of powers conferred by Section 129C of the Customs Act, 1962 (52 of 1962) read with Section 35D of the Central Excise Act, 1944 (1 of 1944), Section 86 of the Finance Act, 1994, Section 9C of the Customs Tariff Act, 1975 and all other enabling provisions; and in terms of the decision of the Union Cabinet dated 21-3-2013 as conveyed by the letter F. No. 27/06/07-Ad.IC (CESTAT), dated 13-11-2013 of the Government of India, Ministry of Finance, Department of Revenue, the President of the Customs, Excise & Service Tax Appellate Tribunal hereby orders that there shall be Regional Bench at Allahabad, State of Uttar Pradesh.

In terms of the jurisdiction specified in the letter dated 13-11-2013 of the Government of India, the Regional Bench, Allahabad shall deal with all matters arising within its jurisdiction as specified in the table below and such other matters as may be transferred to it by a general or special order of the President.

The jurisdiction of the Regional Bench, Allahabad shall be as set out in the table below :

Title of the Bench Location Jurisdiction
Regional Bench, Allahabad Allahabad Appeals arising from territories within the State of Uttar Pradesh.

The Registry of the Regional Bench, Allahabad shall start functioning w.e.f. 1-9-2015 at the following address :

Room No. 210 & 220, 2nd Floor

Office of the Commissioner of Central Excise,

Customs & Service Tax, 38, M.G. Marg, Allahabad-211001

No. 08 Dated: 13-8-2015


Exim Bank’s GoI supported Line of Credit of USD 6.20 million to Myanma Foreign Trade Bank – Circular – Dated 13-8-2015 – FEMA

RBI/2015-16/151

A.P.(DIR Series) Circular No.8

August 13, 2015

To

All Category – I Authorised Dealer Banks

Madam / Sir,

Exim Bank’s GoI supported Line of Credit of USD 6.20 million to Myanma Foreign Trade Bank

Export-Import Bank of India (Exim Bank) has entered into an Agreement dated May 22, 2015 with the Myanma Foreign Trade Bank, Republic of Union of Myanmar, for making available to the latter, a Government of India supported Line of Credit (LOC) of USD 6.20 million (USD Six Million and Two Hundred Thousand) for financing the implementation of a microwave radio link on the Rhi-Mindat route to be carried out by Telecommunication Consultants India Limited in the Republic of Union of Myanmar. 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.

2. The credit agreement under the LOC is effective from July 27, 2015 and the date of execution of agreement is May 22, 2015. The last date for opening of letters of credit and disbursement will be 48 months from the scheduled completion date of contract in the case of project exports and March 21, 2021 (72 months from the execution date of the credit agreement) in the 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.

Yours faithfully,

(A.K. Pandey)

 Chief General Manager

Notification No. : 68/2015 Dated: 13-8-2015


Section 10(46) of the Income-tax Act, 1961 Central Government notifies Kerala Shops and Commercial Establishments Workers Welfare Fund Board , a Board established under the Kerala Shops and Commercial Establishments Workers Welfare Fund Act, 2006 (Act 24 of 2006) in respect of the certain specified income arising to the Board – 68/2015 – Dated 13-8-2015 – Income Tax

 [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 No. 68/2015

New Delhi, the 13th August, 2015

S.O. (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,  ”Kerala Shops and Commercial Establishments Workers Welfare Fund Board”, a Board established under the Kerala Shops and Commercial Establishments Workers’ Welfare Fund Act, 2006 (Act 24 of 2006) in respect of the following specified income arising to the Board, namely:-

(a) amount received in the Fund as established under section 3 of Kerala Shops and  Commercial Establishments Workers’ Welfare Fund Act 2006;

(b) amount of interest income earned on bank deposits.

2.  This notification shall be deemed to have been applied for the financial years 2013-2014, 2014-2015 and shall be applicable for the financial years 2015-2016. 2016-2017 and 2017-2018.

3.  This notification shall he effective subject to the condition, namely: -

(a) that the Kerala Shops and Commercial Establishments Workers’ Welfare Fund  Board does not engage in any commercial activity;

(b) that the activities and the nature of the specified income of the Kerala Shops and Commercial Establishments Workers’ Welfare Fund Board remain unchanged throughout the financial years; and

(c) that the Kerala Shops and Commercial Establishments Workers’ Welfare Fund  Board files return of income in accordance with the provision of clause (g) of  sub-section (4C) of section 139 of the Income-tax Act, 1 961.

[F. No.196/18/2014-ITA-I]

DEEPSHIKHA SHARMA

Director to the Government of India

Notification No. : 67/2015 Dated: 13-8-2015


Section 10(46) of the Income-tax Act, 1961 Central Government notifies Kerala Abkari Workers Welfare Fund Board , established by the Government of Kerala, in respect of the certain specified income arising to the said Board – 67/2015 – Dated 13-8-2015 – Income Tax

[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 No. 67/2015

New Delhi, the 13th August, 2015

S.O. (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. “Kerala Abkari Workers Welfare Fund Board”, established by the Government of Kerala, in respect of the following specified income arising to the said Board, namely:-

(a) amount received as contribution from employers and employees;

(b) interest earned on deposits in the banks.

2. This notification shall be effective subject to the conditions that the Kerala Abkari Workers Welfare Fund Board -

(a) shall not engage in any commercial activity;

(b) files return of income in accordance with the provision of clause (g) of sub-section (4C) of section 139  of the Income-tax Act, 1961 and

(c) its activities and the nature of the specified income remain unchanged throughout the financial years.

3. This notification shall be applicable for the financial years 2014-15 to 2018-19.

[F. No. 196/31/2014-ITA-I]

DEEPSHIKHA SHARMA

Director to the Government of India

Notification No. : 66/2015 Dated: 13-8-2015


Notification u/s. 10(6C) of the Income-tax Act, 1961 – Notified royalty or fees for technical services – 66/2015 – Dated 13-8-2015 – Income Tax

 [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 No. 66/2015

New Delhi, the 13th August, 2015

S.O. (E). - In exercise of powers conferred by clause (6C) of section 10 of the Income -tax Act, 1961 (43 of 1961), the Central Government hereby specifies that any income arising to M/s Rosoboronexport, the Federal State Unitary Enterprise, having its registered office at 107076, Moscow, Stromynka Street, 27/3, Russia, by way of royalty or fees for technical   services  received   in  pursuance  of  the  agreement  vide  Contract  No. P/235611233623, dated the  24th  January,  2007  (for the production of RD-33  Series  3 engines, its aggregates, KSA-2, Aircraft Gear Box and GTDF  117. Gas Turbine engine  power  unit  [Turbine  starter])  between  M/s Rosoboronexport,  Russia and  Hindustan Aeronautics Limited, India in conformity with the agreement entered between Government of the Republic of India and the Government of the Russian Federation, to an extent of ₹ 103.50 crore shall not be included in computing the total income of said company under the said Act.

[F.No.200/29/2009-ITA-I]

(Deepshikha Sharma)

Director to the Government of India

Notification No. : 64/2015 Dated: 13-8-2015


Section 10(46) of the Income-tax Act, 1961 Central Government notifies Karnataka State Rural Livelihood Promotion Society , a body constituted by the Government of Karnataka in respect of the certain specified income arising to the said body – 64/2015 – Dated 13-8-2015 – Income Tax

[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 No. 64/2015

New Delhi, the 13th August, 2015

S.O.  (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, “Karnataka State Rural Livelihood  Promotion Society”, a body  constituted by the Government of Karnataka in respect of the following specified income arising to the said body, namely:-

(a) amount received in the form of grants from the Government of India;

(b) amount received in the form of grants from the Government of Karnataka;

and

(c) Interest earned on bank deposits.

2. This notification shall be effective subject to the conditions that the Karnataka State Rural Livelihood Promotion Society -

(a) Shall not engage in any commercial activity;

(b) Its activities and the nature of the specified income remain unchanged  throughout the financial years; and

(c) Files return of income in accordance with the provision of clause (g) of sub- section (4C) of section 139of the Income-tax Act, 1961.

3. This notification shall he applicable for the financial years 2013-14 to 2017-18.

[F.No.196/12/2014-ITA-I]

DEEPSHlKHA SHARMA

Director to the Government of India

No. C. No. ST-20/STD/Misc./Sevottam/62/12/4693 Dated: 13-8-2015


Clarification on levy of Service Tax on food sold by way of Pick-up or Home Deliveries –C/Regarding – Dated 13-8-2015 – Service Tax

Office of the Deputy Commissioner

Central Excise & Service Tax Division

SCO 48-49, Sector -17 A, Chandigarh

C. No. ST-20/STD/Misc./Sevottam/62/12/4693

Dated 13/08/2015

To

M/s Apex Restaurants Pvt. Ltd.

SCO 7 Sector -26

Chandigarh

Sir,

Subject – Clarification on levy of Service Tax on food sold by way of Pick-up or Home Deliveries –C/Regarding

Please refer to your office letter dated 22.07.2015 (received in this office on 23.07.2015) on the above cited subject where under Clarification as to whether Service Tax is payable on food sold by way of Pick-up or Home deliveries has been sought.

It is clarified that in case of the transaction involving Pick-up or the Home Deliveries of the food sold by the Restaurant the dominant nature of the transaction is that of sale and not service as the food is not served at the Restaurant and further no other element of service which is offered at the restaurants be it ambience, live entertainment, if any, air conditioning, or personalized hospitality is offered. The Service Tax can be levied if there’s an element of ‘Service’ involved which would typically the case where food is served in restaurant.

The above transaction is not liable to Service Tax being sale in nature only if no amount is charged for such free delivery of food.

This is issued with prior approval of the Additional Commissioner.

Yours Faithfully

Deputy Commissioner

Govt hikes import duty on steel products again : 13-08-2015


The Finance Ministry has hiked the import duty on key steel products by 2.5 per cent. This move, the second such hike after June 17, is aimed at protecting the domestic steel industry, as the yuan devaluation will make Chinese imports cheaper than Indian products.

Finance Minister Arun Jaitley tabled a notification related to the duty hike in both the Houses on Wednesday. The hike has come into effect immediately.

A senior Finance Ministry official said the import duty on semi ingots product will now be 10 per cent (from 7.5 per cent). Similarly, duty on stainless steel long products, alloy steel long products, non-alloy long products and alloy steel flat products has been raised to 10 per cent, from 7.5 per cent.

At the same time, non-alloy flat products and some specified alloy steel products will attract an import duty of 12.5 per cent. However, there is no change in the duty on CRGO (5 per cent) and stainless steel flat products (7.5 per cent). The products protected from duty hike are used in the manufacturing of power generation equipment and other machineries.

Steel imports up 71%

Another senior official said as imports from China will be cheaper than Indian products, it will lead to more dumping and hurt the domestic industry. Steel imports shot up 71 per cent to 9.3 million tonnes in 2014-15 year-on-year, with almost a third of it from China, the largest steel producer, consumer and exporter of the commodity.

However, analysts believe that a 2.5 percentage point rise in import duty is not enough to revive the country’s ailing steel sector. A slowdown in economic growth of China dampened demand for steel in the country, causing it to export surplus steel at cheaper prices to countries such as India, hurting revenues of local steel manufacturers. The domestic manufacturers had to cut product prices several times over the past year.

Commenting on the decision, Kumar Kandaswami, Senior Director with Deloitte in India, said while increasing customs duty would be welcome by the steel producers, “most of the end-users like construction, infrastructure, engineering/fabrication and auto, accounting for about 90 per cent of steel consumption would probably feel there was a cost reduction opportunity. As these end-use sectors get back into the investment mode, the opposing interests have to be carefully balanced.”

Shares of most steel companies closed either with moderate gain or loss. The public sector Steel major SAIL ended the day at ₹58.15 with a very small gain of 0.17 per cent.

Similarly, Tata Steel bettered slightly and closed at ₹249.10 with a gain of less than one per cent. However, JSW Steel, Monnet Ispat & energy and Bhushan Steel ended in the red.

Source : PTI

GST jettisoned, govt considers special session : 13-08-2015


An online petition, signed by over 15,000 people, including some of the top industrialists of India, that had appealed to the Congress-led Opposition to end the disruptions in the Rajya Sabha to pass the Goods and Services Tax (GST) Constitutional Amendment Bill led to more protests in the Upper House on Wednesday and effectively jettisoned, in what was the penultimate day of the session, any hope of the ongoing monsoon session of Parliament passing the all-important Bill. The events also put a question mark on the planned rollout of the GST regime by the appointed date of April 1, 2016.

According to a government strategist, the Cabinet Committee on Political Affairs could meet on Thursday to take a decision not to prorogue the House. This could enable the government to extend the current session after a break. The government might even call a special session, sources said. But any such decision will need to have the Opposition, particularly the Congress, on board and will need to factor in the Bihar state polls as well as the festival of Rakshabandhan due on August 29.

Another government strategist expressed the hope that the deadline could still be met if the winter session of Parliament could be advanced and at least half the states ratify the GST Bill soon after it is passed by Parliament, enabling the two Houses to take up other GST-related Bills in the Budget session. Either of these scenarios could work only if the government manages to reach out to a Congress leadership livid after the personal attacks on it by External Affairs Minister Sushma Swaraj and Finance Minister Arun Jaitley.

In the Rajya Sabha, the Opposition not only stuck to its stand that the Prime Minister should face the House on issues of Vyapam and Lalit Modi but also objected to the online signature campaign — Parliament to function: Urge all political parties to have a collaborative and consultative process in Parliament. The petition has been signed, among others, by Confederation of Indian Industry (CII) president Sumit Mazumder, Infosys co-founder Kris Gopalakrishnan, Bajaj Auto chairman Rahul Bajaj, Biocon’s Kiran Mazumdar-Shaw, Hero MotoCorp chief Pawan Munjal, GVK’s GV Sanjaya Reddy, GE India head Banmali Agrawala, Adi Godrej, Ajay S Shriram, Atul Punj and Vikram Kirloskar.

Janata Dal (United) chief Sharad Yadav and Left parties attacked the government for “using” media and businessmen to hit out at the Opposition for disrupting Parliament. Yadav said the petition vindicated the charge that the BJP government was “a government for the moneybags” and it was an attack on Parliament by the “capitalists”.

Jaitley retorted: “Does the common man want Parliament not to function? You are guilty of stalling democracy.” Congress MPs rushed into the well of the House leading to an adjournment. When the House reassembled, the Opposition again criticized the signature campaign causing another adjournment.

The GST Bill came up for discussion when the House reconvened in the post lunch session but was adjourned for the day with the Congress MPs rushing into the well.

Source : Business Standard

Notification No : 63/2015 Dated: 12-8-2015


Agreement between the Government of the Republic of India and the Government of the Republic of San Marino for the Exchange of Information with respect to taxes – 63/2015 – Dated 12-8-2015 – Income Tax

 [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

Notification No. 63/2015

New Delhi, the 12th August, 2015

S.O.(E).- Whereas, an agreement (hereinafter referred to as the said agreement between the Government of the Republic of India and the Government of the Republic of  San Marino, for the exchange of information with respect to taxes was signed at Rome, on the 19th day of December, 2013:

2.  And whereas, the date of entry into force of the said agreement is the 29th day of August, 2014, being the date of the later of the notifications of completion of the procedures as required by the respective laws for entry into force of the said agreement  in accordance with paragraph 1 of Article 11 of the said agreement;

3. And whereas, paragraph 2 of Article 11 of the said agreement provides that the agreement shall enter into force on the date of later of the notifications and shall thereupon have effect forthwith;

4. Now, therefore, in exercise of the powers conferred by section 90 of the Income tax Act 1961  (43 of 1961), the Central Government hereby directs that all provisions of the said agreement between the Government of the Republic of India and the Government of the Republic of San Marino on the exchange of information with respect to taxes, as set out in the said agreement annexed hereto, shall have effect in the Union of India from the 29th day of August, 2014.

[F. No. 500/02/2003-FTD-I]

(Akhilesh Ranjan)

Joint Secretary to the Government of India

GST bill: BJP-led government blames Congress for stalling progress : 12-08-2015


With little likelihood for passage of the goods and services tax bill in the remaining two days of the monsoon session, the government is engaged in an exercise to blame the ‘disruptionist politics’ of the Congress for failure of the legislation.

As a part of this effort, the government moved the GST bill for consideration and passage in the Rajya Sabha on Tuesday, though no understanding was reached with the Opposition without whose support a Constitution amendment bill cannot  be passed in the Upper House. Congress objected to the move, with its deputy House leader Anand Sharma stating that no prior notice was given that the bill will be moved, that it was not even listed earlier in the day’s business and there was no discussion on bringing it this week in the House business advisory committee meeting.

Government sources said though the treasury benches were aware there would be opposition to the bill being moved and this was a bid to send across a message  to the people that the government was trying to get the bill passed while it was being thwarted by a Congress ‘opposed to economic progress of the country’.

As soon as finance minister Arun Jaitley moved the bill, in the form it was cleared by the select committee of the Rajya Sabha, Congress MPs trooped into the well of the House and shouted slogans against Modi and his government. “They (Congress) want to stall to stall the growth of the country and that is why session after session they are using one pretext or the other to stall it. That is why they are using the pretext of external affairs minister… The Congress party does not want the economy to grow,” Jaitley said.

As the din continued, deputy chairperson PJ Kurien adjourned the House saying a Constitution amendment bill that has to be passed by a two-thirds majority present and voting and through division cannot be passed in the pandemonium. Talking to the media later outside Parliament House, Jaitley took  jibes at Congress chief Sonia Gandhi and party vice-president Rahul, alleging that they were responsible for blocking the GST bill.

“It is clear that its (Congress) two leaders have taken their 2014 defeat very badly. And therefore they are unable to accept the fact that anybody outside the Gandhi family can also rule this country,” Jaitley said, though he did not name Sonia and Rahul. Congress defended itself on the issue with party spokesperson Abhishek Singhvi saying the bill was  ’flawed.’ He said that the GST bill was initiated by the Congress-led UPA and warned BJP that it should not try to pass its bill through “stealth and usurpation”.

Source : The Financial Express

Land bill not to come before Parliament before Winter Session : 11-08-2015


The contentious land acquisition bill will not come to Parliament before the Winter Session, with the Joint Committee of Parliament examining the measure on Monday deciding to seek more time to finalise its report after Congress and TMC sought more time to study certain clauses.

The decision to seek further extension till the first week of the Winter Session came after a sharp exchange of words between BJP and Congress as the latter was opposed to any changes in the retrospective clause of the bill dealing with compensation of land acquired under the 1894 Act, which was replaced by the 2013 law passed by the UPA government.

Giving in to the demands by Congress and TMC members for more time to study certain clauses threadbare, panel Chairman S S Ahluwalia decided that the Committee should not submit its report in this session ending on August 13 and instead do so in the first week of the Winter Session.

The committee was earlier given a fresh extension till tomorrow to submit its report. Following demand by Congress and TMC for more time, Ahluwalia decided to seek yet another extension from Lok Sabha Speaker Sumitra Mahajan as he wanted to submit a consensus report.

This means that bill will come to Parliament only after assembly elections are over in the agrarian state of Bihar, where BJP is hoping to replace the incumbent Nitish Kumar government. Congress is using the NDA bill to paint the government as “anti-farmer”.

Monday’s meeting was expected to evolve consensus on three key provisions including the one on return of unutilised land to its owners after five years and the retrospective clause.

However, only the retrospective clause was taken up briefly during which the Congress members vociferiously opposed any change in provision 24 (2) of the UPA Act, which has been diluted in the NDA bill.

Sources in the panel said former Rural Development Minister and Congress member on the committee Jairam Ramesh walked out in a huff when told that his party was engaging in “delaying tactics”.

However, Ahluwalia is learnt to have later persuaded Ramesh to return to the meeting.

The UPA law stated the Land Acquisition Act, 1894 will continue to apply where an award has already been made. However, if such an award was made five years or more before the enactment of The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement (LARR) Act, 2013 and physical possession of land had not been taken or compensation not paid, the UPA law will apply.

Source : The Financial Express

Govt aims to bring GST Bill for last-minute vote : 11-08-2015


The NDA Government led by Prime Minister Narendra Modi will try to pass a Bill setting the path for the country’s biggest tax shake-up on Tuesday, in a last-ditch attempt to salvage a session of Parliament disrupted by Opposition protests.

The Government had put the Bill to create a goods and service tax on the list of business in the Upper House late on Monday, the chamber’s website showed.

But Modi’s Bharatiya Janata Party, which lacks a majority in the Rajya Sabha or the Upper House, will struggle to bring a vote unless the Opposition Congress party drops demanding the resignation of a minister over graft allegations.

The Congress party has repeatedly blocked debates during the “monsoon’’ sitting of parliament, which winds up on Thursday.

Source : Business Standard

No. F.NO.DGIT(S)/DIT(S)-3/AST/PENDING RECTIFICATIONS/92/2015-16/135-7408 Dated: 10-8-2015


List of pending Rectifications u/s 154 of I.T. Act in demand cases as on 22.07.2015 – reg. – Circular – Dated 10-8-2015 – Income Tax

DIRECTORATE OF INCOME TAX (SYSTEMS)

Aaykar Bhawan, Sector-3,

Vaishali Ghaziabad (U.P.) -201010

F.NO.DGIT(S)/DIT(S)-3/AST/PENDING RECTIFICATIONS/92/2015-16/135-7408

DATED 10-8-2015

To

All the Principal Chief Commissioners of Income-Tax/ Chief Commissioners of Income-Tax

Sir/ Madam

Subject : List of pending Rectifications u/s 154 of I.T. Act in demand cases as on 22.07.2015 – reg.

Kindly refer to the subject matter.

2. From time to time, Board has issued directions to the field formations to rectify the cases within time limit as specified in the citizen charter to reduce infructuous demands existing on the System. The directions are aimed at achieving twin objectives of redressal of assessees’ grievances by timely disposal of rectification application as well as reduction of infructuous demand existing on the System.

3. The Region Assessment-year wise statistics of pending Rectification u/s 154 initiated on AST where demand exists as on 22.07.2015, has been extracted from the System. For ready reference Assessment Year wise statistics for the entire country is enclosed as “Annexure-A” and Region and AY wise statistics is enclosed as “Annexure-B”.

4. The exhaustive list containing all the demand cases where Rectification proceeding u/s 154 as on 22.07.2015 are pending, have been extracted and placed on the i-taxnet The Assessing Officers can download the lists by navigating through the following path on i-taxnet

“Resources → Downloads → Systems → Instructions-AST → List of pending rectifications in demand cases as on 22/07/2015″

5. It is requested that the pending application may be disposed off expeditiously.

6. This letter may be brought to the knowledge of all field officers working in your charge for necessary action.

7. For any system related issue, the officers may lodge a complaint at the ITRA- Helpdesk for speedy resolution.

8. This letter is being issued with prior approval of Pr. DGIT(S), New Delhi.

Yours faithfully,

Encls: As Above

(Ramesh Krishnamurthi)

ADGIT(S)-3, New Delhi

FinMin notifies rules on foreign account tax Act : 10-08-2015


The Finance Ministry has come up with the rules for information reporting under the Foreign Account Tax Compliance Act (FATCA), spelling out the timelines and the entities have to comply with the new requirements.

The new rules are significant as it also provides reporting timelines for OECD’s Common Reporting Standard (CRS), which India signed on June 3 this year.

CRS sets out a standard basis for automatic tax information exchange between member countries (OECD and G20) through respective bilateral tax treaties.

India is one of the very few countries that have adopted a common approach for implementation of FATCA and CRS.

Most advanced countries have first adopted FATCA and are now adopting CRS

“Considering that CRS implementation has to start from January 1, 2016, the timing of the Rules is appropriate”, Himanish Chaudhuri, Partner—Financial Services, KPMG told Business Line.

The Central Board of Direct Taxes (CBDT) move to notify the rules came just a month after India and the US signed a intergovernmental agreement (IGA) to implement FATCA with a view to promote transparency between the two countries on tax matters.

The IGA was seen as an important step on part of India and the US to tackle offshore tax evasion and avoidance.

As per the IGA, Financial institutions in India will be required to report tax related information relating to U.S. account holders directly to the Indian Government, which will, in turn, relay that information to the U.S.A.

The U.S.A. will provide similar information relating to Indian account holders in the U.S, although the exchange of information is not fully reciprocal at present.

The exchange of information on an automatic basis is likely to begin by end of September 2015.

The new FATCA rules–which run into 61 pages–prescribe the information to be maintained by the reporting financial institutions in India.

Himanish said that the immediate challenge was on FATCA related reporting, which is due on August 31 this year.

“Considering that a number of industry participants across Banks, Insurance and Asset Management companies, until now, not yet reached out to their customers on FATCA, availability of data for reporting within the short window provided might be an issue”, he said.

From a reporting entity perspective, the new CBDT rules provide several exclusions in respect of FATCA compliance.

The categories of entities that are now excluded for FATCA compliance include Regional Rural Banks, Urban Cooperative Banks, State Cooperative Banks, Local Area Banks, Government pension fund for staff, Gratuity fund and Provident Funds.

Amit Maheshwari, Partner, Ashok Maheshwary & Associates, a firm of chartered accountants, said the rules will provide much needed guidance to the industry to upgrade their internal information systems for FATCA reporting and help them be compliant.

This is even as FATCA reporting has presented short term challenges for the industry, he said.

Source : Business Standard

Govt spending should be within means: Jaitley : 10-08-2015


Stressing the need for fiscal consolidation, Finance Minister Arun Jaitley today said that governments spending more than their means could lead to capital flight and loss in value of currency.

Speaking at the first Indian Cost Accounts Service Day celebration here, Jaitley said what happened in Greece recently was a direct consequence of the fact that governments there decided “not to live” within their means.

“The public exchequer, government money is people’s money after all and this money is something which is sacrosanct.

Sacrosanct for the reason that governments’ have to learn the discipline of living within their means,” he said.

In the inter—connected world, if governments do not live within their means, it can have a lot of adverse consequences, Jaitley added.

“It can lead to outflow of capital…it can have an adverse impact on your currency rates…It can knock off fiscal discipline,” Jaitley said.

The government has pegged the fiscal deficit at 3.9 per cent of the GDP for FY 2015—16 and proposed to lower it to 3 per cent by FY 2017—18.

Jaitley further said the only way to stick to fiscal discipline and follow the road of fiscal consolidation is either “you earn more or spend less“.

“And the ideal route is to do both. And that is what governments are now endeavouring to do,” he said.

He added that governments need professional advice so as to ensure that they do not overspend.

“And obviously, people with varied experience who run the government, the permanent establishment of the government are civil service. How above the professional the civil service is, its ability at analysing cost could always be limited.

“And therefore, the creation of a catalyst service which analyses the cost and comes to a realistic assessment of cost is necessarily required,” the Finance Minister said.

Source : PTI

Narendra Modi’s ‘port-led’ export drive leaves India’s hinterland stranded : 07-08-2015


Mumbai’s commercial seaport, which handles over half the container traffic through India’s major ports, is doubling capacity as Prime Minister Narendra Modi seeks to build an export powerhouse.

The expansion, due to be completed in seven years, can’t come quickly enough for Avinash Gupta, whose family business supplies steel forgings to Europe and the United States from the industrial hub of Ludhiana in northern India.

Yet the greatest challenge his $30 million business faces is getting his production to port. Gupta pays nearly $800 to a state-run rail cargo company to transport a 20-foot container to Mumbai – as much as 40 times the cost of shipping it onward to the Gulf commercial hub of Dubai.

It is exporters like Gupta that Modi had in mind when he launched his ‘Make in India’ drive last September, laying out a model of “port-led” development that would support industrial growth and help create manufacturing jobs.

Modi’s vision includes creating a tax union to slash costs and transport times, and a network of industrial corridors connecting the interior to ports. But political opposition to both the new tax and a law making it easier to buy land for development mean those may be years away.

For now, the inefficiencies are exacerbating the pain of weak global demand and a 15 percent drop in exports between December and June from a year ago.

Exporting a standard container requires seven documents, takes 17 days and costs $1,332 in India, according to the World Bank’s Doing Business 2015 report. India ranked 126th of 189 economies on the ease of trading across borders, well behind Mexico (44th) and China (98th). All of India’s ports together handle less trade than Shanghai alone.

RISING COSTS
Gupta runs one of the thousands of small companies that contribute about half of India’s $300 billion in annual goods exports. Despite falling global prices, his costs have gone up, and his overseas sales are down more than 60 percent.

While shipping lines have slashed freight rates in search of business, state-run Container Corp of India actually raised rail rates by up to 15 percent in April – even though its fuel costs have fallen.

“The hike in freight costs has made our life difficult. Since exports are already down 60-70 percent in the last three months, we will soon have to cut production,” said Gupta.

Unless Modi’s government makes faster progress on stalled rail and road corridors, like one that would link Mumbai port to New Delhi and lower costs, India’s exporters will find it hard to compete on price and speed during the global trade downturn.

Nowhere is this more evident than at state-owned Jawaharlal Nehru Port Trust (JNPT), which last year signed a $1.26 billion deal with Singapore’s PSA International to build a fourth terminal in Mumbai on reclaimed land.

Modi has also acted to simplify export procedures, launching electronic clearance by customs, trade and port officials.

“Ports are the gateway to trade growth,” said Neeraj Bansal, the head of JNPT. “The government is expanding port capacity and building railway freight corridors and roads to reduce logistics costs for exporters. Trade is dynamic, we cannot wait till the end of global recession.”

The two-stage expansion by PSA International would boost capacity to around 11 million twenty-foot equivalent units (TEU). That would speed turnaround times and cut costs – it can take up to 12 hours for a truck to enter the port due to narrow approach roads, limited parking and customs delays. More than 10,000 trucks enter every day.

Imports, too, are hobbled by the poor infrastructure, with several container shippers imposing congestion surcharges of up to $200 per TEU to cover the cost of delays in unloading.

“Congestion at major ports is predominantly caused by an inability to clear cargo from the quayside, and that manifests itself mostly on the bulk handling terminals on the east coast,” said Ian Claxton, managing director of Thoresen Shipping.

PRIVATE PORTS ARE FASTER
Analysts estimate it takes up to four times as long to fill or unload a cargo ship at JNPT than at private rival the Adani Port and Special Economic Zone Ltd up the coast in Gujarat, Modi’s home state.

“Land connectivity plays a major role,” said Deven Choksey, managing director at KR Choksey Securities, a brokerage, adding that even after the expansion “the inherent disadvantages of JNPT will continue.”

India added 71 TEU of capacity at major ports in the fiscal year to March 31. Modi wants to double total capacity to 1,600 million tonnes at major ports over the next five years.

But businesses hit by the worst slide in exports since the global crisis of 2008 say Modi’s approach to easing rules for trade and expanding state-run ports fails adequately to tackle competitive barriers.

“Even a delay of a few hours results in missing the vessel and sometimes cancellation of an order,” said Khalid Khan, a Mumbai-based exporter of engineering goods and regional president of the Federation of Indian Export Organisations.

Source : PTI

Financial sector reforms should be carried out over the next five years: Justice BN Srikrishna : 07-08-2015


Justice BN Srikrishna, who headed the Financial Sector Legislative Reforms Commission (FSLRC), has said that the time is opportune to carry out financial sector reforms in India over the next five years, instead of waiting for a crisis.Srikrishna, who headed a group constituted by the finance ministry to review the draft Indian Financial Code (IFC) which has proposed vast changes in the country’s financial architecture, including a new Independent Debt Management Office to handle sovereign debt functions, a Monetary Policy Committee and a single unified regulator for the financial sector covering the capital and commodities markets besides insurance and pensions, said that he didn’t see no reason why financial sector reforms could not be pursued.After the release of the original report of the FSLRC in 2013 and the recent draft IFC, there has been a view that given the changes in the global markets after the 2008 crisis and which led to a review of some of the established models of regulation and governance, India should tread cautiously.

But according to Srikrishna, this was the right time to bring about changes in the financial sector.

“Over the next five years, we should do it and it is the right time. There is nothing wrong now. When will we do it otherwise, when there is a crisis?” he told The Indian Express on Wednesday. Once a Commission completes its assignment, it is up to the government to accept or reject the recommendations, he said, citing the case of the last Pay Commission which he headed.

“It is up to the government to bring about changes in one shot or do it in driblets depending on its capacity. “

Srikrishna said that after the Commission’s recommendations, the views of regulators were sought by the government.

The Reserve Bank of India had reservations relating to a few proposals as did some of the other regulators. But over the last few days, much of the debate has centered around a change in the composition of the Monetary Policy Committee marked by a removal of the veto power to the RBI Governor on setting interest rates.

The original recommendation in the FSLRC report proposed a veto for the RBI Governor while the latest changes in the draft IFC Code also favours the government nominating four members in the proposed seven member Monetary Policy Committee.

“We (FSLRC) had suggested a working solution then with a veto power. Our idea was that the majority should not be from the RBI and there should be a good number of outside experts. The government modified some of it. But the debate is not dead yet,” Srikrishna said

His job this time around, almost two years after the FSLRC submitted its report, was to put in legal language what the government wanted, Srikrishna said.

Finance minister Arun Jaitley had requested Srikrishna to vet the code.

Source : The Financial Express

Notification No: 62/2015 Dated: 7-8-2015


​Income tax (11th Amendment) Rules, 2015 – 62/2015 – Dated 7-8-2015 – Income Tax

[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 No. 62/2015

New Delhi, the 7th August, 2015

S.O. 2155(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 Board 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 (11th Amendment) Rules, 2015.

(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), after rule 114E, the following rules shall be inserted, namely:-

    ’114F Definitions.- For the purpose of this rule and rules 114G and 114H,-

(1) “financial account” means an account (other than an excluded account) maintained by a financial institution, and includes-

(i) a depository account;

(ii) a custodial account;

(iii) in the case of an investment entity, any equity or debt interest in the financial institution.

Explanation.- For the purposes of this sub-clause “financial account” shall not include any equity interest or debt interest in an entity that is an investment entity solely because it,-

(a) renders investment advice to, and acts on behalf of; or

(b) manages portfolios for, and acts on behalf of,

a customer for the purpose of investing, managing, or administering financial assets deposited in the name of the customer with a financial institution that is not a non-participating financial institution other than such entity;

(iv) in the case of a financial institution not described in sub-clause (iii), any equity or debt interest in the financial institution, if the class of interests was established with a purpose of avoiding reporting in accordance with rule 114G  and, in case of a U.S. reportable account, if the value of debt or equity interest is determined, directly indirectly, primarily by reference to assets that give rise U.S. source withholdable payments; and

(v) any cash value insurance contract and any annuity contract issued or maintained by a financial institution, other than a non-investment-linked, non-transferable immediate life annuity that is issued to an individual and monetises a pension or disability benefit provided under an account that is an excluded account.

Explanation.- For the purposes of this clause,-

(a) “depository account” includes any commercial, checking, savings, time, or thrift account, or an account that is evidenced by a certificate of deposit, thrift certificate, investment certificate, certificate of indebtedness, or other similar instrument maintained by a financial institution in the ordinary course of a banking or similar business and also an amount held by an insurance company pursuant to a guaranteed investment contract or similar agreement to pay or credit interest thereon;

(b) “custodial account” means an account (other than an insurance contract or annuity contract) for the benefit of another person that holds one or more financial assets;

(c) “equity interest” in a financial institution, being-

(i) a partnership firm, means either a capital or profits interest in the partnership firm;

(ii) a trust, means any interest held by any person treated as a settlor or beneficiary of all or a portion of the trust, or any other natural person exercising ultimate effective control over the trust;

Explanation.- A person will be treated as a beneficiary of a trust if he has the right to receive directly or indirectly a mandatory distribution or may receive, directly or indirectly, a discretionary distribution from the trust.

(d) “insurance contract” means a contract (other than an annuity contract) under which the issuer agrees to pay an amount upon the occurrence of a specified contingency involving mortality, morbidity, accident, liability, or property risk;

(e) “annuity contract” means a contract under which the issuer agrees to make payments for a period of time determined in whole or in part by reference to the life expectancy of one or more individuals;

(f) “cash value insurance contract” means an insurance contract (other than an indemnity reinsurance contract between two insurance companies) that has a cash value and in case of a U.S. reportable account such value is greater than an amount equivalent to fifty thousand U.S. dollars.

Explanation.- For the purposes of this clause, a single premium life insurance contract which does not permit an amount to be paid on surrender or termination of the contract and which does not allow amounts to be borrowed under or with regard to the contract, shall not constitute a cash value insurance contract;

(g) “cash value” means the greater of-

(i) the amount that the policyholder is entitled to receive upon surrender or termination of the contract (determined without reduction for any surrender charge or policy loan); and

(ii) the amount the policyholder can borrow under or with regard to the contract,

but does not include an amount payable under an insurance contract,-

(A) solely by reason of the death of an individual insured under a life insurance contract including a refund of a previously paid premium provided such refund is a limited risk refund; or

(B) as a personal injury or sickness benefit or other benefit providing indemnification of an economic loss incurred upon the occurrence of the event insured against; or

(C) as a refund of a previously paid premium (less cost of insurance charges whether or not actually imposed) under an insurance contract (other than a life insurance contract or an annuity contract) due to cancellation or termination of the contract, decrease in risk exposure during the effective period of the contract, or arising from the correction of a posting or similar error with regard to the premium for the contract; or

(D) as a policyholder dividend (other than a termination dividend) provided that the dividend relates to an insurance contract under which the only benefits payable are described in sub-clause (ii); or

(E) as a return of an advance premium or premium deposit for an insurance contract for which the premium is payable at least annually if the amount of the advance premium or premium deposit does not exceed the next annual premium which will be payable under the contract:

Provided that the provisions contained in sub-clause (A) and sub-clause (E) shall not apply in case of a U.S. reportable account;

(h) “excluded account” means,-

(i) a retirement account or pension account that satisfies the following requirements, namely:-

(A) the account is subject to regulation as a personal retirement account or is part of a registered or regulated retirement or pension plan for the provision of retirement or pension benefits (including disability or death benefits);

(B) the account is tax-favoured where contributions to the account that would otherwise be subject to tax are deductible or excluded from the gross total income of the account holder or taxed at a reduced rate, or taxation of investment income from the account is deferred or taxed at a reduced rate;

(C) information reporting is required to the income-tax authorities with respect to the account;

(D) withdrawals are conditioned on reaching a specified retirement age, disability, or death, or penalties apply to withdrawals made before such specified events; and

(E) either annual contributions are limited to an amount equivalent to fifty thousand U.S. dollars or less, or there is maximum lifetime contribution limit to the account of an amount equivalent to one million U.S. dollars or less, in each case applying the rules specified in clause (c) of sub-rule (7) of rule 114H for account aggregation and currency translation.

Explanation.- A financial account that otherwise satisfies the requirements of item (E) will not fail to satisfy such requirements solely because such financial account may receive assets or funds transferred from one or more financial accounts that meet the requirements of item (A) or (B) or from one or more retirement or pension funds that meets with the requirements of clauses (e), (f) or (g) of Explanation to clause (1);

(ii) an account that satisfies the following requirements, namely:-

(A) the account is subject to regulation as a savings vehicle for purposes other than for retirement, or the account (other than U.S. reportable account) is subject to regulation as an investment vehicle for purposes other than for retirement and is regularly traded on an established securities market;

(B) the account is tax-favoured where contributions to the account that will otherwise be subject to tax are deductible or excluded from the total income of the account holder or taxed at a reduced rate, or taxation of investment income from the account is deferred or taxed at a reduced rate;

(C) withdrawals are conditioned on meeting specific criteria related to the purpose of the investment or savings account (for example, the provision of educational or medical benefits), or penalties apply to withdrawals made before such criteria are met; and

(D) annual contributions are limited to an amount equivalent to fifty thousand U.S. dollars or less, applying the rules specified in clause (c) of sub-rule (7) of rule 114H for account aggregation and currency translation.

Explanation.- A financial account that otherwise satisfies the requirements of item (D) will not fail to satisfy such requirements solely because such financial account may receive assets or funds transferred from one or more financial accounts that meet the requirements of item (A) or (B) or from one or more retirement or pension funds that meets the requirements of clauses (e), (f) or (g) of Explanation to clause (1) of this rule;

(iii) an account established under the Senior Citizens Savings Scheme Rules, 2004 made under the Government Savings Banks Act, 1873 (5 of 1873).

(iv) a life insurance contract with a coverage period that will end before the insured individual attains age of ninety years, provided that the contract satisfies the following requirements, namely:-

(A) periodic premiums, which do not decrease over time, are payable at least annually during the period the contract is in existence or until the insured attains age of ninety years, whichever is shorter;

(B) the contract has no contract value that any person can access (by withdrawal, loan, or otherwise) without terminating the contract;

(C) the amount (other than a death benefit) payable upon cancellation or termination of the contract cannot exceed the aggregate premiums paid for the contract, less the sum of mortality, morbidity, and expense charges (whether or not actually imposed) for the period or periods of the contract’s existence and any amounts paid prior to the cancellation or termination of the contract; and

(D) the contract is not held by a transferee for value;

(v) an account that is held solely by an estate if the documentation for such account includes a copy of the deceased’s will or death certificate;

(vi) an account established in connection with any of the following:

(A) a court order or judgment;

(B) a sale, exchange, or lease of real or personal property, provided that the account satisfies the following requirements, namely:-

(a) the account is funded solely with a down payment, earnest money, deposit in an amount appropriate to secure an obligation directly related to the transaction, or a similar payment, or is funded with a financial asset that is deposited in the account in connection with the sale, exchange, or lease of the property;

(b) the account is established and used solely to secure the obligation of the purchaser to pay the purchase price for the property, the seller to pay any contingent liability, or the lessor or lessee to pay for any damages relating to the leased property as agreed under the lease;

(c) the assets of the account, including the income earned thereon, will be paid or otherwise distributed for the benefit of the purchaser, seller, lessor, or lessee (including to satisfy such person’s obligation) when the property is sold, exchanged, or surrendered, or the lease terminates;

(d) the account is not a margin or similar account established in connection with a sale or exchange of a financial asset; and

(e) the account is not associated with a depository account referred to in sub-clause (vii);

(C) an obligation of a financial institution servicing a loan secured by real property to set aside a portion of a payment solely to facilitate the payment of taxes or insurance related to the real property at a later time;

(D) an obligation of a financial institution solely to facilitate the payment of taxes at a later time;

(vii) in the case of an account other than a U.S. reportable account, a depository account that satisfies the following requirements, namely:-

(A) the account exists solely because a customer makes a payment in excess of a balance due with respect to a credit card or other revolving credit facility and the overpayment is not immediately returned to the customer; and

(B) beginning on or before the 31st December, 2015, the financial institution implements its policies and procedures either to prevent a customer from making an overpayment in excess of an amount equivalent to fifty thousand U.S. dollars, or to ensure that any customer overpayment in excess of an amount equivalent to fifty thousand U.S. dollars is refunded to the customer within sixty days, in each case applying the rules specified in clause (c) of sub-rule (7) of rule 114H for account aggregation and currency translation and for this purpose, a customer overpayment does not refer to credit balances to the extent of disputed charges but includes credit balances resulting from merchandise returns;

(2) “financial asset” includes a security (for example, a share of stock in a corporation; partnership or beneficial ownership interest in a widely held or publicly traded partnership or trust; note, bond, debenture, or other evidence of indebtedness), partnership interest, commodity, swap (for example, interest rate swaps, currency swaps, basis swaps, interest rate caps, interest rate floors, commodity swaps, equity swaps, equity index swaps, and similar agreements), insurance contract or annuity contract, or any interest (including a futures or forward contract or option) in a security, partnership interest, commodity, swap, insurance contract, or annuity contract:

    Provided that “financial asset” shall not include a non-debt and direct interest in an immovable property;

(3) “financial institution” means a custodial institution, a depository institution, an investment entity, or a specified insurance company.

Explanation.- For the purposes of this clause,-

(a) “custodial institution” means any entity that holds, as a substantial portion of its business, financial assets for the account of others and where its income attributable to the holding of financial assets and related financial services equals or exceeds twenty per cent. of its gross income during the three financial years preceding the year in which determination is made or the period during which the entity has been in existence, whichever is less;

(b) “depository institution” means any entity that accepts deposits in the ordinary course of a banking or similar business;

(c) “investment entity” means any entity,-

(A) that primarily conducts as a business one or more of the following activities or operations for or on behalf of a customer, namely:-

(i) trading in money market instruments (cheques, bills, certificates of deposit, derivatives, etc.); foreign exchange; exchange, interest rate and index instruments; transferable securities; or commodity futures trading; or

(ii) individual and collective portfolio management; or

(iii) otherwise investing, administering, or managing financial assets or money on behalf of other persons; or

(B) the gross income of which is primarily attributable to investing, reinvesting, or trading in financial assets, if the entity is managed by another entity that is a depository institution, a custodial institution, a specified insurance company, or an investment entity mentioned in sub-clause (A) of this clause.

Explanation 1.- An entity is treated as primarily conducting as a business one or more of the activities described in sub-clause (A) of this clause, or an entity’s gross income is primarily attributable to investing, reinvesting, or trading in financial assets for purposes of sub-clause (B) of this clause, if the entity’s gross income attributable to the relevant activities equals or exceeds fifty per cent. of the gross income of the entity during the shorter of the three-year period ending on 31st March of the year preceding the year in which the determination is made or the period during which the entity has been in existence.

Explanation 2.- The term “investment entity” shall not include an entity that is an active non-financial entity merely because it meets any of the criteria provided in sub-clauses (iv), (v), (vi) or (vii) of clause (A) of Explanation to clause (6) of this rule;

(d) “specified insurance company” means any entity that is an insurance company (or the holding company of an insurance company) that issues, or is obligated to make payments with respect to, a Cash Value Insurance Contract or an Annuity Contract;

(4) “non-participating financial institution” means a financial institution defined in clause (r) of Article 1 of the agreement between the Government of the Republic of India and the Government of the United States of America to improve international tax compliance and to implement Foreign Account Tax Compliance Act of the United States of America (herein after referred to as the FATCA agreement), but does not include,-

(a) an Indian financial institution; or

(b) other jurisdiction, being a jurisdiction that has in effect an agreement with the United States of America to facilitate the implementation of Foreign Account Tax Compliance Act (herein after referred to as other partner jurisdiction), financial institution,

other than a financial institution treated as a non-participating financial institution pursuant to sub-paragraph (b) of paragraph 2 of Article 5 of the FATCA agreement or the corresponding provision in an agreement between the United States of America and other partner jurisdiction;

(5) “non-reporting financial institution” means any financial institution that is,-

(a) a Governmental entity, International Organisation or Central Bank, other than with respect to a payment that is derived from an obligation held in connection with a commercial financial activity of a type engaged in by a specified insurance company, custodial institution, or depository institution;

(b) a Treaty Qualified Retirement Fund; a Broad Participation Retirement Fund; a Narrow Participation Retirement Fund; or a Pension Fund of a Governmental entity, International Organization or Central Bank;

(c) a non-public fund of the armed forces, Employees’ State Insurance Fund, a gratuity fund or a provident fund;

(d) an entity that is an Indian financial institution only because it is an investment entity, provided that each direct holder of an equity interest in the entity is a financial institution referred to in sub-clauses (a) to (c), and each direct holder of a debt interest in such entity is either a depository institution (with respect to a loan made to such entity) or a financial institution referred to in sub-clauses (a) to (c);

(e) a qualified credit card issuer;

(f) an investment entity established in India that is a financial institution only because it,-

(I) renders investment advice to, and acts on behalf of; or

(II) manages portfolios for, and acts on behalf of; or

(III) executes trades on behalf of,

a customer for the purposes of investing, managing, or administering funds or securities deposited in the name of the customer with a financial institution other than a non-participating financial institution;

(g) an exempt collective investment vehicle;

(h) a trust established under any law for the time being in force to the extent that the trustee of the trust is a reporting financial institution and reports all information required to be reported under rule 114G with respect to all reportable accounts of the trust;

(i) a financial institution with a local client base;

(j) a local bank;

(k) a financial institution with only low-value accounts;

(l) sponsored investment entity and controlled foreign corporation, in case of any U.S. reportable account; or

(m) sponsored closely held investment vehicle, in case of any U.S. reportable account.

Explanation.- For the purpose of this clause,-

(A) “Governmental entity” means the Government of a country or territory, any political subdivision of a country or territory (including a state, province, county, or municipality), or any wholly owned agency or instrumentality or controlled entity of a country or territory or of any one or more of the foregoing (where each is also a “Governmental entity”) and includes the integral parts, controlled entities, and political subdivisions of such country or territory.

Explanation.- For the purpose of clause (A),-

(i) an “integral part” of a country or territory means any person, organisation, agency, bureau, fund, instrumentality, or other body, by whatever name called, that constitutes a governing authority of a country or territory and the net earnings of the governing authority must be credited to its own account or to other accounts of the country or territory, with no portion inuring to the benefit of any private person:

            Provided that an integral part does not include any individual who is a sovereign, official, or administrator acting in a private or personal capacity:

Provided further that the income does not inure to the benefit of private persons if such persons are the intended beneficiaries of a Governmental programme, and the programme activities are performed for the general public with respect to the common welfare or relate to the administration of a Department of Government:

Provided also that income is considered to inure to the benefit of private persons if the income is derived from the Governmental entity engaged in a commercial business, such as a commercial banking business, which provides financial services to private persons;

(ii) a controlled entity means an entity that is separate in form from the country or territory or that otherwise constitutes a separate juridical entity:

            Provided that-

(a) the entity is wholly owned and controlled by one or more Governmental entities directly or through one or more controlled entities;

(b) the entity’s net earnings are credited to its own account or to the accounts of one or more Governmental entities, with no portion of its income inuring to the benefit of any private person; and

(c) the entity’s assets vest in one or more Governmental entities upon dissolution:

            Provided further that the income does not inure to the benefit of private persons if such persons are the intended beneficiaries of a Governmental programme, and the programme activities are performed for the general public with respect to the common welfare or relate to the administration of a Department of Government:

            Provided also that income is considered to inure to the benefit of private persons if the income is derived from Governmental entity engaged in a commercial business, such as a commercial banking business, which provides financial services to private persons;

(B) “International Organisation” means any international organization or wholly owned agency or instrumentality thereof including any inter-Governmental organisation,-

(a) that is comprised primarily of Governments;

(b) that has in effect a headquarters or substantially similar agreement with India; and

(c) the income of which does not inure to the benefit of private persons;

(C) “Central Bank” means a bank that is by law or Government sanction the principal authority, other than the Government of the country or territory itself, issuing instruments intended to circulate as currency including an instrumentality that is separate from the Government of the country or territory, whether or not owned in whole or in part by that country or territory;

(D) “Treaty Qualified Retirement Fund” means a fund established in India, provided that the fund is entitled to benefits under an agreement between India and the Government of any country or territory outside India on income that it derives from sources within such country or territory outside India (or would be entitled to such benefits if it derived any such income) as a resident of India that satisfies any applicable limitation on benefits requirement, and is operated principally to administer or provide pension or retirement benefits;

(E) “Broad Participation Retirement Fund” means a fund established to provide retirement, disability, or death benefits, or any combination thereof, to beneficiaries who are current or former employees (or persons nominated by such employees) of one or more employers in consideration for services rendered:

Provided that the fund,-

(i) does not have any beneficiary with a right to more than five per cent. of the fund’s assets;

(ii) is subject to Government regulation and provides information reporting to the income-tax authorities; and

(iii) satisfies at least one of the following requirements, namely:-

(a) the fund is generally exempt from tax on investment income, or taxation of such income is deferred or taxed at a reduced rate, due to its status as a retirement or pension plan;

(b) the fund receives at least fifty per cent of its total contributions [other than transfer of assets from other plans referred to in clauses (D) to (G) or from retirement and pension accounts referred to in sub-clause (i) of clause (h) of Explanation to clause (1)] from the sponsoring employers;

(c) distributions or withdrawals from the fund are allowed only in the event of retirement, disability or death [except rollover distributions to other retirement funds referred to in clauses (E) to (G), or retirement and pension accounts referred to in sub-clause (i) of clause (h) of Explanation to clause (1)], or penalties which apply to distributions or withdrawals made before such events; or

(d) contributions (other than permitted make-up contributions) by employees to the fund are limited by reference to earned income of the employee or may not exceed an amount equivalent to fifty thousand U.S. dollars annually, applying the procedures set forth in clause (c) of sub-rule (7) of rule 114H for account aggregation and currency translation;

(F) “Narrow Participation Retirement Fund” means a fund established to provide retirement, disability, or death benefits to beneficiaries who are current or former employees (or persons nominated by such employees) of one or more employers in consideration for services rendered:

Provided that,-

(i) the fund has less than fifty participants;

(ii) the fund is sponsored by one or more employers who are not investment entities or passive non-financial entities;

(iii) the employee and employer contributions to the fund [other than transfer of assets from retirement and pension accounts referred to in sub-clause (i) of clause (h) of Explanation to clause (1)] are limited by reference to earned income and compensation of the employee, respectively;

(iv) participants who are not residents in India are not entitled to more than twenty per cent of the fund’s assets; and

(v) the fund is subject to Government regulation and provides information reporting to the income-tax authorities;

(G) “Pension Fund of a Governmental entity, International Organisation or Central Bank” means a fund established by a Governmental entity, International Organisation or Central Bank to provide retirement, disability or death benefits to beneficiaries or participants who are current or former employees (or persons nominated by such employees), or who are not current or former employees, if the benefits provided to such beneficiaries or participants are in consideration of personal services rendered to the Governmental entity, International Organisation or Central Bank;

(H) “non-public fund of the armed forces” means a fund established in India as a regimental fund or non-public fund by the armed forces of the Union of India for the welfare of the current and former members of the armed forces and whose income is exempt from tax under clause (23AA) of section 10 of the Act;

(I) “Employees’ State Insurance Fund” means the fund established as Employees’ State Insurance Fund under the provisions of the Employees’ State Insurance  Act, 1948 (34 of 1948), to provide medical expenses of low-income factory workers in India;

(J) “gratuity fund” means a fund established under the Payment of Gratuity Act, 1972 (39 of 1972), to provide for the payment of a gratuity to certain types of employees of an Indian employer specified in the Payment of Gratuity Act, 1972;

(K) “provident fund” means a fund established under the Provident Funds Act, 1925 (19 of 1925) or the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 (19 of 1952) to provide current and former employees of Indian employers retirement benefits in consideration for services rendered:

Provided that fund,-

(i) does not have any beneficiary with a right to more than five per cent. of the fund’s assets;

(ii) is subject to Government regulation and provides annual information reporting about its beneficiaries to the income- tax authorities;

(iii) is generally exempt from tax on investment income due to its status as a provident fund; and

(iv) contributions (other than permitted make-up contributions) by employees to the fund are limited by reference to earned income of the employee or may not exceed an amount equivalent to fifty thousand U.S. dollars annually, applying the procedures set forth in clause (c) of sub-rule (7) of rule 114H for account aggregation and currency translation;

(L) “qualified credit card issuer” means a financial institution satisfying the following requirements, namely:-

(i) it is a financial institution only because it is an issuer of credit cards and accepts deposits only when a customer makes a payment in excess of a balance due with respect to the card and the overpayment is not immediately returned to the customer; and

(ii) beginning on or before the 1st July, 2014, the financial institution implements policies and procedures either to prevent a customer from making an overpayment in excess of an amount equivalent to fifty thousand U.S. dollars or to ensure that any customer overpayment in excess of an amount equivalent to fifty thousand U.S. dollars is refunded to the customer within sixty days, in each case applying the rules set forth in clause (c) of sub-rule (7) of rule 114H for account aggregation and currency translation.

Explanation.-For the purpose of this sub-clause, a customer overpayment does not refer to credit balances to the extent of disputed charges but includes credit balances resulting from merchandise returns;

(M) “exempt collective investment vehicle” means an investment entity that is regulated as a collective investment vehicle, provided that all of the interests in the collective investment vehicle are held by or through persons other than,-

(i) those referred to in sub-clauses (a) to (c) of clause (6); and

(ii) a non-participating financial institution.

Explanation.- An investment entity which is regulated as a collective investment vehicle does not fail to qualify under this clause as an exempt collective investment vehicle, only because it has issued physical shares in bearer form:

Provided that-

(i) the collective investment vehicle has not issued, and does not issue, any physical shares in bearer form after the 31st December, 2012;

(ii) the collective investment vehicle retires all such shares upon surrender;

(iii) the collective investment vehicle performs the due diligence procedures set forth in rule 114H and reports any information required to be reported with respect to any such shares when such shares are presented for redemption or other payment; and

(iv) the collective investment vehicle has in place policies and procedures to ensure that such shares are redeemed or immobilised as soon as possible, and in any event prior to the 1st January, 2017;

(N) “financial institution with a local client base” means a financial institution satisfying the following requirements, namely:-

(i) it has been granted a license and is regulated as a financial institution under any law for the time being in force;

(ii) the financial institution does not have a fixed place of business outside India.

Explanation.- For the purposes of this sub-clause, a fixed place of business does not include a location that is not advertised to the public and from which the financial institution performs only administrative support functions; and

(iii) the financial institution does not solicit customers or account holders outside India.

Explanation.- For the purpose of this sub-clause, a financial institution shall not be considered to have solicited customers or account holders outside India merely because the financial institution,-

(a) operates a website, provided that the website does not specifically indicate that the financial institution provides financial accounts or services to non-residents, and does not otherwise target or solicit customers or account holders who are resident of any country or territory outside India for tax purposes; or

(b) advertises in print media or on a radio or television station which is distributed or aired primarily within India but is also incidentally distributed or aired in other countries, provided that the advertisement does not specifically indicate that the financial institution provides financial accounts or services to non-residents, and does not otherwise target or solicit customers or account holders who are resident of any country or territory outside India for tax purposes;

(iv) the financial institution is required under any law for the time being in force to identify resident account holders for purposes of either information reporting or withholding of tax with respect to financial accounts held by residents or for purposes of satisfying the due diligence requirements under the Prevention of Money-laundering Act, 2002 (15 of 2003);

(v) at least ninety eight per cent. of the financial accounts by value maintained by the financial institution are held by residents;

(vi) beginning on or before the 30th June, 2014, the policies and procedures of the financial institution are consistent with those set forth in rule 114H, to prevent the financial institution from providing a financial account to any non-participating financial institution and to monitor whether the financial institution opens or maintains a financial account for any reportable person who is not a resident of India (including a non-resident who was a resident of India when the financial account was opened but subsequently ceases to be a resident of India) or any passive non-financial entity with controlling persons who are reportable persons;

(vii) such policies and procedures explicitly provide that if any financial account held by a reportable person who is not a resident of India or by a passive non-financial entity with controlling persons who are reportable persons who are not resident of India is identified, the financial institution shall report such financial account as would be required if the financial institution was a reporting financial institution or close such financial account;

(viii) with respect to a pre-existing account held by an individual who is not a resident of India or by an entity, the financial institution shall review those pre-existing accounts in accordance with the procedures set forth in rule 114H applicable to pre-existing accounts to identify any reportable account or financial account held by a non-participating financial institution, and shall report such financial account as would be required if the financial institution were a reporting financial institution or close such financial account;

(ix) each related entity of the financial institution that is a financial institution must be incorporated or organised in India and, with the exception of any related entity that is a retirement fund referred to in clauses (D) to (G) of this Explanation, satisfies the requirements set forth in this clause; and

(x) the financial institution must not have policies or practices which discriminate against opening or maintaining financial accounts for individuals who are specified U.S. persons and residents of India;

(O) “local bank” means a financial institution satisfying the following requirements, namely:-

(i) the financial institution operates only as (and is licensed and regulated under any law for the time being in force) a bank, or a credit union or similar cooperative credit organisation which is operated without profit;

(ii) the business of the financial institution consists primarily of receiving deposits from and making loans to, with respect to a bank, unrelated retail customers and, with respect to a credit union or similar cooperative credit organisation, members, provided that no member has a greater than five per cent. interest in such credit union or cooperative credit organisation;

(iii) the financial institution satisfies the requirements set forth in sub-clauses (ii) and (iii) of clause (N), provided that, in addition to the limitations on the website referred to in sub-clause (iii) of clause (N), the website does not permit the opening of a financial account;

(iv) the financial institution does not have more than an amount equivalent to one hundred seventy-five million U.S. dollars in assets on its balance sheet, and the financial institution and any related entity, taken together, does not have more than an amount equivalent to five hundred million U.S. dollars in total assets on its consolidated or combined balance sheets; and

(v) any related entity must be incorporated or organised in India, and any related entity that is a financial institution, with the exception of any related entity that is a retirement fund referred to in clauses (D) to (G) or a financial institution with only low-value accounts referred to in clause (P), must satisfy the requirements set forth in this clause.

Explanation.- Regional Rural Banks constituted under the Regional Rural Bank Act 1976 (21 of 1976), Urban Cooperative Banks constituted under respective State Cooperative Societies Acts or Multi State Cooperative Societies Act, State Cooperative Banks or District Central Cooperative Banks constituted under respective State Cooperative Societies Act and Local Area Banks licensed under the Banking Regulations Act, 1949 (10 of 1949) and regulated and registered as public limited companies under the Companies Act, 1956 (1 of 1956) or Companies Act, 2013 (18 of 2013), that satisfy the requirement under sub-clause (iv) shall be treated as local bank for the purpose of this clause;

(P) “financial institution with only low-value accounts” means a financial institution satisfying the following requirements, namely:-

(i) the financial institution is not an investment entity;

(ii) no financial account maintained by the financial institution or any related entity has a balance or value in excess of an amount equivalent to fifty thousand U.S. dollars, applying the procedures prescribed in clause (c) of sub-rule (7) of rule 114H for account aggregation and currency translation; and

(iii) the financial institution does not have more than fifty million U.S. dollars in assets on its balance sheet, and the financial institution and any related entities, taken together, do not have more than fifty million U.S. dollars in total assets on their consolidated or combined balance sheets.

(Q) “sponsored investment entity and controlled foreign corporation” means a financial institution described in the following sub-clauses, namely:-

(i) a financial institution is a sponsored investment entity if-

(a) it is an investment entity established in India that is not a qualified intermediary (being an intermediary that is a party to a withholding agreement with the United States of America), withholding foreign partnership, or withholding foreign trust; and

(b) an entity has agreed with the financial institution to act as a sponsoring entity for the financial institution;

(ii) a financial institution is a sponsored controlled foreign corporation if-

(a) the financial institution is a controlled foreign corporation established under any law for the time being in force in India that is not a qualified intermediary (being an intermediary which is a party to a withholding agreement with the United States of America), withholding foreign partnership, or withholding foreign trust;

(b) the financial institution is wholly owned, directly or indirectly, by a reporting U.S. financial institution referred to in Article 1 of the FATCA agreement that agrees to act, or requires an affiliate of the financial institution to act, as a sponsoring entity for the financial institution; and

(c) the financial institution shares a common electronic account system with the sponsoring entity that enables the sponsoring entity to identify all account holders and payees of the financial institution and to access all account and customer information maintained by the financial institution including, but not limited to, customer identification information, customer documentation, account balance, and all payments made to the account holder or payee, and that complies with the following requirements namely:-

(I) the sponsoring entity is authorised to act on behalf of the financial institution (such as a fund manager, trustee, corporate director, or managing partner) to fulfil applicable registration requirements of the United States of America;

(II) the sponsoring entity has registered as a sponsoring entity with the United States of America;

(III) if the sponsoring entity identifies any U.S. reportable account with respect to the financial institution, the sponsoring entity registers the financial institution pursuant to applicable registration requirements of the United States of America on or before the 31st December, 2015 or the date that is ninety days after such U.S. reportable account is first identified, whichever is later;

(IV) the sponsoring entity agrees to perform, on behalf of the financial institution, all due diligence, withholding, reporting, and other requirements that the financial institution would have been required to perform if it were a reporting financial institution;

(V) the sponsoring entity identifies the financial institution and includes the identifying number of the financial institution (obtained by following applicable registration requirements of the United States of America) in all its reporting completed on the financial institution’s behalf; and

(VI) the sponsoring entity has not had its status as a sponsor revoked;

(R) “sponsored, closely held investment vehicle” means a financial institution satisfying the following requirements, namely:-

(i) it is a financial institution only because it is an investment entity and is not a qualified intermediary (being an intermediary that is a party to a withholding agreement with the United States of America), withholding foreign partnership, or withholding foreign trust;

(ii) the sponsoring entity is a reporting U.S. financial institution referred to in Article 1 of the FATCA agreement, reporting financial institution, or participating foreign financial institution defined in Annex II of the FATCA agreement, is authorised to act on behalf of the financial institution (such as a professional manager, trustee, or managing partner), and agrees to perform, on behalf of the financial institution, all due diligence, withholding, reporting, and other requirements which the financial institution would have been required to perform if it were a reporting financial institution;

(iii) the financial institution does not act as an investment vehicle for unrelated parties;

(iv) twenty or less than twenty individuals own all the debt interests and equity interests in the financial institution (other than debt interests owned by participating foreign financial institution defined in Annex II of the FATCA agreement and non-reporting financial institutions and equity interests owned by an entity if that entity owns hundred per cent. of the equity interests in the financial institution and is itself a sponsored financial institution described in this clause); and

(v) the sponsoring entity complies with the following requirements, namely:-

(a) it has been registered as a sponsoring entity in terms of the Foreign Account Tax Compliance Act of the United States of America;

(b) the sponsoring entity agrees to perform, on behalf of the financial institution, all due diligence, withholding, reporting, and other requirements that the financial institution would have been required to perform if it were a reporting financial institution and retains documentation collected with respect to the financial institution for a period of six years;

(c) the sponsoring entity identifies the financial institution in all its reporting completed on the financial institution’s behalf; and

(d) the sponsoring entity has not had its status as a sponsor revoked;

(6) “reportable account” means a financial account which has been identified, pursuant to the due diligence procedures provided in rule 114H, as held by,-

(a) a reportable person; or

(b) an entity, not based in United Sates of America, with one or more controlling persons that is a specified U.S. person; or

(c) a passive non-financial entity with one or more controlling persons that is a person described in sub clause (b) of clause (8) of this rule.

Explanation.- For the purpose of this clause,-

(A) “active non-financial entity” means any non-financial entity which fulfils any of the following criteria, namely:-

(i) less than fifty per cent of the entity’s gross income for the preceding financial year is passive income and less than fifty per cent of the assets held by the entity during the preceding financial year are assets that produce or are held for the production of passive income; or

(ii) the stock of the entity is regularly traded on an established securities market or the non-financial entity is a related entity of an entity, the stock of which is regularly traded on an established securities market.

Explanation.- For the purpose of this sub-clause, an established securities market means an exchange that is recognised and supervised by a Governmental authority in which the securities market is located and that has a meaningful annual value of shares traded on the exchange;

(iii) the entity is a Governmental entity, an International Organization, a Central Bank, or an entity wholly owned by one or more of these entities; or

(iv) substantially all of the activities of the entity consist of holding (in whole or in part) the outstanding stock of, or providing financing and services to, one or more subsidiaries that engage in trades or businesses other than the business of a financial institution:

Provided that an entity shall not qualify for this status if it functions as an investment fund, such as a private equity fund, venture capital fund, leveraged buyout fund, or any investment vehicle whose purpose is to acquire or fund companies and then hold interests in those companies as capital assets for investment purposes; or

(v) the entity is not yet operating a business and has no prior operating history, but is investing capital into assets with the intent to operate a business other than that of a financial institution, provided that the entity shall not qualify for this exception after the date that is twenty four months after the date of the initial organisation of the entity; or

(vi) the entity was not a financial institution in the past five years, and is in the process of liquidating its assets or is reorganising with intent to continue or recommence operations in a business other than that of a financial institution; or

(vii) the entity primarily engages in financing and hedging transactions with, or for, related entities which are not financial institutions, and does not provide financing or hedging services to any entity which is not a related entity, provided that the group of any such related entities is primarily engaged in a business other than that of a financial institution; or

(viii) the entity fulfils all of the following requirements, namely:-

(a) it is established and operated in India exclusively for religious, charitable, scientific, artistic, cultural, athletic, or educational purposes; or it is established and operated in India and it is a professional organisation, business league, chamber of commerce, labour organisation, agricultural or horticultural organisation, civic league or an organisation operated exclusively for the promotion of social welfare;

(b) it is exempt from income-tax in India;

(c) it has no shareholders or members who have a proprietary or beneficial interest in its income or assets;

(d) the applicable laws of the entity’s country or territory of residence or the entity’s formation documents do not permit any income or assets of the entity to be distributed to, or applied for the benefit of, a private person or non-charitable entity other than pursuant to the conduct of the entity’s charitable activities, or as payment of reasonable compensation for services rendered, or as payment representing the fair market value of property which the entity has purchased; and

(e) the applicable laws of the entity’s country or territory of residence or the entity’s formation documents require that, upon the entity’s liquidation or dissolution, all of its assets must be distributed to a Governmental entity or other non-profit organization, or escheat to the Government of the entity’s country or territory of residence or any political sub-division thereof.

Explanation.- For the purpose of this sub-clause, the following shall be treated as fulfilling the criteria provided in the said sub-clause, namely:-

(I) an Investor Protection Fund referred to in clause (23EA);

(II) a Credit Guarantee Fund Trust for Small Industries referred to in clause 23EB; and

(III) an Investor Protection Fund referred to in clause (23EC), of section 10 of the Act;

(B) “controlling person” means the natural person who exercises control over an entity and includes a beneficial owner as determined under sub-rule (3) of rule 9 of the Prevention of Money-laundering (Maintenance of Records) Rules, 2005.

Explanation 1.- In determining the beneficial owner, the procedure specified in the following circular as amended from time to time shall be applied, namely:-

(i) DBOD.AML.BC. No.71/14.01.001/2012-13, issued on the 18th January, 2013 by the Reserve Bank of India; or

(ii) CIR/MIRSD/2/2013, issued on the 24th January, 2013 by the Securities and Exchange Board of India; or

(iii) IRDA/SDD/GDL/CIR/019/02/2013, issued on the 4th February, 2013 by the Insurance Regulatory and Development Authority.

Explanation 2.- In the case of a trust, the controlling person means the settlor, the trustees, the protector (if any), the beneficiaries or class of beneficiaries, and any other natural person exercising ultimate effective control over the trust, and in the case of a legal arrangement other than a trust, the said expression means the person in equivalent or similar position;

(C) “non-financial entity” means any entity that is not a financial institution;

(D) “passive non-financial entity” means,-

(i) any non-financial entity which is not an active non-financial entity; or

(ii) an investment entity described in sub-clause (B) of clause (c) of the Explanation to clause (3); or

(iii) a withholding foreign partnership or withholding foreign trust;

(E) an entity is a “related entity” of another entity if either entity controls the other entity, or the two entities are under common control.

Explanation.- For the purpose of this clause control includes direct or indirect ownership of more than fifty per cent. of the votes and value in an entity;

(F) “passive income” includes income by way of,-

(i) dividends;

(ii) interest;

(iii) income equivalent to interest;

(iv) rents and royalties (other than rents and royalties derived in the active conduct of a business conducted, at least in part, by employees of the non-financial entity);

(v) annuities;

(vi) the excess of gains over losses from the sale or exchange of financial assets which gives rise to the passive income;

(vii) the excess of gains over losses from transactions (including futures, forwards, options, and similar transactions) in any financial assets;

(viii) the excess of foreign currency gains over foreign currency losses;

(ix) net income from swaps; or

(x) amounts received under cash value insurance contracts:

        Provided that passive income will not include, in the case of a non-financial entity that regularly acts as a dealer in financial assets, any income from any transaction entered into in the ordinary course of such dealer’s business as such a dealer.

(7) “reporting financial institution” means,-

(a) a financial institution (other than a non-reporting financial institution) which is resident in India, but excludes any branch of such institution, that is located outside India; and

(b) any branch, of a financial institution (other than a non-reporting financial institution) which is not resident in India, if that branch is located in India;

(8) “reportable person” means,-

(a) one or more specified U.S. persons; or

(b) one or more persons other than,-

(i) a corporation, the stock of which is regularly traded on one or more established securities markets;

(ii) any corporation that is a related entity of a corporation mentioned in item (i);

(iii) a Governmental entity;

(iv) an International organisation;

(v) a Central bank; or

(vi) a financial institution,

that is a resident of any country or territory outside India (except the United States of America) under the tax laws of such country or territory or an estate of a decedent who was a resident of any country or territory outside India (except the United States of America) under the tax laws of such country or territory;

(9) “specified U.S. person” means a U.S. Person, other than the persons referred to in sub-clauses (i) to (xiii) of clause (ff) of Article 1 of the FATCA agreement;

(10) “U.S. person” means,-

(a) an individual, being a citizen or resident of the United States of America ;

(b) a partnership or corporation organized in the United States of America or under the laws of the United States of America or any State thereof;

(c) a trust if,-

(i) a court within the United States of America would have authority under applicable law to render orders or judgments concerning substantially all issues regarding administration of the trust; and

(ii) one or more U.S. persons have the authority to control all substantial decisions of the trust; or

(d) an estate of a decedent who was a citizen or resident of the United States of America;

(11) “U.S. reportable account” means a financial account maintained by a reporting financial institution and, pursuant to the due diligence procedures provided in rule 114H, is identified to be held by one or more specified U.S. persons or by an entity not based in the United States of America with one or more controlling persons which is a specified U.S. Person;

(12) “U.S. source withholdable payment” means any payment of interest (including any original issue discount), dividends, rents, salaries, wages, premiums, annuities,  compensations, remunerations, emoluments, and other fixed or determinable annual or periodical gains, profits, and income, if such payment is from sources within the United States of America:

    Provided that a U.S. source withholdable payment shall not include any payment that is not treated as a withholdable payment in relevant Treasury Regulations of the United States of America;

(13) “withholding foreign partnership” means a foreign partnership that has entered into a withholding agreement with the United States of America in which it agrees to assume primary withholding responsibility for all payments which are made to it for its partners, beneficiaries or owners;

(14) “withholding foreign trust” means a foreign trust that has entered into a withholding agreement with the United States of America in which it agrees to assume primary withholding responsibility for all payments which are made to it for its partners, beneficiaries or owners.

    114G. Information to be maintained and reported.- (1) The following information shall be maintained and reported by a reporting financial institution in respect of each reportable account, namely:-

(a) the name, address, taxpayer identification number (assigned to the account holder by the country or territory of his residence for tax purposes) and date and place of birth (in the case of an individual) of each reportable person, that is an account holder of the account;

(b) in the case of any entity which is an account holder and which, after application of due diligence procedures prescribed in rule 114H, is identified as having one or more controlling persons that is a reportable person,-

(i) the name and address of the entity, taxpayer identification number assigned to the entity by the country or territory of its residence; and

(ii) the name, address, date and place of birth of each such controlling person and taxpayer identification number assigned to such controlling person by the country or territory of his residence;

(c) the account number (or functional equivalent in the absence of an account number);

(d) the account balance or value (including, in the case of a cash value insurance contract or annuity contract, the cash value or surrender value) at the end of relevant calendar year or, if the account was closed during such year, immediately before closure;

(e) in the case of any custodial account,-

(i) the total gross amount of interest, the total gross amount of dividends, and the total gross amount of other income generated with respect to the assets held in the account, in each case paid or credited to the account (or with respect to the account) during the calendar year; and

(ii) the total gross proceeds from the sale or redemption of financial assets paid or credited to the account during the calendar year with respect to which the reporting financial institution acted as a custodian, broker, nominee, or otherwise as an agent for the account holder;

(f) in the case of any depository account, the total gross amount of interest paid or credited to the account during the relevant calendar year;

(g) in the case of any account other than that referred to in clauses (e) or (f), the total gross amount paid or credited to the account holder with respect to the account during the relevant calendar year with respect to which the reporting financial institution is the obligor or debtor, including the aggregate amount of any redemption payments made to the account holder during the relevant calendar year; and

(h) in the case of any account held by a non-participating financial institution, for calendar year 2015 and 2016, the name of each non-participating financial institution to which payments have been made and aggregate amount such payments:

        Provided that the information to be reported,-

(i) with respect to calendar year 2014, is the information referred to in clauses (a), (b), (c) and (d), with regard to U.S. reportable accounts;

(ii) with respect to calendar year 2015, is the information referred to in clauses (a), (b), (c), (d), (f), (g), (h) and sub-clause (i) of clause (e), with regard to U.S. reportable accounts;

(iii) with respect to calendar year 2016, is the information referred to in clauses (a) to (h), with regard to all reportable accounts;

(iv) with respect to calendar year 2017 and subsequent years, is the information referred to in clauses (a) to (g), with regard to all reportable accounts:

        Provided further that with respect to each U.S. reportable account which is maintained by a reporting financial institution as on the 30th June, 2014, the taxpayer identification number of any relevant person is not required to be reported if such taxpayer identification number is not in the records of the reporting financial institution.

(2) For the purpose of sub-rule (1),-

(a) “account holder” means the person listed or identified as the holder of a financial account by the financial institution that maintains the account:

            Provided that a person, other than a financial institution, holding a financial account for the benefit or on account of another person as agent, custodian, nominee, signatory, investment advisor, or intermediary, is not treated as holding the account, and such other person is treated as holding the account:

            Provided further that in the case of a cash value insurance contract or an annuity contract, the account holder is any person entitled to receive a payment upon the maturity of the contract or any person entitled to access the cash value or change the beneficiary of the contract and if no person can access the cash value or change the beneficiary, the account holder is any person named as the owner in the contract and any person with a vested entitlement to payment under the terms of the contract;

(b) “taxpayer identification number” means a number assigned to a person in the country or territory in which he is resident for tax purposes and includes a functional equivalent in case no such number is assigned.

(3) Where the person is a resident of more than one country or territory outside India under the tax laws of such country or territory, the reporting financial institution shall maintain the taxpayer identification number in respect of each such country or territory.

(4) Notwithstanding anything contained in sub-rule (1), with respect to each reportable account which is a pre-existing account, the taxpayer identification number or date of birth is not required to be reported if such taxpayer identification number or date of birth is not in the records of the reporting financial institution:

    Provided that the reporting financial institution shall obtain the taxpayer identification number and date of birth with respect to pre-existing accounts by the 31st December, 2016 and shall report it with respect to calendar year 2017 and subsequent years.

(5) Notwithstanding anything contained in sub-rule (1) and sub-rule (4), the taxpayer identification number is not required to be reported if,-

(i) a taxpayer identification number (including its functional equivalent) is not issued by the relevant country or territory outside India in which the person is resident for tax purposes or;

(ii) the domestic law of the relevant country or territory outside India does not require the collection of the taxpayer identification number issued by such country or territory.

(6) Notwithstanding anything contained in sub-rule (1), the place of birth is not required to be reported unless it is available in the electronically searchable data maintained by the reporting financial institution.

(7) The statement of reportable account required to be furnished under clause (k) of sub-section (1) of section 285BA shall be furnished by a reporting financial institution in respect of each account which has been identified, pursuant to due diligence procedure specified in rule 114H, as a reportable account:

    Provided that where pursuant to such due diligence procedures no account is identified as a reportable account, a nil statement shall be furnished by the reporting financial institution.

(8) The statement referred to in sub-rule (7) shall be furnished in Form No. 61B for every calendar year by the 31st day of May following that year:

    Provided that the statement pertaining to calendar year 2014 shall be furnished by the 31st day of August, 2015.

(9) (a) The statement referred to in sub-rule (7) shall be furnished to the Director of Income-tax (Intelligence and Criminal Investigation) or the Joint Director of Income-tax (Intelligence and Criminal Investigation) through online transmission of electronic data to a server designated for this purpose under the digital signature in accordance with the data structure specified in this regard by the Principal Director General of Income-tax (Systems).

Explanation.-For the purposes of this sub-rule, “digital signature” means a digital signature issued by any Certifying Authority authorised to issue such certificates by the Controller of Certifying Authorities.

(b) Principal Director General of Income Tax (Systems) shall specify the procedures, data structures and standards for ensuring secure capture and transmission of data, evolving and implementing appropriate security, archival and retrieval policies.

(10) (a) Every reporting financial institution shall communicate to the Principal Director General of Income-tax (Systems) the name, designation and communication details of the Designated Director and the Principal Officer and obtain a registration number;

(b) The statement referred to in sub-rule (7) shall be signed, verified and furnished by the Designated Director of the reporting financial institution on the basis of information available with the institution:

    Provided that where the reporting financial institution is a non-resident, the statement may be signed, verified and furnished by a person who holds a valid power of attorney from such Designated Director;

(c) It shall be the duty of every reporting financial institution, its Designated Director, Principal Officer and employees to observe the procedure and the manner of maintaining information as specified by its regulator.

Explanation.- For the purposes of this sub-rule,-

(a) “Designated Director” means a person designated by the reporting financial institution to ensure overall compliance with the obligations imposed under section 285BA and the rules made thereunder and includes-

(i) the Managing Director or a whole-time Director, as defined in the Companies Act, 2013 (18 of 2013), duly authorised by the Board of Directors if the reporting financial institution is a company;

(ii) the managing partner if the reporting financial institution is a partnership firm;

(iii) the proprietor if the reporting financial institution is a proprietorship concern;

(iv) the managing trustee if the reporting financial institution is a trust;

(v) a person or individual, as the case may be, who controls and manages the affairs of the reporting financial institution if the reporting financial institution is an association of persons or a body of individuals, or any other person;

(b) “Principal Officer” means an officer designated by the reporting financial institution;

(c) “regulator” means a person or an authority or a Government which is vested with the power to license, authorise, register, regulate or supervise the activities of the reporting financial institution.

(11)(a) The regulator referred to in clause (c) of sub-rule (10) shall issue instructions or guidelines to,-

(i) incorporate the requirements of reporting and due diligence procedure specified under rules 114F to 114H;

(ii) provide the procedure and manner of maintaining the information by the reporting financial institution; and

(iii) ensure the availability of the information referred to in sub-rule (1) with the reporting financial institution for meeting its reporting obligation, if such information is not maintained by it under any rule or regulation issued by the regulator.

(b) Every reporting financial institution shall maintain information in respect of financial accounts in accordance with the procedure and manner as may be specified by its regulator from time to time so as to enable reporting of information prescribed under this rule and perform due diligence procedure specified under rule 114H.

    114H. Due diligence requirement.- (1) An account shall be treated as a reportable account beginning as on the date it is identified as such pursuant to the due diligence procedure specified in sub-rule (3) to sub-rule (8) and, unless otherwise provided, information with respect to a reportable account shall be reported annually in the calendar year following the calendar year to which the information relates.

(2) For the purpose of this rule,-

(a) “documentary evidence” includes any of the following, namely:-

(i) a certificate of residence issued by an authorised Government body, including a Government agency or a municipality, of the country or territory in which the payee claims to be a resident;

(ii) with respect to an individual, any valid identification issued by an authorized Government body, including a Government agency or a municipality, that includes the individual’s name and is particularly used for identification purposes;

(iii) with respect to an entity, any official documentation issued by an authorized Government body, including a Government agency or a municipality, which includes the name of the entity and either the address of its principal office in the country or territory in which it claims to be a resident or the country or territory in which the entity was incorporated or organized;

(iv) any financial statement, third-party credit report, bankruptcy filing, or a report of the Government agency regulating the securities market;

(b) “high value account” means a pre-existing individual account with a balance or value that,-

(i) in case of a U.S. reportable account, exceeds an amount equivalent to one million U.S. dollars as on the 30th June, 2014 or 31st December of any subsequent year; and

(ii) in case of other reportable account, exceeds an amount equivalent to one million U.S. dollars as on the 31st December, 2015 or 31st December of any subsequent year;

(c) “lower value account” means a pre-existing individual account with a balance or value that,-

(i) in case of a U.S. reportable account, exceeds an amount equivalent to fifty thousand U.S. dollars but does not exceed an amount equivalent to one million U.S. dollars as on the 30th June, 2014; and

(ii) in case of other reportable account, does not exceed an amount equivalent to one million U.S. dollars as on the 31st December, 2015;

(d) “new account” means a financial account maintained by a reporting financial institution opened on or after,

(i) in case of a U.S. reportable account, the 1st July, 2014; and

(ii) in case of other reportable account, the 1st January, 2016;

(e) “new entity account” means a new account held by one or more entities;

(f) “new individual account” means a new account held by one or more individuals;

(g) “other reportable account” means a reportable account which is not a U.S. reportable account;

(h) “pre-existing account” means a financial account maintained by a reporting financial institution as on,-

(I) in case of a U.S. reportable account, the 30th June, 2014; and

(II) in case of other reportable account, the 31st December 2015;

(i) “pre-existing entity account” means a pre-existing account held by one or more entities;

(j) “pre-existing individual account” means a pre-existing account held by one or more individuals;

(k) where a balance or value threshold is to be determined at the end of a calendar year, the relevant balance or value shall be determined as on the last day of the reporting period which ends with or within that calendar year.

(3) The due diligence procedure for the purposes of identifying reportable accounts among pre-existing individual accounts shall be the following, namely:-

(a) a pre-existing individual account is not required to be reviewed, identified or reported, if,-

(i) in case of a U.S. reportable account,-

(A) the balance or value as on the 30th June, 2014, does not exceed an amount equivalent to fifty thousand U.S. dollars, subject to sub-clause (vi) of clause (c) of this sub-rule; or

(B) which is a cash value insurance contract or an annuity contract, the balance or value does not exceed an amount equivalent to two hundred and fifty thousand U.S. dollars as on the 30th June, 2014, subject to sub-clause (vi) of clause (c) of this sub-rule; or

(C) which is a cash value insurance contract or an annuity contract, the reporting financial institution, under any other law for the time being in force in India or of the United States of America, is prevented from selling such contract to a person who is a resident of the United States of America;

(ii) in case of other reportable account, which is a cash value insurance contract or an annuity contract, the reporting financial institution, under any other law for the time being in force in India, is prevented from selling such contract to a person who is not a resident of India for tax purposes;

(b) with respect to lower value accounts among pre-existing individual accounts the following procedures shall apply, namely:-

(i) the reporting financial institution must review electronically searchable data maintained by the reporting financial institution for any of the following indicia, and apply provisions contained in sub-clauses (ii) to (v), namely:-

(A) identification of the account holder as a resident of any country or territory outside India for tax purposes or unambiguous indication of a place of birth in the United States of America; or

(B) current mailing or residence address (including a post office box) in any country or territory outside India; or

(C) one or more telephone numbers in a country or territory outside India and no telephone number in India; or

(D) 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

(E) currently effective power of attorney or signatory authority granted to a person with an address in a country or territory outside India; or

(F) a “hold mail” instruction or “in-care-of” address in a country or territory outside India if the reporting financial institution does not have any other address on file for the account holder;

(ii) if none of the indicia listed in sub-clause (i) are discovered in the electronic search, then no further action is required until there is a change in circumstances which results in one or more indicia being associated with the account, or the account becomes a high value account;

(iii) if any of the indicia listed in items (A) to (E) of sub-clause (i) are discovered in the electronic search, or if there is a change in circumstances which results in one or more indicia being associated with the account, then the reporting financial institution shall treat the account holder as resident for tax purposes of each such country or territory for which an indicium is identified, unless it elects to apply sub-clause (v) and one of the exceptions in the said sub-clause applies with respect to that account;

(iv) if a “hold mail” instruction or “in-care-of” address is discovered in the electronic search and no other address and none of the other indicia listed in items (A) to (E) of sub-clause (i) are identified for the account holder, the reporting financial institution shall apply the paper record search referred to in sub-clause (ii) of clause (c), or seek to obtain from the account holder a self-certification or documentary evidence to establish the residence or residences for tax purposes of such account holder:

            Provided that if the paper search fails to establish an indicium and the attempt to obtain the self-certification or documentary evidence is not successful, the reporting financial institution shall report the account as an undocumented account;

(v) notwithstanding a finding of indicia under sub-clause (i), a reporting financial institution is not required to treat an account holder as a resident, for tax purposes,-

(A) of United States of America if, the account holder’s information unambiguously indicates a place of birth in the United States of America and the reporting financial institution obtains, or has previously reviewed and maintains a record of,-

(I) a self-certification that the account holder is neither a citizen of the United States of America nor its resident for tax purposes;

(II) a passport or other Government-issued identification evidencing the account holder’s citizenship ornationality in a country other than the United States of America; and

(III) a copy of the account holder’s certificate of loss of nationality of the United States of America or a reasonable explanation of-

(1) the reason, the account holder does not have such a certificate despite relinquishing citizenship of the United States of America; or

(2) the reason, the account holder did not obtain citizenship of the United States of America at birth;

(B) of any country or territory outside India if, the account holder’s information contains a current mailing or residence address in any country or territory outside India, one or more telephone numbers in any country or territory outside India (and no telephone number in India) or standing instructions (with respect to financial accounts other than depository accounts) to transfer funds to an account maintained in any country or territory outside India, the reporting financial institution obtains, or has previously reviewed and maintains a record of,-

(I) a self-certification from the account holder of the country or territory or countries or territories of residence for tax purposes of such account holder that does not include any country or territory outside India; and

(II) documentary evidence establishing the account holder’s non-reportable status;

(C) of any country or territory outside India if, the account holder’s information contains a currently effective power of attorney or signatory authority granted to a person with an address in a country or territory outside India, or one or more telephone numbers in any country or territory outside India (if an Indian telephone number in also associated with the account), the reporting financial institution obtains, or has previously reviewed and maintains a record of-

(I) a self-certification from the account holder of the country or territory or countries or territories of residence of such account holder that does not include any country or territory outside India; or

(II) documentary evidence establishing the account holder’s non-reportable status;

(c) with respect to high value accounts among pre-existing individual accounts the following enhanced review procedures shall apply, namely:-

(i) the reporting financial institution must review electronically searchable data maintained by the reporting financial institution for any of the indicia described in sub-clause (i) of clause (b);

(ii) if the reporting financial institution’s electronically searchable databases do not capture all of the information referred to in sub-clause (iii) of this clause, then the reporting financial institution shall also review the current customer master file and, to the extent not contained in the current customer master file, the following documents associated with the account and obtained by the reporting financial institution during the last five years for any of the indicia provided in sub-clause (i) of clause (b),-

(A) the most recent documentary evidence collected with respect to the account;

(B) the most recent account opening contract or documentation;

(C) the most recent documentation obtained by the reporting financial institution pursuant to rules framed under the Prevention of Money-laundering Act, 2002 (15 of 2003) or any other law for the time being in force;

(D) any power of attorney or signature authority forms currently in effect; and

(E) any standing instructions (other than with respect to a depository account) to transfer funds currently in effect:

        Provided that where the electronically searchable databases include fields for, and capture all the information referred to in sub-clause (iii) of this clause, then review of the customer master file and documents referred to above shall not be required;

(iii) a reporting financial institution is not required to perform the paper record search referred in sub-clause (ii) of this clause to the extent the reporting financial institution’s electronically searchable information includes the following, namely:-

(A) the account holder’s residence status for tax purposes;

(B) the account holder’s residence address and mailing address currently on file with the reporting financial institution;

(C) the account holder’s telephone number or numbers currently on file, if any, with the reporting financial institution;

(D) in the case of financial accounts other than depository accounts, whether there are standing instructions to transfer funds in the account to another account (including an account at another branch of the reporting financial institution or another financial institution);

(E) whether there is a current “in-care-of” address or “hold mail” instruction for the account holder; and

(F) whether there is any power of attorney or signatory authority for the account;

(iv) in addition to the electronic and paper record searches provided in sub-clauses (i) to (iii) of this clause, the reporting financial institution shall treat as a reportable account any high value account assigned to a relationship manager (including any financial accounts aggregated with that high value account) if the relationship manager has actual knowledge that the account holder is a reportable person;

(v) after application of review procedures specified in sub-clauses (i) to (iv) if,-

(A) none of the indicia referred to in sub-clause (i) of clause (b) are discovered, and the account is not identified as held by a reportable person as per sub-clause (iv), then further action is not required until there is a change in circumstances which results in one or more indicia being associated with the account;

(B) any of the indicia referred to in items (A) to (E) of sub-clause (i) of clause (b) are discovered, or if there is a subsequent change in circumstances which results in one or more indicia being associated with the account, then the reporting financial institution shall treat the account as a reportable account with respect to each country or territory outside India for which an indicium is identified unless it elects to apply sub-clause (v) of clause (b) and one of the exceptions in the said sub-clause applies with respect to that account;

(C) a “hold mail” instruction or “in-care-of” address is discovered in the electronic search and no other address and none of the other indicia referred to in items (A) to (E) of sub-clause (i) of clause (b) are identified for the account holder, the reporting financial institution shall obtain from such account holder a self-certification or documentary evidence to establish the residence or residences for tax purposes of the account holder:

        Provided that if the reporting financial institution cannot obtain such self-certification or documentary evidence, it shall report the account as an undocumented account;

(vi) if a pre-existing individual account is not a high value account as on the 30th June, 2014 (for U.S. reportable account), or as the case may be, 31st December, 2015 (for other reportable account), but becomes a high value account as on the last day of year 2015 (for U.S. reportable account) or last day of any subsequent calendar year (for all reportable accounts), the reporting financial institution shall complete the enhanced review procedures specified in this clause with respect to such account within the calendar year following the year in which the account becomes a high value account and if based on such review the account is identified as a reportable account, the reporting financial institution shall report the required information about such account with respect to the year in which it is identified as a reportable account and subsequent years on an annual basis, unless the account holder ceases to be a reportable person;

(vii) once a reporting financial institution applies the enhanced review procedures specified in this clause to a high value account, the reporting financial institution is not required to re-apply such procedures, other than an inquiry by the relationship manager provided in sub-clause (iv), to the same high value account in any subsequent year unless the account is undocumented where the reporting financial institution shall re-apply them annually until such account ceases to be undocumented;

(viii) if there is a change of circumstances with respect to a high value account which results in one or more indicia referred to in sub-clause (i) of clause (b) being associated with the account, then the reporting financial institution must treat the account as a reportable account with respect to each such country or territory outside India for which an indicium is identified unless it elects to apply sub-clause (v) of clause (b) and one of the exceptions in the said sub-clause applies with respect to that account;

(ix) a reporting financial institution shall implement procedures to ensure that a relationship manager identifies any change in circumstances of an account and where the relationship manager is informed that the account holder has a new mailing address in any country or territory outside India, the reporting financial institution is required to treat the new address as a change in circumstances and, if it elects to apply sub-clause (v) of clause (b), then it is required to obtain the appropriate documentation from the account holder;

(d) review of pre-existing individual account,-

(i) in case of a U.S. reportable account which is high value account as on the 30th June, 2014, shall be completed by the 31st December, 2015 and if based on this review such account is identified as a U.S. reportable account after the 31st December, 2014 and on or before the 31st December, 2015, the reporting financial institution is not required to report information about such account with respect to calendar year 2014, but shall report information about the account on an annual basis thereafter;

(ii) in case of a U.S. reportable account which is low value account as on the 30th June, 2014, or in case of other reportable account which is high value account as on the 31st December, 2015, shall be completed by the 30th June, 2016;

(iii) in case of other reportable account that is low value account as on the 31st December, 2015, must be completed by the 30th June, 2017;

(e) any pre-existing individual account which has been identified as a reportable account under this sub-rule shall be treated as a reportable account in all subsequent years, unless the account holder ceases to be a resident of any country or territory outside India as per tax laws of such jurisdiction.

(4) The following procedures shall apply for purposes of identifying reportable accounts among new individual accounts, namely:-

(a) unless the reporting financial institution elects otherwise, the following new individual accounts are not required to be reviewed, or reported as U.S. reportable accounts, namely:-

(i) a depository account unless the account balance exceeds an amount equivalent to fifty thousand U.S. dollars at the end of any calendar year;

(ii) a cash value insurance contract unless the cash value exceeds an amount equivalent to fifty thousand U.S. dollars at the end of any calendar year;

(b) in case of a new individual account,-

(i) in respect of a U.S. reportable account, which does not fall under sub-clauses (i) and (ii) of clause (a), upon account opening (or within ninety days after the end of the calendar year in which the account ceases to be covered under sub-clauses (i) and (ii) of clause (a)); and

(ii) in respect of other reportable account, upon account opening, the reporting financial institution shall obtain a self-certification, which may be part of the account opening documentation, that allows the reporting financial institution to determine the account holder’s residence or residences for tax purposes and confirms the reasonableness of such self-certification based on the information obtained by the reporting financial institution in connection with the opening of the account, including any documentation collected in accordance with Prevention of Money-laundering (Maintenance of Records) Rules, 2005;

(c) where the self-certification obtained under clause (b) of this sub-rule establishes that the account holder is resident for tax purposes in a country or territory outside India, the reporting financial institution shall treat the account as a reportable account and the self-certification shall also include the account holder’s taxpayer identification number with respect to such country or territory outside India, subject to sub-rule (5) of rule 114G, and date of birth;

(d) where a self-certification has been obtained under clause (b) of this sub-rule for a new individual account and if there is a change of circumstances with respect to such account which causes the reporting financial institution to know, or have reason to know, that the said self-certification is incorrect or unreliable, the reporting financial institution shall not rely on the said self-certification and shall obtain a valid self-certification that establishes the residence or residences for tax purposes of the account holder:

        Provided that if the reporting financial institution is unable to obtain a valid self-certification, the reporting financial institution shall treat the account as a reportable account with respect to each such country or territory outside India for which an indicium is identified.

(5) The following procedures shall apply for purposes of identifying reportable accounts among pre-existing entity accounts, namely:-

(a) unless the reporting financial institution elects otherwise, either with respect to all pre-existing entity accounts or, separately, with respect to any clearly identified group of such accounts, a pre-existing entity account with an aggregate account balance or value which does not exceed 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), or as the case may be, 31st December, 2015 (in case of other reportable account), is not required to be reviewed, identified, or reported as a reportable account until the aggregate account balance or value exceeds an amount equivalent to two hundred and fifty thousand U.S. dollars as of the last day of any subsequent calendar year;

(b) a pre-existing entity account that has 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), or as the case may be, 31st December, 2015 (in case of other reportable account), and a pre-existing entity account that does not exceed 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), or as the case may be, 31st December, 2015 (in case of other reportable account) but the aggregate account balance or value exceeds an amount equivalent to two hundred and fifty thousand U.S. dollars as of the last day of any subsequent calendar year, shall be reviewed in accordance with the procedure provided in clause (d) of this sub-rule;

(c) with respect to pre-existing entity accounts referred to in clause (b), only accounts which are held by,-

(i) one or more entities which are reportable persons; or

(ii) passive non-financial entity with one or more controlling persons who are reportable persons,

shall be treated as reportable accounts:

            Provided that the accounts held by non-participating financial institutions for which aggregate payments as provided in clause (h) of sub-rule (1) of rule 114G are reported shall be treated as reportable accounts;

(d) for pre-existing entity accounts referred to in clause (b) with respect to which reporting is required, a reporting financial institution, to determine whether the account is held by one or more reportable persons, or by a passive non-financial entity with one or more controlling persons who are reportable persons, or by non-participating financial institutions, shall apply the following review procedures namely:-

(i) to determine whether the entity is a reportable person, the reporting financial institution shall,-

(A) review information maintained for regulatory or customer relationship purposes (including information collected in accordance with the rules made under the Prevention of Money-laundering Act, 2002 (15 of 2003)) to determine whether the information indicates that the account holder is a reportable person.

Explanation.- For the purpose of this sub-clause, information indicating that the account holder is a resident of any country or territory outside India as per tax laws of such country or territory includes a place of incorporation or organisation, or an address in a country or territory outside India;

(B) treat the account as a reportable account, if the information as per item (A) indicates that the account holder is a reportable person, unless it obtains a self-certification from the account holder, or reasonably determines based on information in its possession or that is publicly available, that the account holder is not a reportable person:

        Provided that if the information as per item (A) indicates that the account holder is an entity not based in the United States of America which is a financial institution, or the reporting financial institution verifies the account holder’s Global Intermediary Identification Number, then the account shall not be treated as a U.S. reportable account;

(ii) treat the account holder as a non-participating financial institution if,-

(A) the account holder is an Indian financial institution or other partner jurisdiction financial institution and treated by the United States of America as a non-participating financial institution;

(B) the account holder, being a financial institution, is not an Indian financial institution or other partner jurisdiction financial institution, unless the reporting financial institution,-

(I) obtains a self-certification from the account holder that it is a financial institution referred to in sub-clauses (a) to (m) of clause (5) of rule 114F; or

(II) in the case of participating foreign financial institution defined in Annex II of the FATCA agreement or a financial institution referred to in sub-clauses (e) to (m) of clause (5) of rule 114F, verifies the account holder’s Global Intermediary Identification Number;

(iii) the reporting financial institution shall determine whether the account holder is a passive non-financial entity with one or more controlling persons who are resident of any country or territory outside India as per tax laws of such country or territory and in making these determinations the reporting financial institution shall follow the following procedures, namely:-

(A) for purposes of determining whether the account holder is a passive non-financial entity, the reporting financial institution shall obtain a self-certification from the account holder to establish its status, unless it has information in its possession or which is publicly available, based on which it can reasonably determine that the account holder is an active non-financial entity or a financial institution other than an investment entity referred to in sub-clause (B) of clause (c) of Explanation to clause (3) of rule 114F;

(B) for purposes of determining the controlling persons of an account holder, a reporting financial institution may rely on information collected and maintained in accordance with the rules made under the Prevention of Money-laundering Act, 2002 (15 of 2003);

(C) for purposes of determining whether a controlling person of a pre-existing account of passive non-financial entity is a reportable person, a reporting financial institution may rely on,-

(I) information collected and maintained in accordance with rules made under the Prevention of Money-laundering Act, 2002 (15 of 2003) in the case of pre-existing entity account held by one or more non-financial entity with an aggregate balance or value which does not exceed an amount equivalent to one million U.S. dollars; or

(II) a self-certification from the account holder or such controlling person of the passive non-financial entity with an account balance or value which exceeds an amount equivalent to one million U.S. dollars;

(D) if any controlling person of a passive non-financial entity is a resident of any country or territory outside India for tax purposes, the account shall be treated as a reportable account;

(e) the following additional procedures shall be applicable to pre-existing entity accounts, 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), or as the case may be, 31st December, 2015 (in case of other reportable account) shall be completed by the 30th June, 2016;

(ii) review of pre-existing entity accounts with an aggregate account balance or value which does not exceed 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), or as the case may be, 31st December, 2015 (in case of other reportable account), but exceeds an amount equivalent to two hundred and fifty thousand U.S. dollars as on the 31st December of a subsequent year, shall be completed within the calendar year following the year in which the aggregate account balance or value exceeds an amount equivalent to two hundred and fifty thousand U.S. dollars;

(iii) if there is a change of circumstances with respect to a pre-existing entity account that causes the reporting financial institution to know, or have reason to know, that the self-certification or other documentation associated with the account is incorrect or unreliable, the reporting financial institution shall re-determine the status of the account in accordance with the procedures set forth in clause (d) of this sub-rule.

(6) The following procedures shall apply for purposes of identifying reportable accounts and accounts held by non-participating financial institutions among new entity accounts, namely:-

(a) a reporting financial institution, to determine whether the new entity account is a reportable account, shall apply the following review procedures namely:-

(i) determine whether the entity is a reportable person and for that the reporting financial institution shall,-

(A) obtain a self-certification, which may be part of the account opening documentation, that allows the reporting financial institution to determine the account holder’s residence or residences for tax purposes and confirm the reasonableness of such self-certification based on the information obtained by the reporting financial institution in connection with the opening of the account, including any documentation collected in accordance with the rules made under the Prevention of Money-laundering Act, 2002 (15 of 2003):

                Provided that if the entity certifies that it has no residence for tax purposes, the reporting financial institution may rely on the address of the principal office of the entity to determine the residence of the account holder;

(B) treat the account as a reportable account, if the information as per item (A) indicates that the account holder is a reportable person, unless it reasonably determines based on information in its possession or which is publicly available, that the account holder is not a reportable person:

                Provided that if the information as per item (A) indicates that the account holder is an Indian financial institution, or partner jurisdiction financial institution, which is not a non-participating financial institution or a participating foreign financial institution or a non-reporting financial institution then the account shall not be treated as a U.S. reportable account;

(ii) determine whether the account holder is a passive non-financial entity with one or more controlling persons who are reportable persons and in making these determinations the reporting financial institution shall follow the following procedures, namely:-

(A) for purposes of determining whether the account holder is a passive non-financial entity, the reporting financial institution shall rely on a self-certification from the account holder to establish its status, unless it has information in its possession or that is publicly available, based on which it can reasonably determine that the account holder is not a passive non-financial entity;

(B) for purposes of determining the controlling persons of an account holder, a reporting financial institution may rely on information collected and maintained in accordance with the rules made under the Prevention of Money-laundering Act, 2002 (15 of 2003);

(C) for purposes of determining whether a controlling person of a passive non-financial entity is a reportable person, a reporting financial institution may rely on a self-certification from the account holder or such controlling person;

(b) the reporting financial institution shall determine whether the account holder is a non-participating financial institution and in such case any payment to the account holder shall be reported as per clause (h) of sub-rule (1) of rule 114G.

(7) The following additional procedures shall apply in implementing the due diligence requirement specified in sub-rules (1) to (6), namely:-

(a) a reporting financial institution may not rely on a self-certification or documentary evidence if the reporting financial institution knows or has reason to know that the self-certification or documentary evidence is incorrect or unreliable;

(b) a reporting financial institution may presume that an individual beneficiary (other than the owner) of a cash value insurance contract or an annuity contract receiving a death benefit is not a reportable person and may treat such financial account as other than a reportable account unless the reporting financial institution has actual knowledge, or reason to know, that the beneficiary is a reportable person:

Provided that if a reporting financial institution has actual knowledge, or reason to know, that the beneficiary is a reportable person, it shall follow the procedures specified in clause (b) of sub-rule (3);

Explanation.- For the purposes of this clause, a reporting financial institution shall be deemed to have reason to know that a beneficiary of a cash value insurance contract or an annuity contract is a reportable person if the information collected by the reporting financial institution and associated with the beneficiary contains indicia specified in clause (b) of sub-rule (3).

(c) the following procedures relating to aggregation of account balance and currency shall apply, namely:-

(i) for purposes of determining the aggregate balance or value of financial accounts held by an individual, a reporting financial institution shall be required to aggregate all financial accounts maintained by it, or by a related entity, but only to the extent that the computerised systems of that reporting financial institution links the financial accounts by reference to a data element such as client number or taxpayer identification number, and allows account balances or values to be aggregated;

(ii) for purposes of determining the aggregate balance or value of financial accounts held by an entity, a reporting financial institution shall be required to take into account all financial accounts which are maintained by it, or by a related entity, but only to the extent that the computerised systems of that reporting financial institution links the financial accounts by reference to a data element such as client number or taxpayer identification number, and allows account balances or values to be aggregated;

(iii) for purposes of determining the aggregate balance or value of financial accounts held by a person to determine whether a financial account is a high value account, a reporting financial institution shall also be required, in the case of any financial accounts that a relationship manager knows, or has reason to know, are directly or indirectly owned, controlled, or established (other than in a fiduciary capacity) by the same person, to aggregate all such accounts;

(iv) for the purposes of rules 114F, 114G and this rule, any account maintained in rupees or in any permissible currency (other than the United States Dollar) as designated by the Reserve Bank of India shall be converted to United States Dollar at the end of the reporting period as per the reference rates of the Reserve Bank of India and such converted amount in the United States Dollar shall be used for determining the balance or value of a financial account provided in such rules.

Explanation 1.- For the purposes of this clause each holder of a jointly held financial account shall be attributed the entire balance or value of the jointly held financial account for purposes of applying the aggregation requirements.

(8) In case of a U.S. reportable account opened on or after the 1st July, 2014 but before the date of entry into force of FATCA agreement, notwithstanding the due diligence procedures specified in sub-rule (4) or sub-rule (6) of this rule for new accounts, the reporting financial institution may, in lieu of the procedures specified in the said sub-rules, apply the following alternative procedures, namely:-

(a) within one year after the date of entry into force of the FATCA agreement, reporting financial institutions shall,-

(i) with respect to a new individual account opened on or after the 1st July, 2014 but before the date of entry into force of FATCA agreement, request the self-certification specified in sub-rule (4) and confirm the reasonableness of such self-certification consistent with the procedures specified in sub-rule (4); and

(ii) with respect to a new entity account opened on or after the 1st July, 2014 but before the date of entry into force of FATCA agreement, perform the due diligence procedures specified in sub-rule (6) and request for information as necessary to document the account, including any self-certification, required under sub-rule (6);

(b) the reporting financial institution shall report on any new account which is identified pursuant to clause (a) of this sub-rule as a U.S. reportable account or as an account held by a non-participating financial institution, as applicable, by the date which is the later of,-

(i) the 31st of May next following the date on which the account is identified as a U.S. reportable account or as an account held by a non-participating financial institution, as applicable; and

(ii) forty-five days after the account is identified as a U.S. reportable account or as an account held by a non-participating financial institution, as applicable:

            Provided that the information required to be reported with respect to such a new account shall be information which would have been reportable had the new account been identified as a U.S. reportable account or as an account held by a non-participating financial institution, as applicable, as of the date the account was opened;

(c) by the date that is one year after the date of entry into force of the FATCA agreement, reporting financial institutions shall close any new account described in clause (a) for which it was unable to collect the required self-certification or other documentation in accordance with the procedure specified in clause (b):

Provided that in addition, by such date, the reporting financial institutions shall,-

(i) with respect to such closed accounts which prior to such closure were new individual accounts (without regard to whether such accounts were high value accounts), perform the due diligence procedure specified in clause (c) of sub-rule (3), or

(ii) with respect to such closed accounts which prior to such closure were new entity accounts, perform the due diligence procedures specified in sub-rule (5); and

(d) the reporting financial institution shall report the information specified in rule 114G in respect of any closed account which is identified under clause (c) as a U.S. reportable account or as an account held by a non-participating financial institution, as applicable, by the date that is the later of,-

(i) the 31st of May next following the date on which the account is identified as a U.S. reportable account or as an account held by a non-participating financial institution, as applicable; and

(ii) forty-five days after the account is identified as a U.S. reportable account or as an account held by a non-participating financial institution, as applicable:

    Provided that in respect of all new entity accounts or a clearly identified group of such accounts which are U.S. reportable accounts opened on or after the 1st July, 2014, and before the 1st January, 2015 the reporting financial institution may, in lieu of the procedure specified in clauses (a) to (d), treat such accounts as pre-existing entity accounts and apply the due diligence procedure related to pre-existing entity accounts specified in sub-rule (5) without regard to the account balance or value threshold specified in clause (a) of sub-rule (5).’

GST could push GDP by 1-2 per cent, regret delay in rollout: Arun Jaitley : 06-08-2015


Citing slowdown in China, Finance Minister Arun Jaitleytoday said India has a chance to become a global manufacturing hub but regretted that Congress was not allowing GST rollout which alone could push GDP by 1 to 2 per cent.

The minister said in Lok Sabha that India can see 8 per cent growth as the government is taking a host of steps to boost investment besides reviving stalled projects and pumping in more funds into PSU banks. In addition, “rain Gods have been kinder this year which is expected result in a good harvest,” he said.

Jaitley, who was replying to a debate on Supplementary Demand for Grants amid a boycott by Congress and a number of other opposition parties, said the government will infuse Rs 70,000 crore in PSU banks in the four years and they will raise another Rs 1.10 lakh crore from the market, making them healthier to finance economic growth.

“If my friends (Congress), who are not present in House today, allow implementation of GST, which was introduced by Congress, you will have an uniform tax rate, one market and it is capable of boosting economy by 1-2 per cent.

“In adverse situation we can touch 8 per cent if banks are recapitalised, GST implemented, stalled projects revived and infrastructure spending improves,” he said.

The GST bill, which proposes to usher in a uniform indirect taxation system throughout the country, is stuck in Rajya Sabha which is unable to function because of opposition protests over various issues.

Turning to China, which has been the world’s fastest growing economy, Jaitley said it has slowed down and its wage bills have gone up, pushing up the cost of its products.

In this context, Jaitley said, “It is for us to become a manufacturing hub. It is then the Indian economy will achieve full potential”.

The Finance Minister said India, which is targeting to grow by over 8 per cent in a sustained manner, is a “bright spot” among the global economies.

India grew at 7.3 per cent last year and RBI has projected this year’s growth to be 7.6 per cent.

“In this global environment where global winds are not favourable .. In past few years, we have come down to reasonably bottom pit… Under Prime MinisterNarendra Modi’s leadership, we are reviving the economy and it is responsibility of all of us to cooperate to enhance growth rate,” Jaitley said.

He said global economies are facing challenges and even for a high growth economy like China, the new normal is 7 per cent or below.

Source : The Financial Express

No. 07 Dated: 6-8-2015


Exim Bank’s GoI supported Line of Credit of USD 18.08 million to the Government of Republic of Chad – Circular – Dated 6-8-2015 – FEMA

RBI//2015-16/146

A.P. (DIR Series) Circular No.7

August 06, 2015

To

All Category – I Authorised Dealer Banks

Madam / Sir,

Exim Bank’s GoI supported Line of Credit of USD 18.08 million  to the Government of Republic of Chad

Export-Import Bank of India (Exim Bank) has entered into an agreement on August 6, 2014 with the Government of Republic of Chad, for making available to the latter, a line of credit (LOC) of USD 18.08 million (USD Eighteen Million and Eighty Thousand) for financing veterinary pharmaceutical manufacturing plant in the Republic of Chad. 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.

2. The credit agreement under the LOC is effective from June 30, 2015 and the date of execution of agreement is August 6, 2014. The last date for opening of letters of credit and disbursement will be 48 months from the scheduled completion date[s] of contract[s] in the case of project exports and 72 months from the execution date of the credit agreement in the 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.

Yours faithfully,

(A. K. Pandey)

 Chief General Manager

Notification No. : G.S.R. 627(E) Dated: 6-8-2015


Special Economic Zones (Second Amendment) Rules, 2015 – G.S.R. 627(E) – Dated 6-8-2015 – Special Economic Zone

MINISTRY OF COMMERCE AND INDUSTRY

(Department of Commerce)

NOTIFICATION

New Delhi, the 6th August, 2015

G.S.R. 627(E).-In exercise of the powers conferred by section 55 of the Special Economic Zones Act, 2005 (28 of 2005), the Central Government hereby makes the following rules further to amend the Special Economic Zones Rules, 2006, namely:-

(1) These rules may be called the Special Economic Zones (Second Amendment) Rules, 2015.

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

2. In the Special Economic Zones Rules, 2006, in rule 30, in sub-rule (1), for the words, letters and figures “ARE-1 referred to in Notification number 42/2001-Central Excise (NT), dated the 26th June, 2001”, the words, letters and figures “ARE-1 referred to in Notification number 42/2001-Central Excise (NT), dated the 26th June, 2001 and ARE-2 referred to in Notification number 21/2004-Central Excise (NT), dated the 6th November, 2004” shall be substituted.

[F. No. D. 6/35/2011-SEZ (Pt.)]

Dr. GURUPRASAD MOHAPATRA, Jt. Secy.

Note : The Special Economic Zones Rules, 2006 were published in the Gazette of India, Extraordinary vide number G.S.R 54(E), dated the 10th February, 2006 and last amended vide G.S.R. 564(E), dated the 16th July, 2015.

Monetary Policy: RBI leaves key rates unchanged : 04-08-2015


As was widely expected, the Reserve Bank of India on Tuesday kept the policy repo rate or the interest rate at which it provides short-term liquidity to the banking system unchanged at 7.25 per cent.

This no change in rate stance comes even as a senior finance ministry on Monday said the ministry favours a rate cut to attract investments and promote growth.

Reasoning its policy stance, the central bank said sustained hardening of inflation excluding food and fuel is most worrisome.

“Moreover, the full effects of the service tax increase, which took effect from June, will feed through over the rest of the year. Some food prices, particularly of protein-rich items, pulses and oilseeds have risen sharply in recent months.

“They will have to be carefully monitored as they tend to be sticky and impart an upward bias to inflation and inflation expectations. This assumes significance in view of households’ inflation expectations rising again,” the RBI said in its third bi-monthly monetary policy statement.

Since January, the RBI has cut the repo rate thrice cumulatively by 75 basis points, with the last cut of 25 basis points being on June 2.

The RBI said relative to the projections of the second bi-monthly statement, inflation projections in this bi-monthly statement are elevated by the higher than expected June observation but reduced by prospects of softer crude prices and a near-normal monsoon thus far.

This implies that inflation projections for January-March 2016 are lower by about 0.2 per cent, with risks broadly balanced around the target of 6 per cent for January 2016.

The central bank has retained growth target at 7.6 per cent for 2015-16.

CRR, reverse repo unchanged

It has also kept the cash reserve ratio (CRR) of scheduled banks unchanged at 4.0 per cent of net demand and time liability (NDTL).

Click here to read the complete third bi-monthly monetary policy statement, 2015-16 by RBI Governor Raghuram G. Rajan (PDF)

It will continue to provide liquidity under overnight repos at 0.25 per cent of bankwise NDTL at the LAF repo rate and liquidity under 14-day term repos as well as longer term repos of up to 0.75 per cent of NDTL of the banking system through auctions; and continue with daily variable rate repos and reverse repos to smooth liquidity.

The Sensex was trading down 164 points or 0.58 per cent to 28,023.36 and the Nifty was down 33.20 points or 0.39 per cent at 8,509.85 at 11.05 am (Track markets live here).

The reverse repo rate under the LAF will remain unchanged at 6.25 per cent, and the marginal standing facility rate and the Bank Rate at 8.25 per cent.

The RBI has said banks have passed on an average 0.3 per cent interest rate cut as against its 0.75 per cent rate cut since January.

The government’s capital infusion in public sector banks will help loan growth and transmission of interest rate cuts as well as ease liquidity, the central bank has said.

Payment bank licences by month end

The RBI has received recommendation on payment banks and small finance banks. Internal committee of the RBI is going through each application. A set of recommendations will be presented to the RBI Board. At least one set of bank licence is expected by end of the month.

Consensus on Monitory Policy Committee

The RBI Governor hinted at the possibility of taking away from the veto rights from the Governor to a committee. He said that the RBI and the Government have arrived at a consensus on the contours of the new committee.

The Governor said the RBI is an enthusiastic supporter of the interest-setting Monetary Policy Committee.

“There are three virtues of taking away the veto rights from from Governor and giving it to a committee. We have been supporters of this committee. We have been engaged with the Government. The structure should ensure continuity in policy. The Government and the RBI have reached a broad consensus on what the committee should look like and what the role of the Governor would be,” Raghuram Rajan said.

The RBI is talking to the Government to hike foreign portfolio investment cap in banks in the medium term, Raghuram Rajan has said.

NPAs in power sector a concern

The RBI said that the stress in power distribution sector was a cause of concern. “Our focus is on how can we resolve stress on power distribution companies which will make power purchases more effective,” Rajan said.

Responding to a question on whether the RBI believes the NPA numbers given out by various banks, Rajan said that there was constant inspection and action is taken if there are issues with the disclosures makes by a bank. “Our attempt is to get projects back on track. Banks need to face reality, take medicine and don’t push it to future. We are for allowing banks flexibility not forbearance,” Rajan said. He added that the RBI is examining 5/25 cases if its being used for right projects.

Source : The Business Line

Land Bill: Govt capitulates on social impact, consent clauses : 04-08-2015


The government is set to relent on the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement (Amendment) Bill, 2015. On Monday, the Bharatiya Janata Party (BJP) members of a parliamentary joint committee on the Bill suggested amendments that effectively bring back the social impactassessment and consent clauses, hallmarks of the United Progressive Alliance government’s 2013 Act.

Arguing that these clauses made the 2013 Act cumbersome, the government had excluded these from its land Bill ordinance, promulgated at the end of December 2014 and re-promulgated thrice after that. It had also brought a Bill to this effect in Parliament.

At a meeting of the 30-member joint select committee on Monday, all 11 ruling party MPs suggested changes to six of the nine amendments proposed by the government to the 2013 Act. The BJP, along with its allies, has 14 members in the committee, while Opposition parties have 16.

The committee’s deliberations have seen BJP allies such as the Shiv Sena oppose the government’s amendments to the 2013 Act.

Now, the joint committee members will vote on each clause of the Bill. The move by the panel’s BJP members has paved the way for a more consensual report than expected earlier. The committee has sought two more days and will now submit a report on Friday.

The development will also facilitate states to come up with a more reformist land Bill, as discussed at a NITI Aayog meeting earlier this month.

The BJP’s changed strategy on the Bill, a tactical move in view of the coming Bihar Assembly polls, will assuage not just the discontent within the party over the issue but also Sangh Parivar outfits, which have been opposed to deletion of the consent and social impact assessment clauses. Many in the party were wary of the Opposition’s charge that the 2015 Bill was anti-farmer.

CONCEDING GROUND
The provisions of consent and social impact assessment under the land acquisition law will not apply to acquisition of land under the following laws even if the NDA withdraws its ordinance:
  • The Ancient Monuments and Archaeological Sites and Remains Act, 1958
  • The Atomic Energy Act, 1962
  • The Damodar Valley Corporation Act, 1948
  • The Indian Tramways Act, 1886
  • The Land Acquisition (Mines) Act, 1885
  • The Metro Railways Act, 1978
  • The National Highways Act, 1956
  • The Petroleum and Minerals Pipelines Act, I962
  • The Requisitioning and Acquisition of lmmovable Property Act, 1952
  • The Resettlement of Displaced Persons (Land Acquisition) Act, 1948
  • The Coal Bearing Areas Acquisition and Development Act, 1957
  • The Electricity Act, 2003
  • The Railways Act, 1989

The Swadeshi Jagran Manch, Bharatiya Mazdoor Sangh, Vanavasi Kalyan Ashram and Bharatiya Kisan Sangh, all Sangh Parivar outfits, were opposed to the amendments. Of the 672 representations made before the panel, 670 opposed the amendments being brought by the government, especially changes in the norms pertaining to the consent and social impact assessment clauses.

The National Democratic Alliance government’s Bill exempted five categories – defence, rural infrastructure, affordable housing, industrial corridors, and infrastructure projects, including public-private partnership (PPP) projects in which the central government owned land – from consent and social impact assessment. Also, the Bill allowed the government to exempt projects in these five categories from social impact assessment provisions and restrictions on the acquisition of irrigated multi-crop land and other agricultural land. Under the Act, irrigated multi-crop land couldn’t be acquired beyond the limit specified by the government.

The BJP members also moved amendments for withdrawal of the terminology “private entity”, stated as “private company” in the 2013 law.

Of the 15 amendments in the NDA Bill, nine were substantial in nature; these had been opposed by the Congress and other Opposition parties. Another point of contention was prosecution of officers; this is likely to be restored to the 2013 Act to ensure offending officers are prosecuted.

Also, there was disagreement on the amendment regarding industrial corridors, which allowed the government to further acquire a km of land on each side of designated railway lines or roads in the case of industrial corridors. This, too, had been dropped, sources said. The government can only acquire land for such projects if the ownership isn’t transferred to a private company or a PPPentity. At its next few meetings, the joint committee will consider the remaining clauses, the most important being the return of land unutilised for five years. With the odds stacked heavily against it, the government is likely to concede to the Opposition’s demand to water this down to two to three years.

Apart from the Shiv Sena, another ally, the Shiromani Akali Dal, has persistently opposed the government’s amendments at the NITI Aayog meeting. The Akali Dal, however, doesn’t have any representation in the committee.

 

LAND ORDINANCE
The government can continue to acquire lands without consent and SIA for the following types of activities if the projects are not carried out in the PPP mode or by a private company
TRANSPORT

  • Roads and bridges
  • Ports
  • Inland waterways
  • Airports
  • Railway tracks, tunnels, viaducts and bridges
  • Urban public transport

ENERGY

  • Electricity generation, transmission and distribution
  • Oil pipelines
  • Oil/Gas/LNG storage facilities
  • Gas pipelines

WATER AND SANITATION

  • Solid waste management
  • Water supply pipelines
  • Water treatment plants
  • Sewage collection, treatment system
  • Irrigation (dams, channels, embankments)
  • Storm water drainage system
  • Water harvesting and conservation

COMMUNICATION

  • Telecommunication fixed network and towers

SOCIAL AND COMMERCIAL INFRASTRUCTURE

  • Education institutions
  • Hospitals, medical colleges, diagnostic chains
  • Three- star or higher-star hotels on the periphery of 1-million-plus cities
  • Common infrastructure for industrial parks, SEZs, tourism facilities, agricultural markets
  • Fertilisers
  • Post-harvest infrastructure
  • Terminal markets
  • Soil testing laboratories
  • Cold chains
  • Projects involving agro-processing
  • Marketing infrastructure for agriculture, dairy, fisheries and meat processing
  • Projects for industrial corridors
  • Mining activity
  • National investment and manufacturing zones
  • Projects for sports, health care, tourism, transportation or space programme
  • Defence projects and installations

 

Ahead of monetary policy meet on Aug 4, Raghuram Rajan meets Arun Jaitley : 01-08-2015


Ahead of the third bi-monthly monetary policy review on August 4, Reserve Bank of India (RBI) governor Raghuram Rajan met finance minister Arun Jaitley on Friday.

The meeting, which was a customary call by the RBI governor before a policy review to discuss the macro-economic situation, comes just days after the finance ministry released a revised draft of the Indian Financial Code that would reduce the central bank’s powers to decide the monetary policy stance.

Rajan, however, refrained from commenting on the meeting but welcomed the capital infusion plan for public sector banks that was outlined by the finance ministry.

However, while the finance minister had said the government would consult all stakeholders before finalising its views, the research arm of global rating agency Moody’s has warned that curbing RBI’s autonomy on rates could have repercussions on the economy.

“Overall, we believe that tampering with the central bank’s independence would make it difficult to anchor inflation expectations. This would weigh on India’s economic prospects, particularly financial market stability,” Moody’s Analytics said in a report titled India’s Outlook: Waiting for Reforms to Fuel Growth.

Noting that inflation has eased, external accounts have improved and the economy is poised for further rate cuts, it however warned that “a recent draft bill could undo the RBI’s good work”. “Overall, India’s monetary policy, with governor Raghuram Rajan at the helm, has been effective,” it stressed.

The report hoped that the draft IFC is unlikely to pass in Parliament given the criticism surrounding it.

The revised draft of the IFC has proposed that while inflation targeting would be the key responsibility of the monetary policy committee, which would be headed by the RBI “chairperson”, the central bank governor would not have a veto power on key rates. Instead, it has suggested that a decision on key interest rates would be taken by the committee through majority vote.

Source : Business Standard

No. Press Note No. 08 Dated: 30-7-2015


Introduction of Composite Caps for Simplification of Foreign Direct Investment (FDI) policy to attract foreign investment – FDI GUIDELINES – Dated 30-7-2015 – FEMA

Press Note No. 08 – Introduction of Composite Caps for Simplification of Foreign Direct Investment (FDI) policy to attract foreign investment

FinMin working on ‘reasonable’ GST rate: Revenue Secretary : 30-07-2015


A day after the Cabinet approved incorporation of changes in the landmark GST Bill as suggested by a Rajya Sabha Select panel, Finance Ministry today said it is working closely on a “reasonable” GST rate.

“Working closely on GST rates. Reasonable rates are key to its success. Passage of Bill in Parliament to take us to next activities,” Revenue Secretary Shaktikanta Das said in a tweet.

The Union Cabinet had last night approved amendments to the GST Bill to compensate states for revenue loss for five years on introduction of the uniform nationwide indirect tax regime, as has been suggested by the Rajya Sabha Select Committee.

The GST Constitution Amendment Bill would now be taken up for discussion in the Rajya Sabha, where the ruling NDA does not enjoy a majority, for passage in the ongoing session of Parliament.

The Government proposes to roll out the new indirect tax regime on April 1, 2016.

After the Bill is passed, the Centre will prepare GST laws and a GST Council would be set up to decide on the rates as well as to decide on exemptions and thresholds.

The Rajya Sabha Select Committee has suggested that the Goods and Services Tax (GST) rate should not go beyond 20 per cent as higher rates could fuel inflation and erode the confidence of consumers.

Internationally, the GST rate ranges from 16-20 per cent.

However, there are some exceptions like Japan, Australia and Germany, where the rates are 8 per cent, 10 per cent and 23 per cent, respectively.

KPMG Partner Pratik Jain said: “One would hope that now Opposition would support the Bill in the larger interest of the country to get it passed in the current session of Parliament so that April 1, 2016 deadline can be met. It would send a strong signal to the businesses that government is serious about this transformational change.’’

A sub-committee of Empowered Committee of State Finance Ministers on GST had earlier suggested 27 per cent RNR. But the rate is being reworked by the sub-committee in view of taxation of petroleum products as also the 1 per cent additional tax which states can levy as part of the GST rollout.

While liquor has been completely kept out of the GST, petroleum products like petrol and diesel will be part of the new regime from a date to be decided by the GST Council, which will have two-thirds of its members from states.

Source : PTI

Shah panel begins stakeholder deliberation on FII MAT issue : 30-07-2015


The high-level Justice A P Shah panel, set up to look into levy of MAT on FIIs, has begun consultations with stakeholders including an industry body which said it should not apply on such investors.

The committee met representatives of Ficci, CII, Assochamand American Chamber of Commerce (Amcham) as well as experts from KPMG, EY and Deloitte.

It is scheduled to hold further consultations with Institute of Chartered Accountants of India, Pricewaterhouse Coopers and other expert groups.

Headed by Law Commission Chairman A P Shah, the panel was formally constituted in May with former Chief Economic Advisor Ashok Lahiri and Chartered accountant Girish Ahuja as other two members.

In its representation to the committee, Assocham said the government should issue a clarification that Minimum Alternate Tax provisions were never intended and do not apply to FIIs/FPIs.

“It is also requested (that you should) recommend to the Government to direct the Revenue authorities to stay the demand raised on FIIs/FPIs and not to take any coercive action, till the time the MAT issue is resolved.

“The above action would be in accordance with the Government’s intention of providing a non-adversarial and stable tax regime to the taxpayer in India,” the chamber said.

Although the Shah panel has one-year term, sources said the committee would submit its report on the MAT issue much earlier as the Finance Ministry is keen that it gives its recommendations “expeditiously”.

The Shah committee has been entrusted with the task of examining MAT notices to the Foreign Institutional Investors for the period prior to April 1, 2015.

The Income Tax Department had sent notices to 68 FIIs demanding Rs 602.83 crore as MAT dues of previous years. This has raked up a big controversy, with FIIs moving higher court challenging the demand.

Finance Minister Arun Jaitley in Budget 2015-16 has exempted FIIs from paying MAT with effect from April 1, 2015.

Following the announcement of setting up of the panel, the tax department has directed its field officers to put on hold issuance of fresh notices and any further assessments on levy of this tax on such entities.

Source : The Economic Times

Notification No : 40/2015 Dated: 30-7-2015


Seeks to amend Notification No.30/2013-Central Excise dated 29.11.2013 – 40/2015 – Dated 30-7-2015 – Central Excise – Tariff

[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. 40/2015-Central Excise

New Delhi, the 30th July, 2015

G.S.R. (E). - 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 amendments in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No.30/2013-Central Excise, dated the 29th November, 2013, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 763(E), dated the 29th November, 2013, namely: -

In the said notification,-

(a) in the Explanation, for the figures, letters and words “1st day of October, 2015” the figures, letters and words “1st day of April, 2016 ” shall be substituted;

(b) after the Explanation, for the TABLE, the following TABLE shall be substituted, namely:-

“TABLE

Sl. No.

Category

Description of goods

(1)

(2)

(3)

1.

Anti Tuberculosis Drugs

(i) New Cases (PC-1)(ii) Re-treatment cases (PC-2)(iii) Prolongation Pouches (PC-4)(iv) Pediatric Box (PC-13)

(v) Pediatric Box (PC-14)

(vi) Pediatric Pouch (PC-15)

(vii) Pediatric Pouch (PC-16)

(viii) Isoniazid-100 mg (PC-7)

(ix) Ethambutol-800 mg (PC-10)

(x) Isoniazid-300 mg (PC-11)

(xi) Kanamycin 500 mg (PC-17)

(xii) Kanamycin 1000 mg (PC-27)

(xiii) Capreomycin 500 mg (PC-42)

(xiv) Capreomycin 750 mg (PC-35)

(xv) Capreomycin 1000 mg (PC-36)

(xvi) Levoflox-250 mg (PC-28)

(xvii) Levoflox-500 mg (PC-29)

(xviii) Moxifloxacin 400 mg (PC-39)

(xix) Cycloserine 250 mg (PC-24)

(xx) Ethionamide 250 mg (PC-20)

(xxi) Ethionamide 125 mg (PC-30)

(xxii) Na-PAS 4 gm (PC-32)

(xxiii) Na-PAS 10 gm (PC-25)

(xxiv) Ethambulol 400 mg (PC-45)

(xxv) Ethambulol 800 mg (PC-10)

(xxvi) Pyrazinamide 500 mg (PC-8)

(xxvii) Pyrazinamide 750 mg (PC-23)

(xxviii) Pyridoxine 50 mg (PC-31)

(xxix) Pyridoxine 100 mg (PC-26)

(xxx) Clofazimine 100 mg (PC-40)

(xxxi) Linezolid 600 mg (PC-38)

(xxxii) Amoxyclav 875/125 mg (PC-43)

(xxxiii) Sodium PAS 4 gm (PC-32)

(xxxiv) Sodium PAS 10 gm (PC-25)

(xxxv) Clarithromycin 500 mg (PC-37)

(xxxvi) Thiacetazone 150 mg (PC-44)

(xxxvii) Inj. Streptomycin-750mg (PC-5)

(xxxviii) Cap Rifampicin-150mg(PC-6)

(xxxix) Cap Rifabutin-150mg(PC-33)

2.

2. Diagnostics and Equipments (i) Biosafety cabinet Class II A2 with UPS as per specification(ii) Bacteriologic Incubator (300 LT)(iii) Refrigerated centrifuge with UPS as per specification(iv) Autoclaves: Horizontal

(v) Autoclaves: Vertical

(vi) LPA Equipments

(vii) LC Equipments

(viii) LPA kits

(ix) Liquid Culture reagents

(x) Capillia Kits

(xi) Fluorescence microscope

(xii) DNA Sequencing kits

(xiii) Inspissators

(xiv) LED Fluorescence microscopes

(xv) Binocular Microscopes

(xvi) CB-NAAT machine

(xvii) Cartridges

(xviii) Annual Calibration.”.

[F. No.354/195/2014-TRU]

(Akshay Joshi)

Under Secretary to the Government of India

Note.- The principal notification No. 30/2013- Central Excise, dated the 29th November, 2013, was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 763(E), dated the 29th November, 2013.

Govt to seek cabinet’s approval for amendments to GST Bill : 29-07-2015


The government is ready with amendments to the Constitution (122nd Amendment) Bill on Goods and Service Tax (GST) incorporating the suggestions of a Rajya Sabha select panel, which endorsed most of the clauses in the Bill verbatim and a few with some changes.

Sources said the finance ministry will soon seek cabinet approval for making amendments to the Bill, which was passed in the Lok Sabha during the Budget session and is pending in the Rajya Sabha. The government would propose a few amendments and try to get the Bill passed in the Rajya Sabha as soon as it starts functioning without disruption from the opposition, sources said.

The government is in agreement with the select panel’s recommendations about giving full five-year compensation to states for any revenue loss due to introduction of GST as well as to exempt stock transfers within group companies from the 1% origin based tax on inter-state supplies.

The Rajya Sabha panel turned down a series of substantive demands made by theCongress party and Jayalalithaa’s AIADMK. The Congress’ demand for dropping the 1% tax on inter-state supply of items, which would benefit the exporting state, was not accepted. Instead, the panel recommended a practical solution to reduce its cascading impact by excluding stock transfers within a company from this levy. According to industry sources, about 80-85% of any large factory’s output goes out of the state where it is located and a bulk of this is stock transfers.

The Congress party’s demand for a constitutional provision mandating the GST council to bring petroleum products within the GST in five years of the new regime’s beginning, as well as the AIADMK demand for their constitutional exclusion from the GST, were not accepted. The panel also did not propose any change in the voting pattern of the GST council, a decision-making body to be set up, as demanded by the Congress and AIADMK. Also, calls from parties for extra taxation rights for states on tobacco as well as the Congress’ demand for a dispute-settlement body were not accepted.

Source : The financial Express

Notification No : 61/2015 Dated: 29-7-2015


Income-tax (Tenth Amendment) Rules, 2015 – 61/2015 – Dated 29-7-2015 – Income Tax

[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

NOTIFICATION NO. 61/2015

New Delhi, the 29th day of July, 2015

S.O. 2070 (E).─ In exercise of the powers conferred by 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 (Tenth Amendment) Rules, 2015.

(2) They shall be deemed to have come into force with effect from the 1st day of April, 2015.

2. In the Income-tax Rules, 1962, in Appendix-II, for FORM ITR-3, FORM ITR-4, FORM ITR-5, FORM ITR-6 andFORM ITR-7, the following FORMS shall respectively be substituted, namely:-

[ F.No.142/1/2015-TPL]

(Gaurav Kanaujia)

Director to the Government of India

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.1683 (E), dated 24.06.2015.

 

Govt to take view on Financial Code after public comments: FM Arun Jaitley : 28-07-2015


Finance Minister Arun Jaitley today said that the government will take a view on the draft Indian Financial Code, which proposes to dilute powers of the RBI chief, after receiving comments from stakeholders.

“FSLRC has made its recommendations, which have been made public for comments. After the comments are received, it is only then that the government will take a view,” he told reporters here.

The draft had proposed taking away Reserve Bank chief’s authority to veto the interest rate decision of the central bank’s monetary policy committee.

The revised draft of Indian Financial Code (IFC) also proposed that the committee would have four representatives of the government and only three from the central bank, including the ‘RBI Chairperson’.

The draft talks of ‘RBI Chairperson’ and not ‘RBI Governor’. RBI is headed by a Governor, at present.

The revised draft of IFC, released by the Finance Ministry last week, is based on the recommendations of the Financial Sector Legislative Reforms Commission (FSLRC), headed by Justice B N Srikrishna.

The IFC, which is conceived as an overarching legislation for the financial sector, proposes a monetary policy committee which will be entrusted with the task of deciding the key policy rate and chasing the annual retail inflation target to be decided by the government in consultation with RBI.

Further, it said the RBI “must constitute a Monetary Policy Committee to determine by majority vote on the Policy Rate required to achieve the inflation target”.

At present, the RBI Governor consults a Technical Advisory Committee, but does not necessarily go by the majority opinion while deciding on the monetary policy stance.

Source : PTI

Shah panel begins stakeholder deliberation on FII MAT issue : 28-07-2015


The high-level Justice A P Shah panel, set up to look into levy of MAT on FIIs, has begun consultations with stakeholders including an industry body which said it should not apply on such investors.

The committee met representatives of Ficci, CII, Assochamand American Chamber of Commerce (Amcham) as well as experts from KPMG, EY and Deloitte.

It is scheduled to hold further consultations with Institute of Chartered Accountants of India, Pricewaterhouse Coopers and other expert groups.

Headed by Law Commission Chairman A P Shah, the panel was formally constituted in May with former Chief Economic Advisor Ashok Lahiri and Chartered accountant Girish Ahuja as other two members.

In its representation to the committee, Assocham said the government should issue a clarification that Minimum Alternate Tax provisions were never intended and do not apply to FIIs/FPIs.

“It is also requested (that you should) recommend to the Government to direct the Revenue authorities to stay the demand raised on FIIs/FPIs and not to take any coercive action, till the time the MAT issue is resolved.

“The above action would be in accordance with the Government’s intention of providing a non-adversarial and stable tax regime to the taxpayer in India,” the chamber said.

Although the Shah panel has one-year term, sources said the committee would submit its report on the MAT issue much earlier as the Finance Ministry is keen that it gives its recommendations “expeditiously”.

The Shah committee has been entrusted with the task of examining MAT notices to the Foreign Institutional Investors for the period prior to April 1, 2015.

The Income Tax Department had sent notices to 68 FIIs demanding Rs 602.83 crore as MAT dues of previous years. This has raked up a big controversy, with FIIs moving higher court challenging the demand.

Finance Minister Arun Jaitley in Budget 2015-16 has exempted FIIs from paying MAT with effect from April 1, 2015.

Following the announcement of setting up of the panel, the tax department has directed its field officers to put on hold issuance of fresh notices and any further assessments on levy of this tax on such entities.

Source : The Economic Times

Govt can be bolder on administration, financial reforms: Leo Puri : 27-07-2015


As disappointment grows over delay in reforms, Leo Puri, MD, UTI Mutual Fund, has said the government can become much bolder with the administrative and financial sector reforms to build the people’s confidence and show that changes are indeed taking place on the ground.

Stating that issues around “land, labour and resources” are deep-rooted, Puri said any reform in these areas would certainly take time and therefore, the government needs to focus on areas where reforms are much easier.

“I did not have expectations that big-bang type reforms, which some people expected, would ever be easy. A lot of people were hoping for big-bang reforms.

“To the extent you were hoping for big-bang reforms, perhaps there has been some disappointment. But that does not mean that we should not expect some very strong, purposeful, incremental reforms,” said Puri, Managing Director of the country’s oldest fund house UTI Mutual Fund.

Puri, a dual Masters degree holder from Oxford and Cambridge University of the UK, said that India is a high- growth economy that has reasonable potential for 7 per cent plus growth over the next 2-3 years.

“That makes India stand out. We do still have our much talked about advantages in terms of demography, consumer demand and so on. There is still enough belief that we have a government that is broadly committed to reforms.

“That is not fundamentally altered, while there are varying degrees of expectations on the pace, speed and execution and approach. As of now, most people are still of the view that we have a government that is committed to reforms and they are backing them,” Puri told PTI in an interview here.

When asked whether the expectations were too high, Puri said it is a matter of personal opinion.

“The issues around land, labour and resources are very deep-rooted and nobody can wish them away. Also, we have a constitutional framework that encourages checks and balances, whether it is judiciary providing a check on executive or the legislature providing a check on executive,” he said.

Hopeful for reforms in all possible areas over a period of time, Puri said, “There is a policy in place for each major area of economy — whether it is land, labour, resources, development of infrastructure, reforms of financial systems.

“These are all important areas and there are still some policy gaps. I think the government is framing its views where would it like to take reforms in some of these sectors.

“I think, once these things get clearer, one should at least be able to see the progressive steps and I think that should be able to satisfy most reasonable investors.”

Puri, who has been heading UTI Mutual Fund for about two years now, was earlier Managing Director at global private equity giant Warburg Pincus. He has previously also worked as Director and Senior Advisor with McKinsey.

Source : PTI

No. F.No.328/08/2015-WT Dated: 27-7-2015


Extension of due date of filing Return of wealth for A.Y, 2015-16-clarification – Order-Instruction – Dated 27-7-2015 – Income Tax

F.No.328/08/2015-WT

Government of India

Ministry of Finance

Department of Revenue

Central Board of Direct Taxes

New Delhi, dated 27th July, 2015

To All Pr. Chief Commissioners of Income-tax

Subject: Extension of due date of filing Return of wealth for A.Y, 2015-16-clarification

In terms or Explanation to sub-section (1) of section 14 of the Wealth-tax Act 1957, ‘due date’ of filing Return of wealth in relation to an assessee under the Wealth-tax Act shall be the same date as that applicable to an assessee under the Income-tax Act under the explanation to sub-section(1) of Section 139 unite Income-tax Act.

2. Central Board of Direct Taxes vide order under section 119 of the Income-tax Act F.No.225/154/ 2015/ETA-II dated 10.6.2015 has extended the ‘due date’ for filing Return of Income for assessment year 2015-16 in respect of assessees falling under clause (c) of explanation 2 to sub-section (1) of section 139 of the Income-tax Act from 31.7.2015 to 31.8.2015, In view of the same, the ‘due date’ for filing Retain of wealth by such assessees for assessment year 2015-16 also stands extended from 31st July 2015 to 31st August 2015.

3. This issues with the approval of Chairperson, CBDT.

(Ekta Jain)

Deputy Secretary (OT)

GST panel has ironed out all differences on bill : 27-07-2015


The GST Committee has ironed out every difference in the GST Bill. The Government should, therefore, be able to pass it in this session if Parliament is allowed to function, Nirmala Sitharaman, Minister of State for Commerce and Industry, said here today.

Stating that the committee formed to iron out the differences has done a detailed thrashing out of the various processes, she said “the GST bill itself, prior to the GST Bill per se, needs a constitution amendment. The first step therefore is constitution amendment and then the Bill; post this, it will be laying of rules. At this stage, every difference has been ironed out by the committee.”

Coming down heavily on the Opposition for not allowing conduct of Parliament, she said “we have, from day one, been ready to discuss issues. But, of course, in Rajya Sabha we want to discuss issues related to states, but it is not done ever. As things stand, Parliament does not normally discuss issues related to states.

Sitharaman was in the city at the International Business Conference of Nagarathars (IBCN) 2015 organised by the Nagarathar Entrepreneurs Union.

Reverting to FTA, she said discussions were on with regard to FTA with Australia, Canada and the European Union, including Eurasian countries, which have not come within the ambit of free trade yet.

A group has been formed to assess how best we can go with Latin American countries, particularly Peru, she said, adding “discussions on RCEP (Regional Comprehensive Economic Partnership) with ASEAN are also on.”

To a query on Rahul Gandhi’s visit, Sitharaman said “if he is really worried about farmers, I will challenge him to go to Karnataka, Congress-ruled states. It is not too far away from TN or from Anantapur and Rayalseema region. The maximum number of farmer suicides has happened in Karnataka in the last two months.”

Recalling his visit to Orissa (during the UPA rule), and his assertion then that we would work as a Sipahito protect the interest of the tribals, she asked “what happened subsequently? What was the fallout of that interest, the land acquisition bill? Which tribal interest has he taken care of?”

Answering yet another query, she said “we are earnestly trying to revive the economy. But the odds are manifesting themselves in the Parliament. Against every such terrible odd, the Government is trying its best to take everyone’s voice on board.

Source : The Economic Times

No. F. No. 328/08/2015-WT Dated: 27-7-2015


Extension of due date of filling Return of wealth for A.Y. 2015-16- clarification – Circular – Dated 27-7-2015 – Income Tax

F. No. 328/08/2015-WT

Government of India

Ministry of Finance

Department of Revenue

Central Board of Direct Taxes

New Delhi, dated the 27th July, 2015

To

All Pr. Chief Commissioners of Income Tax

Subject : Extension of due date of filling Return of wealth for A.Y. 2015-16- clarification

In terms of Explanation to sub-section (1) of section 14 of the Wealth-tax Act 1957, ‘due date’ of filling Return of wealth in relation to an assesse under the Wealth-tax Act shall be the same date as that applicable to an assesse under the Income-tax Act under the explanation to sub-section (1) of Section 139 of the Income-tax Act.

2.   Central Board of direct Taxes vide order under section 119 of the Income-tax Act  F. No.225/154/2015/ITA-II dates 10.6.2015 has extended the ‘due date’ for filling Return of Income for assessment year 2015-16 in respect of assesses falling under clause (c) of explanation 2 of sub-section (1) of section 139 of the Income-tax Act from 31.7.2015 to 31.8.2015. In view of the same, the ‘due date’ for filling Return of wealth by such assesses for assessment year 2015-16 also stands extended from 31st July 2015 to 31st August 2015.

3.   This issues with the approval of ‘Chairperson, CBDT.

(Ekta Jain)

Deputy Secretary (OT)

Copy to :

  1. Database Cell, CBDT with a request to upload on irsofficers online website.
  2. ADG(Systems)-IV with a request to upload on incometaxindia.gov.in website.
  3. Guard File

(Ekta Jain)

Deputy Secretary (OT)

‘Draft financial code not last word on veto power’ : 25-07-2015


The finance ministry on Friday sought to downplay a contentious suggestion by a government-appointed committee about taking away the veto power of the Reserve Bank of India governor in the proposed monetary policy committee (MPC).

It also highlighted the point that the committee was appointed by the previous United Progressive Alliance government and the incumbent one had common ground with the RBI governor on veto power.

The consultation paper on the Indian Financial Code was not the last word on the RBI’s powers, said a senior finance ministry official. Other sources said the ministry had broad understanding with the RBI governor on veto rights.

The government had no intention of diluting the power or autonomy of the RBI, they said. They also underscored the point that a decision to grant veto power to the governor would be taken at the “highest” level.

On Thursday, a revised draft by the Financial Sector Legislative Reforms Commission (FSLRC) was put up on the finance ministry site. The draft suggested the RBI governor should not have veto power in the seven-member committee on fixing the policy interest rate to target inflation.

This was a departure from its earlier draft that had proposed entrusting the power to the governor in case of a conflict with the majority view.

“Decisions in a meeting of the monetary policy committee must be taken by a majority vote of the members present and voting,” the revised draft said. The decisions would be binding and the central bank must form a committee to decide the rate, it suggested.

In case of a tie, the governor will have a second and casting vote. Five members are required for a quorum.

At present, the RBI governor consults a technical advisory committee, but does not necessarily go by the majority opinion while deciding on the monetary policy stance.

The sources in the finance ministry said the issue had been misinterpreted. They said the earlier government had constituted the committee, which had now put up a revised report. This government had not done anything out of pique against the RBI governor, they pointed out.

Source : PTI

Shah panel submits report on contentious MAT issue to FM : 25-07-2015


The Justice A P Shah Committee on Friday submitted the report on applicability of  minimum alternate tax (MAT) on foreign institutional investors (FIIs), which drew flak from overseas  portfolio  players, to finance  minister Arun Jaitley. While the government said it would soon make  the 66-page report public after examining it, experts  hoped that  it would rely on the committee’s report  when  the Supreme  Court hears a MAT case against Castleton in August. Revenue Secretary Shaktikanta Das told mediapersons that the government has enough time to decide  on its position in the Supreme  Court hearing, slated for August 4. However, Das did  not disclose whether the report  would  be  made  public  before that, though he said the government will give a lot of weightage  to the report.

But, Rajesh H Gandhi, partner, Deloitte Haskins & Sells LLP, said, “It is expected that the government will rely on the Committee’s report when the Supreme Court hears Castleton early next month. If the report is favourable to the FPIs (foreign portfolio investors), the government might probably not press for levy of MAT before the Supreme Court.” On the other hand, Shah said, “This is not about giving relief to FIIs or anyone. We have examined the issues arising out of the inconsistent judgments of the AAR (Authority for Advance Rulings ), judgments of  ITAT (Income Tax Appellate Tribunal) taking very different views. We have examined the material.”

The Supreme Court is hearing a petition filed by Castleton on levy of MAT, while there is also another case on the same, pending before the Bombay High Court.

Earlier, in 2012, AAR directed Castleton to pay MAT in India on their book profits when it transferred shares from a Mauritius entity to a Singapore one.

The Income Tax department had sent notices to 68 foreign institutional investors (FIIs) demanding Rs 602 crore as MAT dues of the previous years.

This has raked up a controversy, with FIIs moving the higher court, challenging the MAT demand.

Following the announcement of setting up of the panel, headed by Law Commission Chairman A P Shah and including former Chief Economic Advisor Ashok Lahiri and Chartered Accountant Girish Ahuja as members, the tax department has directed its field officers to put on hold issuance of fresh notices and any further assessments on levy of this tax on such entities.

Crux of the issue is whether the government will waive MAT prior to April 2015. From the current  financial year, MAT,  is anyway, not leviable on FPIs.

Das further said other legacy tax issues would be referred to the Shah committee in due course. Though he did not refer to specific  issues, one of these issues  is retrospective amendment to the Income Tax Act, that has also  drawn flak  from foreign investors.

Source : The Economic Times

Draft Indian Financial Code: Govt may take away RBI governor’s veto power on monetary policy : 24-07-2015


In a move that may dilute powers of RBI chief, the government on Thursday proposed taking away his authority to veto the interest rate decision of the central bank’s monetary policy committee.

The revised draft of Indian Financial Code (IFC), released on Thursday by the Finance Ministry, has also proposed that the all-powerful committee would have four representatives of the government and only three from the central bank, including the ‘RBI Chairperson’.

The draft talks of ‘RBI Chairperson’ and not ‘RBI Governor’. RBI is headed by a Governor, at present.

The IFC, which is conceived as an overarching legislation for the financial sector, proposes a monetary policy committee which will be entrusted with the task of deciding the key policy rate and chasing the annual retail inflation target to be decided by the government in consultation with RBI.

“Inflation target for each financial year will be determined in terms of the Consumer Price Index (CPI) by the Central Government in consultation with the Reserve Bank every three years,” said the draft on which the Finance Ministry has invited comments till August 8.

Further, it said the RBI “must constitute a Monetary Policy Committee to determine by majority vote on the Policy Rate required to achieve the inflation target”.

At present, the RBI Governor consults a Technical Advisory Committee, but does not necessarily go by the majority opinion while deciding on the monetary policy stance.

The first draft, submitted in March 2013, too had talked about the committee and majority vote, but gave powers to RBI chairperson to supersede the decision of the panel.

“In exceptional and unusual circumstances, if the RBI Chairperson disagrees with a decision taken at a meeting of the Monetary Policy Committee, the RBI Chairperson will have the right to supersede such decision,” it had said. The provision was dropped in the revised draft.

As per revised draft there will be three members from the RBI side and four from the central government, thus giving full control to the government on policy rate.

Source : PTI

GST: Government to promise states relief for five years; panel looking at 1% additional tax issue : 24-07-2015


NEW DELHI: The government is set to promise compensation to states for five years after rollout of the goods and services tax (GST) in the Constitution Amendment Bill when it comes up in the Rajya Sabha, while other recommendations of the select committee will be taken up before the indirect tax reform is implemented.

Sources said that issues such as exempting certain services such as banking from the ambit of proposed levy would need to be decided by the GST council, which can only  be set up once Parliament enacts the legislation. Similarly , an official said, the tax rate will also have to be decided by the council, comprising the Union finance minister and state FMs.

On the issue of levying up to 1% additional tax in manufacturing states, the officer said that a committee was already looking into the issue to minimize the cascading effect. The proposal was included at the behest of states, such as Gujarat, which were playing hardball in joining the GST net. The select committee had recommended a new definition of “supply”, which sources said would be included in the two other Bills -Central GST and State GST – that would be moved after Parliament and  the states endorses the Constitution Amendment Bill.

The select committee had submitted its report to Rajya Sabha on Wednesday and the government is hoping to push through the Constitution Amendment Bill during the current session of Parliament as a further delay would mean the GST rollout missing the April deadline again. Most regional parties are now supporting the government on the issue although the Congress is still to agree to the plan.

Source : Business Standard

Notification No. : 347/2015-RB Dated: 24-7-2015


Foreign Exchange Management (Export of Goods and Services) (Second Amendment) Regulations, 2015 – 347/2015-RB – Dated 24-7-2015 – Foreign Exchange Management

RESERVE BANK OF INDIA

(Foreign Exchange Department)

(CENTRAL OFFICE)

NOTIFICATION NO. 347 /2015-RB

Mumbai, 24th July, 2015

Foreign Exchange Management (Export of Goods and Services) (Second Amendment) Regulations, 2015

G.S.R. 579(E).-In exercise of the powers conferred by clause (a) of sub-section (1), sub-section (3) of Section 7 andsub-section (2) of Section 47 of the Foreign Exchange Management Act, 1999 (42 of 1999) and in partial modification of its Notification No.FEMA.23/2000-RB dated May 3, 2000 as amended from time to time, Reserve Bank of India makes the following amendment in the Foreign Exchange Management (Export of Goods and Services) Regulations, 2000, as amended from time to time, namely:

1. Short title and commencement

(i) These Regulations may be called the Foreign Exchange Management (Export of Goods and Services) (Second Amendment) Regulations, 2015.

(ii) They shall come into force from the date of publication in Official Gazette.

2. Amendment to the Regulations

In the Foreign Exchange Management (Export of Goods and Services) Regulations, 2000 (Notification No.FEMA.23/2000-RB dated May 3, 2000) (hereinafter called “the principal regulations”), the following amendment shall be made, namely:-

In Regulation 4, the clause (h) stands deleted.

A.K. PANDEY, Chief General Manager

Foot Note : The Principal Regulations were published in the Official Gazette vide G.S.R. No.409(E) dated May 8, 2000 in Part II, Section 3, Sub-section (i) and subsequently amended vide

G.S.R. No. 199(E) dated March 21, 2001

G.S.R. No. 473(E) dated July 8, 2002

G.S.R. No. 773(E) dated September 29, 2003

G.S.R. No. 900(E) dated November 22, 2003

G.S.R. No. 279(E) dated April 23, 2004

G.S.R. No. 352(E) dated June 8, 2004

G.S.R. No. 576(E) dated August 5, 2008

G.S.R. No. 896(E) dated December 17, 2012

G.S.R. No. 342(E) dated May 29, 2013

G.S.R. No. 362(E) dated May 27, 2014

G.S.R. No. 434(E) dated July 8, 2014

G.S.R. No. 930(E) dated December 31, 2014

G.S.R. No. 326(E) dated April 28, 2015

Notification No. : 60/2015 Dated: 24-7-201


Amendment in Notification Number S.O. 709(E), dated the 20th August, 1998 – 60/2015 – Dated 24-7-2015 – Income Tax

[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 No. 60/2015

New Delhi, the 24th  July, 2015

S.O.  (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 34 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)

“35

2015-16

1081”

[F. No. 142/10/2015-TPL]

Gaurav Kanaujia

Director to the Government of India

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. 1498(E), dated the 11th June 2014.

FinMin asks ministries to avoid excess expenditure : 23-07-2015


The finance ministry has asked secretaries of all the departments to take measures to avoid excess expenditure, over and above what has been approved in the Budget. The directive comes in the backdrop of Public Accounts Committee (PAC) criticising the government for excess expenditure and wrongful appropriation.

“In the light of the observations of the PAC, secretaries to the Government of India, being chief accounting authority, are once again requested to take all measures, including use of electronic systems, to ensure proper planning and monitoring of expenditure vis-a-vis voted grants so that excess expenditure is avoided,” Expenditure Secretary Ratan Watal said in a letter to all Secretaries.

He also asked various Ministries to scrupulously scrutinise the Budget proposals, both at the time of preparation of demands for grants and supplementary demands for grants.

Watal asked them to comply with the General Finance Rules to eliminate “the possibility of excess expenditure, under-spending, wrongful appropriations etc”.

The PAC, in its seventh report to the 15th Lok Sabha, had criticised the ministries and department for not taking firm measures to avoid excess expenditure.

The Committee had also expressed its displeasure over the tepid approach of the defaulter Ministries/Departments. It had criticised them for bad planning, lack of foresight and ineffective monitoring on the part of Budget controlling authorities while preparing both Budget estimates as well as Supplementary demands for Grants.

Source : PTI

Rajya Sabha panel for up to 20% GST rate; Congress wants it within 18% : 23-07-2015


A select committee of the Rajya Sabha has observed that the standard Goods and Services Tax (GST) rate should be within 20 per cent, while the lower one should not cross 14 per cent. These rates are quite lower than the Revenue Neutral Rate (RNR) of around 27 per cent, arrived at by the sub-panel of the Empowered Committee of State Finance Ministers on GST, earlier. Besides, the panel suggested changes in the two important provisions of the Constitution Amendment Bill on GST – one per cent additional tax over GST on interstate supply of goods to help the producing states, and reduction in compensation to states in the fourth and fifth years.

In its crucial report on the Constitution Amendment Bill on GST, submitted to the Rajya Sabha on Wednesday, the committee recommended that the proposed GST council may opt for a broad-based and moderate rate as the high rate will surely erode the confidence of the consumers badly and may lead to high inflation. In its dissent note, the Congress wanted the GST rate to be within 18 per cent.

It should be noted here that the committee did not recommend any specific rate, but made an observation: “To start with, India’s GST rate should not go beyond 20 per cent for standard rate, and perhaps 14 per cent for reduced rate.”

It was so because the Constitution Amendment Bill, which was vetted by the panel, does not have any provision for the specific rates. It was left to the proposed GST council, a body of the union and state finance ministers. In fact, even the committee’s observation drew flak from AIADMK in its dissent note. “The select committee has gone beyond its brief on the issue of Revenue Neutral Rate (RNR)… This is a matter for the Empowered Committee of State Finance Ministers, GST council to take an appropriate view.”

OBSERVATIONS
  • Retains provisions on electricity, real estate, alcohol, tobacco

Wants that banking services be kept out of GST if possible, and if not possible:

  • GST rate for banking industry should be minimum, more than service  tax rate of 14% not desirable
  • Interest, trading in securities, foreign currency and services to retail consumers should not draw GST

Congress dissent focuses on:

  • Reducing Centre’s voting power in GST council to 25% from 33.3% and raise that of states to 75% from 66.7%

AIADMK dissent focuses on:

  • GST council harms sovereignty of Parliament, Assemblies
  • Select panel exceeds brief by recommending GST rate

The Left parties’ objections:

  • Same as the Congress and AIADMK in GST council
  • Corporate will dictate the policies of governments

The committee also favoured that Centre and states should have powers to impose the GST rate in a range over the floor rate, and wanted this band to be specifically defined in GST laws.

Earlier, a sub-panel of the Empowered Committee had recommended an RNR of around 27 per cent, to be broken into state GST of 13.91 per cent, and the central GST of 12.77 per cent. A committee, headed by Chief Economic Advisor Arvind Subramanian, is looking into the issue, and is expected to submit its report in four to six weeks.

In fact, the Rajya Sabha panel, chaired by BJP MP Bhupender Yadav, observed that there is no necessity to strictly go by the RNR, while fixing the GST rate.
Currently, the Union service tax rate is at 14 per cent, and the general excise duty at 12 per cent. On the states’ side, VAT is supposed to be 12.5 per cent at standard rate, and 5 per cent at lower rate. However, many states have breached the 12.5 per cent limit on VAT. All these rates would be subsumed in GST along with local taxes, with some exceptions.
Earlier, Finance Minister Arun Jaitley had assured the Lok Sabha that the GST rate would be much lower than 27 per cent.
The committee’s observation on GST rate has evoked positive reaction from tax experts. “The recommendation to keep the rate of GST at 20 per cent is a welcome one, and a lower rate will increase economic activity in the country and hence, revenues,” said Bipin Sapra, tax partner, EY India.
R Muralidharan, senior director, Deloitte India, said while implementing this new tax reform, it is also necessary for the government to ensure that the basic features of an ideal GST are not diluted much. “Towards this, it is necessary to widen the tax base, but keep the GST rates moderate (below 20 per cent).”
In this context, the committee also dealt with another issue of protecting interests of local bodies and gram panchayats. While it shared the views of members and experts that interests of these bodies should be protected, it also sounded a note of caution that it would not be appropriate for the committee to recommend to the state governments what they have to do with regard to the interests of the local bodies.
Besides, the committee recommended two important changes in the proposed GST regime – limiting up to one per cent tax over GST to only those interstate supply of goods, which are for a monetary consideration, and expanding full compensation to states for any revenue losses to five years against the current three years.
ALSO READ: Industry fears ‘cascade’ of woes over RS panel proposal on 1% tax on GST
The select committee wanted that the exact definition of interstate supply of goods, which would attract one per cent tax, be made at the time of framing GST laws.
The Constitution Amendment Bill, passed by the Lok Sabha earlier, has a provision of one per cent additional tax over GST for interstate supply of goods to help producing states, since GST is a destination-based tax. However, this evoked strong criticism from industry and experts as it would lead to a cascading effect.
To address the interests of the two sides, the panel recommended that the proposed GST law should explicitly state that the interstate movement of goods would not be taxable, if it is supplied without any monetary consideration.
“The committee feels that the provision of one per cent additional tax in its present form is likely to lead to cascading of taxes. Therefore, the committee strongly recommends that in the concerned GST law, an explanation should be given that for the purpose of clause 18, the word “supply” would mean all forms of supply made for a consideration,” the report said. The clause 18 of the Constitution Amendment Bill deals with the one per cent tax. Basically, what this recommendation means is that one per cent tax would be levied on interstate sale of goods, and not on stocks transfer within the company.
However, experts do not think that this would entirely address the issue of cascading. “It is like converting a jail term to a jail term with bail,” said Satya Poddar, tax consultant, EY. He said it would do away with one per cent tax on stocks transfer or depot transfers from one state to another within a company. This kind of transfer constitutes around 75 per cent of the interstate supply of goods, he added.
It should be noted that the Constitution Amendment Bill is an enabling mechanism to allow the Centre and states to impose GST. After the Bill is passed, the new indirect tax regime would need another central law as well as state laws on GST. It is in these laws that the committee wanted this explanation to be incorporated.
The Congress, in its dissent note, wanted to eliminate the one per cent tax altogether since it is market distortionary.
Finance Minister Arun Jaitley said the government will try and build a consensus on the legislation and explain the rationale and reasoning to various parties, including the Congress.
“It is hardly a dissent note on the Bill; it is a dissent against the Congress party’s own proposals, which were originally given. Congress MPs are expressing dissent against the suggestions made by their own chief ministers,” Jaitley said. Besides the Congress and AIADMK, the Left parties also submitted a dissent note.
Jaitley said the government will go ahead with the legislation in Parliament that seeks to create a simplified tax structure across the country, which is “revolutionary”.
The select panel also recommended that compensation to states should not taper from the fourth year onwards. The present Bill mentions that states would be fully compensated for their losses for three years, but it would reduce to 75 per cent in the fourth year, and 50 per cent in the fifth year.
“Parliament may, by law, on the recommendation of the GST council, provide for compensation to the states for the loss of revenue arising on account of implementation of the GST for a period of five years,” the report said.
The panel rejected the ideas of having a separate dispute resolution tribunal, changes in the voting powers of the Centre and states in the proposed GST council, among others.
The Constitutional Amendment Bill requires a two-thirds majority in the Upper House of members present and voting to be cleared. Thereafter it will need to be ratified by at least 15 out of the 29 states. The government is keen that it be passed in this monsoon session so that the GST regime can be introduced by the April 1, 2016 deadline. The Lok Sabha has already cleared the Bill.
Source : The Economic Times

Notification No : 39/2015 Dated: 21-7-2015


Seeks to further amend notification No.12/2012-Central Excise dated 17.3.2012 – 39/2015 – Dated 21-7-2015 – Central Excise – Tariff

[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, the 21st July, 2015

Notification No. 39/2015 – Central Excise

G.S.R. (E).- In exercise of the powers conferred by sub-section (1) and sub-section (2A) 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 number G.S.R. 163(E), dated the 17th March, 2012, namely:-

In the said notification, in the ANNEXURE,-

(a) in Condition No. 16, under the heading “Conditions”, after the entries, the following Explanation shall be inserted, namely:-

“Explanation.- For the purposes of this condition, appropriate duty or appropriate additional duty includes nil duty or concessional duty, whether or not read with any relevant exemption notification for the time being in force.”;

(b)  in Condition No. 20, under the heading “Conditions”, after the proviso, the following Explanation shall be inserted, namely:-

Explanation.- For the purposes of this condition, appropriate duty or appropriate additional duty includes nil duty or concessional duty, whether or not read with any relevant exemption notification for the time being in force.”;

(c) in Condition No. 25, under the heading “Conditions”,-

(i) for the word and figures “section 66”, the word, figures  and letter “section 66B” shall be substituted;

(ii) after the entries, the following Explanation shall be inserted, namely:-

“Explanation.- For the purposes of this condition, appropriate duty or appropriate additional duty or appropriate service tax includes nil duty or nil service tax or concessional duty or concessional service tax, whether or not read with any relevant exemption notification for the time being in force.”;

(d) in Condition No. 52A, , under the heading “Conditions”,

(i) for the word and figures “section 66”, the word, figures  and letter “section 66B” shall be substituted;

(ii)  after the entries, the following Explanation shall   be inserted, namely:-

Explanation.- For the purposes of this condition appropriate duty or appropriate additional duty or appropriate service tax includes nil duty or nil service tax or concessional duty or concessional service tax, whether or not read with any relevant exemption notification for the time being in force.”.

[F. No. 336/4/2015-TRU]

(Akshay Joshi)

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 No.36/2015-Central Excise, dated the 17th July, 2015, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R.562 (E), dated the 17th July, 2015.

Notification No : S.O. 1748(E) Dated: 22-6-2015


Additional area of 11.4477 hectares included – Special Economic Zone for handicraft sector at, Village Kalwara, Tehsil Sanganer, District Jaipur, in the State of Rajasthan – S.O. 1748(E) – Dated 22-6-2015 – Special Economic Zone

MINISTRY OF COMMERCE AND INDUSTRY

(Department of Commerce)

NOTIFICATION

New Delhi, the 22th June, 2015

S.O. 1748(E).-WHEREAS, M/s. Mahindra World City (Jaipur) 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 handicraft sector at, Village Kalwara, Tehsil Sanganer, District Jaipur, in the State of Rajasthan;

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 areas of 102.7659 hectares at above Special Economic Zone vide Ministry of Commerce and Industry Notification Numbers S.O. 40(E) dated 6th January, 2009;

AND, WHEREAS, the Central Government 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, had notified an area of 52.093 hectares and de-notified an area of 1.095 hectares from the above Special Economic Zone vide Ministry of Commerce and Industry Notification Number S.O. 632(E) dated 28th March, 2012.

AND, WHEREAS, M/s. Mahindra World City (Jaipur) Limited, has now proposed to include an area of 11.4477 hectares in the above Special Economic Zone;

NOW, THEREFORE, in exercise of the powers conferred by second proviso to sub-section (1) of section 4 of theSpecial 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 11.4477 hectares, thereby making total area of the Special Economic Zone as 165.2116 hectares, comprising the survey numbers and the area given below in the table, namely:-

TABLE FOR ADDITIONAL AREA

S.No.

Name of the Village

Khasra No.

Area (in Hectares)

1

2

0.080

2

5

0.0050

3

12

0.5600

4

14

4.0800

5

100

0.0650

6

121

0.5400

7

122

0.1700

8

123

0.0800

9

125

0.2100

10

126/2904

0.0800

11

127

0.0600

12

129

1.0000

13

134

0.0200

14

135

0.0200

15

136

0.2200

16

137

0.0300

17

138

0.0400

18

139

0.2400

19

139/2903

0.0500

20

140

0.4300

21

147

0.9900

22

148

0.0400

23

149

0.1000

24

150

0.0400

25

154

0.1400

26

154/2768

0.1300

27

155

0.2600

28

156

0.1900

29

157

0.5400

30

158

0.3200

31

159

0.1400

32

160

0.2600

33

172

0.0500

34

182

0.1400

35

208

0.0246

36

209

0.0311

37

211

0.0061

38

212

0.0156

39

213

0.0113

40

222

0.0200

41

314

0.0080

42

315

0.0010

43

316

0.0100

Total

11.4477 hectares

Grant total of the SEZ area after above addition

165.2116 hectares

[F. No. F.1/279/2007-SEZ]

Dr. GURUPRASAD MOHAPATRA, Jt. Secy.

Finance ministry downplays cascading effect of levy : 22-07-2015


The finance ministry on Tuesday downplayed the cascading effect of one per cent tax over GST, proposed in the Constitution Amendment Bill.

A key official said the tax need not be one per cent, and could be much lower. The Bill says an additional tax on supply of goods, not exceeding one per cent, in the course of interstate trade or commerce, will be imposed. So, it might be, say 0.1 per cent, whose cascading effect would not be as high as feared, the official explained.

He said there is no problem in compensating states entirely for their losses due to the switch-over to the GST regime for five years. The RS select panel report could be tabled in the Upper House on Wednesday, according to the business schedule.

Source : PTI

Industry fears ‘cascade’ of woes over RS panel proposal on 1% tax on GST : 22-07-2015


A key recommendation of the Rajya Sabha’s select committee to confine one per cent tax over the proposed goods and services tax (GST) to only the interstate movement of goods, which are for a consideration, would considerably reduce the contentious cascading effect of the levy, but would not completely eliminate it.

Besides, the fears expressed by Chief Economic Advisor Arvind Subramanian that imports may be cheaper in some cases than the effect of this one per cent tax -which would be imposed each time goods move from one state to other – would also lessen, but won’t end.

The Constitution Amendment Bill, passed by the Lok Sabha earlier, has a provision of one per cent additional tax over GST for interstate supply of goods to help producing states since GST is a destination-based tax. However, this drew flak from industry and experts, who claimed it would have a cascading effect.

To balance the interests of the two sides, the panel is understood to have recommended the proposed GST law read that interstate movement of goods won’t be taxable if it is without a consideration.

This means that only interstate sale of goods would be imposed one per cent tax and not what is called depot or branch transfer, explained Satya Poddar, tax partner, Policy Advisory Group, EY.

In layman’s term, it means that if stocks are transferred from say a plant in a state to a depot of the same company in another state, these would not invite tax. It is the same as the central sales tax (CST) since it too does not apply to depot or branch transfers, Poddar said. However, in CST Act, the word “sale” is used, instead of “for a consideration” proposed by the select panel, but the effect would remain the same.

It should be noted that CST, which is a levy on interstate sale of goods, would go once GST is introduced. CST currently stands at two per cent.

Poddar believes that 75 per cent of interstate transfers of goods is a stock transfer. Most of the companies say fast-moving consumer goods (FMCGs) and pharmaceutical firms do these kinds of transfer. However, it is not prevalent that much in auto sector, because of complications in setting up these warehouses in various states, he said.

“In a way, I will say that a jail-term has been converted to a jail-term with a bail,” he said, adding market distortions would remain. Concurred Naresh Thaacker, partner, Economic Laws Practice. “The recommendation would address the cascading effect to a great extent, but would not do away with it,” Thaacker said.

That is why he said some Opposition parties have asked for completely doing away with the tax. The Congress, meanwhile, has dug in its heels on this issue as it views this as a “market distortion” mechanism.

Earlier when the Lok Sabha had passed the Bill, Subramanian had said the proposed tax would harm the Make in India campaign. “Think of a good going from Gujarat to Tamil Nadu, crossing four states. The good would embody an additional tax of about 4-5 per cent, because it is one per cent every state. That might make it easier to import into Tamil Nadu from Bangkok,” Subramanian had said.

Poddar said the fear of one per cent tax making imports in some cases would still be there, though it has receded with the select panel’s recommendation. He said it all depends on whether interstate movement of goods is for the purpose of sale or is a stocks transfer. There is, however, still ambiguity in the proposed tax that does not address Subramanian’s apprehensions.

While the law specifies that this tax is to be levied by the Centre and given to states from where the supply of good originates, there is ambiguity whether it will be levied at the final consumption point or at every border that it crosses, said Mandira Kala of PRS Legislative Research.

The select panel has recommended it would only be liable for goods where interstate movement would be for a consideration, the imposition of this tax on all such goods would lead to additional burden on the consumer, she added.

Source : Business Standard

Notification No : 38/2015 Dated: 21-7-2015


Seeks to further amend notification No.1/2011-Central Excise dated 1.3.2011 – 38/2015 – Dated 21-7-2015 – Central Excise – Tariff

[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, the 21st July, 2015

Notification No. 38/2015 – Central Excise

G.S.R. (E). - In exercise of the powers conferred by sub-section (1) and sub-section (2A) of section 5A of theCentral 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. 1/2011-Central Excise, dated the 1st March, 2011, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 116(E), dated the 1st March, 2011, namely: -

In the said notification, in the opening paragraph, -

(A) in the proviso, for the word and figures “section 66”, the word, figures  and letter “section 66B”  shall be substituted.

(B) after the proviso, the following Explanation shall be inserted, namely:-

“Explanation.- For the purposes of this notification, appropriate duty or appropriate additional duty or appropriate service tax includes nil duty or nil service tax or concessional duty or concessional service tax, whether or not read with any relevant exemption notification for the time being in force.”.

 [F. No. 336/4/2015-TRU]

(Akshay Joshi)

Under Secretary to the Government of India

Note.- The principal notification No. 1/2011-Central Excise, dated the 1st March, 2011 was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R.116 (E), dated the 1st  March, 2011and last amended vide notification No.35/2015-Central Excise, dated the 17th July, 2015, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R.561 (E), dated the 17th July, 2015.

Notification No : 37/2015 Dated: 21-7-2015


Seeks to further amend notification No.30/2004-Central Excise dated 9.7.2004 – additional duty includes nil duty or concessional duty – 37/2015 – Dated 21-7-2015 – Central Excise – Tariff

[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, the 21st July, 2015

Notification No. 37/2015 – Central Excise

G.S.R (E).- In exercise of the powers conferred by sub-section (1) and sub-section (2A) 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  being  satisfied that it is necessary in the public interest so to do, hereby makes the following further amendment  in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No 30/2004-Central Excise, dated the 9th July, 2004, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 421(E), dated the 9th July, 2004, namely :-

In the said notification, in the opening paragraph, after the proviso, the following Explanation shall be inserted, namely:-

“Explanation.- For the purposes of this notification, appropriate duty or appropriate additional duty includes nil duty or concessional duty, whether or not read with any relevant exemption notification for the time being in force.”.

[F. No. 336/4/2015-TRU]

(Akshay Joshi)

Under Secretary to the Government of India

Note.- The principal notification No. 30/2004-Central Excise, dated the 9th July, 2004 was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R.421(E), dated the 9th July, 2004 and last amended vide notification No.34/2015-Central Excise, dated the 17th July, 2015, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R.560(E), dated the 17th July, 2015.

No. 11/2015 Dated: 21-7-2015


Clarification with regard to circulation and filing of financial statement under relevant provisions of the Companies Act, 2013-reg. – Dated 21-7-2015 – Companies Law

General Circular No. 11 /2015

No. 1 / 19/2013-CL-V

Government of India

Ministry of Corporate Affairs

5th Floor, A Wing, Shastri Bhavan,

 Dr R.P. Road, New Delhi

Dated 21st July, 2015

To

All Regional Directors,

All Registrars of Companies,

All Stakeholders.

Subject: Clarification with regard to circulation and filing of financial statement  under relevant provisions of the Companies Act, 2013-reg.

Sir,

Stakeholders have drawn attention to the proviso to section 101(1) of the Companies Act, 2013 (Act) which allows general meetings to be called at a shorter notice than twenty one days, and sought clarification as to whether provisions of section 136 would also allow circulation of financial statements at a shorter notice if conditions undersection 101 are fulfilled.

1.2 The matter has been examined and it is clarified that a company holding a general meeting after giving a shorter notice as provided under section 101 of the Act may also circulate financial statements (to be laid/considered in the same general meeting) at such shorter notice.

2.1  Attention has also been drawn to the provisions of clause;  (a) of fourth proviso to section  136(1) which require every company having a subsidiary or subsidiaries to place on its website, if any, separate audited accounts in respect  of  each  of  its  subsidiary.   Further, fourth  proviso  to  section 137 (1) requires that. a company shall attach along with its financial statements to be filed with the Registrar, the accounts of its subsidiary(ies) which have been incorporated outside India and which have not established their place of business in India. Clarification has been sought on -

(a) Whether a company covered under above provisions can place/file unaudited accounts of a foreign subsidiary if the audit of such foreign subsidiary is not a mandatory legal requirement in the country where such foreign subsidiary has been incorporated and such audit has not been conducted, and;

(b) Whether accounts of such foreign subsidiary would need to be as per format under Schedule III /Accounting Standards or the format as per country  of  incorporation  of the  foreign  subsidiary would be sufficient.

2.2  The matter has been examined in the Ministry in consultation with ICAI and it is clarified that. in case of a foreign subsidiary, which is not required to get its accounts audited as per legal requirements prevalent in the country of its  incorporation  and  which  does  not  get  such accounts audited, the holding/parent Indian may place/file such unaudited accounts to comply with requirements of Section 136(1) and 137 ( 1 ) as applicable. These, however, would need to be translated in English, if the original accounts are not in English. Further, the format of accounts of foreign subsidiaries should be, as far as possible, in accordance with requirements underCompanies Act, 2013. In case this is not possible, a statement indicating the reasons for deviation may be placed/filed alongwith such accounts.

This issues with the approval of the competent authority .

Yours faithfully

(KMS Narayanan)

Assistant Director

Copy to:-

1. e-Governance Section and Web Contents Officer to place this circular on the Ministry’s website

2. Guard File

No. 1005/12/2015-CX Dated: 21-7-2015


Judgment of the Supreme Court in the case of Mis SRF Ltd. versus Commissioner of Customs. Chennai – Clarification relating to notifications No.30/2004-Central Excise dated 09.07.2004. No.1 /2011-Central Excise dated 01.03.2011 and No.12/2012-Central Excise dated 17.03.2012. as amended Regarding. – Dated 21-7-2015 – Central Excise

Circular No.1005/12/2015-CX

F.No. 336/4/2015-TRU

Government of India

Ministry of Finance (Department of Revenue)

Tax Research Unit

**

New Delhi, the 21st July. 2015

To.

Principal Chief Commissioners / Chief Commissioners of Central Excise (All)

Principal Chief Commissioners / Chief Commissioners of Central Excise & Service Tax (All) Principal Chief Commissioners / Chief Commissioners of Customs (All)

Sir Madam.

Subject Judgment of the Supreme Court in the case of Mis SRF Ltd. versus Commissioner of Customs. Chennai – Clarification relating to notifications No.30/2004-Central Excise dated 09.07.2004. No.1 /2011-Central Excise dated 01.03.2011 and No.12/2012-Central Excise dated 17.03.2012. as amended Regarding.

 

It may recalled that the Hon’ble Supreme Court. in the case of M/s SRF Ltd. versus Commissioner Of Customs. Chennai and M/s ITC Ltd. v/S Commissioner of Customs (I&G) [2015 (4) TMI 561 - SUPREME COURT]. New Delhi relating to CVD exemption. has held that the benefit of excise duty exemption [available to final products manufactured by the domestic manufacturer. subject to the condition of non-availment of CENVAT credit of duty on inputs or capital goods used by such manufacturer for manufacture of such final products] will also be available to the importers of such final products for the purposes of CVD on the ground that the importer was not availing the credit of duty on inputs or capital goods.

2. The implication of the Hon’ble Supreme Court judgment was that all such final products when imported by manufacturer importer would have attracted concessional excise duty as CVD. while the domestic manufacturer of such final products had to forgo input tax credit to be eligible for such concessional rate. This would put the domestic manufacturers at a disadvantage vis-a-vis imports and would adversely impact the Make in India Policy of the Government.

3. The Judgment of the Hon’ble Supreme Court was examined in CBEC and it was found that there were certain errors apparent on record/interpretational issues and. with the concurrence of the Ld. Attorney General. a Review Petition / Revision Application has been filed against the same.

4. However, keeping in view the adverse implications of the aforesaid judgment on the domestic industry, legal opinion was sought from the Ministry of Law & Justice as to whether pending the aforesaid Review Petition / Revision Application, such conditions in the relevant notifications be suitably amended so as to make the intention abundantly clear (that these conditions are to be satisfied by the manufacturers of such goods and not the buyer / importer of such goods).

5. In this context, opinion of the Ministry of Law & Justice was also sought With the concurrence of the Ld. Attorney General notifications No.34/2015-CE. No.35/2015-CE and No.36/2015-CE all dated            17.7.2015 were issued amending the conditions in notifications No.30/2004-CE dated 09.07.2004. No.1/2011-CE dated 01.032011 and No.12/2012-CE dated 17.03.2012, respectively.

6. In the above context. apprehensions have been raised about the use of the phrase of “appropriate duty” In this regard. Explanations have been inserted in the  notifications No.30/2004-CE dated 09.07.2004. No.1/2011-CE dated 01.032011 and No.12/2012-CE dated 17.03.2012 so as to clarify that the appropriate duty or appropriate additional duty or appropriate service tax for the purposes of the said notifications/entries includes nil duty or tax or concessional duty or tax. whether or not read with any relevant exemption notification for the time being in force.

7. It may, therefore, be noted that the domestically manufactured goods covered under these notifications/entries continue to be exempt from excise duty or subject to concessional rate of excise duty. as the case may be as they were prior to 17th July. 2015.

8. Trade Notice/Public Notice may be issued to the field formations and taxpayers.

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

 (Alok Shukla)

Joint Secretary (TRU)

No. 1004/11/2015-CX Dated: 21-7-2015


Instructions regarding Detailed Scrutiny of Central Excise Returns-reg. – Dated 21-7-2015 – Central Excise

Circular No. 1004/11/2015-CX

Dated 21.07.2015

F. No. 206/15/2014-CX.6

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

DEPARTMENT OF REVENUE

CENTRAL BOARD OF EXCISE & CUSTOMS

To

The Principal Chief Commissioners/ Chief Commissioners of Central Excise (All)

The Principal Chief Commissioners/ Chief Commissioners of Central Excise and Service Tax (All)

Sub: Instructions regarding Detailed Scrutiny of Central Excise Returns-reg.

Madam/ Sir,

In view of the self-assessment procedure wherein the assessee himself assesses the duty liability, the responsibility of the departmental officers is to scrutinise the assessment made for verification of its correctness. Return scrutiny is the first line of verification carried out as soon as the tax return is submitted by the assessee. A returns scrutiny process consists of two parts viz. preliminary scrutiny and detailed scrutiny. While the preliminary scrutiny system covers all the returns filed online, detailed scrutiny system covers a few returns selected on the basis of identified risk parameters. In exercise of powers conferred under sub-rule (3) of rule 12 of the Central Excise Rules, 2002, Board hereby lays down following guidelines for detailed scrutiny of Central Excise Returns:

i) Detailed Scrutiny of Central Excise returns should be conducted regularly by the proper officers in the field following the procedure already prescribed. Detailed scrutiny of a minimum of 2% and maximum of 5% of the total returns received in a month shall be mandatorily performed by the proper officer.

ii) Selection of assessees by the Commissionerates for detailed scrutiny shall be based on Risk score and procedure for using it, as forwarded by DG (Audit) vide letter F. No. 381/20/2015 dated 18.05.2015. Chief Commissioners and Commissioners shall also have powers to manually select returns for detailed scrutiny using such criteria as deemed fit to further complement the list of assessees selected on the basis of risk. After selection of units centrally, month-wise detailed scrutiny plan should be laid down by the Commissionerate headquarters for each Range, conveyed to the Range and monitored for compliance.

iii) As assessee who has been selected for audit in a given financial year shall not be selected for detailed scrutiny. Further, once the return of an assessee has been selected for detailed scrutiny, the return of the assesse should not be selected again for the next 12 months for detailed scrutiny.

iv) Once an assessee has been selected for detailed scrutiny, most recent return filed by that assesse should be used for conducting the detailed scrutiny. During the course of detailed scrutiny of Central Excise returns by proper officer, the documents and records of assessees, where necessary, may be called for verification by proper officer.

v) In Composite Ranges where there are both Central Excise and Service Tax assessees, the total number of Central Excise and Service Tax returns to be taken up for detailed scrutiny shall be same as prescribed at para (i) above. The ratio of returns for Service Tax & Central Excise to be scrutinised in a composite range shall be in the ratio of the number of assessees registered as Service Tax and Central Excise assessees respectively. For detailed scrutiny of Service Tax returns, Board’s Circular No. 185/4/2015-Service Tax dated 30.06.2015 may be referred.

vi) On issues relating to difficulty, if any, in access of returns on ACES, DG (Systems) shall be directly contacted/ appraised by the Chief Commissioner/ Commissioner concerned. Where the problem persists over a long period of time, the same may be brought to the notice of the Board. In the interim, where necessary, printouts of the return may be taken from ACES and detailed scrutiny done manually using the printout.

vii) Past circulars/ manuals/ instructions on detailed scrutiny in conflict with above instructions shall stand rescinded to the extent of the conflict.

2. Difficulty, if any, in implementation of the procedure may please be brought to the notice of the Board. Hindi version would follow.

Yours faithfully,

(ROHAN)

Under Secretary (CX.6)

No. 05/2015 Dated: 21-7-2015


Trade Notice Number 03/2015 regarding – Dated 21-7-2015 – Central Excise

OFFICE OF THE COMMISSIONER CENTRAL EXCISE & CUSTOMS, SURAT-I

New Central excise Building, Near Gandhi Baug , Chowk Bazar

Surat-395001

Trade Notice No 05/2015

Subject: -(1) Trade Notice Number 03/2015 regarding Amendment in Notification No. 30/2014-Cental Excise dated 09th July, 2004 Vide Notification No. 34/2015-Central Excise, dated 17th July 2015.

(2) Trade Notice No. 04/2015, regarding Amendment in Notification No. 01/2011- Central Excise dated 01stMarch, 2011 vide Notification No. 35/2015- Central Excise dated 17th July 2015 and amendment in Notification No. 12/2012-Central Excise dated 17th March 2012 vide Notification No. 36/2015-Central Excise dated 17th July 2015

Trade Notice No. 03/2015 & Trade Notice No. 04/2015 are withdrawn as notification No. 34/2015- Central Excise dated 17th July 2015, Notification No. 35/2015- Central Excise dated 17th July 2015 Notification No. 36/2015-Central Excise dated 17th July 2015 are self explanatory.

(V.K. Verma)

Commissioner

Central Excise, Customs & Service Tax

Surat-I

Dated 21.07.2015

F.No. IV(16)/SRT-I/02/2015

No. F. No. 225/141/2015/ITA.II Dated: 20-7-2015


Validation of tax-returns through Electronic Verification Code-reg. – Order-Instruction – Dated 20-7-2015 – Income Tax

F. No. 225/141/2015/ITA.II

Government of India

Ministry of Finance

Department of Revenue

Central Board of Direct Taxes

North Block, New Delhi, the 20th  of July, 2015

Order under section 119(1) of Income-tax Act, 1961

Subject: Validation of tax-returns through Electronic Verification Code-reg.-

The Central Board of Direct Taxes (‘CBDT’) vide Notification No. 41/2015 dated 15.04.2015 in cases of categories of ‘persons’ specified therein, has introduced Electronic Verification Code (‘EVC’) as one of the modes for validation of return of income which are filed electronically on or after 01.04.2015.

2. In case of returns of income pertaining to Assessment Year’s 2013-2014 and 2014-2015 filed  electronically (without digital  signature certificate) between 01.04.2014 to 31.03.2015, time-limit for submission of ITR-V to the CPC Bengaluru has already been extended till 31.10.2015 vide Notification No. 1/2015 dated 10.07.2015 issued by the Pr. DGIT(Systems). CBDT.  In order to facilitate the process of validation of such returns, CBDT, in exercise of the powers conferred under sub-section (1) of section 119 of the Income-tax Act. 1961, hereby directs that the taxpayer can validate such returns of income within the said extended time through EVC also.

F. No.  225/141/2015-ITA.II

(Rohit Garg)

Deputy Secretary to the Government of India

Copy to:

1. Chairperson, CBDT and all Members, CBDT

2. All JS/CsIT, CBDT

3. Pr. DGIT(Systems), N. Delhi

4. All PCCsIT/PDsGIT/CCsIT/DsGIT for kind information

5.  ITCC, Central Board of Direct Taxes (4 copies)

6. O/o  Pr. DGIT (Systems).   New   Delhi,   for   placing   on   the   website: incometaxindia.gov.in.

7. Addl. CIT, Data base Cell for uploading on Departmental Website

8. ITBA Publisher for uploading on ITBA

9. DIT(PR, PP & OL)

10. Guard file.

(Rohit Garg)

Deputy Secretary to the Government of India

Notification No. : S.O. 2013(E) Dated: 20-7-2015


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 – S.O. 2013(E) – Dated 20-7-2015 – Special Economic Zone

MINISTRY OF COMMERCE AND INDUSTRY

(Department of Commerce)

NOTIFICATION

New Delhi, the 20th July, 2015

S.O. 2013(E).-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 Zone Rules, 2006, had notified the areas of 16.91 hectares and 1.49 hectares at above Special Economic Zone vide Ministry of Commerce and Industry Notification numbers S.O. 2107(E) dated 15th December, 2006 and S.O. 2635(E) dated 20th October, 2009 respectively;

And, whereas, M/s. HCL Technologies Limited has now proposed to include an area of 0.5915 hectares at Plot Number 3B, Sector 126, Noida in the State of Uttar Pradesh as a part of 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 0.5915 hectares at Plot Number 3B, Sector 126, Noida, in the State of Uttar Pradesh as part of the above Special Economic Zone, thereby making total area of the Special Economic Zone as 18.9915 hectares.

[F. No. F.2/85/2005-SEZ]

Dr. GURUPRASAD MOHAPATRA, Jt. Secy.

No. 03/2015 Dated: 20-7-2015


Amendment in Notification No. 30/2004-Central Excise dated 9th July, 2004 vide Notification No. 34/2015-Central Excise dated 17th July, 2015 – Dated 20-7-2015 – Central Excise

OFFICE OF THE COMMISSIONER OF CENTRAL EXCISE & CUSTOMS,

SURAT-I

New Central Excise Building, Near Gandhi Baug, Chowk Bazar Surat- 395 001

TRADE NOTICE NO : 03/2015

Dated 20/07/2015

Subject : – Amendment in Notification No. 30/2004-Central Excise dated 9th July, 2004 vide Notification No. 34/2015-Central Excise dated 17th July, 2015

Government of India, Ministry of Finance, Department of Revenue, vide Notification No. 34/2015 – Central Excise dated 17th July 2015 (the copy enclosed) substituted the proviso in the opening paragraph of No. 30/2004-Central Excise dated 9th July, 2004. The relevant portion of Notification No. 34/2015 – Central Excise dated 17th July, 2015is reproduced as under-

“ In the said notification in the opening paragraph, for the proviso, the following proviso shall be substituted namely-

Provided that the said excisable goods are manufactured from inputs on which appropriate duty of excise leviable under the First Schedule to the Central Excise Tariff Act or additional duty of customs under section 3 of the Customs Tariff Act, 1975 (51 of 1975) has been paid and no credit of such excise duty or additional duty of customs on inputs has been taken by the manufacturer of such goods (and not the buyer of such goods). Under the provisions of the CENVAT Credit Rules 2004”

2.  All such manufactures are required to get registered themselves under the Rule 9 of the Central Excise Rule 2002

3.  All such manufactures are directed to declare the stock of the inputs and finished goods separately, as on 17thJuly, 2015, (in duplicate) to the Jurisdictional Range Office on or before 24/07/2015.

4.  All the Trade Associations Chamber of Commerce and Member of Regional Advisory Committees are requested to publicize the Amendment in Notification No. 30/2004-Central Excise dated 9th July 2004 Vide Notification No. 34/2015 – Central Excise dated 17th July, 2015.

File No. IV(16)/SRT-I/02/2015

(V. K. Verma)

Commissioner

Central Excise Customs & Service Tax

Surat -

Notification No.G.S.R. 563(E). Dated: 20-7-2015


Amendment to G.S.R.38( E) dated 19th January 2011 – - G.S.R. 563(E). – Dated 20-7-2015 – Companies Law

MINISTRY OF CORPORATE AFFAIRS

NOTIFICATION

New Delhi, the 20th July, 2015

G.S.R. 563(E).-In exercise of the powers conferred by Section 28A of the Chartered Accountants Act, 1949 (38 of 1949), the Central Government hereby makes the following amendments in the notification of the Government of India in the Ministry of Corporate Affairs, published in the Gazette of India, Extraordinary, Part-II, Section 3, Sub-section (i), vide number G.S.R. 38(E), dated the 19th January, 2011.

2. In the said notification, against serial number (1) and entries relating thereto, the following serial number and entries  shall be substituted with effect from the date of publication of this notification in the Official Gazette, namely:-

“(1) Dr. (Smt.) Pravinder Sohi Behurla, IRS (Rets.) – Chairperson”.

C-I/9, Humayun Road,

New Delhi-110003

New Delhi-110003

[F. No.  1/15/2010-PI]

MANOJ KUMAR, A. Secy.

Note:-The principal notification was published in the Gazette of India, Extraordinary, Part-II, Section 3, Sub-section (i) vide number G.S.R. 38(E), dated the 19th January, 2011 and subsequently amended vide number G.S.R. 684(E), dated the 16th September, 2011, G.S.R.441(E), dated the 12th June, 2012, number G.S.R. 486(E), dated the 21st June, 2012, G.S.R. 810(E), dated the 5th November, 2012, G.S.R. 131(E), dated the 1St March, 2014, G.S.R. 569(E), dated the 7th August, 2014 and G.S.R. 837(E), dated the 24th November, 2014.

Notification No : 36/2015 Dated: 17-7-2015


Effective rate of duty – Amendments in the Notification No.12/2012-Central Excise dated 17/03/2012 – Exemption shall be grated to certain items eligible Nil rate of duty or concessional rate of duty only if such goods manufactured out of inputs on which appropriate duty of excise leviable has been paid and no cenvat credit avalied – 36/2015 – Dated 17-7-2015 – Central Excise – Tariff

[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. 36/2015 – Central Excise

New Delhi, the 17th July, 2015

G.S.R. (E).- 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 number G.S.R. 163(E), dated the 17th March, 2012,namely:-

In the said notification, in the ANNEXURE,-

(a) for condition No. 16, and the entries relating thereto, the following shall be substituted, namely:-

“16. If the said excisable goods are manufactured from inputs or capital goods on which appropriate duty of excise leviable under the First Schedule to the Excise Tariff Act or additional duty of customs under section 3 of the Customs Tariff Act, 1975 (51 of 1975)has been paid and no credit of such excise duty or additional duty of customs on inputs or capital goods has been taken by the manufacturer of such goods (and not the buyer of such goods) under rule 3 or rule 13 of the CENVAT Credit Rules, 2004.”;

(b) in Condition No. 20, in clause (a), for the existing entry the following entry shall be substituted namely:-

“the said excisable goods are manufactured from inputs on which appropriate duty of excise leviable under the First Schedule to the Excise Tariff Act or additional duty of customs under section 3 of the Customs Tariff Act, 1975 (51 of 1975) has been paid and no credit of such excise duty or additional duty of customs on inputs has been taken by the manufacturer of such goods (and not the buyer of such goods), under rule 3 or rule 13 of the CENVAT Credit Rules, 2004;”;

(c) for condition No. 25, and the entries relating thereto, the following shall be substituted, namely:-

“25. If the said excisable goods are manufactured from inputs or by utilising input services on which appropriate duty of excise leviable under the First Schedule to the Excise Tariff Actor additional duty of customs under section 3 of the Customs Tariff Act, 1975 (51 of 1975) or service tax under section 66 of the Finance Act, 1994 (32 of 1994) has been paid and no credit of such excise duty or additional duty of customs on inputs or service tax on input services has been taken by the manufacturer of such goods (and not the buyer of such goods), under rule 3 or rule 13of the CENVAT Credit Rules, 2004.” ;

(d) for condition No. 52A, and the entries relating thereto, the following shall be substituted, namely:-

“52A If the said excisable goods are manufactured from inputs or capital goods or by utilising input services on which appropriate duty of excise leviable under the First Schedule to the Excise Tariff Act or additional duty of customs under section 3 of theCustoms Tariff Act, 1975 (51 of 1975) or service tax under section 66 of the Finance Act, 1994 (32 of 1994) has been paid and no credit of such excise duty or additional duty of customs on inputs or capital goods or service tax on input services has been taken by the manufacturer of such goods (and not the buyer of such goods), underrule 3 or rule 13 of the CENVAT Credit Rules, 2004.”.

[F. No. 336/4/2015-TRU]

(Akshay Joshi)

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.32/2015-Central Excise, dated the 4th June, 2015, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R.456(E), dated the 4th June, 2015.

Notification No.35/2015 Dated: 17-7-2015


Effective rate of duty 2 on certain items – Amendments in the Notification No.1/2011-Central Excise dated 01/03/2011 – Exemption will be allowed only if such goods manufactured out of inputs on which appropriate duty of excise leviable has been paid and no cenvat credit avalied – 35/2015 – Dated 17-7-2015 – Central Excise – Tariff

[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. 35/2015 – Central Excise

New Delhi, the 17th July, 2015

G.S.R. (E). - 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 amendment in the notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 1/2011-Central Excise, dated the 1st March, 2011 published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 116(E), dated the 1st March, 2011, namely: -

In the said notification, in the opening paragraph, for the proviso, the following proviso shall be substituted, namely:-

“Provided that the said excisable goods are manufactured from inputs or by utilising input services on which appropriate duty of excise leviable under the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) or additional duty of customs under section 3 of the Customs Tariff Act, 1975 (51 of 1975) or service tax under section 66 of the Finance Act, 1994 (32 of 1994) has been paid and no credit of such excise duty or additional duty of customs on inputs or service tax on input services has been taken by the manufacturer of such goods (and not the buyer of such goods), under the provisions of the CENVAT Credit Rules, 2004.”.

[F. No. 336/4/2015-TRU]

(Akshay Joshi)

Under Secretary to the Government of India

Note.- The principal notification No. 1/2011-Central Excise, dated the 1st March, 2011 was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R.116 (E), dated the 1st March, 2011 and last amended vide notification No.07/2015-Central Excise, dated the 1st March, 2015, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R.137(E), dated the 1st March, 2015.

Notification No : 34/2015 Dated: 17-7-2015


Exemption to specified goods of chapters 50 to 63 – Amendments in the Notification No.30/2004-Central Excise dated 09/07/2004 – Exemption will be allowed only if textile goods manufactured out of inputs on which appropriate duty of excise leviable has been paid and no cenvat credit avalied – 34/2015 – Dated 17-7-2015 – Central Excise – Tariff

[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. 34/2015 – Central Excise

New Delhi, the 17th July, 2015

G.S.R. (E).- 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 being satisfied that it is necessary in the public interest so to do, hereby makes the following further amendment in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No 30/2004-Central Excise, dated the 9th July, 2004, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 421(E), dated the 9th July, 2004, namely :-

In the said notification, in the opening paragraph, for the proviso, the following proviso shall be substituted, namely:-

“Provided that the said excisable goods are manufactured from inputs on which appropriate duty of excise leviable under the First Schedule to the Central Excise Tariff Act or additional duty of customs under section 3 of theCustoms Tariff Act, 1975 (51 of 1975) has been paid and no credit of such excise duty or additional duty of customs on inputs has been taken by the manufacturer of such goods (and not the buyer of such goods), under the provisions of the CENVAT Credit Rules, 2004.”.

[F. No. 336/4/2015-TRU]

(Akshay Joshi)

Under Secretary to the Government of India

Note.- The principal notification No. 30/2004-Central Excise, dated the 9th July, 2004 was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R.421(E), dated the 9th July, 2004 and last amended vide notification No.11/2013-Central Excise, dated the 1st March, 2013, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R.146(E), dated the 1st March, 2013.

No. LETTER F.NO.310/03/2015-OT Dated: 17-7-2015


Region wise target for ‘New Taxpayers’ for Financial Year 2015-16 – Circular – Dated 17-7-2015 – Income Tax

DATED 17-7-2015

Please refer to the above.

2. The Region wise target for ‘New Taxpayers’ for Financial Year 2015-16 is as under:

Region

New Taxpayer target for F.Y.2015-16

Andhra Pradesh and Telengana

7,93,427

Bihar and Jharkhand

4,97,207

Delhi

5,32,218

Gujarat

7,86,459

Karnataka and Goa

6,22,602

Kerala

3,55,848

Madhya Pradesh and Chattisgarh

4,68,778

Mumbai

6,23,867

Nagpur

1,70,799

North East Region

1,77,103

North West Region

9,30,911

Odisha

1,98,129

Pune

10,14,418

Rajasthan

4,64,152

Tamil Nadu

7,64,396

Uttar Pradesh (East)

4,32,956

Uttar Pradesh (West)

4,74,925

West Bengal and Sikkim

6,91,806

TOTAL

100,00,000

3. The action points for achieving the target in the respective areas are identified as under:

Area

Action Points

Devise and pursue region specific strategies
  • Devise and pursue region specific strategies for identification and pursuing potential taxpayers – Professionals, Businesses, Employees
  • Conduct meetings with Professional bodies and trade associations
  • Work with DIT (I&CI) to collect potential information
Pursue NMS defaulters
  • Complete verification of NMS 1 and 2 cases by 31-7-2015 (available on i-taxnet)
  • Complete verification of NMS 3 cases by 30-9-2015 (available on Actionable Information Monitoring System – AIMS).
Handle Non-PAN data
  • PCCsIT to decide whether action will be taken on pin code wise segregated non-PAN data through Jurisdictional AOs or special units (Non-PAN data having sufficient address information will be disseminated using online platform)
  • Ensure that jurisdictional AOs/special units follow-up with transacting parties to verify and populate PAN in non-PAN data
Ensure action against TDS defaulters
  • Follow-up with Deductors for submission of TDS statements
  • Follow-up with Deductors for submission of transactions involving non-deduction/lower deduction by TDS AOs

4. This issues with the approval of Chairperson, CBDT.

LETTER F.NO.310/03/2015-OT

A P Shah panel on MAT may submit report next week: Arun Jaitley : 17-07-2015


The high-level Justice A P Shah panel, set up to look into the levy of MAT on FIIs, is likely to submit its report to the Government next week, Finance Minister Arun Jaitley said today.

“Shah panel on MAT may submit report in a week,” Jaitley told reporters here.

The committee constituted in May has held series of consultations with the tax department, various industry chambers, besides institute of chartered accountants of India to elicit their views on levying Minimum Alternate Tax (MAT) on Foreign Institutional Investors (FIIs)

The three-member committee also includes former Chief Economic Advisor Ashok Lahiri and Chartered accountant Girish Ahuja.

The revenue department, according to sources, is of the view that MAT is not applicable on FIIs and the notices were sent to them following a verdict by the Authority of Advance Ruling (AAR).

In 2012, the AAR directed Castleton to pay MAT in India on their book profits when it transferred shares from a Mauritius entity to a Singapore entity.

Assocham, in its representation to committee said, that government should issue a clarification that MAT provisions were never intended and do not apply to FIIs/FPIs.

“It is also requested (that you should) recommend to the Government to direct the revenue authorities to stay the demand raised on FIIs/FPIs and not to take any coercive action, till the time the MAT issue is resolved.

“The above action would be in accordance with the government’s intention of providing a non-adversarial and stable tax regime to the taxpayer in India,” the chamber said.

The Shah Committee has been entrusted with the task of examining MAT notices to the FIIs for the period prior to April 1, 2015.

The Income Tax Department had sent notices to 68 FIIs demanding Rs 602.83 crore as MAT dues of previous years. This has raked up a big controversy, with FIIs moving higher court challenging the MAT demand.

The Budget 2015-16 had exempted FIIs from paying MAT with effect from April 1, 2015.

Following the announcement of setting up of the panel, the tax department directed its field officers to put on hold issuance of fresh notices and any further assessments on levy of MAT on such entities.

Source : PTI

No. AST INSTRUCTION NO. 136 Dated: 10-7-2015


Restriction on issuance of manual refunds by assessing officer – Order-Instruction – Dated 10-7-2015 – Income Tax

 

AST INSTRUCTION NO. 136

DATED 10-7-2015

Kindly refer to the above subject.

2. The functionalities for passing orders u/s 143(1)(a)/143(3)/154/ appeal effects/penalty etc. exist on the system and, progressively, AOs are mostly issuing orders on the system from AY 2011-12 onwards. The CBDT has repeatedly instructed that in all cases orders must be passed on the system. This has also been stressed in the Central Action Plan for each year. Further, all charges including LTUs and Central Charges are now covered by Refund Banker scheme. However, instances continue to come to the notice of the CBDT where the Assessing Officers have issued manual refunds even in cases which have been processed on AST.

3. In certain exceptional time-barring cases the CBDT has allowed processing of Returns of Income in Online TMS. The AST Instruction No. 135 dated 20th March 2015 provides for processing of following categories of returns for AY. 2013-14 in Online TMS.

Category 1

Sr. No.

Category of cases

I

PAN under migration

II

PAN is deleted in de-duplication process.

III

PAN is under de-duplication restoration.

Category 2:

Sr. No.

Category of cases

I

Invalid PAN mentioned in the return

II

PAN is not available

III

Name in PAN database does not match with name in Return of Income

IV

Return with one PAN issued to two different entities OR someone filing a return quoting the PAN of original holder and this wrong return is processed first in AST/CPC/TMS, therefore the System will not allow processing of Return of original PAN holder.

V

Any other contingency in AST not allowing the processing of such return even with valid PAN.

4. As per the aforementioned instruction, refunds can be issued via refund voucher printing facility for Online TMS Category 1 cases only. Subsequent to the issue of refunds, the information regarding processing and refund issued, if any, needs to be integrated with AST. However, for the Online TMS Category 2 cases, refund via refund voucher printing facility or integration with AST is not possible, as the correct PAN details are not available.

5. Only in cases where the initial underlying order is passed outside the system, the subsequent orders cannot be passed in the AST system and therefore in such cases refund cannot be issued through Refund Banker. As discussed in para 2 above, from AY 2011-12 onwards, most orders u/s 143(1) and subsequent orders are already on AST system.

6. It is therefore decided by the CBDT that henceforth no manual refund should be issued in a case which has been processed on AST. In cases referred to in paras 4 & 5 or in exceptional cases, manual refunds may be issued with the following safeguards:

i.  It is mandatory for AO to take Approval by Range head for refunds upto ₹ 1 lakh and approval by CIT for refund above ₹ 1 lakh and record reasons as to why manual refund was necessary.

ii. Mandatory quoting of PAN, AY and Bank account number on the Cheque.

iii.  No manual refund will be permitted if a prior manual refund for same PAN, AY and amount has already been encashed.

7. For control purposes, a separate ITD functionality/screen is being rolled out vide this instruction to capture important details for manual refunds (other than using print refund voucher functionality where details are already captured in the system) issued by the Assessing Officer(s). The Assessing Officer(s) are advised to mandatorily fill these details before issuance of any manual refund from the date of issue of this instruction. Range Heads are advised to ensure that the Assessing Officers duly fill all the details for such manual refunds as provided in the functionality before issuance of any such manual refund. The path of this functionality is as under:

“ITD → AST → Others → Manual Refund Details”

For monitoring by supervisory officers, the data of refunds issued manually and entered by the AOs in this new screen will be matched with the data of such refunds encashed as per OLTAS database regularly to identify cases that have not been entered by AOs through MIS feature that will be launched shortly.

This process would continue till a separate functionality is developed in ITBA.

8. The CIT(COs) are requested to ensure that all the Assessing Officers are enabled under Refund Banker Scheme as per new Jurisdiction Order issued after restructuring w.e.f. 15.11.2014. It also needs to be ensured that the old jurisdictions are dis-continued immediately.

9. For any clarifications/difficulties user is advised to lodge ticket with Helpdesk for resolution. Any queries on this issue can also be addressed to Shri Ashish Abrol, Addl.DIT(S)-3(1)(09013850443), ashishabrol@incometax.gov.in

10. This issues with the approval of Chairperson, CBDT.

[F.NO.DGIT(S)/DIT(S)-3/AST/MANUAL REFUNDS/85-2015-16]

No. 06 Dated: 16-7-2015


Foreign Investment in India by Foreign Portfolio Investors – Circular – Dated 16-7-2015 – FEMA

RBI/2015-16/131

A.P.(DIR Series) Circular No. 6

July 16, 2015

To,

All Authorised Persons

Madam/ Sir,

Foreign Investment in India by Foreign Portfolio Investors

Attention of Authorized Dealer Category-I (AD Category-I) banks is invited to Schedule 5 to the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulations, 2000 notified vide Notification No. FEMA.20/2000- RB dated May 3, 2000, as amended from time to time and to  A.P. (DIR Series) Circular No. 71 dated February 3, 2015 and A.P. (DIR Series) Circular No. 73 dated February 6, 2015 in terms of which all future investments by an FPI within the limit for investment in corporate bonds shall be required to be made in corporate bonds with a minimum residual maturity of three years.

2. The Reserve Bank has been receiving enquiries about the applicability of the aforesaid directions on investment by FPIs in security receipts (SRs) issued by the Asset Reconstruction Companies (ARCs). It is clarified that the restriction on investments with less than three years residual maturity shall not be applicable to investment by FPIs in SRs issued by ARCs. However, investment in SRs shall be within the overall limit prescribed for corporate debt from time to time.

3. The aforesaid directions come into force with immediate effect. Further operational guidelines, if any, will be issued by SEBI. All other existing conditions for investment by FPIs in the debt market remain unchanged.

4. AD Category – I banks 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 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.

Yours faithfully,

(R. Subramanian)

Chief General Manager

No. 05 Dated: 16-7-2015


Export factoring on non-recourse basis – Circular – Dated 16-7-2015 – FEMA

RBI/2015-16/129

A.P. (DIR Series) Circular No. 5

July 16, 2015

To

All Authorised Dealers in Foreign Exchange

Madam/ Sir,

Export factoring on non-recourse basis

In order to facilitate exports, Authorised Dealer Category – I (AD Category –I) banks have been permitted to provide ‘export factoring’ services to exporters on ‘with recourse’ basis by entering into arrangements with overseas institutions for this purpose without prior approval from the Reserve Bank of India subject to compliance with guidelines issued by the Department of Banking Regulation in this regard.

2. Taking into account the recommendation made by the Technical Committee on Facilities and Services to the Exporters (Chairman: Shri G. Padmanabhan), it has been decided to permit AD banks to factor the export receivables on a non-recourse basis, so as to enable the exporters to improve their cash flow and meet their working capital requirements subject to conditions as under:

a. AD banks may take their own business decision to enter into export factoring arrangement on non-recourse basis. They should ensure that their client is not over financed. Accordingly, they may determine the working capital requirement of their clients taking into account the value of the invoices purchased for factoring. The invoices purchased should represent genuine trade invoices.

b. In case the export financing has not been done by the Export Factor, the Export Factor may pass on the net value to the financing bank/ Institution after realising the export proceeds.

c. AD bank, being the Export Factor, should have an arrangement with the Import Factor for credit evaluation & collection of payment.

d. Notation should be made on the invoice that importer has to make payment to the Import Factor.

e. After factoring, the Export Factor may close the export bills and report the same in the Export Data Processing and Monitoring System (EDPMS) of the Reserve Bank of India.

f. In case of single factor, not involving Import Factor overseas, the Export Factor may obtain credit evaluation details from the correspondent bank abroad.

g. KYC and due diligence on the exporter shall be ensured by the Export Factor.

3. Authorised Dealers 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) 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.

Yours faithfully,

(A. K. Pandey)

 Chief General Manager

No. LETTER F.NO.DGIT(S)/DIT(S)-I/AIS MISC./0010/2015 Dated: 16-7-2015


Migration of PAN lying in old/orphan/defunct Jurisdiction – Circular – Dated 16-7-2015 – Income Tax

DATED 16-7-2015

Kind reference is invited to AIS instructions nos. 80, AST instruction no. 97 and 134 on the above subject (copies enclosed for ready reference) wherein procedure for migration of PAN lying in old/orphan/defunct Jurisdiction to the Jurisdictional A.Os. through the Nodal officer/jurisdiction defined under CIT(CO) was circulated.

2. Presence of PAN in old/orphan/defunct jurisdiction leads to problem in timely processing of returns and also raises problems consequent to selection of PAN in CASS. Therefore the above procedure was devised to address the various problems of processing and informed to field formation vide above instructions.

3. It is observed that some Jurisdictional CsIT/RCCs have yet not finished the work of transfer of PANs from old/orphan/defunct jurisdiction to their correct and present jurisdictional officers. CIT wise status of PANs lying in old/orphan/defunct jurisdiction is attached in Annexure A.

4. The work of migration of PAN from Old/orphan/defunct jurisdiction should be completed before 31.7.2015 well before running of next CASS cycle. Considering the urgency of matter, I am directed to request you that jurisdictional CsIT may be asked to expedite the work of transfer of PAN lying in old/orphan/defunct jurisdiction to the Nodal jurisdiction and thereafter RCCs should transfer PANs to their correct present jurisdiction.

5. Detailed PAN wise list of PANs present in Old/orphan/defunct jurisdiction is also available on ITAXNET server path ITAXNET → RESOURCES → DOWNLOADS → SYSTEMS → DATA FOR FIELD FORMATIONS → OLD MARKED PANs.csv.

6. Also, there are certain jurisdictions having description like TDS AO, CIB AO where PAN should not reside as no processing is done in such jurisdictions. It may therefore be ensured that PANs may be quickly transferred out from these jurisdictions to correct current jurisdiction or to the Nodal jurisdiction under CIT (CO). Nodal officer/CIT (CO) may transfer such PANs to correct jurisdiction at the earliest.

Annexure-A

AREA CD

CIT CD

CIT

Count of PAN

RCC

DLC

59

CIT (CENTRAL) LUCKNOW

2

AGRA

KNP

16

PCIT 1, AGRA

4

AGRA

DLC

16

OLD-CIT CENT AHM

1

AHMEDABAD

GUJ

15

PCIT 5, AHMEDABAD

5

AHMEDABAD

GUJ

17

PCIT 7, AHMEDABAD

87

AHMEDABAD

LKN

2

OLD-CIT, ALLAHABAD

4

ALLAHABAD

LKN

3

OLD CIT, VARANASI

2

ALLAHABAD

NWR

4

CIT, AMRITSAR

2

AMRITSAR

NWR

10

CIT-1 JALANDHAR

6

AMRITSAR

NWR

18

CIT-1, AMRITSAR

1

AMRITSAR

NWR

19

CIT-2, AMRITSAR

7

AMRITSAR

DLC

38

PCIT/CIT CEN., BLR

62

BANGLORE

DLC

39

CIT EXEMPTIONS, BLR

162

BANGLORE

DLC

40

CIT, INTL, .TAXATION, BANGALORE

224

BANGLORE

KAR

11

PCIT 1, BANGALORE

551

BANGLORE

KAR

13

PCIT 2, BANGALORE

12

BANGLORE

KAR

15

CIT(CO) PAN TRANSFER

507

BANGLORE

KAR

19

CIT (ADMN&CO), BANGALORE

42

BANGLORE

KAR

21

PCIT 3, BANGALORE

10

BANGLORE

KAR

22

PCIT 4, BANGALORE

832

BANGLORE

KAR

31

PCIT 5, BANGALORE

659

BANGLORE

KAR

32

PCIT, MYSORE

709

BANGLORE

KAR

34

PCIT 6, BANGALORE

49

BANGLORE

KAR

35

PCIT 7, BANGALORE

32

BANGLORE

KAR

41

PCIT, HUBLI

29

BANGLORE

KAR

42

PCIT, GULBARGA

39

BANGLORE

KAR

43

PCIT, DAVANAGERE

85

BANGLORE

KAR

51

PCIT, PANAJI

2226

BANGLORE

KAR

52

PCIT, BELGAUM

20

BANGLORE

KAR

53

PCIT, MANGALORE

119

BANGLORE

KAR

61

CIT LTU, BANGALORE

13837

BANGLORE

DLC

97

CIT CEN AHM AT BRD

174

BARODA

GUJ

31

PCIT l, VADODARA

1

BARODA

BPL

1

PCIT1/CIT1 BHOPAL

415

BHOPAL

BPL

2

CIT-I, INDORE

1242

BHOPAL

BPL

3

PCIT/CIT GWALIOR

287

BHOPAL

BPL

6

PCIT2/CIT2 BHOPAL

227

BHOPAL

BPL

7

CIT, UJJAIN

1

BHOPAL

BPL

8

CIT-II, INDORE

99

BHOPAL

BPL

15

CIT (TDS), BHOPAL

13

BHOPAL

BPL

44

CIT (EXEMPTION), BHOPAL

29

BHOPAL

DLC

69

CIT (CENTRAL), BHOPAL

7

BHOPAL

BBN

1

PCIT 1, BHUBANESWAR

615

BHUBHNESWAR

BBN

3

PCIT CUTTACK

3

BHUBHNESWAR

CHE

51

PCIT/CIT 1 CHENNAI

108

CHENNAI

CHE

52

PCIT/CIT 2 CHENNA1

38

CHENNAI

CHE

53

PCIT/CIT 3 CHENNAI

1066

CHENNAI

CHE

54

PCIT/CIT 4 CHENNAI

477

CHENNAI

CHE

55

PCIT/CIT 5 CHENNAI

383

CHENNAI

CHE

56

PCIT/CIT 6 CHENNAI

1586

CHENNAI

CHE

57

PCIT/CIT 7 CHENNAI

42

CHENNAI

CHE

58

PCIT/CIT 8 CHENNAI

62

CHENNAI

CHE

59

PCIT/CIT 9 CHENNAI

265

CHENNAI

CHE

60

PCIT/CIT 10 CHENNAI

68

CHENNAI

CHE

62

CIT TDS CHENNAI

123

CHENNAI

CHE

63

PCIT/CIT PUDUCHERRY

59

CHENNAI

CHE

64

PCIT/CIT 1 TRICHY

8

CHENNAI

CHE

65

PCIT/CIT 2 TRICHY

218

CHENNAI

CHE

66

PCIT/CIT SALEM

584

CHENNAI

CHE

68

CIT-TDS CN FOR TRY

3

CHENNAI

DLC

9

PCIT/CIT CENTRAL 1 CHENNAI

54

CHENNAI

DLC

10

PCIT/CIT CENTRAL 2 CHENNAI

1

CHENNAI

DLC

11

CIT (EXEMPTION), CHENNAI

265

CHENNAI

DLC

29

CIT CENTRAL, KOCHI AT TVM

1

CHENNAI

DLC

46

CIT (INT.TAX.), CHENNAI

152

CHENNAI

DLC

47

CIT CENTRAL, KOCHI

1036

COCHIN

KRL

1

PCIT 2, KOCHI

1

COCHIN

KRL

2

PCIT, KOZHIKODE

2

COCHIN

KRL

6

CIT (ADMIN CO), KOCHI

8

COCHIN

CHE

21

PCIT/CIT 1, COIMBATORE

3

COIMBATORE

CHE

22

PCIT/CIT 2, COIMBATORE

20

COIMBATORE

CHE

23

PCIT/CIT 3, COIMBATORE

43

COIMBATORE

DEL

15

CIT – COMPUTER OPERATIONS, DEL

212

DELHI

DEL

44

CIT 20, DELHI

103

DELHI

DEL

47

CIT 23, DELHI

9

DELHI

DEL

48

CIT 24, DELHI

8

DELHI

DLC

1

CIT CENTRAL 1, DELHI

76

DELHI

DLC

2

CIT CENTRAL 2, DELHI

43

DELHI

DLC

3

OLD-DIT (EXEMPTION)

75

DELHI

DLC

20

CIT INTERNATION TAX. 1, DELHI

5296

DELHI

DLC

31

CIT INTERNATIONAL 2, DELHI

2337

DELHI

DLC

54

DIT INVESTIGATION II

3

DELHI

APR

2

OLD-CIT-II HYD

1

HYDERABAD

APR

10

CIT(CO), HYDERABAD

72

HYDERABAD

APR

11

PCIT/CIT 1, HYDERABAD

3

HYDERABAD

APR

17

PCIT/CIT,VIJAYAWADA

22642

HYDERABAD

APR

18

PCIT/CIT, GUNTUR

33

HYDERABAD

APR

19

PCIT/CIT, TIRUPATI

5

HYDERABAD

APR

24

PCIT/CIT(TDS), HYDERABAD

2

HYDERABAD

DLC

12

OLD-CIT CNTRL, BANGL

1

HYDERABAD

DLC

23

PCIT/CIT (CENTRAL), HYD

12

HYDERABAD

BPL

5

PCIT 1/CIT 1, RAIPUR

176780

JABALPUR

BPL

9

PCIT 2/CIT 2, JABALPUR

9

JABALPUR

BPL

10

PCIT/CIT, BILASPUR

14384

JABALPUR

BPL

41

PCIT 2/CIT 2, RAIPUR

234

JABALPUR

BPL

52

CIT (EXEMPTION) BHOPAL AT JBP

35

JABALPUR

DLC

37

CIT CENTRAL, JAIPUR

5

JAIPUR

DLC

87

CIT(INT.TAX.)-I, DELHI AT JPR

2

JAIPUR

RJN

12

CIT 2, JAIPUR

9

JAIPUR

RJN

20

CIT (CO), JAIPUR

3

JAIPUR

NWR

10

CIT-1,JALANDHAR

10

JALANDHAR

NWR

11

CIT-2JALANDHAR

6

JALANDHAR

NWR

14

CIT-1,LDH

10

JALANDHAR

NWR

15

CIT-2,LDH

61

JALANDHAR

NWR

16

CIT-3,LDH

37

JALANDHAR

DLC

48

CIT CEN, JPR AT JDH

51

JODHPUR

RJN

32

CIT-II, JODHPUR

2

JODHPUR

RJN

34

CIT, BIKANER

2

JODHPUR

RJN

36

CIT, UDAIPUR

14

JODHPUR

RJN

40

CIT, KOTA

20022

JODHPUR

RJN

45

CIT(CO), JAIPUR AT JODHPUR

97

JODHPUR

DLC

59

CIT (CENTRAL) LUCKNOW

3

KANPUR

KNP

11

PCIT 1, KANPUR

2

KANPUR

KNP

12

PCIT 2, KANPUR

62

KANPUR

PNE

4

OLD-CIT, KOLHAPUR

4

KOLHAPUR

PNE

38

CIT TDS PUNE AT KOLHAPUR

11

KOLHAPUR

WBG

1

CIT WB-1-OLD

12

KOLKATA

WBG

3

CIT WB-3-OLD

8

KOLKATA

WBG

4

CIT WB-4-OLD

2

KOLKATA

WBG

5

CIT WB-5-OLD

2

KOLKATA

WBG

6

CIT WB – 6-OLD

2

KOLKATA

WBG

7

CIT WB-7-OLD

14

KOLKATA

WBG

8

CIT WB-8-OLD

1

KOLKATA

WBG

10

CIT WB-10-OLD

2

KOLKATA

WBG

11

CIT WB-11-OLD

1

KOLKATA

WBG

12

CIT JALPAIGURI-OLD

4

KOLKATA

WBG

45

CIT KOL V

1

KOLKATA

WBG

46

CIT KOL VI

10

KOLKATA

WBG

65

PCIT, SILIGURI

31

KOLKATA

WBG

73

PCIT 13, KOLKATA

39

KOLKATA

WBG

82

PCIT 18, KOLKATA

3928

KOLKATA

WBG

86

PCIT 21, KOLKATA

1681

KOLKATA

WBG

95

CIT, TDS, KOL

28

KOLKATA

DLC

59

CIT (CENTRAL) LUCKNOW

516

LUCKNOW

LKN

4

CIT, BAREILLY

24

LUCKNOW

LKN

5

CIT-2,LUCKN0W

23

LUCKNOW

LKN

6

CIT,FAIZABAD

2

LUCKNOW

LKN

7

CIT, MORADABAD

11

LUCKNOW

LKN

9

CIT-1, LUCKNOW

2

LUCKNOW

LKN

13

CIT TDS, LUCKNOW

57

LUCKNOW

LKN

17

CIT(CO), LUCKNOW

99

LUCKNOW

CHE

31

OLD-CIT-MADURAI

3

MADURAI

CHE

71

PCIT/CIT 1 MADURAI

516

MADURAI

CHE

72

PCIT/CIT 2 MADURAI

341

MADURAI

DLC

9

PCIT/CIT CENTRAL 1 CHENNAI

62

MADURAI

KNP

2

PCIT, MEERUT

7

MEERUT

KNP

4

PCIT, GHAZIABAD

20

MEERUT

KNP

7

PCIT 1 DEHRADUN

5051

MEERUT

KNP

8

PRCIT 2 HALDWANI

19284

MEERUT

KNP

43

CIT, ALIGARH

78

MEERUT

DLC

4

PCIT (CENTRAL) 1, MUMBAI

613

MUMBAI

DLC

5

PCIT (CENTRAL) 2, MUMBAI

107

MUMBAI

DLC

7

PCIT (CENTRAL) 4, MUMBAI

28

MUMBAI

DLC

8

CIT (EXEMPTIONS), MUMBAI

1

MUMBAI

DLC

30

CIT (IT) 1, MUMBAI

9

MUMBAI

MUM

1

PCIT 1, MUMBAI

27

MUMBAI

MUM

2

PCIT 2, MUMBAI

3

MUMBAI

MUM

3

PCIT 3, MUMBAI

5

MUMBAI

MUM

4

PCIT 4, MUMBAI

3

MUMBAI

MUM

5

PCIT 5, MUMBAI

1

MUMBAI

MUM

6

PCIT 6, MUMBAI

13

MUMBAI

MUM

7

PCIT 7, MUMBAI

9

MUMBAI

MUM

9

PCIT 9, MUMBAI

4

MUMBAI

MUM

10

PCIT 10, MUMBAI

11

MUMBAI

MUM

11

PCIT 11, MUMBAI

10

MUMBAI

MUM

12

PCIT 12, MUMBAI

50

MUMBAI

MUM

13

PCIT 13, MUMBAI

3

MUMBAI

MUM

14

PCIT 14, MUMBAI

3

MUMBAI

MUM

15

PCIT 15, MUMBAI

9

MUMBAI

MUM

16

PCIT 16, MUMBAI

1

MUMBAI

MUM

17

PCIT 17, MUMBAI

1131

MUMBAI

MUM

18

PCIT 18, MUMBAI

16

MUMBAI

MUM

19

PCIT 19, MUMBAI

45

MUMBAI

MUM

20

PCIT 20, MUMBAI

22

MUMBAI

MUM

21

PCIT 21, MUMBAI

8

MUMBAI

MUM

22

PCIT 22, MUMBAI

68

MUMBAI

MUM

23

PCIT 23, MUMBAI

14

MUMBAI

MUM

24

PCIT 24, MUMBAI

13

MUMBAI

MUM

25

PCIT 25, MUMBAI

9

MUMBAI

MUM

26

PCIT 26, MUMBAI

8

MUMBAI

MUM

27

PCIT 27, MUMBAI

20

MUMBAI

MUM

28

PCIT 28, MUMBAI

10

MUMBAI

MUM

29

PCIT 29, MUMBAI

26

MUMBAI

MUM

30

PCIT 30, MUMBAI

4

MUMBAI

MUM

31

PCIT 31, MUMBAI

18

MUMBAI

MUM

32

PCIT 32, MUMBAI

6

MUMBAI

MUM

33

PCIT 33, MUMBAI

10

MUMBAI

MUM

34

PCIT 34, MUMBAI

1165

MUMBAI

MUM

35

PCIT 35, MUMBAI

4490

MUMBAI

MUM

97

ERSTWHILE CIT 15

10333

MUMBAI

MUM

98

CIT(CO), MUMBAI

839

MUMBAI

DLC

53

CIT, CENTRAL, NAGPUR

774

NAGPUR

NGP

1

PCIT 1, NAGPUR

27

NAGPUR

NGP

2

PCIT 2, NAGPUR

59

NAGPUR

NGP

3

PCIT 3, NAGPUR

32

NAGPUR

NGP

4

CIT-IV NGP

66

NAGPUR

PNE

6

OLD CIT (VDB), NGP

1

NAGPUR

DLC

55

PCIT CENTRAL, PUNE AT NASHIK

324

NASIK

PNE

7

PCIT 1, NASHIK

17

NASIK

PNE

8

PCIT 2, NASHIK

20

NASIK

PNE

9

PCIT 1, AURANGABAD

103

NASIK

PNE

44

PCIT 2, AURANGABAD

13

NASIK

NWR

1

CIT, CHANDIGARH

80

PATIALA

NWR

4

CIT, AMRITSAR

3

PATIALA

NWR

7

CIT, SHIMLA

10

PATIALA

NWR

8

CIT, PATIALA

50

PATIALA

NWR

10

CIT-1, JALANDHAR

1

PATIALA

NWR

21

CIT-1, CHANDIGARH(N)

25

PATIALA

NWR

24

CIT, BHATINDA (OLD)

17

PATIALA

NWR

27

CIT (TDS)-1, CHANDIGARH

6

PATIALA

NWR

29

PAN FOR GOVT UNDER RCC PTL

1

PATIALA

PTN

1

OLD CIT, PATNA

1

PATNA

PTN

3

OLD CIT, MUZAFFARPUR

2

PATNA

PTN

11

CIT 1, PATNA

22

PATNA

PTN

12

CIT 2, PATNA

2

PATNA

PTN

13

CIT, MUZAFFARPUR

18

PATNA

PTN

14

CIT, BHAGALPUR

2

PATNA

PTN

15

CIT TDS, PATNA

4

PATNA

DLC

52

PCIT CENTRAL, PUNE

73

PUNE

PNE

1

OLD-CIT-1, PUNE

2

PUNE

PNE

5

OLD-CIT, THANE

1

PUNE

PNE

20

PCIT 1, PUNE

448

PUNE

PNE

21

PCIT 2, PUNE

95

PUNE

PNE

22

PCIT 3, PUNE

11

PUNE

PNE

24

PCIT 5, PUNE

1044

PUNE

PNE

26

PCIT 1, THANE

141

PUNE

PNE

27

PCIT 2, THANE

38

PUNE

PNE

28

PCIT 3, THANE

38

PUNE

PNE

29

OLD-CIT-IV, THANE

13

PUNE

PNE

35

CIT(CO), PUNE

2

PUNE

PNE

52

PCIT 6, PUNE

5

PUNE

DLC

16

OLD-CIT CENT AHM

1

RAJKOT

PTN

23

CIT HAZARIBAGH

1

RANCHI

NWR

51

CIT, FARIDABAD

44

ROHTAK

NWR

59

CIT GURGAON

16

ROHTAK

GHY

1

OLD CIT-1 GUWAHATI

12

SHILONG

SHL

1

PR.CIT SHILLONG

68

SHILONG

SHL

2

PR.CIT DIBRUGARH

5

SHILONG

SHL

5

PR.CIT-1, GUWAHATI

1923

SHILONG

SHL

6

PR.CIT-2, GUWAHATI

25

SHILONG

SHL

7

PR.CIT JORHAT

12

SHILONG

SHL

9

CIT(CO), GUWAHATI

33

SHILONG

SHL

40

CIT(TDS), GUWAHATI

42

SHILONG

DLC

47

CIT CENTRAL, KOCHI

4

TRIVANDRUM

KRL

10

PCIT, THIRUVANANTHAPURAM

2

TRIVANDRUM

KRL

11

PCIT, KOTTAYAM

1

TRIVANDRUM

APR

22

CIT, RAJAMUNDRY

6

VISHAKAPATANAM

Total

329717

 

LETTER F.NO.DGIT(S)/DIT(S)-I/AIS MISC./0010/2015

No. LETTER F.NO.A-23012/04/2012-AD.VI Dated: 16-7-2015


Revised Inter-se Seniority List of ITOs to be prepared giving effect to the judgment dated 27-11-2012 – Circular – Dated 16-7-2015 – Income Tax

DATED 16-7-2015

I am directed to refer to the above mentioned subject and to say that the decision of the Hon’ble Supreme Court in the case of N.R. Parmar has been implemented by Ahmedabad, Lucknow and Guwahati charge. Consequent upon this, CBDT is receiving representations from officers of these Regions for revision of their seniorities in the All India Inter-se Seniority List of ITOs. Also, one of them namely Shri Chakrapani Dilip warrier filed an OA. No. 180 of 2015 before the Hon’ble CAT, Ernakulam Bench, Ernakulam. The Hon’ble CAT vide its Interim Order dated 11-6-2015 have directed the UOI not to make any further promotion based on the Final All India Seniority List of ITOs as on 1-1-2009.

2. In the above connection, you are requested to expedite the Revised Inter-se Seniority List of ITOs pertaining to your charge by giving effect to the judgment dated 27-11-2012 for further revision in the All India Inter-se Seniority List of ITOs.

LETTER F.NO.A-23012/04/2012-AD.V

No. 04 Dated: 16-7-2015


Issue of shares under Employees Stock Options Scheme and/or sweat equity shares to persons resident outside India – Circular – Dated 16-7-2015 – FEMA

RBI/2015-16/128

A.P. (DIR Series) Circular No.4

July 16, 2015

To

All Category – I Authorised Dealer banks

Madam/Sir,

Issue of shares under Employees Stock Options Scheme and/or sweat equity shares to persons resident outside India

Attention of Authorised Dealer Category – I (AD Category-I) banks is invited to Regulation 8 of the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulations, 2000, notified by the Reserve Bank vide Notification No. FEMA. 20/2000-RB dated 3rd May 2000, as amended from time to time.

2. In terms of the extant instructions, an Indian company can issue shares under Employees’ Stock Option (ESOP) Scheme, by whatever name called, to its employees or employees of its Joint venture or Wholly owned overseas subsidiary/subsidiaries who are resident outside India, directly or through a Trust, provided that the scheme has been drawn in terms of regulations issued under the SEBI Act, 1992 and face value of the shares to be allotted under the scheme to non-resident employees does not exceed 5 per cent of the paid up capital of the issuing company. The Trust or Indian company has to ensure compliance with the above conditions and comply with the reporting requirement.

3. On a review, it has been decided that an Indian company may issue “employees’ stock option” and/or “sweat equity shares” to its employees/directors or employees/directors of its holding company or joint venture or wholly owned overseas subsidiary/subsidiaries who are resident outside India, provided that :

a.The scheme has been drawn either in terms of regulations issued under the Securities Exchange Board of India Act, 1992 or the Companies (Share Capital and Debentures) Rules, 2014 notified by the Central Government under the Companies Act 2013, as the case may be.

b.The “employee’s stock option”/ “sweat equity shares” issued to non-resident employees/directors under the applicable rules/regulations are in compliance with the sectoral cap applicable to the said company.

c.Issue of “employee’s stock option”/ “sweat equity shares” in a company where foreign investment is under the approval route shall require prior approval of the Foreign Investment Promotion Board (FIPB) of Government of India.

d.Issue of “employee’s stock option”/ “sweat equity shares” under the applicable rules/regulations to an employee/director who is a citizen of Bangladesh/Pakistan shall require prior approval of the Foreign Investment Promotion Board (FIPB) of Government of India.

4. The issuing company shall furnish to the Regional Office concerned of the Reserve Bank of India under whose jurisdiction the registered office of the company operates, within 30 days from the date of issue of employees’ stock option or sweat equity shares, a return as per the Form-ESOP (given as Annex to this circular).

5. Authorised Dealer banks may bring the contents of this circular to the notice of their constituents /customers concerned.

6. Reserve Bank has since amended the Principal Regulations through the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) (Fourth Amendment) Regulations, 2015 notified through Notification No. FEMA.344/2015-RB dated June 11, 2015, vide G.S.R. No. 484 (E) dated June 11, 2015.

7. 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.

Yours faithfully,

(B.P. Kanungo)

 Principal Chief General Manager


Annex 

Form ESOP
Return to be filed by Indian company who has issued shares under Employees’ Stock Options (ESOP) Scheme and/or sweat equity shares.
(To be filed by the company through its Authorised Dealer Category – I bank with the Regional Office of the RBI under whose jurisdiction the Registered Office of the company is situated making the declaration as and when shares under Employees’ Stock Options Scheme and/or sweat equity shares are issued to the foreign investor)

I. Details of the Company issuing ESOP/sweat equity shares

S. No.

Particulars

(In Block Letters)

1.

Name of the Company  

2.

Permanent Account Number (PAN)  

3.

Address of the Registered office  

4.

Registration No. given by Registrar of Companies  

5.

Registration No. given by RBI for FDI, if applicable  

6.

Telephone  

7.

Fax  

8.

e-mail  

9.

Business details

a)

Description of the main business activity  

b)

NIC Code  

c)

Percentage of FDI allowed as per FDI policy  

d)

State whether FDI is allowed under Automatic Route or Approval route  

e)

FIPB approval, if any  

 

II. Type of security issued

 (Tick mark whichever is applicable)

1. Sweat equity shares

(            )

2. Stock Option Scheme

(            )

3. Shares issued against exercise of option

(            )

Please provide the details of the security issued in a separate Annex viz. date of issue, names of persons to whom shares are issued, number of shares, issue price, consideration other than cash(if any), in case of options (maturity date, pre-determined issue price etc.) and any other details relevant to the issue.

DECLARATION TO BE FILED BY THE AUTHORISED REPRESENTATIVE OF THE INDIAN COMPANY: (Delete whichever is not applicable and authenticate)

We hereby declare that:

1. We comply with the procedure for issue of shares under Employees’ Stock Option Scheme/ sweat equity shares as indicated in Notification No. FEMA 20/2000-RB dated 3rd May 2000, as amended from time to time.

2. The investment is within the sectoral cap / statutory ceiling permissible under the Automatic Route of RBI and we fulfill all the conditions laid down for investments under the Automatic Route namely (strike off whichever is not applicable).

a) Options issued under Employees’ Stock Option Scheme

OR

b) Shares issued against exercise of option as (a) above

OR

c) Sweat Equity Shares issued to non-residents

3. Shares have been issued in terms of FIPB approval No.___________________ dated ____________________

4. The foreign investment received and reported now will be utilized in compliance with the provision of a Prevention of Money Laundering Act 2002 (PMLA) and Unlawful Activities(Prevention) Act, 1967 (UAPA). We confirm that the investment complies with the provisions of all applicable Rules and Regulations.

5. We enclose the following documents in compliance with Regulation 8 of Notification No. FEMA 20/2000-RB dated May 3, 2000:

(i) A certificate from our Company Secretary certifying that

  1. Sweat equity shares have been issued / the Employees’ Stock Option Scheme has been drawn either in terms of regulations issued under the Securities Exchange Board of India Act, 1992 or the Companies (Share Capital and Debentures) Rules, 2014 notified by the Central Government under the Companies Act, 2013, as the case may be
  2. all the requirements of the Companies Act, 2013 have been complied with;
  3. terms and conditions of the Government approval, if any, have been complied with;
  4. the company is eligible to issue shares under these Regulations; and
  5. the company has all original certificates issued by authorised dealers in India evidencing receipt of amount of consideration in accordance with paragraph 8 of Schedule 1 to Notification No. FEMA 20/2000-RB dated May 3, 2000.

(ii) A certificate from SEBI registered Merchant Banker / Chartered Accountant indicating the manner of arriving at the price of the shares issued to the persons resident outside India.

6. Unique Identification Numbers given for all the remittances received as consideration for issue of shares under Employees’ Stock Option Scheme/ Sweat Equity shares by Reserve Bank.

(Signature of the Applicant)* :___________________________________________

(Name in Block Letters) :___________________________________________

(Designation of the signatory) :___________________________________________

Place:
Date:

(* To be signed by Managing Director/Director/Secretary of the Company)

CERTIFICATE TO BE FILED BY THE COMPANY SECRETARY OF THE INDIAN COMPANY ACCEPTING THE INVESTMENT:

In respect of the abovementioned details, we certify the following:

  1. Sweat equity shares have been issued / the Employees’ Stock Option Scheme has been drawn either in terms of regulations issued under the Securities Exchange Board of India Act, 1992 or the Companies (Share Capital and Debentures) Rules, 2014 notified by the Central Government under the Companies Act, 2013, as the case may be
  2. all the requirements of the Companies Act, 2013 have been complied with;
  3. terms and conditions of the Government approval, if any, have been complied with;
  4. the company is eligible to issue shares under these Regulations; and
  5. the company has all original certificates issued by authorised dealers in India evidencing receipt of amount of consideration in accordance with paragraph 8 of Schedule 1 to Notification No. FEMA 20/2000-RB dated May 3, 2000.

(Name & Signature of the Company Secretary) (Seal)

FOR USE OF THE RESERVE BANK ONLY:

Notification No. : G.S.R. 564(E) Dated: 16-7-2015


Special Economic Zones (Amendment) Rules, 2015 – G.S.R. 564(E) – Dated 16-7-2015 – Special Economic Zone

MINISTRY OF COMMERCE AND INDUSTRY

(Department of Commerce)

NOTIFICATION

New Delhi, the 16th July, 2015

G.S.R. 564(E).-In exercise of the powers conferred by section 55 of the Special Economic Zones Act, 2005 (28 of 2005), the Central Government hereby makes the following rules further to amend the Special Economic Zones Rules, 2006, namely:-

1. (1)  These rules may be called the Special Economic Zones (Amendment) Rules, 2015.

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

2.  In the Special Economic Zones Rules, 2006, in Annexure II, in serial number 3, in column (4), for the figures and word “38 hectares”, the figures and word “20 hectares” shall be substituted.

[F. No. C. 5/1/2010-SEZ]

Dr. GURUPRASAD MOHAPATRA Jt. Secy.

Note: The principal rules were published in the Gazette of India, Extraordinary vide number G.S.R 54(E), dated the 10th February, 2006 and last amended vide number G.S.R. 5(E), dated the 2nd January, 2015.

Back-channel talks on; Jaya unlikely to come around on GST Bill : 14-07-2015


Although the Samajwadi Party (SP), Trinamool Congress (TMC) and Biju Janata Dal (BJD) have indicated they will support the government on the Goods and Services Tax (GST) legislation, it is unlikely that the All India Anna Dravida Munnetra Kazhagam (AIADMK) will change its mind and support it.

The government has indicated it will do everything possible to have the bill passed in the monsoon session, failing which it will miss the rollout target of April 2016. However, not only will the opposition prevent a discussion on the bills but Congress-ruled states will not pass it.

So far, without too much effort, and little outreach to its allies, the Congress has managed to stall the bill at every stage. The bill did pass the Lok Sabha earlier this year but that is where it is stuck since.

Unlike the AIADMK, the Congress’ opposition is not ideological. It is opposed to the bill as a protest against the ruling Bharatiya Janata Party’s “high-handedness”, and refusal to respect the Congress as an “equal”. “Objections to the bill are an afterthought. We are stakeholders. We should be treated as such”, said a Congress leader.

In the circumstances, it is hard to see how the bill will become law in the time-frame visualised by the government.

Prime Minister Narendra Modi is in touch with West Bengal chief minister Mamata Banerjee, Odisha CM Naveen Patnaik, Karnataka CM Siddaramaiah and Tamil Nadu CM J Jayalalithaa to ensure the Bill is passed Rajya Sabha.

Some back-channel efforts are also on. A top leader is likely to fly from Delhi to Chennai to meet Jayalalithaa to discuss the issue. However, the possibility of bringing Tamil Nadu around seems remote.

The Naveen Patnaik-led BJD maintained it is not opposed to the Bill. The regional party, which has seven MPs in the Rajya Sabha, has proposed only one amendment, that would allow levy of one per cent additional cess by all mineral bearing states.

“We have demanded that all mineral-bearing states be empowered to levy one per cent extra cess for the next two years. This would be in the interest of all such states. The BJD is okay with the overall GST structure and all other provisions in the Bill. In fact, our party is backing the introduction of GST”, said Bhartruhari Mahtab, BJD leader in the Lok Sabha.

Due to the application of destination principle in GST, the mineral producing states where the pollution is localized do not get any part of the revenue. It is only the consuming state that gets the tax revenue whereas due to pollution, the citizens of the producing state suffer. Hence, Odisha has been demanding one per cent cess.

Source : PTI

State govts say fund allocations by Centre inadequate : 14-07-2015


The Centre has been claiming it has increased devolution to states in the 14th Finance Commission, but most state governments are of the view that their financial position has worsened during 2015-16, compared to the previous year, if one takes into account the reduction in block grants and transfers through central schemes vis-à-vis the increase through tax devolution.

States have voiced concern in this respect in a report submitted to a sub-committee of chief ministers on revamping the central schemes under the NITI Aayog. The committee is headed by Bharatiya Janata Party-ruled Madhya Pradesh’s Chief Minister Shivraj Singh Chouhan.

Data contained in the report show ed, though the devolution to state governments through the 14th Finance Commission’s (FFC) route increased by Rs 1.78 lakh crore in 2015-16, as compared to the previous year, deductions by way of the central assistance to state plans, the Centre’s share in schemes and also block grants has been greater during the period.  The total reduction in the central share through schemes, block grants and assistance to state plans was to the tune of around Rs 2.67 lakh crore in 2015-16, more than the increase of Rs 1.78 lakh crore to states through FFC route.

States also feel the overall impact of fund transfer through the commission received, by way of block grant from the Centre and its share of schemes, should not be to their disadvantage. The report, expected to be submitted to Prime Minister Narendra Modi in the next few days, emphatically says the issues raised by state governments could have an important bearing on the ongoing effort to strengthen cooperative federalism, though some of it might be outside its terms of reference (ToR).

The sub-group also suggested the Centre should get the concern raised by state governments suitably examined for taking appropriate measures. The report mentions some states in the course of their interaction with the sub-group said their share in the FFC grants has gone down as compared to the previous commissions, thereby making their financial position weak. They have opposed any additional burden from the Centre through upward revision in their share of centrally sponsored schemes.

Source : The Hindu

No. 10/2015 Dated: 13-7-2015


Relaxation of additional fees and extension of last date of in filing of forms MGT-7 (Annual Return) and AOC-4 (Financial Statement) under the Companies Act, 2013-reg. – Dated 13-7-2015 – Companies Law

General Circular No. 10/2015

F.No. 01/34/2013 CL-V

Government of India

Ministry of Corporate Affairs

5th Floor, ‘A’ Wing, Shastri Bhawan,

Dr. Rajendra Prasad Road, New Delhi-1

Dated: 13/07/2015

To

All Regional Directors,

All Registrar of Companies,

All Stakeholders.

Subject: Relaxation of additional fees and extension of last date of in filing of forms MGT-7 (Annual Return) and AOC-4 (Financial Statement) under the Companies Act, 2013-reg.

Sir,

This Ministry has clarified vide General Circular 8/2014 dated 04/04/2014 that provisions of the Companies Act, 2013 relating to financial statements, auditors report and board’s report shall apply in respect of financial years commencing on or after 1St April, 2014. Form AOC-4 or Form AOC-4 XBRL (Format of filing of financial statement) shall, as applicable, have to be used for filing of such statement for financial years commencing on or after 1st  April, 2014.  Attention is also invited to this Ministry’s General Circular 22/2014 dated 25/06/2014 wherein it has been clarified that MGT-7 (Form of Annual Return) shall apply to annual returns in respect of financial years ending after 1St  April, 2014.

2. The electronic versions of Forms AOC-4, AOC-4 XBRL and MGT-7 are being developed and shall be made available for electronic filing latest by 30th September 2015. In addition, a separate form for filing of Consolidated Financial Statement (CFS) with the nomenclature AOC-4 CFS will be made available latest by October 2015. MGT-7 has been notified while AOC-4, AOC-4 XBRL and AOC-4 CFS will be notified shortly.

3. In view of this, it has been decided to relax the additional fee payable on Forms AOC-4, AOC-4 XBRL and Form MGT-7 upto 31/10/2015. Further, a company which is not required to file its financial statement in XBRL format and is required to file its CFS would be able to do so in the separate form for CFS without any additional fees upto 30/11/2015.

4. This issues with the approval of the competent authority.

Yours faithfully,

(Kamna Sharma)

Assistant Director

Copy to:-

1. E-Governance section

Notification No.2/2015 Dated: 13-7-2015


Notified procedures, data structure and standards for Electronic Verification Code (EVC) – EVC would verify the identity of the person furnishing the return of income and would be generated on the E -filing website https //incometaxindiaefiling.gov.in. – 2/2015 – Dated 13-7-2015 – Income Tax

F No. 1/23/CIT(OSD)/E-filing – Electronic Verification/ 2013-14

Government of India

Ministry of Finance

Central Board of Direct Taxes

Directorate of Income Tax (Systems)

Notification No. 2/2015

New Delhi, 13th of July 2015

Subject: Electronic Verification Code (EVC) for electronically filed Income Tax Return.

Explanation to sub rule (3) of Rule 12 of the Income tax Rules 1962, states that for the purposes of this sub rule “electronic verification code” means a code generated for the purpose of electronic verification of the person furnishing the return of income as per the data structure and standards specified by Principal Director General of Income-tax (Systems) or Director General of Income-tax (Systems). Further, Sub rule (4) of Rule 12 of the Income Tax Rules 1962 states that the Principal Director-General of Income-tax (Systems) or Director -General of Income-tax (Systems) shall specify the procedures, formats and standards for ensuring secure capture and transmission of data and shall also be responsible for evolving and implementing appropriate security, archival and retrieval policies in relation to furnishing the returns in the manners (other than the paper form) specified in column (iv) of the Table in sub -rule (3) and the report of audit or notice in the manner specified in proviso to sub -rule (2).

2 In exercise of the powers delegated by the Central Board of Direct Taxes (‘Board’) under Explanation to sub rule 3 and sub -rule 4 of Rule 12 of the Income tax Rules 1962, the Principal Director General of Income-tax (Systems) lays down the procedures, data structure and standards for Electronic Verification Code as under: :

The Electronic Verification Code (EVC) would verify the identity of the person furnishing the return of income (hereinafter called ‘Verifier) and would be generated on the E -filing website https: //incometaxindiaefiling.gov.inor as otherwise indicated.The EVC can be used by a Verifier being an Individual to verify his Income Tax Return or that of an HUF of which he is the Karta in Income Tax Return Form 1, 2, 2A, 3, 4 or 4S or the Income Tax Return Form filed in ITR 5 or 7 of any person in accordance with Section 140 of the Income Tax Act 1961. The EVC generation process may vary based on the risk -category of the Assessee (the term ‘Assessee’ is as defined inSubsection (7) of Section 2 of the Income Tax Act 1961), method of accessing the E -filing website or interface with third party authenticating entity. The EVC would be unique for an Assessee PAN and will not valid for any other PAN at the time of filing of the Income Tax Return. One EVC can be used to validate one return of the Assessee irrespective of the Assessment Year or return filing type (original or revised). The EVC will be stored against the Assessee PAN along with the other verification details. The EVC will be valid for 72 hours or as otherwise specified. The Verifier can use more than one mode to obtain EVC and can generate the EVC multiple times. The notification will come into effect from the date of issue.

3 The mode and process for generation and validation of EVC and its use can be modified, deleted or added by the Principal DGIT (System)/ DGIT (System).

4 Modes of Generation of EVC

Case 1: Where the EVC (Electronic Verification Code) in generated after Verifier logs in to the e -filing website https: //incometaxindiaefiling.gov.in through Net- Banking

Specified banks registered with the Income Tax Department for this purpose, provide direct access to the e -filing website i.e. https: //incometaxindiaefiling.gov.in “My Account” to a Verifier through Internet Banking. The Banks will be providing such facilities to their account holders whose bank accounts have a validated PAN number (Primary Account Holder) as part of the ‘Know Your Client’ (KYC). The facility will be available on their present Internet Banking website and the Verifier will use this facility using existing internet banking user id, login password & transaction password. When the user logs in via Net -banking and seeks redirection to e –filing then he will be redirected to the E -filing website where he can generate the EVC which will be displayed and also sent to his validated Mobile number registered with https: //incometaxindiaefiling.gov.in. This EVC generated through this net –banking mode can be used to verify Assessee’s Income Tax return.

Case 2: Where the EVC (Electronic Verification Code) is generated after Aadhaar authentication using Aadhaar One Time Password (Aadhaar OTP)

The Aadhaar authentication framework of Unique Identification Authority of India (UIDAI) is an example of what is called ‘Federated Identity Services for Government’ – i.e. an independent agency of the Government undertakes to authenticate the identity of the citizen/person using Aadhaar for all ‘relying parties’ or verifiers. The Income Tax Department has registered with UIDAI for Aadhaar authentication service.

A Verifier can provide his Aadhaar number for linking with his PAN on the e –filing website i.e. https: //incometaxindiaefiling.gov.in which will be verified on the basis of his name, date of birth and gender as per PAN database with similar data available under his Aadhaar with UIDAI. If the Aadhar authentication in this manner is successful, the Verifier’s Aadhaar will be linked to his PAN. Thereafter, an OTP will be generated by UIDAI and sent to the Verifier’s mobile number registered with UIDAI. This Aadhaar OTP will be the EVC generated under this Aadhaar Authentication and OTP mode and can be used to verify the Assessee’s Income Tax return.

‘The Aadhaar OTP as EVC will be valid for 10 minutes (or as specified by UIDAI).

Case 3: Where the EVC (Electronic Verification Code) is generated using Automatic Teller Machine (ATM) of a Bank

Verifier whose ATM card is linked to PAN validated bank account and the Bank is registered with the Income Tax Department for providing this service can generate an EVC through this mode. A Verifier can access the ATM of the Bank in which he/she has an account using ATM (Debit/Credit) card. After due authentication by using ATM PIN at the Bank ATM, the Verifier can select the ‘Generate EVC for Income Tax Return Filing’ option on the ATM screen (A new option that will be available at ATMs of specified banks). The Bank will communicate this request to the Income Tax Department E -Filing website which will generate the EVC and send the EVC to Assessee on the Assessee’s registered mobile number with E -Filing. EVC generated through this Bank ATM mode can be used to verify Assessee’s Income Tax return.

Case 4: Where the EVC (Electronic Verification Code) is generated and sent to the Registered Email ID and Mobile Number of Assessee with E -filing Website

Where the total income as per the Income Tax Return is ₹ 5 lakhs or below and there is no refund claim, the Verifier can generate an EVC on the E -filing website that will be sent to the Registered Email ID and Mobile Number of Assessee with .E-Website. This option may further be restricted to Assessees based on other risk criteria that may be determined from time to time. EVC generated through this E-filing EVC mode can be used to verify Assessee’s Income Tax return.

5 Validation of EVC

EVC shall be valid for the period specified in Clauses 2 and 4 above. The EVC used to verify the Income Tax Return will be validated against the EVC stored against Assessee PAN at the time of generation and only a valid and matched EVC will be accepted. Invalid, already used or unmatched EVC shall be rejected.

6 Data Structure

The EVC will be a 10 digit alpha -numeric number.

 

(Nishi Singh)

Pr. DGIT (Systems), CBDT

Services covered under Reverse Charge Mechanism from 01.06.2015 (with % and type of person) : 13-07-2015


Services covered under Reverse Charge Mechanism from 01.06.2015

(with % and type of person)

S.No. Description of service Service Provider Service Receiver
1 Insurance AgencyServices Insurance Agent Any person carrying on insurance business
NIL (0%) 100% (14%)
1A Recovery Agent Services Recovery Agent Banking co./ Financial inst./NBFC
NIL (0%) 100% (14%)
1B Mutual Fund Agent/DistributorServices Mutual Fund Agent/Distributor Mutual Fund/ Asset Mgt Co.
NIL (0%) 100% (14%)
1C Selling or marketing lottery ticket Services Selling or marketing lottery Agent Lottery distributor or selling agent
NIL (0%) 100% (14%)
2 Transport of Goods by Road GTA When person liable to pay freight isSpecified person
NIL (0%) 100% (14%)
 # GTA Abatement is now reduced to 70% from erstwhile 75%
3 SponsorshipServices Any person Body corporate/ partnership firm
NIL (0%) 100% (14%)
4 Legal service by advocate Individuals/ Firm of advocates Business Entity
NIL (0%) 100% (14%)
# Excluding a business entity with a turnover up to rupees ten lakh in the preceding F.Y
5 Arbitral Tribunal Arbitral Tribunal Business Entity
NIL (0%) 100% (14%)
# Excluding a business entity with a turnover up to rupees ten lakh in the preceding F.Y
5A Director services Individual Company/ Body corporate
NIL (0%) 100% (14%)
6 Government Support services Govt/ Local Auth. Business Entity
NIL (0%) 100% (14%)
except the following:
a. Renting of Immovable Property,
b. Services by Department of Post by way of Speed Post, Express Parcel Post, Life Insurance and Agency Services;
c. Services in relation to aircraft or a vessel, inside or out side the precincts of a port or an airport;
d. Transportation of goods or passengers.
Government Services NIL (0%) 100% (14%)
Yet to be notified
7 

 

Renting of Motor Vehicle (WITH ABATEMENT @60%) Individual/ HUF/ Partnership firm AOP/ LLP Business Entity registered as body corporate
NIL (0%) 100% (14%)
Renting of Motor Vehicle (WITHOUT ABATEMENT) Individual/ HUF/ Partnership firm AOP/ LLP Business Entity registered as body corporate
50% 50%
8 Supply of manpower Individual/ HUF/ Partnership firm AOP/ LLP Business Entity registered as body corporate
NIL (0%) 100% (14%)
9 Security Services Individual/ HUF/ Partnership firm AOP/ LLP Business Entity registered as body corporate
NIL (0%) 100% (14%)
10 

 

 

Service Portion On execution of works contract Individual/ HUF/ Partnership firm AOP/ LLP Business Entity registered as body corporate
Value of service excluding material (Taxable 100%)
50% (7%)
50% (7%)
Original Works (Taxable 100%) 40% (5.60%) 40% (5.60%)
Repair & Maintenance of any goods) (Taxable 70%) 50% (4.9%) 50% (4.9%)
Maintenance, Repairing, Completion or Finishing of immovable property (Taxable 70%) 50% (4.9%) 50% (4.9%)
11 Import of services SP located in Non Taxable Teritory Person located in Taxable Territory
NIL (0%) 100% (14%)
12 Aggregator Services Any Person Any Person
NIL (0%) 100% (14%)
# Small Service Provider’ exemption of Rs. 10 lakh is not available to recipient of service.
# Kindly refer Negative List and Exemption Notification No.25/2012 along with this chart to determine tax liability

Rain gods likely to shower blessings this year: FinMin : 13-07-2015


The government on Sunday sought to dispel fears of an uptick in food prices from concern over scanty rainfall, saying macroeconomic parameters like financial and current account deficit (CAD) were in good shape.

“It appears the rain gods might be kinder this year to us than they were last year,” Finance Minister Arun Jaitley said, while speaking at a seminar organised by Nabard.

“India’s financial deficit and CAD are coming under control. Inflation is also under check,” he added.

Consumer Price Index (CPI) inflation rose to a three-month high of 5.01 per cent in May, compared with 4.87 per cent in April. However, retail food inflation eased to 4.80 per cent from 5.11 per cent in April. A year ago, it had stood at 8.89 per cent. The June CPI inflation data is due this week. This would be the last retail inflation data before Reserve Bank of India’s (RBI) bi-monthly monetary policy statement on August 4.

The Narendra Modi-led Bharatiya Janata Party (BJP) government, which came to power last year on the promise of initiatives, reforms and reviving growth, said the country is now aiming for eight to 10 per cent annual growth.

“With the ongoing reform process, with more measures like Goods and Services Tax in the pipeline, increased infrastructure spending this year, emphasis on smart cities… When all these initiatives add up, then India’s aspiration to cross the eight per cent hub and get on to the eight to 10 per cent growth targets might not be completely out of sight, but something eminently achievable,” Jaitley said.

The finance minister also expects rainfall to be better this year compared to the previous year, which is the key to contain food prices. He also highlighted that prices of items like pulses and oilseeds are likely to go up, which could allay fears of price rise.

“The department of agriculture has informed me that, with better rainfall in most parts of the country, even pulses, which at the moment is a cause of concern with one-item inflation, productivity of oilseeds this year is likely to be much higher. I hope their estimates turn true,” he said.

Data from the India Meteorological Department showed between July 2 and July 8, India received around 30.1 mm of rainfall as against a normal of 61.4 mm.

Jaitley sounded satisfied on the financial front as revenue collection has been promising.

“On Saturday, when the indirect revenue data came out for the first quarter, they did indicate that customs and excise duty, service tax – even without additional revenue measures – were up 14.5 per cent. If you take the additional revenue measures, they were up 37 per cent, the silver lining being, the revenue situation is a lot more comfortable with all these measures compared to past year’s,” he said.

Improvement in the macroeconomic parameters like inflation and financial deficit will give more room to RBI for easing of monetary policy. The RBI had set an inflation target of less than six per cent by January 2016 and four per cent (+/- 2) by the end of two years, starting in 2016-17.

Since the start of this year, RBI had cut the repo rate (or the rate at which banks borrow from the central bank) by 75 bps to 7.25 per cent.

The central bank will review its next policy on August 4.

Source : PTI

Black money: CBDT rejigs committee to handle FATCA cases : 13-07-2015


NEW DELHI: The CBDT has rejigged a special committee formed to secure confidential tax data and initiate a check on instances of black money as part of mutual exchange of information with US authorities under the recently inked Foreign Account Tax Compliance Act (FATCA).

Through an order issued days before FATCA was signed by the two countries on July 9, the CBDT has increased the strength of the panel from existing seven to eight members. It has also replaced one of its members with an officer dealing with issues of international taxation in the CBDT.

An order issued in this regard, also accessed by PTI, said a Joint Secretary in the CBDT dealing with foreign tax issues has been added to the panel, while a Commissioner of Income Tax rank officer has  been added to the panel, while a Commissioner of Income Tax rank officer has been replaced by and officer of the same rank. The committee is headed by the Member (Income Tax) of the Central Board of Direct Taxes (CBDT) who is a Special Secretary-rank officer in the Finance Ministry.

The new composition of the panel, called Information Security Committee (ISC), now includes three Joint Secretary rank officers handling the sensitive foreign tax exchange information and policy matters  and four Commissioners of I-T dealing with investigation and intelligence subjects of the I-T department apart from one on global tax subjects.

“The panel has been constituted as part of the essential compliance norms required to be in place at home in India to operationalise the FATCA in a full-fledged manner with the United States of Amercia,” a senior official said.

FATCA will cover automatic sharing of information on bank accounts as well as financial products like equities, mutual funds and insurance and is aimed at fighting the menace of black money stashed abroad.

Beginning September 30, banks, mutual funds, insurance, pension and stock-broking firms will report their Indian client details to the US which will be shared with New Delhi.

Indian entities will do a reciprocal information sharing about Americans. US has so far signed pacts with 110 tax jurisdictions to implement the FATCA.

The information shared under the FATCA will be treated as confidential and will be used only for tax purposes.

The agreement was signed by Revenue Secretary Shaktikanta Das and US Ambassador to India Richard Verma here last week.

“The ambitious agreement between the two countries is a very important tool to combat black money cases in the two countries in specific and across the globe in general,” the official said.

If a financial institution does not comply to FATCA, it would have to pay 30 per cent penalty on all its US revenues, including dividend, interest, fees and sales.

The committee, according to the Terms of Reference (ToR) issued earlier by the CBDT, will “ratify information, security policies  and procedures” with regard to the dealing of a tax case in the I-T department and CBDT.

“Once an information is shared under FATCA about an entity, its confidentiality is the most important virtue as the data obtained under exchange will travel under different verticals in the board and the department.

“The Committee, will hence ensure that accountability and responsibilities are fixed at each stage of a case under exchange or probe and see that no breach occurs while handling  of this secret data,” a senior official had earlier said.

CBDT, the apex policy making body of the Income Tax department, by way of ISC has also brought together all its business and e-data heads on one platform for seamless and sabotage-proof information ranging from the PAN database to the Income Tax Returns of an entity whose case is exchanged under FATCA.

The ISC will also have a Chief Information Security Officer (CSIO) whose main role will be to “ensure that responsibilit  are defined and that procedures are in effect to promptly detect, investigate, report and resolve security incidents” among other tasks related to coordination of the panel.

Source : The Economic Times

Notification No. : S.O. 1939(E) Dated: 10-7-2015


To set up a sector specific Special Economic Zone for information technology and electronics at village Kejehra and Mastemau, Chuck Gajaria Farm, Sultanpur Road, Lucknow, Uttar Pradesh – S.O. 1939(E) – Dated 10-7-2015 – Special Economic Zone

MINISTRY OF COMMERCE AND INDUSTRY

(Department of Commerce)

NOTIFICATION

New Delhi, the 10th July, 2015

S.O. 1939(E).-Whereas, M/s U.P. Electronics Corporation 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 electronics at village Kejehra and Mastemau, Chuck Gajaria Farm, Sultanpur Road, Lucknow, 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 Zone Rules 2006, had notified an area of 40.469 hectares vide Ministry of Commerce and Industry Notification Number S. O. 3918(E) dated 26th December, 2013;

And, whereas, M/s U.P. Electronics Corporation limited has proposed to de-notify the entire area of 40.469 hectares of the above Special Economic Zone;

And, whereas, the State Government of Uttar Pradesh has given its “No Objection” to the proposal vide letter no. 723/78-1-201551I.T/2014T.C dated 25th June, 2015.

And, whereas, the Development Commissioner, Noida Special Economic Zone has recommended the proposal for de-notification of the entire area of 40.469 Hectares of the Special Economic Zone;

Now, therefore, in exercise of the powers conferred by first proviso to rule 8 of the Special Economic Zones Rules 2006, the Central Government hereby rescinds the above notification except as respects things done or omitted to be done before such rescission.

[F. No. F.1/2/2013-SEZ]

Dr. GURUPRASAD MOHAPATRA, Jt. Secy.

Notification No. : S.O. 1937(E) Dated: 10-7-2015


To set up a sector specific Special Economic Zone for food processing sector at Vakalapudi Village, Kakinada Rural Mandal, Kakinada, Andhra Pradesh – S.O. 1937(E) – Dated 10-7-2015 – Special Economic Zone

MINISTRY OF COMMERCE AND INDUSTRY

(Department of Commerce)

NOTIFICATION

New Delhi, the 10th July, 2015

S.O. 1937(E).-Whereas, M/s. Parry Infrastructure Company Private Limited, a Private Organization of the State of Andhra Pradesh, 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 food processing sector at Vakalapudi Village, Kakinada Rural Mandal, Kakinada in the State of Andhra 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 an area of 101.12 hectares at above Special Economic Zone vide Ministry of Commerce and Industry Notification Number S.O. 2169 (E) dated 20th December, 2007;

And, Whereas, M/s. Parry Infrastructure Company Private Limited has now proposed for denotification of 51.12 hectares at the above Special Economic Zone;

And, Whereas, the State Government of Andhra Pradesh has given its “No Objection” to the proposal vide letter No.15100/IP&INF/A2/2013, dated 29th January, 2015;

And, Whereas, the Development Commissioner, Visakhapatnam Special Economic Zone has recommended the proposal for de-notification of an area of 51.12 hectares of the Special Economic Zone;

Now, Whereas, the Central Government is satisfied that the requirements under sub-section (8) of Section 3 of the said Act and other related requirements are fulfilled;

Now, Whereas, 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 de-notifies an area of 51.12 hectares, thereby making resultant area as 50.00 hectares, comprising the survey numbers and the area given below in the table, namely:-

TABLE

S.No.

Name of the Village

Survey No.

Area to de-notified (in Hectares)

1

Vakalpudi

185/1C2

6.50

2

186/2B

3.00

3

223

0.85

4

224

1.93

5

225

2.95

6

226

0.50

7

227

0.23

8

228/P

1.55

9

235/1A

10.32

10

235/1B

2.86

11

237/2P

20.37

12

235/2

0.06

Total

51.12 hectares

Total Area of SEZ after above de-notification

50.00 hectares

[F. No. F.2/602/2006-SEZ]

Dr. GURUPRASAD MOHAPATRA Jt. Secy.

India, US sign FATCA to fight tax evasion : 10-07-2015


To check offshore tax evasion, India and the US today signed an agreement to implement FATCA that will facilitate exchange of information between the two countries from October 1.

The Foreign Account Tax Compliance Act (FATCA) was signed here by Revenue Secretary Shaktikanta Das and US Ambassador Richard Verma.

“FATCA is a mutual effort to combat tax evasion and it would be mutually beneficial for both the countries… FATCA would detect, discourage offshore tax evasion. This kind of exchange of information is top priority for governments”, Verma said.

Talking to reporters after singing the agreement, Das said: “We reassured the US government of the binding commitment to…fight the menace of evasion and bring transparency in the matters of payment of taxes which are legitimately due to the government.”

US law FATCA seeks to facilitate flow of financial information between countries. Under the inter-governmental agreement, Indian financial institutions would have to reveal information about US tax payers to the revenue department which would be passed on to the US tax authorities.

Under the pact, US will also share with India financial information.

The current reporting period beginning October 1 would be for July-December 2014.

If a financial institution does not comply to FATCA, it will have to pay 30 per cent penalty tax on all its US revenues, including dividend, interest, fees and sales.

FATCA will help India deal with the black money menace. The country has stepped up efforts to tackle it. Under the multilateral agreement India will start receiving information from other countries under automatic exchange of information (AEOI) route from 2017 onwards.

Source : PTI

Notification No:F. No. 334/5/2015-TRU Dated: 10-7-2015


Corrigendum – Notification No.12/2015-Central Excise (N.T.), dated the 30th April, 2015 – F. No. 334/5/2015-TRU – Dated 10-7-2015 – Central Excise – Non Tariff

[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, the 10th July, 2015

Corrigendum

G.S.R. (E).- In the notification of the Government of India, in the Ministry of Finance (Department of Revenue) No.12/2015-Central Excise (N.T.), dated the 30th April, 2015 published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 346(E) dated the 30th April, 2015, in page 15, in line 29, for “substituted” read “inserted”.

[F. No. 334/5/2015-TRU]

(Akshay Joshi)

Under Secretary to the Government of India

PM Modi to visit Pakistan next year for SAARC summit : 10-07-2015


Prime Minister Narendra Modi will visit Pakistan in 2016 to attend the (South Asian Association of Regional Cooperation (SAARC) summit being held in Islamabad. The decision was taken Friday during an hour-long meeting he had with his Pakistani counterpart Nawaz Sharif in Russia to bilateral issues.

Pakistan Prime Minister Nawaz Sharif is said to have extended the invitation to Modi to visit Islamabad and attend the summit. If this fructifies, then Modi will be the first PM after Atal Behari Vajpayee to visit Pakistan. Modi’s predecessor Manmohan Singh never visited Pakistan during the decade that he was prime minister.

Indian Prime Minister Narendra Modi meets Pakistani Prime Minister Nawaz Sharif on the sidelines of the SCO Summit (Image source: Twitter)

According to sources, Modi strongly raised the issue of release of 26/11 mastermind Zakhi-ur Rahman Lakhvi even as he asked Sharif to take action against him. Besides, the PM is reported to also have raised issues of the ongoing ceasefire violation along the border in which many Indian soldiers have been killed.

Both sides had agreed to maintain ceasefire across the Line of Control (LoC) in 2003. Reports of a BSF soldier being killed, allegedly by Pakistan army, in the Baramulla sector of Jammu and Kashmir started trickling in just as talks between both leaders were confirmed Thursday evening.

In a breakthrough, India and Pakistan today decided to revive the stalled dialogue process and find ways to expedite trial of the Mumbai attack case as Prime Ministers Narendra Modi and Nawaz Sharif agreed to cooperate to eliminate terrorism from South Asia.

Modi and Sharif, in their first bilateral talks in over an year, met for nearly one hour here on the sidelines of the Shanghai Cooperation Organisation (SCO) summit and discussed entire gamut of issues between the two countries.

Significantly, Foreign Secretaries S Jaishankar and Aizaz Ahmad Chaudhry held a joint press meet where they read out a joint statement on the outcome of the much-anticipated meeting between the two leaders.

National Security Adviser Ajit Doval and his Pakistani counterpart Sartaj Aziz will meet in New Delhi to discuss all issues connected to terrorism, the statement said.

“Both sides agreed to discuss ways and means to expedite the Mumbai case trial including additional information like providing voice samples,” the statement said.

Early in the morning, hours before the talks started, Vikas Swarup, spokesperson, ministry of external affairs (MEA) described it as “neighbourhood engagement.”

Modi and Sharif have not met since May 2014 when Sharif had visited India to attend Modi’s oath-taking ceremony and held talks with the newly-minted Indian prime minister. However, contrary to expectations, bilateral relations deteriorated with Pakistan engaging in talks with Kashmiri separatist leaders.

However, ties were somewhat mended when Foreign Secretary Jaishankar visited Islamabad in March as part of the SAARC Yatra and met with his Pakistani counterpart.

Source : Business Standard

Notification No.1/2015 Dated: 10-7-2015


Extension of time limit for submitting ITR-V for electronically filed returns for A.Y. 2013-14 and A.Y. 2014-15 – 1/2015 – Dated 10-7-2015 – Income Tax

 

itr_v_extension_notification

 

No. 03 Dated: 9-7-2015


Exim Bank’s GoI supported Line of Credit of USD 15.13 million to the Government of Republic of Djibouti for financing Ali Sabieh Cement Project in the Republic of Djibouti. – Circular – Dated 9-7-2015 – FEMA

RBI/2015-16/121

A.P. (DIR Series) Circular No. 3

July 09, 2015

To

All Category – I Authorised Dealer Banks

Madam / Sir,

Exim Bank’s GoI supported Line of Credit of USD 15.13 million  to the Government of Republic of Djibouti

Export-Import Bank of India (Exim Bank) has entered into an agreement dated March 9, 2015 with the Government of Republic of Djibouti, for making available to the latter, a Line of Credit (LOC) of USD 15.13 million (USD Fifteen Million One Hundred and Thirty Thousand) for financing Ali Sabieh Cement Project in the Republic of Djibouti. 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.

2. The credit agreement under the LOC is effective from June 5, 2015 and the date of execution of agreement is March 9, 2015. Under the LOC, the last date for opening of letters of credit and disbursement will be 48 months from the scheduled completion date of contract in the case of project exports and March 8, 2021 (72 months from the execution date of the credit agreement) in the 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.

Yours faithfully,

(A. K. Pandey)

 Chief General Manage