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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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No. 109 Dated: 11-6-2015


Extension of scheme of External Commercial Borrowings (ECB) for working capital for Civil Aviation Sector by airline companies till 31-3-2016. – Circular – Dated 11-6-2015 – FEMA

RBI//2014-15/638

A.P. (DIR Series) Circular No.109

June 11, 2015

To,

All Authorised Dealer Category – I Banks

Madam/ Sir

External Commercial Borrowings (ECB) for Civil Aviation Sector

Attention of Authorized Dealer Category – I (AD Category – I) banks is invited to A.P. (DIR Series) Circular No. 113 dated April 24, 2012 in terms of which External Commercial Borrowings (ECB) can be raised by airline companies for working capital as a permissible end-use, under the approval route, subject to the conditions stipulated in the said Circular. The scheme was extended initially till December 31, 2013 vide A.P. (DIR Series) Circular No.116 dated June 25, 2013 and thereafter till March 31, 2015 vide A.P. (DIR Series) Circular No. 113 dated March 26, 2014.

2. On a review, it has been decided that the above scheme of raising ECB for working capital for Civil Aviation Sector will continue till March 31, 2016 with the same terms and conditions.

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

4. The directions contained in this circular have been issued under sections 10(4) and 11(1) of theForeign 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. 108 Dated: 11-6-2015


Extension of scheme of raising External Commercial Borrowings (ECB) by eligible borrowers for low cost affordable housing projects till 31-3-2016. – Circular – Dated 11-6-2015 – FEMA

RBI/2014-15/637

A. P. (DIR Series) Circular No. 108

 

June 11, 2015

 

To

All Authorised Dealer Category – I Banks

Madam/ Sir

External Commercial Borrowings (ECB) for low cost affordable housing projects

Attention of Authorized Dealer Category – I (AD Category – I) banks is invited to A.P. (DIR Series) Circular No. 61 dated December 17, 2012 and A.P. (DIR Series) Circular No. 113 dated June 24, 2013 in terms of which External Commercial Borrowings (ECB) can be raised by eligible borrowers, for low cost affordable housing projects, under the approval route.

2. On a review, it has been decided that the scheme of raising ECB for low cost affordable housing projects will continue for the financial year 2015-16 with the same terms and conditions as mentioned in the above A.P. (DIR Series) Circulars.

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

4. The directions contained in this circular have been issued under sections 10(4) and 11(1) of theForeign 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. 107 Dated: 11-6-2015


Permission granted to subscribe to chit funds by NRIs without limit on non-repatriation basis subject to some specified conditions. – Circular – Dated 11-6-2015 – FEMA

RBI/2014-15/636

A. P. (DIR Series) Circular No .107

June 11, 2015

To

All Authorised Dealer Category-I Banks

Madam / Sir,

Subscription to chit funds by Non -Resident Indian on non-repatriation  basis

Attention of Authorised Dealers Category – I (AD Category – I) banks is invited to the Foreign Exchange Management (Permissible Capital Account Transactions) Regulations 2000, notified videNotification No. FEMA 1/2000 – RB dated May 3, 2000 , as amended from time to time and 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.

2. In terms of Regulation 4(b) (i) of Notification No. FEMA 1/2000 – RB dated 3rd May 2000 , no person resident outside India shall make investment in India, in any form, in a company or partnership firm or proprietary concern or any entity, whether incorporated or not, which is engaged or proposes to engage “in the business of chit fund”.

3. The extant guidelines for subscription to the chit funds have been reviewed in consultation with the Government of India and accordingly, it has been decided to permit Non – Resident Indians (NRIs) to subscribe to the chit funds, without limit, on non – repatriation basis subject to the following conditions:

i. The Registrar of Chits or an officer authorised by the State Government in accordance with the pro visions of the Chit Fund Act in consultation with the State Government concerned, may permit any chit fund to accept subscription from Non – Resident Indians on non – repatriation basis;

ii. The subscription to the chit funds shall be brought in through normal banking channel, including through an account maintained with a bank in India.

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

5. Reserve Bank has since amended the subject Regulations accordingly through the Foreign Exchange Management (Permissible Capital Account Transactions) (Second Amendment) Regulations, 2015 and Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) (Second Amendment) Regulations, 2015 which have been notified throughNotification No. FEMA.337/2015 – RB dated March 2, 2015 , vide G.S.R. No. 283(E) dated April 13, 2015 and Notification No. FEMA.338/2015 – RB dated March 2, 2015 , vide G.S.R. No. 284 (E) dated April 13, 2015 , respectively.

6. The directions contained in this circular have been issued under sections 10(4) and 11(1) of theForeign 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.344/2015-RB Dated: 11-6-2015


Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) (Fourth Amendment) Regulations, 2015 – 344/2015-RB – Dated 11-6-2015 – Foreign Exchange Management

RESERVE BANK OF INDIA

(Foreign Exchange Department)

(CENTRAL OFFICE)

NOTIFICATION NO. 344/2015 RB

Mumbai, the 11th  June, 2015

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

G.S.R. 484(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:-

a) These Regulations may be called the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) (Fourth Amendment) Regulations, 2015.

b) They shall come into force from the date of its publication in the Official Gazette.

2. Amendment of the Regulations:-

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),

I. In Regulation 2:

a) after clause (iie), the following new clause shall be added, namely:-

‘(iif) “employees’ stock option” means the option given to the directors, officers or employees of a company or of its holding company or joint venture or wholly owned overseas subsidiary/subsidiaries, if any, which gives such directors, officers or employees, the benefit or right to purchase, or to subscribe for, the shares of the company at a future date at a pre-determined price;’

b) after clause (x), the following new clause shall be added, namely :-

“(xa) “sweat equity shares” means such equity shares as issued by a company to its directors or employees at a discount or for consideration other than cash, for providing their know-how or making available rights in the nature of intellectual property rights or value additions, by whatever name called;”

II. For the existing Regulation 8, the following shall be substituted, namely :

“(1) 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.

(2) The Reserve Bank may require the company issuing “employees’ stock option”and/or “sweat equity shares” to submit such reports and at such frequency as it may consider necessary.

B.P. KANUNGO, Principal Chief General Manager

Service Tax – Short Message Peer to Peer (SMPP) service – covered under Business Auxiliary Service: CESTAT : 11-06-2015


NEW DELHI, JUNE 11, 2015: THE appellants were providing Short Message Peer to Peer (SMPP) service to various clients but were not paying service tax thereon. The SMPP service inter alia involves sending SMS to customers of their clients on a bulk basis. The said service was provided to a large number of clients and described in their invoices as “charges for short messaging enabling software on per SMS basis and peer to peer and person to person basis”.

The adjudicating authority held that service being provided clearly fell under the category of provision of service on behalf of clients and therefore was liable to tax under Business Auxiliary Service (BAS) defined under Section 65(19) of the Finance Act, 1994. The adjudicating authority has also held that the appellants had suppressed the facts and therefore invoking the extended period also imposed penalty along with mandatory penalty under Section 78 of the Act.

The Tribunal observed,

Telecom Service?: As regards contention of the appellants that they were providing telecommunication service which is recognised as a separate service under section 65 (109a) ibid, they not being a telegraph authority were not liable to pay service tax and as they were covered under Telecommunication Service, they cannot be covered under BAS, it is pertinent to point out the inherent contradictions in this contention in-as-much-as the telecommunication service defined under Section 65(109a) requires that the services, inter alia, is rendered by a person, who has been granted a licence under the first proviso to sub-section (1) of Section 4 of Indian Telegraph Act, 1985 and the appellants not having been granted such a licence are not covered thereunder. Consequently, the appellants’ contention that as they are covered under Telecommunication Service, they cannot be covered under BAS is totally invalid [even if the contention that being covered under Telecommunication Service would necessarily mean they were not covered under any other taxable service earlier is presumed (without admitting) to be valid].

Courier?:- As regards the contention of the appellants that they were only acting as a courier for delivery of their clients’ messages to their customers/subscribers and therefore they were not rendering any service to the subscribers of the clients, one has to carefully scrutinise the nature of service which was rendered by the appellants. It is evident that SMPP service does not merely involve transmitting SMS; it supports a full featured set of two way messaging functions described above. The service rendered by the appellants cannot be described to be merely involving only delivery of SMSs.

BAS – On behalf of: The appellants also argued that they were not providing service on behalf of their clients In the present case, there is hardly any doubt that the appellants were providing service to their client’s subscribers on behalf of their clients for which they were paid by their clients. If the services provided by them to their clients’ subscribers were not on behalf of their clients, they (i.e., the appellants) had no reason to provide service to their clients’ subscribers and there would be no reason for their clients to pay the appellants for the said service. Indeed, to whom the data/SMSs should be sent, at what time they should be sent, the priority to be attached to them etc. are all decided by the clients and the appellants are merely acting on behalf of the clients. There is an agreement between the appellants and their clients, like an agreement dated 28.08.2006. Under the agreement, the appellants have to give their client a direct SMPP connection through their network. The appellants then have to deliver the SMSs received from the clients to the latter’s subscribers for which they get a fee from the clients. The clients also promise not to send any data which consider as objectionable. The terms of the agreement make it clear that the SMS which is being sent to the client’s subscriber is only on behalf of the client and the appellants cannot send any material on their own. Thus it is amply clear that the service has been rendered by the appellants on behalf of the clients and is therefore clearly covered under the scope of BAS as the appellants have rendered service in relation to provision of service on behalf of the clients.

Cum tax: Indeed, Section 67(2) of Finance Act, 1994 allows cum-tax benefit only if the gross amount charged for the service is inclusive of service tax payable. In the light of the admitted fact that the price charged by the appellants did not include any service tax, the cum tax benefit cannot be extended to them.

Suppression: ?The Show Cause Notice does not give any clue as to on what basis Revenue expected the appellants to give description of exempted services in the ST-3 Returns when there is no such legal requirement mentioned either in the Show Cause Notice or in the impugned order. Something positive other than mere inaction or failure on the assessee’s part or conscious withholding of information when assessee knew otherwise is required for invoking extended period. Further, with regard to the demand pertaining to July, 2004 to March, 2006 for which the Show Cause Notice was issued on 04.04.2009, when there had been other Show Causes Notices issued for subsequent period on 24.10.2007 and 18.09.2008 the allegation of suppression becomes even more untenable. The Supreme Court in the caseNizam Sugar Factory Vs. CCE, held that while issuing second and third Show Cause Notices involving same/similar facts, suppression/wilful mis-statement could not be alleged.

Held:

(i) The impugned service is liable to service tax under Business Auxiliary Service (defined in Section 65(19) of Finance Act, 1994).

(ii) The extended period is not invokable in the present case and hence the demand beyond normal period of one year and the penalty under Section 78 ibid would not be sustainable.

(II) The appeals are allowed and remand the cases to the primary adjudicating authority to re-compute the impugned demand and the corresponding penalties under Sections 76 and 77.

No. 11/2015 Dated: 11-6-2015


Authorisation of Principal Commissioners/Commissioners of Wealth-tax to admit application for revision under section 25 of the Act from assessees seeking refund arising due to exemption of urban land from wealth tax restrospectively w.e.f. 01/04/1993. – Circular – Dated 11-6-2015 – Income Tax

F.No.325/02/2014-WT

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

DEPARTMENT OF REVENUE

CENTRAL BOARD OF DIRECT TAXES

NEW DELHI, the 11th June, 2015

Order under section 10(2)(b) of the Wealth-tax Act

Prior to amendment by Finance Act 2013, sub clause (b) of Explanation 1 to clause (ea) of section 2of the Wealth-tax Act 1957 (Act) provided that an urban land shall be chargeable to wealth-tax. This inter alia included land situated in any area which is comprised within the jurisdiction of a municipality or a cantonment board and which has population of not less than ten thousand according to the last preceding census; or land situated in any area within such distance not being more than eight kilometers from the local limits of any municipality or cantonment board as the Central government may, having regard to the extent of, and scope for, urbanization of that area and other relevant considerations specify in this behalf by notification in the official gazette. Subsequently, by Finance Act 2013 the said sub clause (b) of Explanation 1 to clause (ea) was amended to provide that the term “urban land” would not include land classified as agricultural land in the records of the Government and used for agricultural purposes. Accordingly, such land stands exempt from wealth-tax. This amendment was done with retrospective effect from 1.4.1993.

2. Various representations in this regard have been received in the Central Board of Direct Taxes(the Board) that assessees had paid wealth-tax on such agricultural land as per the provisions of the Act as they existed prior to Finance Act 2013. In view of the amendment brought by theFinance Act 2013 w.r.e.f. 1.4.1993, the wealth-tax paid in respect of such land is required to be refunded. However, the time-limit for filing revised return or application for rectification for the purpose of claiming refund has expired in several cases.

3. With a view to avoid genuine hardship and in exercise of the powers conferred under Section 10(2)(b) of the Wealth-tax Act, the Board hereby authorizes Principal Commissioners/Commissioners of Wealth-tax to admit application for revision under section 25 of the Act from assessees seeking refund arising due to the aforesaid amendment, after the expiry of the period specified under the said section and to deal with it on merits as per law.

4. The Principal Commissioner/ Commissioner of Wealth-tax shall dispose of such applications within one year from the end of the financial year in which the application is received. However, the Principal Commissioner/Commissioner shall not set-aside any order. While disposing the application, the Principal Commissioner/Commissioner may for deciding the matter call for a report from the assessing officer and seek relevant information from the assessee. In case such order results in refund, the assessee shall be entitled to interest on such refund at the rate specified in the Act in this behalf.

5. The application for such claim shall be made by the assessee within one year from the date of issue of this order. After expiry of the said period, no such claim shall be admitted.

Ekta Jain

Deputy Secretary to the Government of India

FinMin readies plan for strategic sale of unviable govt assets : 11-06-2015


The finance ministry’s disinvestment department is likely to ask other central government ministries and departments to prepare a list of assets — companies, factories, warehouses and office buildings, among others, which are no longer viable and can be sold off — Business Standard has learnt.

Such asset divestments will be part of the Centre’s 2015-16 strategic stake sales target. The overall budgeted disinvestment target for the year is Rs 69,500 crore, of which Rs 41,000 crore is expected to be raked in from 5-15 per cent stake sales in listed public sector units (PSUs), while Rs 28,500 crore is to be raised from strategic stake sales.

Senior government sources said other ministries would be requested to follow the tourism ministry’s example. The latter has identified eight loss-making hotels operated by India Tourism Development Corporation (ITDC) which can be sold off this year. A Cabinet note regarding the same is expected to be moved soon.

The assets various ministries could identify are likely to include companies on the ‘sick PSU’ list. The latest list of 65 floundering PSUs (Public Sector Units) was tabled in the Budget session of Parliament by Heavy Industries Minister Anant Geete. The list includes Air India, Fertilizer Corporation of India, Hindustan Shipyard, HMT, Mahanagar Telephone Nigam Ltd, Bharat Coking Coal and ITI.

Apart from PSUs, the ministries will be told to identify any asset which can be monetised, including warehouses, guest houses, office buildings and factories. The assets being identified are “basically anything which is unviable and can be sold,” said a senior government official who did not wish to be identified. “This matter is in the initial stages and it all depends on when the disinvestment department gets such lists from various ministries once they are told to prepare the same.”

The official, however, did not clarify whether there is a deadline for ministries to prepare such lists, or by when such instructions will be relayed, but said it might not be possible to sell all such assets in the current financial year.

The person added assets that can be sold will not include land banks. “The issue of land banks is a sensitive one, especially with the likes of defence and railways ministries.”

According to sources in the finance ministry, disinvestment officials will soon meet their counterparts in the defence ministry and in the Uttar Pradesh and Andhra governments to revive the planned initial public offerings of Hindustan Aeronautics (HAL), THDC India, and Rashtriya Ispat Nigam Ltd (RINL).

The proposal to sell a 10 per cent stake in HAL has been discussed for two years, while public debuts of RINL and THDC (each by sale of 10 per cent shares) were considered for 2014-15 as well. None of these plans materialised for a number of reasons.

As reported in Business Standard earlier, the disinvestment department has already secured approvals from the Cabinet Committee on Economic Affairs, led by Prime Minister Narendra Modi, for stake sales worth about Rs 50,000 crore (at current prices) in 20 PSUs, including Oil and Natural Gas Corporation, Power Finance Corporation, NMDC, NTPC, Nalco, BHEL, National Fertilizers, and Indian Oil, among others. While the majority of these stakes will be sold in the current financial year, some might be divested over the next two years.

Source : Business Standard

No. F.No.225/154/2015/ITA.II Dated: 10-6-2015


Extension of due date of filing return of income for Assessment Year 2015-16 in case of Non-corporate & assessee not covered under tax audit provisions – Upto 31st August, 2015 – Order-Instruction – Dated 10-6-2015 – Income Tax

F.No. 225/154/2015/ITA. II

Government of India

Ministry of Finance

Department of Revenue

Central Board of Direct Taxes

 

North Block, ITA.II Division

New Delhi, the 10″‘ June, 2015.

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

Subject:- Extension of due date of filing return of income for Assessment Year 2015-16 regarding.

The Central Board of Direct Taxes, in exercise of powers conferred under section 119 of the Income-tax Act, 1961, hereby extends the `due-date’ for filing Returns of Income, in terms of clause (c) of Explanation 2 to sub-section (1) of section 139 of the Income-tax Act, 1961, for Assessment Year 2015-16 from 31st July, 2015 to 31st August, 2015 in respect of income tax assesses concerned.

 

(Riche Rastogi)

Under secretary to the Government of India

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


Clarifications on Rollback Provisions of Advance Pricing Agreement Scheme – Question and Answer format. – Circular – Dated 10-6-2015 – Income Tax

F.No. 500/7/2015-APA-II

Government of India

Ministry of Finance

Department of Revenue

Central Board of Direct Taxes

Foreign Tax and Tax Research Division-I

APA-II Section

New Delhi, dated 10th June, 2015

Subject: Clarifications on Rollback Provisions of Advance Pricing Agreement Scheme

 

The Advance Pricing Agreement provisions were introduced in 2012 through insertion of sections 92CC and 92CD in the Income-tax Act, 1961 by the Finance Act, 2012. Subsequently, the Advance Pricing Agreement Scheme was notified vide S.O. 2005 (E), dated 30/8/2012, thereby inserting Rules 10F to 10T and Rule 44GA in the Income-tax Rules, 1962.

2. Rollback provisions in the APA Scheme were introduced through subsection (9A) inserted in section 92CC by the Finance (No. 2) Act, 2014 and the relevant rules, namely, Rules 10MA and10RA, have been notified recently vide S.O. 758(E) dated 14th March, 2015 and S.O. 915(E) dated 1st April, 2015. Subsequent to the notification of the rules, requests for clarification regarding certain issues have been received in the Central Board of Direct Taxes. In order to clarify such issues, the Board has decided to adopt a Question and Answer format and the clarifications are hereby provided as below:

Q.1 Under rule 10 MA(2)(ii) there is a condition that the return of income for the relevant roll back year has been or is furnished by the applicant before the due date specified in Explanation 2 to sub-section (1) of section 139 of the Income tax Act (hereinafter referred to as the ‘Act’). It is not clear as to whether applicants who have filed returns under section 139(4) or 139(5) of the Act would be eligible for roll back.

Answer:

The return of income under section 139(5) of the Act can be filed only when a return under section 139(1) has already been filed. Therefore, the return of income filed under section 139(5) of the Act, replaces the original return of income filed under section 139(1) of the Act. Hence, if there is a return which is filed under section 139(5) of the Act to revise the original return filed before the due date specified in Explanation 2 to sub-section (1) of section 139, the applicant would be entitled for rollback on this revised return of income.

However, rollback provisions will not be available in case of a return of income filed under section 139(4) because it is a return which is not filed before the due date.

Q.2 Rule 10MA (2)(i) mandates that the rollback provision shall apply in respect of an international transaction that is same as the international transaction to which the agreement (other than the rollback provision) applies. It is not clear what is the meaning of the word “same”. Further, it is not clear whether this restriction also applies to the Functions, Assets, Risks (FAR) analysis.

Answer:

The international transaction for which a rollback provision is to be allowed should be the same as the one proposed to be undertaken in the future years and in respect of which the agreement has been reached. There cannot be a situation where rollback is finalised for a transaction which is not covered in the agreement for future years. The term same international transaction implies that the transaction in the rollback year has to be of same nature and undertaken with the same associated enterprise(s), as proposed to be undertaken in the future years and in respect of which agreement has been reached. In the context of FAR analysis, the restriction would operate to ensure that rollback provisions would apply only if the FAR analysis of the rollback year does not differ materially from the FAR validated for the purpose of reaching an agreement in respect of international transactions to be undertaken in the future years for which the agreement applies.

The word “materially” is generally being defined in the Advance Pricing Agreements being entered into by CBDT. According to this definition, the word “materially” will be interpreted consistently with its ordinary definition and in a manner that a material change of facts and circumstances would be understood as a change which could reasonably have resulted in an agreement with significantly different terms and conditions.

Q.3 Rule 10MA (2)(iv) requires that the application for rollback provision, in respect of an international transaction, has to be made by the applicant for all the rollback years in which the said international transaction has been undertaken by the applicant. Clarification is required as to whether rollback has to be requested for all four years or applicant can choose the years out of the block of four years.

Answer:

The applicant does not have the option to choose the years for which it wants to apply for rollback. The applicant has to either apply for all the four years or not apply at all. However, if the covered international transaction(s) did not exist in a rollback year or there is some disqualification in a rollback year, then the applicant can apply for rollback for less than four years. Accordingly, if the covered international transaction(s) were not in existence during any of the rollback years, the applicant can apply for rollback for the remaining years. Similarly, if in any of the rollback years for the covered international transaction(s), the applicant fails the test of the rollback conditions contained in various provisions, then it would be denied the benefit of rollback for that rollback year. However, for other rollback years, it can still apply for rollback.

Q.4 Rule 10 MA(3) states that the rollback provision shall not be provided in respect of an international transaction for a rollback year if the determination of arm’s length price of the said international transaction for the said year has been the subject matter of an appeal before the Appellate Tribunal and the Appellate Tribunal has passed an order disposing of such appeal at any time before signing of the agreement. Further, Rule 10 RA(4) provides that if any appeal filed by the applicant is pending before the Commissioner (Appeals), Appellate Tribunal or the High Court for a rollback year, on the issue which is subject matter of the rollback provision for that year, the said appeal to the extent of the subject covered under the agreement shall be withdrawn by the applicant.

There is a need to clarify the phrase “Tribunal has passed an order disposing of such appeal” and on the mismatch, if any, between Rule 10MA(3) and Rule 10RA(4).

Answer:

The reason for not allowing rollback for the international transaction for which Appellate Tribunal has passed an order disposing of an appeal is that the ITAT is the final fact finding authority and hence, on factual issues, the matter has already reached finality in that year. However, if the ITAT has not decided the matter and has only set aside the order for fresh consideration of the matter by the lower authorities with full discretion at their disposal, the matter shall not be treated as one having reached finality and hence, benefit of rollback can still be given.

There is no mismatch between Rule 10MA(3) and Rule 10RA(4).

Q.5 Rule 10MA(3) (ii) provides that rollback provision shall not be provided in respect of an international transaction for a rollback year if the application of rollback provision has the effect of reducing the total income or increasing the loss, as the case may be, of the applicant as declared in the return of income of the said year. It may be clarified whether the rollback provisions in such situations can be applied in a manner so as to ensure that the returned income or loss is accepted as the final income or loss after applying the rollback provisions.

Answer:

It is clarified that in case the terms of rollback provisions contain specific agreement between the Board and the applicant that the agreed determination of ALP or the agreed manner of determination of ALP is subject to the condition that the ALP would get modified to the extent that it does not result in reducing the total income or increasing the total loss, as the case may be, of the applicant as declared in the return of income of the said year, the rollback provisions could be applied. For example, if the declared income is ₹ 100, the income as adjusted by the TPO is ₹ 120, and the application of the rollback provisions results in reducing the income to ₹ 90, then the rollback for that year would be determined in a manner that the declared income ₹ 100 would be treated as the final income for that year.

Q.6 Rule 10RA(7) states that in case effect cannot be given to the rollback provision of an agreement in accordance with this rule, for any rollback year to which it applies, on account of failure on the part of applicant, the agreement shall be cancelled. It is to be clarified as to whether the entire agreement is to be cancelled or only that year for which roll back fails.

Answer:

The procedure for giving effect to a rollback provision is laid down in Rule 10RA. Sub-rules (2), (3), (4) and (6) of the Rule specify the actions to be taken by the applicant in order that effect may be given to the rollback provision. If the applicant does not carry out such actions for any of the rollback years, the entire agreement shall be cancelled. This is because the rollback provision has been introduced for the benefit of the applicant and is applicable at its option. Accordingly, if the rollback provision cannot be given effect to for any of the rollback years on account of the applicant not taking the actions specified in sub-rules (2), (3), (4) or (6), the entire agreement gets vitiated and will have to be cancelled.

Q.7 If there is a Mutual Agreement Procedure (MAP) application already pending for a rollback year, what would be the stand of the APA authorities? Further, what would be the view of the APA Authorities if MAP has already been concluded for a rollback year?

Answer:

If MAP has been already concluded for any of the international transactions in any of the rollback year under APA, rollback provisions would not be allowed for those international transactions for that year but could be allowed for other years or for other international transactions for that year, subject to fulfilment of specified conditions in Rules 10MA and 10RA. However, if MAP request is pending for any of the rollback year under APA, upon the option exercised by the applicant, either MAP or application for roll back shall be proceeded with for such year.

Q.8 Rule 10MA(1) provides that the agreement may provide for determining ALP or manner of determination of ALP. However, Rule 10MA(4) only specifies that the manner of determination of ALP should be the same as in the APA term. Does that mean the ALP could be different?

Answer:

Yes, the ALP could be different for different years. However, the manner of determination of ALP (including choice of Method, comparability analysis and Tested Party) would be same.

Q.9 Will there be compliance audit for roll back? Would critical assumptions have to be validated during compliance audit?

Answer:

Since rollback provisions are for past years, ALP for the rollback years would be agreed after full examination of all the facts, including validation of critical assumptions. Hence, compliance audit for the rollback years would primarily be to check if the agreed price or methodology has been applied in the modified return.

Q.10 Whether applicant has an option to withdraw its rollback application? Can the applicant accept the rollback results without accepting the APA for the future years?

Answer:

The applicant has an option to withdraw its roll back application even while maintaining the APA application for the future years. However, it is not possible to accept the rollback results without accepting the APA for the future years. It may also be noted that the fee specified in Rule 10MA(5)shall not be refunded even where a rollback application is withdrawn.

Q.11 For already concluded APAs, will new APAs be signed for rollback or earlier APAs could be revised?

Answer:

The second proviso to Rule 10MA(5) provides for revision of APAs already concluded to include rollback provisions.

Q.12 For already concluded APAs, where the modified return has already been filed for the first year of the APA term, how will the time-limit for filing modified return for rollback years be determined?

Answer:

The time to file modified return for rollback years will start from the date of signing the revised APA incorporating the rollback provisions.

Q.13 In case of merger of companies, where one or more of those companies are APA applicants, how would the rollback provisions be allowed and to which company or companies would it be allowed?

Answer:

The agreement is between the Board and a person. The principle to be followed in case of merger is that the person (company) who makes the APA application would only be entitled to enter into the agreement and be entitled for the rollback provisions in respect of international transactions undertaken by it in rollback years. Other persons (companies) who have merged with this person (company) would not be eligible for the rollback provisions.

To illustrate, if A, B and C merge to form C and C is the APA applicant, then the agreement can only be entered into with C and only C would be eligible for the rollback provisions. A and B would not be eligible for the rollback provisions. To illustrate further, if A and B merge to form a new company C and C is the APA applicant, then nobody would be eligible for rollback provisions.

Q.14 In case of a demerger of an APA applicant or signatory into two or more companies (persons), who would be eligible for the rollback provisions?

Answer:

The same principle as mentioned in the previous answer, i.e., the person (company) who makes an APA application or enters into an APA would only be entitled for the rollback provisions, would continue to apply. To illustrate, if A has applied for or entered into an APA and, subsequently, demerges into A and B, then only A will be eligible for rollback for international transactions covered under the APA. As B was not in existence in rollback years, availing or grant of rollback to B does not arise.

Non-AC restaurants not in service tax ambit : 10-06-2015


With the increase in the rate of Service Tax to 14% from June 1, the effective rate of tax will be 5.6% of the total amount charged.

The finance ministry on Tuesday clarified that service taxwould be levied only on air-conditioned or air-heated restaurants.

“Restaurants, eating-joints or messes which do not have the facility of air-conditioning or central air-heating in any part of the establishment are exempt from service tax,” said the finance ministry in a statement.

At present, service tax is chargeable on services provided by restaurants, eating-joints or messes that have air-conditioning or central air-heating in any part of the establishment at any time during the year, in relation to serving of food or beverages.

In case of air-conditioned or air-heated restaurants, “Sixty per cent of the value is to be deducted from the total amount charged, while applying the rate of service tax and tax is to be calculated on the balance 40 per cent,” it added.

With the increase in the rate of service tax to 14 per cent (subsuming the education cesses) from June 1, the effective rate of tax would be 5.6 per cent of the amount charged.

Prior to June 1, when the rate of service tax was 12.36 per cent (including education cesses), the effective rate was 4.94 per cent.

After the increase in the rate of the tax, some of the key services that have become costlier are railways, airlines, banking, insurance, advertising, architecture, construction, credit cards, event management and tour operators.

Source : The Economic Times

GST will lower logistics costs by 20% says CRISIL : 10-06-2015


Phasing out of central sales tax, dismantling of check-posts key to realising full benefits.

CRISIL Research sees rollout of goods & services tax (GST) to reduce logistics costs of companies producing non-bulk goods by as much as 20%.

The savings will accrue from a gradual phasing out of Central Sales Tax (CST), consolidation of warehouse space, and faster transit of goods since local taxes (such as octroi and local body tax) will be subsumed into GST. However, to maximise benefits from the rollout of GST, a complete phasing out of CST (currently paid for inter-state movement of goods) and dismantling of state-level check-posts are imperatives.

To get states on its side, the government has proposed allowing states to levy an additional tax of one% on supply of goods in lieu of CST for two years. “We believe this is against the core principle of GST, and will defer full benefits of the rollout. This will also delay the dismantling of check-posts so critical to ensure faster transit of goods,” said CRISIL.

Today, a considerable amount of journey time – estimated at a quarter – is spent at check-posts and city entry points, which add to the cost of transporting goods, and forces companies to maintain buffer inventories.
“Manufacturers of non-bulk goods spend about 5-8% of sales on logistics. GST will save warehousing costs of 1-1.5% of sales in 3-4 years. Eliminating check-post delays will yield additional savings of 0.4-0.8%, thus taking overall savings to 1.5-2% of sales. But this will be gradual and back-ended as companies will have to realign supply chains while ensuring minimum business disruption,” Prasad Koparkar, senior director, CRISIL Research was quoted as saying.
CRISIL Research’s assessment shows the consumer durables sector will be the biggest beneficiary of GST, potentially saving 30% of logistics costs from current levels of 7-8% of sales. The sector has the most number of warehouses set up solely to avoid paying CST and hence offers maximum scope for consolidation. Also, consumer durables have high brand recall and long shelf life, so can’t be easily substituted. This would persuade manufacturers’ to consolidate loads in larger warehouses.

For FMCG and pharmaceutical companies, cost gains may be a relatively lower 15-20%. That’s because both tax and logistics considerations have dictated their decision-making on warehousing. Given that stocks need to be replenished quickly, warehouses are located closer to distributors. So consolidation will be more calibrated and gradual. To start with, they could consolidate warehouses near state borders. Within FMCG, personal care and household products may see more consolidation, given the longer shelf life of products compared with food and beverages.

Source : PTI

Farmer leaders slam proposed land Bill changes : 10-6-2015


A parliamentary joint committee on land Bill on Tuesday heard leaders of five farmer organisations, who slammed the Narendra Modi government’s proposed amendments to the2013 Act as alarming.

These leaders requested the committee members to recommend the withdrawal of these proposed amendments.

These farmer leaders criticised amendments such as removal of consent clause and social impact assessment in five categories, terming them “alarming”. The organisations that gave oral evidence to the

S S Ahluwalia-headed 30-member committee were theRashtriya Kisan Union and the Kisan Mazdoor Sangathan from Uttar Pradesh, the Kisan Jagriti Manch and the Bhartiya Kisan Union from Haryana and the Khet Bachao Jeewan Bachao Sangharsh Samiti from Bihar.

The committee had its third meeting on Tuesday. Those who met the panel included farmers from Bhatta Parsaul, Uttar Pradesh, from where Congress Vice-President Rahul Gandhi had started his agitation against forcible land acquisition in 2011.

Sources said some members of the Bharatiya Janata Party and its allies tried to reason with the farmer leaders on the need for the amendments. However, Opposition members of Parliament requested them to allow these leaders to express their views. Ahluwalia said questionnaires would be sent to those appearing before the panel so that their views on relevant points would be available in writing when the panel meets again on Monday.

The farmer leaders objected to the proposed repeal of Section 24 (2) of the 2013 Act, relating to acquired land being returned to the original owner if it remained unused for more than five years. They said such a change would cause great loss to farmers whose lands were acquired under the 1894 Act but have not accepted any compensation till date.

They said if there was an amendment in Section 24 (2) of the 2013 law, those farmers would be forced to accept compensation according to the 1894 Act. A leader also pointed out that Section 24 (2) provided a window of opportunity to farmers in Noida and Gurgaon to claim compensation on a much higher scale, in case their land was acquired some years ago before the passage of the 2013 land law, but either its possession was not taken or they have not been paid compensation.

FARMERS MEET PARLIAMENTARY JOINT COMMITTEE MEMBERS
  • Those who met the parliamentary joint committee on land Bill included farmers from Bhatta Parsaul
  • Sources said some members of BJP and its allies tried to reason with the farmer leaders about the need for amendments
  • Opposition MPs, however, requested them to allow these leaders to express their views
  • Questionnaires will be sent to those appearing before the panel to give their views on some of the relevant points in writing

Source : Business Standard

Notification No. : 33/2015 Dated: 10-6-2015


Exemption from excise duty for goods required for the National AIDS Control Programme funded by Global Fund to fight AIDS, TB and Malaria (GFATM) till 31-03-2016 – 33/2015 – Dated 10-6-2015 – 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. 33/2015-Central Excise

New Delhi, the 10th June, 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 exempts the goods mentioned in column (1) of the Table below of the description specified in column (2) of the said Table from the whole of the duty of excise leviable thereon which is specified in the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), subject to the condition that the manufacturer produces at the time of clearance of the said goods, before the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise having jurisdiction, a certificate from an officer not below the rank of Deputy Secretary to the Government of India in the Ministry of Health and Family Welfare to the effect that the said goods are required for the National AIDS Control Programme funded by Global Fund to fight AIDS, TB and Malaria(GFATM):-

TABLE

(1)

(2)

Goods

Description

Anti-Retroviral Drugs (ARV Drugs) Adult First Line - Zidovudine 300 mg + Lamivudine 150 mg + Nevirapine 200 mg, Zidovudine 300 mg + Lamivudine 150 mg, Tenofivir 300 mg + Lamivudine 150 mg, Tenofivir 300 mg + Lamivudine 300 mg, Nevirapine 200 mg, Efavirenz 600 mg, Stavudine 30 mg + Lamivudine 150 mg + Nevirapine 200 mg, Stavudine 30 mg + Lamivudine 150 mg, Abacavir 600 mg + Lamivudine 300 mg and Tenofivir 300 mg + Lamivudine 300 mg + Efavirenz 600 mg
Adult Second Line - Atazanavir 300 mg Capsules, Ritonavir 100 mg tablets, Lopinavir 200 mg + Ritonavir 50 mg tablets
Paediatric Drugs - Zidovudine 60 mg + Lamivudine 30 mg + Nevirapine 50 mg tablets, Stavudine 6 mg + Lamivudine 30 mg + Nevirapine 50 mg tablets, Abacavir 60 mg + Lamivudine 30 mg, Zidovudine 60 mg + Lamivudine 30 mg tablets, Stavudine 6 mg + Lamivudine 30 mg tablets, Nevirapine 50 mg tablets, Efavirenz 200 mg tablets, Lopinavir 100 mg + Ritonavir 25 mg tablets
Diagnostics and Equipments Cluster of Differentiation (CD) 4 Kits / Reagents, HIV-DNA-PCR Kits for DNA Testing of Early Infant Diagnostics, Viral Load Kits, CD4 Machines, Viral Load Machines

2. Nothing contained in this notification shall have effect on or after the first day of April, 2016.

[F.No.354/194/2014 –TRU]

(Akshay Joshi)

Under Secretary to the Government of India

G7 summit: Obama, Hollande reach agreement on Ukraine crisis, Iran nuke deal : 09-06-2015


United States President Barack Obama and French President Francois Hollande have reportedly agreed on some of the world’s most pressing issues, including the imposition of sanctions on Russia in the light of its actions in Ukraine and the need to curb Iran’s nuclear ambitions, the White House said.

United States President Barack Obama and French President Francois Hollande have reportedly agreed on some of the world’s most pressing issues, including the imposition of sanctions on Russia in the light of its actions in Ukraine and the need to curb Iran’s nuclear ambitions, the White House said.

The two leaders agreed that the economic sanctions against Russia should stay in place until the country fully abides by the terms of the peace accord that was struck with Ukraine last year, reported The New York Times.

Although Paris had taken a harder line and had expressed more scepticism than Washington DC on the Iran nuclear talks, both Obama and Hollande concurred that the two nations, along with other world powers, will stay united in pursuit of a nuclear deal with Tehran.

The White House further informed that the two leaders also discussed climate change, trade, countering Islamic State (IS) militants in Iraq and Syria and the instability in Libya.

The two leaders met on the sidelines of the G7 summit in Elmau, Germany.

Source : PTI

Waiver notified from many provisions of Companies Act : 09-06-2015


The government has decided to exempt private companies, from seeking shareholder approval for its related-party transactions (RPTs) and relaxed norms related to deposit-taking, rights issue and ESOPs under the Companies Act, 2013.

Similarly, in separate notifications by the ministry of corporate affairs (MCA), government companies exempted public sector entities from managerial remuneration restrictions under the Act.

Besides, charitable companies and nidhis (mutual benefit loan societies) have also been exempted from various provisions of the Act.

TWEAKED COMPANIES ACT
  • Private companies exempted from tough rules on related party transactions

Private company means a company which

  • Restricts the right to transfer its shares
  • Limits the number of its members to 50
  • Prohibits any invitation to the public to subscribe for any securities
  • One person company, small companies, private companies would not be taken into account, while calculating the maximum limit of 20 companies for audit

According to one such notification, all the restrictions and rigorous approval requirements concerning RPTs would not be applied to private companies or their associate companies. The restriction on a related party to vote on such a special resolution and to approve any contract or arrangement which may be entered into by the company has been removed in the case of private companies.

“It is worth citing that none of these exemptions and relaxations would hamper the interest of the investors or public at large, as they cover only private companies with no or low public interest,” said Yogesh Sharma, partner, Grant Thornton India LLP.

These exemptions have been notified almost a year after the draft notification for doing so was issued, in June last year.

In another relief, private companies would now be able to issue employee stock ownership plans (ESOPs) with an ordinary resolution, which requires only 50 per cent approval of shareholders. Earlier, such a step required a special resolution, which requires 75 per cent approval.

Moreover, private companies would now be able to make a rights issue with 90 per cent shareholder approval. The earlier provisions had some time limit set in this regard, held to cause unnecessary procedural delay.

“Private companies have also been allowed to accept deposits from members without the requirement of offer circular and creation of deposit repayment reserves etc. Flexibility has also been provided in the types of share capital that can be issued by private companies,” the ministry said in a press release.

Private companies not having any investment by corporates have been allowed to extend loans to directors subject to certain conditions. An interested private company director has been allowed to participate in board meeting after declaring his interest.

For government companies, the ministry has done away with limits on managerial remuneration as well as restrictions on the maximum number of directorships. Rules for disqualification of directors in certain cases have also been eased .

Source : Business Standard

No. 09/2015 Dated: 9-6-2015


Comprehensive guidelines to be followed for Condonation of delay in filing refund claim and claim of carry forward of losses u/s 119(2)(b) of the Income-tax Act – Circular – Dated 9-6-2015 – Income Tax

CIRCULAR NO 09/2015

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

DEPARTMENT OF REVENUE

CENTRAL BOARD OF DIRECT TAXES

Dated : June 9, 2015

Sub: Condonation of delay in filing refund claim and claim of carry forward of losses under Section 119(2)(b) of the Income-tax Act

In supersession of all earlier Instructions/Circulars/Guidelines issued by the Central Board of Direct Taxes (the Board) from time to time to deal with the applications for condonation of delay in filing returns claiming refund and returns claiming carry forward of loss and set-off thereof under section 119(2)(b) of the Income-tax Act (the Act), the present Circular is being issued containing comprehensive guidelines on the conditions for condonation and the procedure to be followed for deciding such matters.

2. The Principal Commissioners of Income-tax/Commissioners of Income-tax (Pr.CsIT/CsIT) shall be vested with the powers of acceptance/rejection of such application/claims if the amount of such claims is not more than ₹ 10 lakhs for any one assessment year. The Principal Chief Commissioners of Income-tax/Chief Commissioners of Income-tax (Pr.CCsIT/CCsIT) shall be vested with the powers of acceptance/rejection of such application/claims if the amount of such claims exceeds ₹ 10 lakhs but is not more than ₹ 50 lakhs for any one assessment year. The applications/claims for amount exceeding ₹ 50 lakhs shall be considered by the Board.

3. No condonation application for claim of refund/loss shall be entertained beyond six years from the end of the assessment year for which such application/claim is made. This limit of six years shall be applicable to all authorities having powers to condone the delay as per the above prescribed monetary limits, including the Board. A condonation application should be disposed of within six months from the end of the month in which the application is received by the competent authority, as far as possible.

4. In a case where refund claim has arisen consequent to Court order, the period for which any such proceedings were pending before any Court of Law shall be ignored while calculating the said period of six years, provided such condonation application is filed within six months from the end of the month in which the Court order was issued or the end of financial year whichever is later.

5. The powers of acceptance/rejection of the application within the monetary limits delegated to the Pr.CCsIT/CCsIT/Pr.CsIT/CsIT in case of such claims will be subject to following conditions:

i. At the time of considering the case under Section 119(2)(b), it shall be ensured that the income/loss declared and /or refund claimed is correct and genuine and also that the case is of genuine hardship on merits.

ii. The Pr.CCIT/CCIT/Pr.CIT/CJT dealing with the case shall be empowered to direct the jurisdictional assessing officer to make necessary inquiries or scrutinize the case in accordance with the provisions of the Act to ascertain the correctness of the claim.

6. A belated application for supplementary claim of refund (claim of additional amount of refund after completion of assessment for the same year) can be admitted for condonation provided other conditions as referred above are fulfilled. The powers of acceptance/rejection within the monetary limits delegated to the Pr.CCsIT/CCsIT/Pr.CsIT/CsIT in case of returns claiming refund and supplementary claim of refund would be subject to the following further conditions:

i. The income of the assessee is not assessable in the hands of any other person under any of the provisions of the Act.

ii. No interest will be admissible on belated claim of refunds.

iii. The refund has arisen as a result of excess tax deducted/collected at source and/or excess advance tax payment and/or excess payment of self-assessment tax as per the provisions of the Act.

7. In the case of an applicant who has made investment in 8% Savings (Taxable) Bonds, 2003 issued by Government of India opting for scheme of cumulative interest on maturity but has accounted interest earned on mercantile basis and the intermediary bank at the time of maturity has deducted tax at source on the entire amount of interest paid without apportioning the accrued Interest/TDS, over various financial years involved, the time limit of six years for making such refund claims will not be applicable.

8. This circular will cover all such applications/claims for condonation of delay under section 119(2)(b) which are pending as on the date of issue of the Circular.

9. The Board reserves the power to examine any grievance arising out of an order passed or not passed by the authorities mentioned in para 2 above and issue suitable directions to them for proper implementation of this Circular. However, no review of or appeal against the orders of such authorities would be entertained by the Board.

[F. No. 312/22/2015-OT]

Ekta Jain

Deputy Secretary to Government of India

Bangladesh offers 2 SEZs to Indian companies : 08-06-2015


With an aim to boost bilateral trade, Bangladesh has offered to establish two Special Economic Zones for Indian companies besides allowing Life Insurance Corporation to start operations in the country.

After Prime Minister Narendra Modi’s talks with his counterpart Sheikh Hasina yesterday, both sides signed a number of pacts to spur economic engagement and enhance connectivity so that North East region could be linked to South Asian countries.

As per the MoU on the economic zone, Bangladesh will offer SEZs to Indian companies in Mongla and Bheramara.

India becomes the third country after Japan and China to have shown interest in developing economic zones in Bangladesh, media reports here said.

India will develop the economic zone near the government-sponsored one in Mongla, which is now under construction, Paban Chowdhury, executive chairman of Bangladesh Economic Zones Authority, told The Daily Star.

India wants over 200 acres of land in Mongla and 477 acres at Bheramara to establish the zones, he said.

The zones will be developed with funds obtained from the USD 2 billion line of credit from India, the BEZA executive chairman said.

“As there will be no uncertainty regarding funds, we expect the zones can be developed in three years,” Chowdhury said.

Both the sides also renewed a Bilateral Trade Agreement and signed another one on Coastal Shipping which will allow direct and regular movements of Indian ships to Bangladeshi ports.

Foreign Secretary S Jaishankar said the pact will help movement of goods and encourage the shipping industry of Bangladesh.

Opening its insurance sector, Bangladesh handed over consent letter by Insurance Development and Regulatory Authority (IDRA) to Life Insurance Corporation (LIC) to start operations in the country.

The annual trade between Bangladesh is around USD 6.5 billion out of which India’s export is around USD 6 billion while Bangladesh exports to India is around USD 0.5 billion.

Modi, after holding talks with Hasina yesterday, promised to do “everything” to address the trade deficit.

To improve connectivity, an MoU was signed on Blue Economy and Maritime Cooperation in the Bay of Bengal and the Indian Ocean.

A separate MoU was also inked on use of Chittagong and Mongla Ports by Indian ships to ensure better movement of goods.

An agreement was inked between Bangladesh Standards and Testing Institution (BSTI) and Bureau of Indian Standards (BIS) on cooperation in the field of standardisation.

Source : PTI

Lower inflation, high tax outgo explain mismatch between corporate performance and GDP growth: Pronab Sen : 08-06-2015


Many, including Reserve Bank of India Governor Raghuram Rajan, have noted the contradiction between the high gross domestic product (GDP) growth numbers and poorcorporate earnings for 2014-15, particularly the fourth quarter. Pronab Sen, who heads the National Statistical Commission (NSC) that had approved the methodology for the new series of GDP, talks about this to Indivjal Dhasmana. Edited excerpts:

There is a lot of criticism of GDP data on the ground that it showed high growth in manufacturing, while companies’ results did not reflect this. Do you take it as a fair criticism?

No. The top line (revenue data) of companies has to be seen in the context of low WPI (Wholesale Price Index) inflation for manufacturing, 2.43 per cent on an average in 2014-15. So, there was a miniscule price increase in manufacturing. Whatever value addition came primarily from quantity. Now, the manufacturing IIP (Index of Industrial Production), which gives growth in volume terms, rose only 2.3 per cent in the year. So, this explains the weak growth in the year. In the fourth quarter of the year, WPI inflation for manufacturing dropped much more, to 0.39 per cent, while manufacturing grew a bit more, by 3.6 per cent, compared to the entire year. So, this explained the poor top line growth of manufacturing in 2014-15, particularly in the fourth quarter (Q4).

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What about the bottom line (profit)?

Companies give much more taxes in the fourth quarter of a year than the previous three. This is a typical trend. As such, the profit after tax would yield less of growth in Q4.

In its monetary review, the Reserve Bank of India deliberated more on the gross value added (GVA) than gross domestic product (GDP). As a matter of study, which indicator should we take?

Always GDP. It is total income generated in the economy. This income may then be shared by the government, labour and businesses or capital. If GDP grew 7.5 per cent in Q4, just behind 8.4 per cent in second quarter (Q2), while GVA rose only 6.1 per cent in Q4, the lowest in any three months of the year, it showed the government took much more through taxes in the fourth quarter compared to earlier ones.

R Nagaraj, a non-official member of the Central Statistics Office’s (CSO’s) first sub-committee, objected to blowing up the methodology used in the GDP estimation for the non-financial private corporate sector. His argument is when you blow up, you are erring because many of these companies remain on paper and do not produce any goods or services. Do you find the criticism sound?

We have to go by what the ministry of corporate affairs is telling us. There are some 900,000 active companies, which means those which have filed a balance sheet with MCA-21 (the ministry’s e-governance initiative) at least once in the previous three years. We follow that.

Then, why has a committee under you been set up to verify the methodology in estimating manufacturing in GDP data? Is it a new committee, announced after the provisional estimates of GDP were out last month?

No, the committee was set up way back, when the CSO came out with its earlier estimation of GDP in January-February. It is a standard practice, whenever CSO changes the methodology of estimation. CSO came out with new GDP data after the NSC approved the new methodology. We are essentially reviewing whether the methodology as approved by NSC was adopted by CSO or not. It is not related to the criticism.

Will you review the methodology in agriculture and services sector data of GDP as well?

Not agriculture, as the methodology there has not changed. However, we will review the methodology in the services sector, after we are done with the manufacturing sector. Earlier, services sector data were based on the National Sample Surveys, using the labour input method. Now, the corporate part of the services sector is based on MCA-21 filings and the non-corporate segment from service tax.

Source : Business Standard

Notification No. : 17/2015 Dated: 8-6-2015


Centralized registration facility to manufacturers of aluminium roofing panel subject to condition of consumption at the site of manufacture. – 17/2015 – Dated 8-6-2015 – 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)

Notification No.   17/ 2015 – Central Excise (N.T.)

New Delhi, the 8th June, 2015

G.S.R.  (E).____  In exercise of the powers conferred by sub-rule (2) of rule 9 of the Central Excise Rules, 2002, the Central Board of Excise and Customs hereby exempts from the operation of said rule, every manufacturing unit engaged in the manufacture of aluminium roofing panels falling under tariff item 7610 90 10 of the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), subject to the conditions that such roofing panels are consumed at the site of manufacture for execution of the project and the manufacturer of such goods has a centralised billing or accounting system in respect of such goods manufactured by different manufacturing units and opts for registering only the premises or office from where such centralised billing or accounting is done.

[F. No. 209/05/2013-CX.6]

(ROHAN)

Under Secretary to the Govt. of India

Govt sets up panel to review Companies Act : 06-06-2015


The panel would be examining suggestions from the Bankruptcy Law Reforms committee and Law Commission, among some other commitees.

The government on Friday formed an eight-member panel to review the Companies Act, 2013, and suggest necessary changes.

Chaired by Anjuly Chib Duggal, secretary, ministry of corporate affairs (MCA), it is to give the report within six months of its first meeting. It is to “make recommendations to the government on issues arising from implementation of the Act”. The panel would be examining recommendations from the Bankruptcy Law Reforms committee, High Level Committee on Corporate Social Responsibility, Law Commission and other agencies on the issue. It may invite subject experts and those from regulatory bodies as needed.

Others on the committee are Manoj Fadnis, president of The Institute of Chartered Accountants of India; A S Durga Prasad, president, Institute of Cost Accountants of India; Atul H Mehta, president, Institute of Company Secretaries of India; Reva Khetarpal, former Delhi high court judge; Bharat Vasani, chief legal and group general counsel, Tata Sons, and Y M Deosthalee, chairman, L&T Finance Holdings. The joint secretary (policy), MCA, would be member-convener.

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 The government has already made many changes in the year since the Act came into implementation, with Parliament recently okaying amendments, including easing thee norms for related-party transactions.
Source : PTI

States inching towards GST, says Mani : 06-06-2015


GST is scheduled to be rolled out from April 1, 2016

A day after pressing for modifications in the Constitution Amendment Bill on goods and services tax (GST), the Empowered Committee of Finance Ministers on Friday seemed to be striking a conciliatory note with the Centre on the roll out of the new indirect tax system.

“It is a stupendous achievement that all the states with so much diversity,…diverse political governance, have come under the umbrella of the Empowered Committee and inching towards creating a single common market in the country,” said the chairman of the Committee, K M Mani, who is also the finance minister of Kerala.

GST is scheduled to be rolled out from April 1, 2016.

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On Thursday, the committee had put forward new demands on compensation which delay the GST introduction. It demanded full compensation to states for five years, whereas the Bill seeks to provide for such compensation for only three years, to be reduced to 75 per cent in the fourth year and 50 per cent in the fifth year.

Speaking at the conference organised by the Indirect Taxes Committee of the Institute of Chartered Accountants of India on Friday, Mani said GST should reduce final consumer prices of items.

GST is a major tax reform and should benefit the final consumer and the public without affecting resources of the states. The committee is in the process of discussing and arriving at consensus on large number of issues, he said.

On Thursday, consuming states opposed the Bill’s provision to impose one per cent tax on inter-state sale of goods to help the manufacturing states. The commmittee is to take a view on the issue.

The Committee, Mani said, has been called by the Select Committee of Rajya Sabha to represent its views on the GST on June 16.

The Constitutional Amendment Bill for rolling out GST, was referred to the Select Committee of the Rajya Sabha, while the Lok Sabha had already cleared the Bill. The Select Committee is scrutinising the Bill. If the Rajya Sabha modifies the Bill on the recommendations of the select panel, the Lok Sabha will have to re-consider the Bill. At least half of the states (15 out of 29) would have to give assent to the Bill, to enable its enactment.

Source : Business Standard

Notification No. : F.No. 2/11/2014-CL.V Dated: 5-6-2015


Exemptions to Nidhis under section 462 of CA 2013 – F.No. 2/11/2014-CL.V – Dated 5-6-2015 – 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 05th June, 2015

G.S.R  (E). - In exercise of the powers conferred by clauses (a) and (b) of sub-section (1) of section 462 read with section 406 of the Companies Act, 2013 (18 of 2013) and in supersession of notification number GSR 517(E), dated the 31st  August, 2006 and GSR 326(E), dated the 8th  April, 2011 or any other notification issued under section 620A of the Companies Act, 1956, except as respects things done or omitted to be done before such supersession, the Central  Government  in  the  interest of public,  hereby directs that certain provisions of the Companies Act, 2013, as specified in column (2) of the Table, shall  not  apply  or  shall  apply  with  such  exceptions,  modifications  and adaptations, as specified in column (3) of the said Table, to Nidhis, namely:-

Serial No.

Provisions of the Companies Act, 2013 Exceptions, modifications and Adaptations

(1)

(2)

(3)

1.

Sub-section (2) of section 20 Shall apply subject to the modification that in the case of a Nidhi, the document may be served only on members who hold shares of more than one thousand rupees in face value or more than one per  cent.  of the  total  paid-up  share capital of the Nidhis whichever is less.For other shareholders, document may be   served   by   a   public   notice   in newspaper  circulated   in   the  district where the Registered Office of the Nidhi is situated; and publication of the same on the notice board of the Nidhi.

2.

Section  42 except  sub-section (1),  explanation (II)  to  sub-section (2), sub-sections (4), (6), (8),  (9) and (10) Shall not apply

3.

Clause (b) of sub-section (1) of section 47 Shall apply, subject to the modification that  no  member  shall  exercise voting rights on poll in excess of five per cent. of   total  voting  rights  of   equity shareholders.

4.

Section 62 Shall not apply.

5.

Sub-section (1) of section 67 Shall not   apply,   when   shares   are purchased   by   the   company  from  a member on his ceasing to be a depositor or   borrower   and   it   shall   not   be considered as reduction of capital under section 66 of the Companies Act, 2013.

6.

Sub-section (5) of Section 123 Shall apply, subject to the modification that any dividend payable in cash may be  paid  by  crediting the same to the account of the member, if the dividend is not claimed within 30 days from the date of declaration of the dividend.

7.

Section 127 Shall apply, subject to the modification that where the dividend  payable to a member is one hundred rupees or less, it shall  be  sufficient  compliance  of the provisions  of   the   section,  if  the declaration of dividend is announced in the   local language   in one   local newspaper   of   wide   circulation   and announcement of the said declaration is also displayed on the notice board of the Nidhis for at least three months.

8.

Sub-section (1) of Section 136 Shall apply, subject to the modification that, in the case of members who do not individually  or  jointly  hold  shares  of more than one thousand rupees in face value or more than one per cent. of the total paid-up share capital whichever is less,  it  shall  be  sufficient  compliance with the provisions of the section if an intimation  is sent by  public notice in newspaper circulated  in the district in which the Registered Office of the Nidhi is situated stating the date, time and venue of Annual  General  Meeting  and the financial statement   with   its enclosures  can  be  inspected  at  the registered office of the company, and the  financial statement with enclosures are affixed in the Notice Board of the company and a  member is entitled to vote either in person or through proxy.

9.

Section 160 In sub-section  (1), for the words “one lakh rupees”, the words “ten thousand rupees” shall be substituted

10.

Section 185 Shall  not apply,  provided the loan is given to a director or his relative in their capacity as members   and   such transaction  is disclosed  in the annual accounts by a note.

11.

Second  proviso to sub-section (1) of section  197 Shall apply with the modification that the remuneration  of a director who  is neither  managing  director nor whole-time director or manager for performing special services to the Nidhis specified in the articles of association may be paid by way of monthly payment subject to the approval of the company in general meeting   and also to the provisions of section  197 :P rovided   that   no   approval   of  the company in general meeting   shall be required where,-

(a) a Nidhi does not have a managing director or a whole-time director or a manager;

(b) the remuneration payable during a financial year to all the directors of the Nidhi does not exceed ten per cent. of the net profits of such Nidhi or  fifteen lakh rupees, whichever is less; and

(c) a remuneration payable under clause (b) is approved by a special resolution passed in this behalf by the Nidhi.

12.

Section 403 Shall  apply,  with the modification that the filing fees in respect of every return of allotment  under sub-section  (9)  of section 42 shall be calculated at the rate of  one  rupee  for  every  one  hundred rupees or parts thereof on the face value of the shares included in the return but shall not exceed the amount of normal filing fee payable.

2.  The  Nidhis,  while  complying  with  such  exceptions,  modifications  and  adaptations, as specified in column (3) of the aforesaid Table, shall ensure that the interests of their shareholders are protected.

3.  A copy of this notification has been laid in draft before both Houses of Parliament as required by sub-section (2) of section 462 of the Companies Act, 2013.

[F No 2/11/2014-CL.V]

Amardeep Singh Bhatia

Joint Secretary of the Government of India

Notification No. : F. No. 1/2/2014-CL.I Dated: 5-6-2015


Exemptions to Section 8 (Non-Profit) under section 462 of CA 2013 – F. No. 1/2/2014-CL.I – Dated 5-6-2015 – 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 05th June, 2015

G.S.R. (E). - In exercise of the powers conferred by clauses (a) and (b) of sub-section (1) of section 462 and in pursuance of sub-section (2) of said section read with section 8 of the Companies Act, 2013 (18 of 2013), and in supersession of notifications issued under section 25 of the Companies Act, 1956 (1 of 1956) except as respects things done or omitted to be done before such supersession, the Central Government in the interest of public, hereby directs that certain provisions of the Companies Act, 2013, as specified in column (2) of the Table, shall not apply or shall apply with such exceptions, modifications and adaptations, as specified in column (3) of the said Table, to a body to which a licence is granted under the provisions of the aforesaid section 8, namely :-

SerialNumber

Provisions of the Act Exceptions, Modifications and Adaptations

(1)

(2)

(3)

1.

Clause (24) of section 2. The provisions of clause (24) of section 2 shall not apply

2.

Clause (68) of section 2 The   requirement  of  having   minimum paid-up share capital shall not apply.

3.

Clause (71) of section 2 The  requirement  of  having  minimum paid-up share capital shall not apply.

4.

Sub-section (2) of section 96. In sub-section  (2), after the proviso and before  the  explanation,  the  following proviso shall be inserted, namely:-Provided further that the time, date and  place of each annual general meeting are  decided upon before-hand by the board of   directors   having   regard   to   the

directions, if any, given in this regard by the company in its general meeting.

5.

Sub-section (1) of section 101 In sub-section  (1), for the words “twenty one  days”,  the  words “fourteen  days” shall be substituted.

6.

Section 118. The section shall not apply as a whole except that minutes  may  be recorded within  thirty days of the conclusion of every  meeting  in  case  of  companies where the articles of association provide  for confirmation of minutes by circulation

7.

Sub-section (1) of section 136 In sub-section  (1), for the words “twenty one days”,  the  words “fourteen  days”  shall be substituted.

8.

Sub-section (1) of section 149 and the first proviso to sub-section (1). Shall not apply. 

9.

Sub-sections (4), (5), (6), (7), (8), (9), (10), (11),  clause  (i) of sub-section (12) and   sub-section (13) of  section 149. Shall not apply.

10.

Section 150. Shall not apply.

11.

Proviso to sub-section (5 of section  152. Shall not apply.

12.

Section 160. Shall   not  apply  to  companies  whose articles provide for election of directors by ballot.

13.

Sub-section (1) of section 165. Shall not apply.

14.

Sub-section (1) of section  173. Shall apply only to the extent that the Board of Directors, of such Companies shall  hold at least one meeting within every six calendar months.

15.

Sub-section (1) of section 174. In sub-section (1),—(a) for the words “one-third of its total strength or two directors, whichever is higher”, the words “either eight members or  twenty  five  per  cent.  of its total strength   whichever  is  less”  shall   be substituted;

(b) the   following   proviso   shall   be inserted, namely:-

“Provided that the quorum shall not be less than two members”.

16.

Sub-section (2) of section 177. The  words “with  independent directors forming a majority” shall be omitted.

17.

Section 178. Shall not apply

18.

Section 179. Matters referred to in clauses (d), (e) and  (f) of sub-section  (3) may be decided by the Board by circulation instead of at a meeting.

19.

Sub-section (2) of section184 Shall apply only if the transaction with reference to section  188 on the basis of  terms and conditions of the contract or arrangement exceeds one lakh rupees.

20.

Section  189. Shall apply only if the transaction with reference to section  188 on the basis of terms and conditions of the contract or  arrangement exceeds one lakh rupees.

2. The companies covered under section 8 of the Companies Act, 2013, while complying with such exceptions, modifications and adaptations, as specified in column (3)  of the  aforesaid Table,  shall  ensure that the interests of their shareholders are protected.

3. A copy of this notification  has been laid in draft before both Houses of Parliament as required by sub-section 2013.

[F NO 1/2/2014-CL.I]

Amardeep Singh Bhatia

Joint Secretary to the Government of India

Notification No. : F. No. 1/2/2014-CL-V Dated: 5-6-2015


Exemptions to Government Companies under section 462 of CA 2013 – F. No. 1/2/2014-CL-V – Dated 5-6-2015 – 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 05th June, 2015

G.S.R…(E) - In exercise of the powers conferred by clauses (a) and (b) of sub-section (1) of  section 462 and in pursuance of sub-section (2) of said section of the Companies Act, 2013 (18 of 2013) and in supersession of notifications issued under section 620 of the Companies Act, 1956 (1 of 1956). except as respects things done or omitted to be done before such supersession, the Central Government, in the interest of public hereby directs that certain provisions of the Companies Act, 2013, as specified in column (2) of the Table, shall not apply or shall apply with such exceptions, modifications and adaptations, as specified in column (3) of the said Table, to a Government company. namely :-

S. No. Chapter                Number/ Section number/ Sub-section(s) in the Companies Act, 2013 Exceptions, Modifications and Adaptations.

 

(1)

(2)

(3)

1. Chapter II, section 4. In section 4, in sub-section (1). in clause (a), the words ‘in the case of a public limited company, or the last words “Private Limited” in the case of a private limited company’ shall he omitted.
2. Chapter  IV,  section 56 In sub-section  (1), after the proviso, the following provisos shall he inserted, namely:-

Provided further that the provisions of this sub-section, in so far as it requires a proper instrument of transfer, to be duly  stamped and executed by or on behalf of the transfer  and  by or on behalf of the transferee, shall not apply with respect  to bonds issued by a Government company, provided that an  intimation by the transferee specifying his name, address and  occupation, if any, has been delivered to the company along with the certificate relating to the bond; and if no such certificate is in existence, along with the letter of allotment of  the bond:

Provided also that the provisions of this sub-section shall not apply to a Government Company in respect of securities held by nominees of the Government.

3. Chapter VII.  section 89. Shall not apply.
4. Chapter VII.  section 90. Shall not apply
5. Chapter   VII.   sub- section  (2) of section 96 In sub-section (2). for the words “some other place within the city, town or village in which the registered office of the company is situate”, the words “such other place as the Central Government may approve in this behalf ” shall be  substituted.
6. Chapter VIII, second proviso to sub-section (1 ) of section 123. Shall not apply to a Government Company in which the entire  paid  up  share  capital  is  held  by  the  Central Government, or by any State Government or Governments or  by  the  Central  Government  and  one  or  more  State Governments.
7. Chapter   VIII.   sub- section  (4) of section 123. Shall not apply to a Government Company in which the entire  paid  up  share  capital  is  held  by  the  Central Government. or by any State Government or Governments or by  the  Central  Government  and  one  or  more  State Governments or by one or more Government Company.
8. Chapter  IX.  section 129. Shall not apply to the extent of application of Accounting Standard  17 (Segment Reporting) to the companies engaged in defence production.
9. Chapter IX, clause (e) of sub-section  (3) of section 134 Shall not apply
10 Chapter IX, clause (p) of sub-section  (3) of section 134. Shall not apply in case the directors are evaluated by the Ministry or Department of the Central Government which is  administratively in charge of the company, or, as the case  may be. the State Government, as per its own evaluation  methodology.
11 Chapter  Xl  section 149 (1) (b)    and   first proviso to sub-section (1) of section  149. Shall not apply
12. Chapter XI, clause (a) of sub-section  (6) of section 149. In section  149. in sub-section (6), in clause (a), for the word “Board”, the words “Ministry or Department of’ the Central Government which is administratively in charge of the company, or, as the case may he, the State Government” shall be substituted
13 Chapter XI, clause (c) of sub-section  (6) of section 149. Shall not apply.
14. Chapter   XI   sub-section  (5) of section 152 Shall not apply where appointment of such director is done by the Central Government or State Government, as the case may be
15. Chapter   XI   sub sections (6) and (7) of section 152 Shall not apply to –

(a) a Government Company in which the entire paid up share capital is held by the Central Government, or by any State Government or Governments or by the Central Government and one or more State Governments;

(b) a subsidiary of a Government company, referred to in (a) above, in which the entire paid up share capital is held by that Government company.

16 Chapter  XI,  section 160. Shall not apply to –

(a) a Government Company in which the entire paid up share capital is held by the Central Government, or by any State Government or Governments or by the Central Government and one or more State Governments;

(b) a subsidiary of a Government company. referred to in (a) above, in which the entire paid up share capital is held by that Government company.

17 Chapter  XI,  section 162. Shall not apply to –

(a) a Government Company in which the entire paid up share capital is held by the Central Government, or by any State Government or Governments or by the Central Government and one or more State Governments;

(b) a subsidiary of a Government company, referred to in (a) above, in which the entire paid up share capital is held by that Government company.

18 Chapter  X1,  section  163. Shall not apply to –

(a) a Government Company in which the entire paid up share capital is held by the Central Government, or by any State Government or Governments or by the Central Government and one or more State Governments;

(b) it subsidiary of a Government company, referred to in (a) above, in which the entire paid up share capital is held by that Government company.

19 Chapter   XI,    sub- section(2) of section 164 Shall not apply.
20 Chapter  XI,  section 170 Shall not apply to a Government Company in which the.entire share capital is held by the Central Government, or by any State Government or Governments or by the Central Government or by one or more State Governments
21 Chapter  XI,  section 171 Shall not apply to a Government Company in which the entire share capital is held by the Central Government, or by any State Government or Governments or by the Central Government or by one or more State Governments.
22 Chapter  XII,  clause (1) of sub-section      (4) of section 177. ln clause (i) of sub-section (4) of the section 177, for the words “recommendation for appointment, remuneration and terms of appointment” the words “recommendation for remuneration” shall be substituted.
23 Chapter XII, sub-sections (2), (3) and (4) of section 178. Shall not apply to Government company except with regard to appointment of ‘senior management’ and other employees.
24 Chapter XII, section 185. Shall  not apply to Government company in case such .company obtains approval of the Ministry or Department of the Central Government which is administratively in charge of the  company,  or,  as  the  case  may  be,  the  State Government before making any loan or giving any guarantee or providing any security under the section
25 Chapter XII, section 186 Shall not apply to        -

(a) a   Government   company   engaged   in   defence production;

(b) a Government company, other than a listed company. in  case  such  company  obtains  approval  of the Ministry or Department of the Central Government which is administratively in charge of the company, or. as the case may be, the State Government before making any loan or giving any guarantee or providing any security or making any investment under the section.

26 Chapter XII, first and second proviso to sub-section (1) of section 188. Shall not apply to –

(a)  a  Government company in respect of contracts or arrangements entered into by it with any other Government Company

(b) a Government company, other than a listed company, in respect of contracts or arrangements other than those referred to in clause (a), in case such company obtains approval of the Ministry or Department of the Central Government which is administratively in charge of the company, or, as the case may be, the State Government before entering into such contract or arrangement.-

27 Chapter   XIII,   sub sections (2),   (4) and (5) of section 196 Shall not apply.
28 Chapter XIII, section 197 Shall not apply.
29 Chapter XIII, sub-sections (l), (2), (3) and (4) of section 203. After sub-section (4), the following sub-section shall be inserted, namely:-

“(4A) The provisions of sub-sections (1). (2). (3) and (4) of this section shall not apply to a managing director or Chief Executive Officer or manager and in their absence, a whole-time director of the Government Company.”

30 Chapter XXIX.  sub-section  (2) of section 439 In sub-section (2), the words the Registrar, a shareholder of the company, or of shall be omitted.

2. The Government companies, while complying with such exceptions, modifications and adaptations, as specified in column (3) of the aforesaid Table, shall ensure that the interests of’ their shareholders are protected.

3.  A copy of this notification has been laid in draft before both Houses of Parliament as required by sub-section (2) of section 462 of the Companies Act. 2013.

[F. No. 1/2/2014-CL. V]

(Amardeep Singh Bhatia)

Joint Secretary to the Government of India

Notification No. : F. No. 1/1/2014-CL.V Dated: 5-6-2015


Exemptions to Private Companies under section 462 of CA 2013 – F. No. 1/1/2014-CL.V – Dated 5-6-2015 – 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 05th June, 2015

G.S.R.__ (E). - In exercise of the powers conferred by clauses (a) and (b) of sub-section (1) of section 462 and in pursuance of sub-section (2) of said section of the Companies Act, 2013 (18 of 2013), the Central Government, in the interest of public, hereby directs that certain provisions of the Companies Act, 2013, as specified in column (2) of the Table, shall not apply or shall apply with such exceptions, modifications and adaptations, as specified in column (3) of the said Table, to a private company, namely:-

Serial number Chapter/   Section  number/ Sub- section(s) in the Companies Act, 2013 Exceptions/ Modifications  /Adaptations

(1)

(2)

(3)

1 Chapter I, sub-clause  (viii) of clause 76 of section 2. Shall not apply with respect to section 188.
2 Chapter IV, section 43 and section 47. Shall not   apply   where memorandum or articles of association  of  the  private company so provides.
3 Chapter IV, sub-clause (1) of clause (a) of sub-section (1) and sub-section  (2)  of section 62 Shall  apply  with  following modifications:-

In clause  (a), in sub-clause

(i), the   following   proviso  shall be inserted, namely:-

Provided that notwithstanding anything  contained in this sub-clause  and sub-section (2) of this  section,  in case ninety per cent of the members of a private company have given their consent in -writing or in electronic   mode,   the periods  lesser  than  those specified  in  the  said  sub-clause or sub-section shall apply.

4 Chapter IV, clause  (b) of sub-section (1) of section 62. In clause  (b), for the words “special  resolution”,  the words “ordinary resolution” shall be substituted
5. Chapter IV, section 67. Shall  not apply to  private companies –

(a) in whose share capital no other  body  corporate  has invested any money;

(b) if the borrowings of such a company  from banks or financial institutions or any body corporate is less than twice  its  paid  up  share capital or fifty crore rupees, whichever is lower; and

(c) such a company is not in  default   in   repayment   of  such borrowings subsisting at   the   time   of   making transactions under   this section.

6. Chapter V, clauses  (a)  to  (e)  of  sub-section (2) of section 73 Shall not apply to a private company   which   accepts from  its  members  monies not exceeding one hundred per cent. of aggregate of the paid  up share capital and free  reserves,  and  such company   shall   file the details   of monies   so accepted to the Registrar in such  manner  as  may  be specified.
7. Chapter VII, sections  101 to 107 and section  109. Shall apply unless otherwise specified  in  respective sections  or  the  articles of the company provide otherwise.
8. Chapter VII, clause (g) of sub-section (3) of section  1 17. Shall not apply.
9. Chapter X, Clause  (g) of sub-section (3) of section  141. Shall apply   with the modification that the words  ”other   than   one   person companies, dormant companies, small  companies   and   private  companies  having  paid-up  share capital less than one  hundred crore rupees” shall  be inserted after the words  ”twenty companies”.
10. Chapter XI, section 160. Shall not apply.
11. Chapter XI, section 162 Shall not apply.
12. Chapter XII, section 180. Shall not apply.
13. Chapter XII, sub-section (2)  of section

184.

Shall apply   with the exception that the interested director may  participate in such meeting after disclosure   of   his  interest.
14. Chapter XII, section 185. Shall not apply to a private company –

(a) in whose share capital no other  body  corporate  has invested any money;

(b)  if  the borrowings  of such a company from banks or  financial  institutions or any body corporate is less than  twice  of its  paid  up share capital or fifty crore rupees, whichever is lower; and

(c) such a company has no default   in   repayment   of such borrowings subsisting at   the   time   of   making  transactions under   this section

 

15. Chapter XII, second proviso to sub- section (1) of section 188. Shall not apply.
16. Chapter XIII, sub-sections (4) and (5) of section 196. Shall not apply.

2.  The   private   companies,   while   complying   with   such   exceptions, modifications and adaptations, as specified in column (3) of the aforesaid Table, shall ensure that the interests of their shareholders are protected.

3.  A copy of this notification has been laid in draft before both Houses of Parliament as required by sub-section (2) of section 462 of the Companies Act., 2013.

[F No. 1/1/2014-CL.V]

Amardeep Singh Bhatia,

Joint Secretary to the Government of India

No. F. No. 225/148/2015-ITA-II Dated: 5-6-2015


Expeditious disposal of applications for rectification under section 154 of the Income-tax Act, 1961 (Act) during the Financial Year 2015-16 – reg. – Circular – Dated 5-6-2015 – Income Tax

F. No. 225/148/2015-ITA-II

Government of India

Ministry of Finance

Department of Revenue

Central Board of Direct Taxes

North Block, New Delhi

Dated the 5th of June, 2015

To

All PCCsIT/PDGsIT/CCsIT/DGsIT

Subject: Expeditious disposal of applications for rectification under section 154 of the Income-tax Act, 1961 (Act) during the Financial Year 2015-16 – reg.

Sir/Madam,

Expeditious redressal of taxpayers grievances has been identified as a key result area in the current years Action Plan. In the recently held 31st  Annual Conference of PCCsIT/PDGsIT/CCsIT/DGsIT at New Delhi, the Union Finance Minister in his key-note address has also exhorted the income-tax Department to be prompt in redressing the grievances of taxpayers. It has been a matter of concern that the rectification applications u/s 154 filed by the taxpayers before the field officers are not being dealt with promptly. The Citizen’s Charter of the Department requires that applications for rectification are to be disposed of within two months from the end of the month in which application is received.

2.   As per the Interim Action Plan for the first quarter of FY 2015-16, all rectification applications that were received up to 31st  March 2015, were required to be disposed by 15th May, 2015. In this regard, a feedback report on the achievement of the targets for disposal of rectification applications may be forwarded to the respective Zonal Members, under intimation to Member (IT), on or before 20th June 2015.

3.   I am directed to reiterate that the timeline pertaining to this area of work as mentioned above must be strictly adhered to. The supervisory authorities are requested to ensure that the Rectification Registers are properly maintained by the AOs as per the standard operating procedure (SOP) prescribed vide Instruction No. 3/2015 dated 05.07.2013 and disposal of applications for rectification is regularly monitored.

4.   It may also be noted that CBDT vide Circular No. 8/2015 dated 14.05.2015 has brought out an SOP for verification and correction of demand. The procedure prescribed therein would lead to correction of disputed demands and shall help in mitigating the grievances to a large extent. I am directed to request that the Assessing Officers may kindly be advised to promptly settle the grievances related to verification of demand in accordance with the said circular. The Income-tax Department is committed to prompt redressal of taxpayer grievances and all the officers of the Department are expected to take lead in fulfilling this commitment.

5.  This issues with the approval of Chairperson (CBDT).

Yours faithfully,

(Rohit Garg)

Deputy Secretary to the Govt. of India

Copy to:

1.  PPS to Chairperson, CBDT

2.  PPS/PS to Zonal Members, CBDT

3.  Addl. CIT, Data base Cell for uploading on the Departmental Website

FM Arun Jaitley reins in rain worries : 05-06-2015


The next few months would see “a far bigger increase” in public expenditure and the “recovery trend” in the economy was going to continue, finance minister Arun Jaitley said on Thursday, even as he sought to downplay adverse impact of a likely deficient monsoon on the grain production and inflation. Addressing a brief press conference that followed Tuesday’s India Meteorological Department prediction of a 12% shortfall in normal monsoon showers and the Reserve Bank of India’s bi-monthly policy announcement,which included a quarter-point cut in the key rates and a revision of the its inflation forecast for January 2016 to 6% from 5.8%, the minister said even assuming the IMD proves spot on, a distress situation in the farm sector or in the rural areas was highly unlikely.

The minister also said the aggressive PSU disinvestment plan for the current fiscal would not be altered despite the recent steep fall in equity markets. TheBSE Sensex has fallen by 1,036 points in last three trading sessions.

RBI governor Raghuram Rajan had said that the future trajectory of the monetary policy would depend on the monsoon, the way the government managed shocks, if any, emanating from it, and the price of crude oil. “Going forward, room (for any further policy easing) may absolutely open up if the monsoon is better than currently expected, or if government actions mitigate any potential rise in food prices and if energy prices stay contained,” he was quoted as saying.

Arguing that the timing and geographical spread of rains were as significant was the extent of rainfall for farm-sector performance, Jaitley said any slight inadequacy was to be felt, if at all, in the northwest region that comprises Punjab, Haryana and western Uttar Pradesh, whereas the south, central and northeastern regions would witness rainfall closer to normal. Abundance of foodgrain stocks with the government and deft food management as was seen last year would prevent any form of inflationary trend, the minister said. “The kind of speculation that we have been seeing and the speculative analysis that we have been reading about (the monsoon) appears to be somewhat misplaced,” Jaitley who just received a detailed briefing from IMD officials, said.

A 12% deficit in normal monsoon showers dragged down growth in the farm and allied sectors to just 0.2% in 2014-15, compared with 3.6% a year earlier. This was even as grain production was down just 5.3% at 251.1 million tonnes last year from a year before.

Even though the RBI has just revised its GDP growth forecast for the current fiscal year to 7.6% from 7.8% projected in April and governor Rajan said in media interactions that the state of the economy appeared weaker than assumed earlier, Jaitley stuck to his optimistic view of the economy and said he “foresaw the recovery to continue”.

Allaying inflationary fears, he said the government was adequately prepared to deal with any eventuality, adding that the food ministry would increase supplies (by importing) to address the price rise in pulses.

As per the IMD prediction, there is now a 66% chance of deficient monsoon rains, which are defined as below 90% of the long-period average of 89 centimetres of showers recorded between 1951 and 2000. Even chances of an El Nino weather pattern, which had caused the worst drought in 37 years in 2009 and affected rainfall last year, are pegged at 90% now, while the El Nino situation was considered weak earlier. While only two out seven times in the past an El Nino has developed into a monsoon failure, the link between the monsoon and food production has also been rather complex. Rajan had said: “There has been El Nino incidents in the past with reasonable rainfalls, and poor rainfall which has not led to a fall in production, and a fall in production which has not led to inflation. So each path of this sequence is fraught with uncertainty.”

Stating that the FY16 disinvestment programme (to fetch Rs 69,500 crore) was firmly on track, Jaitley suggested that movements in a day or two hardly indicated a trend. Such transience should not be misconstrued to be a negative vote by global investors on the Indian economy. There was much greater stability in the market now than a few months ago, he said.

Bullish on the economy, Jaitley said several stalled projects had been resumed while some still needed to be pushed.

He also cited the downward movement in bank’s non-performing assets to drive home his point. Gross NPAs of public sector banks (as a percentage of their advances) had come down from a high of 5.64% as on December 31, 2014, to 5.2% as on the end of the March quarter.

The Modi government, which trimmed expenditure in the final months of last year to meet its deficit target, spent about 9% of the budget for FY16 in April, on the higher side going by historic pattern. The minister has now indicated that front-loading of government spending would be continued in the coming months too.

Source : The Financial Express

States demand full compensation for 5 years after GST rollout : 05-06-2015


NEW DELHI: States today pressed for Centre compensating fully for the loss of revenue in the first five years of GST replacing their taxes, a position that may create hurdle in plans for roll out of new tax regime from next year.

Although the Union Government has agreed to compensate states fully in the first three years and partially in fourth and fifth year, the states have demanded for full compensation for the five-year period.

The issue of compensation, besides other matters, was raised at the meeting of the Empowered Committee of State Finance Ministers, headed by Kerala Finance Minister KM Mani, here.

Observing that most of the States have welcomed GST because it is beneficial for both states and Centre, Mani said, “The biggest concern is about the compensation.” States are worried about the revenue loss.

“The central government stand is that compensation will be given in phased manner. First three years full compensation, Fourth year 75 per cent and fifth year 50 per cent that is the formula of government of India but states are asking for the full payment for five years,” Mani said.

These concerns will be communicated to the select committee of the Rajya Sabha which is scrutinising the GST Bill.

“We are discussing and deliberating it. The final views will be presented before the select committee on June 16,” he added.

Moreover, he said that for tobacco and tobacco products states should be allowed to levy additional sales tax over and above GST.

Besides, some states have also favoured abolition of entry tax, he said, adding certain states have demanded that purchase tax is not merged in GST, and if it is merged, 15 years compensation is awarded.

He said there was no discussion on the revenue neutral rates.

“Revenue neutral rates we have not yet finalised, decided. We are discussing that. Discussion is not complete,” he said.

He further said that there is a provision of 1 per cent additional tax but some states have apprehension about that. “Some states have objected that because it will create cascading effect,” he said.
“We will give it final shape before presenting to select committee,” he added.

On being asked on confident of meeting April 1 deadline, Mani said, “Yes”.

Touted as the single biggest indirect tax reform since independence, the GST will subsume various levies like excise duty, service tax, entry tax and octroi.

Source : The Economic Times

No. F. No. DGIT(Vig.)/HQ/Misc./20I 5-16/1285 Dated: 5-6-2015


Principles laid down by SC (Civil Appeal No.1912 of 2015) in the case of Shri Ajay Kumar Choudhary Vs. Union of India in relation to Suspension order — Maximum time limit for suspension fixed 3 months, in case of no charge sheet served. – Circular – Dated 5-6-2015 – Income Tax

DIRECTORATE GENERAL OF INCOME TAX (VIGILANCE)

First Floor, Dyal Singh Public Library Building,

1, Deen Dayal Upadhyay Marg,

New Delhi – 110 002

F. No. DGIT(Vig.)/HQ/Misc./20I 5-16/1285

Dated: 05/06/2015

To

All Principal Chief Commissioners of Income Tax (CCA)

SUB : Principles laid down by Hon’ble Supreme Court in the judgment in Civil Appeal No. 1912 of 2015 in the case of Shri Ajay Kumar Choudhary Vs. Union of India – Circular – reg.

Sir/ Madam,

Kindly refer to the above mentioned subject.

2. In this regard I am directed to draw your kind attention to the principles laid down by Hon’ble Supreme Court in the judgment in Civil Appeal No. 1912 of 2015 in the case of Shri Ajay Kumar Choudhary Vs. Union of India. Hon’ble Apex Court has laid down the following principles in para 14 of the judgment:-

a) The direction of the Central Vigilance Commission that pending a criminal investigation, departmental proceedings are to be held in abeyance, is now superseded.

b) The currency of a Suspension Order should not extend beyond three months if within this period the Memorandum of Charges/Chargesheet is not served on the delinquent officer/employee.

c) If the Memorandum of Charges/Chargesheet is served, a reasoned order must be passed for the extension of the suspension.

d) The Government is free to transfer the concerned person to any Department in any of its offices within or outside the State so as to severe any local or personal contact that he may have and which he may misuse for obstructing the investigation against him.

e) The Government may also prohibit him from contacting any person, or handling records and documents till the stage, he is required to prepare his defence.

3. I am further directed to request that these principles may also kindly be communicated to all Chief Commissioners of Income Tax/ Directors General of Income Tax, all Principal Commissioners of Income Tax/ Principal Directors of Income Tax and all Commissioners of Income Tax/ Directors of Income Tax functioning in your Region as they also conduct disciplinary proceedings in cases of departmental officers/ officials. Further, pending Disciplinary Proceedings/suspension cases may be reviewed urgently in light of directions of Hon’ble Supreme Court.

4. I am also directed to request that in all such cases where officers/ officials are transferred to a different station after revocation of their suspension, the transfer order must specifically refer to the judgment in this case and mention about the liberty granted by the Hon’ble Supreme Court, so that the transfer cannot be challenged as being in violation of Transfer Policy. Further, in all such cases where the officers/ officials are retained at the same station after revocation of their suspension, orders may be issued prohibiting such officers/ officials from contacting any person, or handling records and documents till the stage of their having to prepare their defence

Yours faithfully,

(Rakesh Gupta)

Addl. Director of Income Tax (Vig) (HQ)

New Delhi

Copy to -

(i)  The Directors of Income-tax (Vigilance), NZ/ EZ/ WZ/ SZ for information

(ii)  Addl. Director of Income-tax, Data Base Cell of CBDT with a request to publish the letter on the Departmental website.

Addl. Director of Income Tax (Vig) (HQ)

New Delhi

No. F. No. 2/19/2011-CL-V Dated: 4-6-2015


Constitution of Companies Law Committee – Dated 4-6-2015 – Companies Law

F. No. 2/19/2011-CL-V

Ministry of Corporate Affairs

Government of India

‘A’ Wing, 5th Floor, Shastri Bhawan

New Delhi – 110 001

Dated 04th June, 2015

ORDER

Subject : – Constitution of Companies Law Committee

The Government hereby constitutes a Companies Law Committee consisting of the following : -

S. No.

Name of Person/Institution Position

1.

Secretary, Ministry of Corporate Affairs Chairperson

2.

Ms. Reva Khetarpal, former Judge, Delhi High Court Member

3.

Sh.   Manoj   Fadnis,   President,  The Institute of Chartered Accountants of India Member

4.

Sh.   Atul  H  Mehta,  President,  The Institute  of  Company  Secretaries of India Member

5.

Dr. A.S. Durga Prasad, President, The Institute of Cost Accountants of India Member

6.

Shri  Bharat  Vasani,  Chief Legal Group General Counsel, Tata Sons Ltd, Industry nominee Member

7.

Shri Y.M. Deosthalee, Chairman, L & T Finance Holdings, Industry nominee Member

8.

Joint  Secretary (Policy),  Ministry  of Corporate Affairs Member- Convener

2.    The Committee may invite or co-opt subject matter experts relating to corporate law or any other subject matter, as well as experts from SEBI, RBI, C & AG as needed.  The Committee may also invite any other person or body in the interest of broad-based consultation.

3.    The terms of reference of the Committee are as follows:

(i) to make recommendations to the Government on issues arising from the implementation of the Companies Act, 2013 and

(ii) to examine the recommendations received from the Bankruptcy Law Reforms  Committee,  the High Level Committee on CSR, the Law Commission and other agencies, while undertaking (i) above.

4.    Non-official members of the Committee will be eligible for travelling, conveyance and other allowances as per extant Government instructions, wherever the sponsoring agency is unable to bear their expenditure. Secretarial support to the Committee will be given by the Ministry of Corporate Affairs.

5.   The Committee shall submit its recommendations within six months of its first meeting.

(Alok Samantrai)

Director, Inspection and Investigation

Phone: 2338 9602

To

The Members of the Committee Copy also to:-

(i) PS to CAM

(ii) Sr. PPS to Secretary

(iii) PS to AS

(iv) PSs to JS(M), JS(B), JS(SP), JS(K)

(v) All RDs/ROCS/OLs

(vi) President ASSOCHAM/FICCI/CII (vii)Guard File

(viii) Website of the Ministry

Notification No. : 32/2015 Dated: 4-6-2015


Seeks to further amend notification no 12/2012 – Central Excise dated 17/03/2012 – 32/2015 – Dated 4-6-2015 – 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. 32/2015-Central Excise

New Delhi, the 4th June, 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. 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 Table, after Sl.No. 40 and the entries relating thereto, the following Sl.No. and entries shall be inserted, namely:-

(1)

(2)

(3)

(4)

(5)

“40A 2207 20 00 Ethanol produced from molasses generated from cane crushed in the sugar season 2015-16 i.e. 1stOctober, 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. Nil -”.

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

(Pramod Kumar)

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.31/2015-Central Excise, dated the 28th May, 2015 published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 432 (E) dated the 28th May, 2015.

Gift not to be deemed as unexplained when gift deed and bank certificate were furnished to prove its genuineness : 04-06-2015


IT : Where assessees received certain amount as gift from NRI through cheque and they produced bank certificate and gift deed regarding same, addition of said gift as unexplained income was not justified

 

[2015] 57 taxmann.com 176 (Gujarat)

HIGH COURT OF GUJARAT

Smt. Neelamben Gopaldas Agrawal

v.

Income-tax Officer*

K.S. JHAVERI AND K.J. THAKER, JJ.

TAX APPEAL NOS. 600 & 602 OF 2005

NOVEMBER  19, 2014

Section 68 of the Income-tax Act, 1961 – Cash credit (Gifts) – Assessment year 1996-97 – Whether, where assessees received certain amount as gift from NRI through cheque and they produced bank certificate and gift deed regarding same, addition as unexplained income under section 68 was not justified – Held, yes [Para 6] [In favour of assessee]

No. Press Note No. 7 (2015 Series) Dated: 3-6-2015


Review of Foreign Direct Investment (FDI) Policy on Investments by Non Resident Indians (NRIs), Persons of Indian Origin (PIOs) and Overseas Citizens of India (OCIs) – FDI GUIDELINES – Dated 3-6-2015 – FEMA

Government of India

Ministry of Commerce & Industry

Department of Industrial Policy & Promotion

Press Note No. 7 (2015 Series)

Subject: Review of Foreign Direct Investment (FDI) Policy on Investments by Non Resident Indians (NRIs), Persons of Indian Origin (PIOs) and Overseas Citizens of India (OCIs)

1.0   Present Position:

1.1   Paragraph 2.1.27 of ‘Consolidated FDI Policy Circular of 2015′, effective from May 12, 2015, relating to the definition of Non Resident Indian (NRI), presently reads as below:

‘Non-Resident Indian’ (NRI) means an individual resident outside India who is a  citizen of India or is a person of Indian origin.

2.0   Revised Position:

2.1   The Government of India has reviewed the FDI policy relating to investments by Non. Resident Indians (NRIs), Persons of Indian Origin (PIOs) and Overseas Citizens of India (OCIs). It has been decided to amend the definition of Non Resident Indian as contained in the FDI policy, and also to provide that for the purposes of FDI policy, investment by  NRIs under Schedule 4 of FEMA (Transfer or Issue of Security by Persons Resident Outside India) Regulations will be deemed to be domestic investment at par with the investment made by residents.

3.0   Accordingly, the following amendments are made in the ’Consolidated FDI Policy Circular of 2015′, effective from May 12, 2015:

(i) Para 2.1.27 is amended to read as below:

‘Non-Resident Indian’ (NRI) means an individual resident outside India who is a citizen of India or is an ‘Overseas Citizen of India’ cardholder within the meaning of section 7 (A) of the Citizenship Act,  1955. ‘Persons of Indian Origin’ cardholders registered as such under Notification No.  26011/4/98 F.I, dated  19.8.2002, issued by the Central Government are deemed to be ‘Overseas Citizen of India’ cardholders.

(ii) Insertion of a new para 3.6.2 (vii), after para 3.6.2 (vi) of the Consolidated FDI Policy  Circular of 2015:

Investment by NRIs under Schedule 4 of FEMA (Transfer or Issue of Security by Persons Resident Outside India) Regulations  will  be deemed to be domestic investment at par with the investment made by residents.

5.2.4  The   FIPB  Secretariat   in   Department  of  Economic  Affairs  will   process  the recommendations of FIPB to obtain the approval of Minister of Finance and CCEA.

4.0  The above decision will take immediate from 18.06.2015.

(Atul Chaturvedi)

Joint Secretary to the Government of India


D/o IPP File No.: No. 5/5/2015-FC-I dated: 3rd June, 2015

Finance Minister Arun Jaitley pitches for greater use of plastic money and payment gateways : 03-06-2015


NEW DELHI: Finance Minister Arun Jaitley made a case for greater use of plastic money in the country, only days after the government rolled out currency notes made of indigenously developed paper and ink.

“The developed world has moved substantially to plastic currency and payment gateways. I think there is need for India and our determination is there to gradually take steps to move in that direction,” he said on Tuesday at a conference on ‘Make in India – Indigenisation of  Currency.’ Jaitley said the country needs to get rid of “obsolete methodologies” and catch up with technology to promote industrialisation and create jobs.

Plastic currency refers to the use of credit and debit cards, which helps to reduce reliance on paper currency notes. Jaitley said the development of paper manufacturing facilities at Hoshangabad and Mysore would help in printing currency notes on domestically produced paper and promote the government’s ‘Make in India’ initiative, aimed at making the country a hub for manufacturing goods for the global market.

Jaitley last week inaugurated the New Bank Note Paper Line with an annual capacity of 6,000 tonnes at the Security Paper Mill (SPM) at Hoshangabad. The minister said that industry must now focus on producing quality products at competitive prices for the global market. “It is extremely important that you make quality products cheaper…You don’t only cater to our own consumers. You should also cater to consumers in other countries,” Jaitley said, pointing out that large economies such as China benefited by focusing on core competencies and lowcost manufacturing.

“Time is running against us and therefore we cannot merely be satisfied with a slow incremental growth in manufacturing,” Jaitley said, adding that there was a need to shift labour from agriculture sector to manufacturing.

PM Narendra Modi had in April made a case for using Indian paper and ink to print currency notes as part of the ‘Make in India’ campaign. Minister of state of finance Jayant Sinha felt that India’s manufacturing abilities should meet domestic and global needs. “To meet global needs, innovation is also required. We have to continuously improve the security features of the bank notes to stay a step ahead of counterfeiters. We have to match in the cost and security features,” he added.

Source : The Financial Express

No. 184/3/2015-ST Dated: 3-6-2015


Clarification on rate of service tax on restaurant service – Dated 3-6-2015 – Service Tax

Circular No. 184/3/2015-ST

Dated the 3rd June, 2015

F. No. 334 / 5 /2015-TRU (Pt.)

Government of India

Ministry of Finance

Department of Revenue

(Tax Research Unit)

Dated the 3rd June, 2015.

To

Chief Commissioner of Customs and Central Excise (All)

Chief Commissioner of Central Excise & Service Tax (All)

Director General of Service Tax

Director General of Central Excise Intelligence

Director General of Audit,

Principal Commissioner/ Commissioner of Customs and Central Excise (All)

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

Principal Commissioner/Commissioner of Service Tax (All)

Madam/Sir,

Subject: Clarification on rate of service tax on restaurant service – regarding.

The Service Tax rate has been increased to 14% with effect from 1st  June, 2015. Certain doubts have been raised in regard to abatement on value of services provided in relation to serving of food or beverages by a restaurant, eating joint or a mess, having the facility of air-conditioning or central air-heating in any part of the establishment, at any time during the year.

2. Matter has been examined. Valuation of services provided in relation to serving of food or beverages by a restaurant, eating joint or a mess having the facility of air-conditioning or central air-heating in any part of the establishment, is determined as provided in rule 2C of the Service Tax (Determination of Value) Rules, 2006. In the said rule, service portion in an activity wherein goods, being food or any other article of human consumption or any drink (whether or not intoxicating) is supplied in any manner as a part of the activity, at a restaurant has been specified as 40 percentage of the total amount charged for such supply. In Budget, 2015, no change has been made in abatement and the rate of service tax on the abated value has been increased to 14% with effect from 1st June, 2015. Therefore, effective service tax rate would be 5.6% (14% of 40%) of the total amount charged.

Hence, with the increase in the applicable rate of service tax from 12.36% (including education cesses) to 14%, the effective rate on such establishments has increased from 4.9% to 5.6% of the total amount charged.

3. It is further clarified that exemption from service tax still continues to services provided in relation to serving of food or beverages by a restaurant, eating joint or a mess, other than those having the facility of air-conditioning or central air-heating in any part of the establishment, at any time during the year.

4. All concerned are requested to acknowledge the receipt of this circular.

5. Trade Notice/ Public Notice to be issued. Wide publicity through local news media including vernacular press may be given. Hindi version shall follow.

Yours faithfully,

(Akshay Joshi)

Under Secretary to Government of India

No. Press Note No. 7 (2015 Series) Dated: 3-6-2015


Review of Foreign Direct Investment (FDI) Policy on Investments by Non Resident Indians (NRIs), Persons of Indian Origin (PIOs) and Overseas Citizens of India (OCIs) – FDI GUIDELINES – Dated 3-6-2015 – FEMA

Government of India

Ministry of Commerce & Industry

Department of Industrial Policy & Promotion

Press Note No. 7 (2015 Series)

Subject: Review of Foreign Direct Investment (FDI) Policy on Investments by Non Resident Indians (NRIs), Persons of Indian Origin (PIOs) and Overseas Citizens of India (OCIs)

1.0   Present Position:

1.1   Paragraph 2.1.27 of ‘Consolidated FDI Policy Circular of 2015′, effective from May 12, 2015, relating to the definition of Non Resident Indian (NRI), presently reads as below:

‘Non-Resident Indian’ (NRI) means an individual resident outside India who is a  citizen of India or is a person of Indian origin.

2.0   Revised Position:

2.1   The Government of India has reviewed the FDI policy relating to investments by Non. Resident Indians (NRIs), Persons of Indian Origin (PIOs) and Overseas Citizens of India (OCIs). It has been decided to amend the definition of Non Resident Indian as contained in the FDI policy, and also to provide that for the purposes of FDI policy, investment by  NRIs under Schedule 4 of FEMA (Transfer or Issue of Security by Persons Resident Outside India) Regulations will be deemed to be domestic investment at par with the investment made by residents.

3.0   Accordingly, the following amendments are made in the ’Consolidated FDI Policy Circular of 2015′, effective from May 12, 2015:

(i) Para 2.1.27 is amended to read as below:

‘Non-Resident Indian’ (NRI) means an individual resident outside India who is a citizen of India or is an ‘Overseas Citizen of India’ cardholder within the meaning of section 7 (A) of the Citizenship Act,  1955. ‘Persons of Indian Origin’ cardholders registered as such under Notification No.  26011/4/98 F.I, dated  19.8.2002, issued by the Central Government are deemed to be ‘Overseas Citizen of India’ cardholders.

(ii) Insertion of a new para 3.6.2 (vii), after para 3.6.2 (vi) of the Consolidated FDI Policy  Circular of 2015:

Investment by NRIs under Schedule 4 of FEMA (Transfer or Issue of Security by Persons Resident Outside India) Regulations  will  be deemed to be domestic investment at par with the investment made by residents.

5.2.4  The   FIPB  Secretariat   in   Department  of  Economic  Affairs  will   process  the recommendations of FIPB to obtain the approval of Minister of Finance and CCEA.

4.0  The above decision will take immediate from 18.06.2015.

(Atul Chaturvedi)

Joint Secretary to the Government of India


D/o IPP File No.: No. 5/5/2015-FC-I dated: 3rd June, 2015

No. Press Note No. 6 (2015 Series) Dated: 3-6-2015


Review of the investment limit for cases requiring prior approval of the Foreign Investment Promotion Board (FIPB)/ Cabinet Committee on Economic Affairs (CCEA) – FDI GUIDELINES – Dated 3-6-2015 – FEMA

Government of India

Ministry of Commerce & Industry

Department of Industrial Policy & Promotion

Press Note No. 6 (2015 Series)

Subject: Review of the investment limit for cases requiring prior approval of the Foreign Investment Promotion Board (FIPB)/ Cabinet Committee on Economic Affairs (CCEA)               

1.0  Present Position:

1.1  Paragraph 5.2 of ‘Consolidated FDI Policy Circular of 2015′, effective from May 12, 2015, relating to levels of approvals for cases under Government route, presently reads as below:

5.2  Levels of Approvals for Cases under Government Route

5.2.1  The Minister of Finance who is in-charge of FIPB would consider the recommendations of FIPB on proposals with total foreign equity inflow of and below ₹ 2000 crore.

5.2.2  The recommendations of FIPB on proposals with total foreign equity inflow of more than ₹ 2000 crore would be placed for consideration of Cabinet Committee on Economic Affairs (CCEA).

5.2.3  The CCEA would also consider the proposals which may be referred to it by the FIPB/the Minister of Finance (in-charge of FIPB).

2.0  Revised Position:

2.1  The Government of India has reviewed the position in this regard and decided to revise the investment limit for cases requiring prior approval of the Foreign Investment Promotion Board (FIPB)/ Cabinet Committee on Economic Affairs (CCEA).

3.0  Amendment to paragraph 5.2:

3.1  Accordingly, Para 5.2 of ‘Consolidated FDI Policy Circular of 2015′, effective from May 12, 2015, is amended, as below:

5.2  Levels of Approvals for Cases under Government Route

5.2.1  The Minister of Finance who is in-charge of FIPB would consider the recommendations of FIPB on proposals with total foreign equity inflow up to ₹ 3000 crore.

5.2.2  The recommendations of FIPB on proposals with total foreign equity inflow of more than ₹ 3000 crore would be placed for consideration of Cabinet Committee on Economic Affairs (CCEA).

5.2.3  The CCEA would also consider the proposals which may be referred to it by the FIPB/the Minister of Finance (in-charge of FIPB).

5.2.4  The   FIPB   Secretariat  in   Department  of  Economic  Affairs  will  process  the recommendations of FIPB to obtain the approval of Minister of Finance and CCEA.

4.0   The above decision will take immediate from 18.06.2015.

(Atul Chaturvedi)

Joint Secretary to the Government of India


D/o IPP File No.: No. 5/5/2015-FC-I dated: 3rd June, 2015

Govt announces simpler forms for I-T returns : 01-06-2015


In a relief to income tax (I-T) return filers the finance ministry on Sunday said it had decided to simplify these. However, while reducing the number of pages, the government has retained clauses meant to curb tax evasion.

With the new e-filing return forms expected only by the third week of June, the government also extended the last date for filing of returns to August-end from the usual July-end.

The ministry had come under criticism over the earlier forms, issued in April. These were termed complex and onerous by tax payers and experts. The 14-page form sought extensive details on foreign trips, bank balances and capital gains. The minister had later said these would be withdrawn and replaced with a simpler format. The new form has three pages.

Taxpayers won’t have to disclose details of all foreign travel and expenses incurred but will have to give their passport numbers in the revised I-T return form. They won’t have to mention the balances in their bank accounts but will have to disclose all their accounts.

“All these steps are heartening. However, to understand the fine print, we would have to wait for the final forms to be notified. The e-filing version is expected in three weeks,” said Tapti Ghose, partner, Deloitte Haskin and Sells.

The ministry said the new form, named ITR 2A, is for individuals without capital gains, income from business/profession or foreign assets/foreign income.

The disclosures on bank accounts have also been relaxed. An I-T payer will not have to disclose details about accounts not operational for the past three years. Payers will have to give details about their bank accounts, including the IFS code and the account number for all the current and savings account held by them at any time during the previous year.

The new return forms also make life easier for expatriates and non-resident Indians (NRIs), who in the earlier forms would have been subjected to reporting of their foreign assets.

“An individual who is not an Indian citizen and is in India on a business, employment or student visa (expatriate), would not mandatorily be required to report the foreign assets acquired by him during the previous years in which he was non-resident, if no income is derived from such assets during the relevant previous year,” the government said.

However, disclosures of foreign assets have been retained as a precursor to the Undisclosed Foreign Assets and Income Bill, and to help check tax evasion.

Source : Business Standard

Service tax to rise to 14% from tomorrow; mobiles, hotels to be costlier : 01-06-2015


NEW DELHI: People will have to shell out more from tomorrow while using mobiles, eating out and travelling as the service tax rate goes up to 14 per cent.

Finance Minister Arun Jaitley in his Budget had proposed to raise service tax from 12.36 per cent (including education cess) to 14 per cent. The proposal takes effect from June 1.

The tax is levied on all services, expect a small negative list.

Some of the key services that will attract higher tax and hence become become costlier are: railways, airlines, banking, insurance, advertising, architecture, construction, credit cards, event management and tour operators.

Mobile operators and credit card companies have already started sending messages to subscribers conveying the increase in service tax rate which will have a bearing on the bills.

According to railway ministry officials, fares for First Class and AC classes in passenger trains, besides freight charges, will go up by 0.5 percent from June 1.

“Currently, 3.7 per cent service tax is levied on train fares for AC Class, First Class and freight. This will go up to 4.2 per cent from June which means the rise is only 0.5 per cent,” the official said. Currently, there is abatement of 70 per cent on passenger services.

Jaitley had proposed to raise the service tax rate to 14 per cent to facilitate a smooth transition to the Goods and Services Tax (GST) regime, which the government wants to roll out from April 2016.

Once implemented, GST will subsume service tax, excise and other local levies.

“To facilitate a smooth transition to levy of tax on services by both the Centre and the States, it is proposed to increase the present rate of service tax plus education cesses from 12.36 per cent to a consolidated rate of 14 per cent,” Jaitley had said in Budget speech.

Education cess, which is levied on service tax, will be subsumed in the service tax rate with effect from June 1.

Although the Budget also proposed a 2 per cent Swachh Bharat cess on selected services, the government is yet to come out with a notification in this regard.

Source : The Economic Times

No. F.NO.HRD/CM/158/1/2014-05/1244 Dated: 1-6-2015


REDESIGNATION OF SPECIFIED COMMISSIONER (SAG) LEVEL OFFICERS POSTED IN VARIOUS DIRECTORATES OF CBDT – Order-Instruction – Dated 1-6-2015 – Income Tax

OFFICE ORDER

DATED 1-6-2015

It has been decided to redesignate all Commissioner (SAG) level officers posted in the attached Directorates of CBDT as under.

S.No.

Old designation of officers of attached Directorates of CBDT

New designation of officers of attached Directorates of CBDT

Rank/scale of pay

1

Director of Income Tax (Public Relations, Printing & Publications & Official Language) Additional Director General, (Public Relations, Printing & Publications & Official Language), CBDT Commissioner/SAG (PB-4) Grade Pay of ₹ 10,000/-

2

Director of Income Tax (Recovery) Additional Director General (Recovery), CBDT Commissioner/SAG (PB-4) Grade Pay of ₹ 10,000/-

3

Director of Income Tax (Examinations) Additional Director General (Examinations), CBDT Commissioner/SAG (PB-4) Grade Pay of ₹ 10,000/-

4

Director of Income Tax (Audit) Additional Director General (Audit), CBDT Commissioner/SAG (PB-4) Grade Pay of ₹ 10,000/-

5

Director of Income Tax (Tax Deduction at Source) Additional Director General (TDS), CBDT Commissioner/SAG (PB-4) Grade Pay of ₹ 10,000/-

6

Director of Income Tax, (Systems)-I Additional Director General (Systems)-I, CBDT Commissioner/SAG (PB-4) Grade Pay of ₹ 10,000/-

7

Director of Income Tax (Systems)-II Additional Director General (Systems)-II, CBDT Commissioner/SAG (PB-4) Grade Pay of ₹ 10,000/-

8

Director of Income Tax (Systems)-III Additional Director General (Systems)-II, CBDT Commissioner/SAG (PB-4) Grade Pay of ₹ 10,000/-

9

Director of Income Tax (Systems)-IV Additional Director General (Systems)-IV, CBDT Commissioner/SAG (PB-4) Grade Pay of ₹ 10,000/-

10

Director of Income Tax (Systems)-V Additional Director General (Systems)-V, CBDT Commissioner/SAG (PB-4) Grade Pay of ₹ 10,000/-

11

Director of Income Tax (Infrastructure)-1 Additional Director General (Infrastructure)-1, CBDT Commissioner/SAG (PB-4) Grade Pay of ₹ 10,000/-

12

Director of Income Tax (Infrastructure)-2 Additional Director General Infrastructure)-2, CBDT Commissioner/SAG (PB-4) Grade Pay of ₹ 10,000/-

13

Director of Income Tax (Expenditure Budget) Additional Director General (Expenditure Budget), CBDT Commissioner/SAG (PB-4) Grade Pay of ₹ 10,000/-

14

Director of Income Tax, (Human Resource Development)-I Additional Director General (Human Resource Development)-I, CBDT Commissioner/SAG (PB-4) Grade Pay of ₹ 10,000/-

15

Director of Income Tax (Human Resource Development-II Additional Director General (Human Resource Development)-II, CBDT Commissioner/SAG (PB-4) Grade Pay of ₹ 10,000/-

16

Director of Income Tax (Human Resource Development)-III Additional Director General (Human Resource Development)-III, CBDT Commissioner/SAG (PB-4) Grade Pay of ₹ 10,000/-

17

Director of Income Tax (Organisation & Management Services) Additional Director General (Organisation & Management Services), CBDT Commissioner/SAG (PB-4) Grade Pay of ₹ 10,000/-

18

Director of Income Tax (Legal & Research)-I Additional Director General (Legal & Research)-I, CBDT Commissioner/SAG (PB-4) Grade Pay of ₹ 10,000/-

19

Director of Income Tax (Legal & Research)-II Additional Director General (Legal & Research)-II, CBDT Commissioner/SAG (PB-4) Grade Pay of ₹ 10,000/-

20

Director of Income Tax (Vigilance)-I Additional Director General (Vigilance)-I, CBDT Commissioner/SAG (PB-4) Grade Pay of ₹ 10,000/-

21

Director of Income Tax (Vigilance)-II Additional Director General (Vigilance)-II, CBDT Commissioner/SAG (PB-4) Grade Pay of ₹ 10,000/-

22

Director of Income Tax (Vigilance)(North) NZ, Additional Director General (Vigilance)(North) NZ, CBDT Commissioner/SAG (PB-4) Grade Pay of ₹ 10,000/-

23

Director of Income Tax (Vigilance)(West) Additional Director General Vigilance)(West), CBDT Commissioner/SAG (PB-4) Grade Pay of ₹ 10,000/-

24

Director of Income Tax (Vigilance)(South) Additional Director General (Vigilance)(South), CBDT Commissioner/SAG (PB-4) Grade Pay of ₹ 10,000/-

25

Director of Income Tax (Vigilance)(East) Additional Director General (Vigilance)(East),CBDT Commissioner/SAG (PB-4) Grade Pay of ₹ 10,000/-

This order is issued with the approval of CBDT.

[F.NO.HRD/CM/158/1/2014-05/1244]

No. 106 Dated: 1-6-2015


Liberalised Remittance Scheme (LRS) for resident individuals – increase in the limit from USD 125,000 to USD 250,000 and rationalisation of current account transactions – Remittance facilities for persons other than individuals – Circular – Dated 1-6-2015 – FEMA

RBI/2013-14/620

A.P. (DIR Series) Circular No. 106

A.P. (FL Series) Circular No.

June 1, 2015

To,

All banks Authorised to Deal in Foreign Exchange

All Authorised Money Changers (AMCs) / Full-Fledged Money Changers (FFMCs)

Madam/Sir,

I. Liberalised Remittance Scheme (LRS) for resident individuals- increase in the limit from USD 125,000 to USD 250,000 and rationalisation of current account transactions

II. Remittance facilities for persons other than individuals

Attention of Authorised Persons is invited to the A.P.(DIR Series) Circular No. 138 dated June 3, 2014 regarding the Liberalised Remittance Scheme (LRS) for resident individuals and the existing guidelines issued under the Foreign Exchange Management (Current Account Transactions) Rules, 2000. On a review, it has been decided to make the following changes for further liberalization and rationalization on the existing guidelines.

Limit and Facilities under LRS

2. AD banks may now allow remittances by a resident individual up to USD 250,000 per financial year for any permitted current or capital account transaction or a combination of both. If an individual has already remitted any amount under the LRS, then the applicable limit for such an individual would be reduced from the present limit of USD 250,000 for the financial year by the amount already remitted. The permissible capital account transactions by an individual under LRS are:

i) opening of foreign currency account abroad with a bank;

ii) purchase of property abroad;

iii) making investments abroad;

iv) setting up Wholly owned subsidiaries and Joint Ventures abroad;

v) extending loans including loans in Indian Rupees to Non-resident Indians (NRIs) who are relatives as defined in Companies Act, 2013.

3. Further, to facilitate ease of transactions, all the facilities (including private/business visits) for release of exchange/remittances for current account transactions available to resident individuals under Para 1 of Schedule III to the Foreign Exchange Management (Current Account Transactions) Rules, 2000, as amended from time to time, shall now be subsumed under the overall limit of USD 250,000. However, for item numbers as mentioned at (iv)[ emigration], (vii)[expenses in connection with medical treatment abroad] and (viii)[studies abroad] in Para 1 of Schedule III provided at Annex 1, individuals may avail of exchange facility for an amount in excess of the overall limit prescribed under the LRS, if it is so required by a country of emigration, medical institute offering treatment or the university respectively. Gift in Indian Rupees by resident individuals to NRI relatives as defined in the Companies Act, 2013 shall also be subsumed under the LRS limit.

The Notification dated May 26, 2015 containing the revised Schedule III is given in Annex 1.

4. As hitherto, the Scheme cannot be made use for making remittances for any prohibited or illegal activities such as margin trading, lottery, etc.

5. Remittance Procedure

Requirements to be complied with by the remitter

5.1 The resident individual seeking to make the remittances should furnish an application cum declaration in the format indicated in Annex 2 to the AD/ full fledged money changer (FFMC) concerned regarding the purpose of the remittances and declaration to the effect that the funds belong to the remitter and will not be used for the prohibited purposes referred to in Para 4 above. Resident individuals can also purchase foreign exchange from a full fledged money changer (FFMC) for private/business visits. Foreign exchange thus purchased from an FFMC should also be reckoned within the overall LRS limit USD 250,000 and declared accordingly in the application-cum-declaration form submitted to the AD bank.

Requirements to be complied with by the Authorised Persons

5.2 While allowing the facility to resident individuals, Authorised Persons, including AD Category II and FFMCs, are required to ensure that the ‘;Know Your Customer’; guidelines and the Anti-Money Laundering Rules in force have been complied with while allowing the transactions.

Requirements to be complied with by the Authorised Dealers

5.3 It is clarified that banks should not extend any kind of funded and non-funded facilities to resident individuals to facilitate capital account remittances under the Scheme.

5.4 The applicants should have maintained the bank account with the bank for a minimum period of one year prior to the remittance for capital account transactions. If the applicant seeking to make the remittances is a new customer of the bank, Authorised Dealers should carry out due diligence on the operations and maintenance of the account.

5.5 No part of the foreign exchange of USD 250,000 shall be used for remittance directly or indirectly to countries notified as non-cooperative countries and territories by the Financial Action Task Force (FATF) from time to time and communicated by the Reserve Bank of India to all concerned.

6. Reporting of the transactions

Authorised Dealers may arrange to furnish on a monthly basis information on the number of applicants and total amount remitted under LRS to the Chief General Manager, External Payment Division, Foreign Exchange Department, Reserve Bank of India, Central Office, Mumbai – 400001 through Online Return Filing System (ORFS) only.

7. Facilities for persons other than individuals

7.1 As provided in Para 2 of Schedule III provided in Annex 1, persons other than individuals can make remittances for

i.Donations for educational institutions;

ii.Commissions to agents abroad for sale of residential flats/commercial plots in India;

iii.Remittances for consultancy services and

iv.Remittances for reimbursement of pre-incorporation expenses

within the limit and conditions laid down therein.

7.2 While making the above remittances, such persons shall submit to the concerned AD branch a declaration to the effect that the limits and conditions relating to the remittances have been complied with.

8. All other terms and conditions for making overseas remittances shall remain unchanged.

9. Necessary amendments to the Foreign Exchange Management (Current Account Transactions) Rules, 2000 and the Foreign Exchange Management (Permissible Capital Account Transactions) Regulations, 2000, (Notification No. FEMA 1/2000-RB dated May 3, 2000) have been notified videGSR No. 426 (E) dated May 26, 2015 and GSR No.425 (E) dated May 26, 2015 respectively.

10. Authorised Persons may bring the contents of this circular to the notice of their constituents and customers concerned.

11. The directions contained in this circular have been issued under Section 10(4) and 11(1) of theForeign Exchange Management Act, 1992 (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


Annex-1


Annex-2

Application cum Declaration for purchase of foreign exchange under the Liberalised Remittance Scheme of USD 250,000

(To be completed by the applicant)

I. Details of the applicant
a. Name …………………………..
b. Address…………………………
c. Account No……………………..
d. PAN No………………………….

II. Details of the foreign exchange required
1. Amount (Specify currency)………………………………
2. Purpose ………………………………………………….

III. Sources of funds: ………………………………….

IV. Nature of instrument 
Draft………………………..
Direct remittance…………
Others

V. Details of the Beneficiary
1. Name ……………………..
2. Address ……………………
3. Country ……………………
4*. Name and address of the bank……………………….
5*. Account No……………………………………………..
(* Required only when the remittance is to be directly credited to the bank account of the beneficiary)
This is to authorize you to debit my account and effect the foreign exchange remittance/issue a draft as detailed above. (strike out whichever is not applicable).

VI. Details of the remittances made/transactions effected under the Scheme in the current financial year (April- March) ..…
Sl. No…….Date :………Amount :…………. Name and address of AD branch/FFMC through which the transaction has been effected.

Declaration
I, ………………. …………(Name), hereby declare that the total amount of foreign exchange purchased from or remitted through all sources in India during the financial year as per item No…….of the Application, is within the overall limit of USD 250,000/-(US Dollar Two hundred and Fifty Thousand only), which is the limit prescribed by the Reserve Bank of India for the purpose and certify that the sources of funds for making the said remittance belong to me and the foreign exchange will not be used for prohibited purposes.

Signature of the applicant

(Name)

Certificate by the Authorised Dealer

This is to certify that the remittance is not being made by/ to ineligible entities and that the remittance is in conformity with the instructions issued by the Reserve Bank from time to time under the Scheme.

Name and designation of the authorised official:
Stamp and seal

Signature

Date:
Place:

 

2. Last Date for KVAT Quarterly Reconciliation Return for transaction under CST Act within 3 months from the end of each quarter-Omitted vide Notification No. F.3(27)/Fin.(Rev-I)/2013-14/dsVI/291, dated 05/03/2014


Title: 2. Last Date for KVAT Quarterly Reconciliation Return for transaction under CST Act within 3 months from the end of each quarter-Omitted vide Notification No. F.3(27)/Fin.(Rev-I)/2013-14/dsVI/291, dated 05/03/2014
Date: 2015-06-30

Last Date for Income Tax Particulars under the third proviso to section 194C(3)(i) to be furnished by a contractor responsible for paying any sum to such sub-contractor shall be in Form No. 15J. – A copy shall be furnished before Commissioner of Income Tax for the Financial Year ending March 31.


Title: Last Date for Income Tax Particulars under the third proviso to section 194C(3)(i) to be furnished by a contractor responsible for paying any sum to such sub-contractor shall be in Form No. 15J. – A copy shall be furnished before Commissioner of Income Tax for the Financial Year ending March 31.
Date: 2015-06-30

1. Last Date for PF ESI Monthly Consolidated Statement of dues and remittance under EPF Scheme, 1952, EPS 1995 and Employees’ Deposit Linked Insurance Scheme, 1976 of the previous month to which the dues relate.


Title: 1. Last Date for PF ESI Monthly Consolidated Statement of dues and remittance under EPF Scheme, 1952, EPS 1995 and Employees’ Deposit Linked Insurance Scheme, 1976 of the previous month to which the dues relate.
Date: 2015-06-25

Last Date for PF ESI Monthly Payment of ESI Contribution for the previous month (plus grace period of 5 days)


Title: Last Date for PF ESI Monthly Payment of ESI Contribution for the previous month (plus grace period of 5 days)
Date: 2015-06-16

6. Last Date for PF ESI Monthly Payment of Provident Fund Contribution for the previous month (plus grace period of 5 days)


Title: 6. Last Date for PF ESI Monthly Payment of Provident Fund Contribution for the previous month (plus grace period of 5 days)
Date: 2015-06-15

5. Last Date for PF ESI Exempted extablishment EPS/EDLIS Monthly Return of Members Leaving Service During the previous Month


Title: 5. Last Date for PF ESI Exempted extablishment EPS/EDLIS Monthly Return of Members Leaving Service During the previous Month
Date: 2015-06-15

4. Last Date for PF ESI Monthly EPF Return of member leaving/joining service during the previous month


Title: 4. Last Date for PF ESI Monthly EPF Return of member leaving/joining service during the previous month
Date: 2015-06-15

3. Due Date for PF ESI Monthly EPF Return of Employees qualifying for membership to the EPF for the first time during previous month.


Title: 3. Due Date for PF ESI Monthly EPF Return of Employees qualifying for membership to the EPF for the first time during previous month.
Date: 2015-06-15

2. Last Date for Income Tax Advance Income Tax in case of company


Title: 2. Last Date for Income Tax Advance Income Tax in case of company
Date: 2015-06-15

1. Last Date for KVAT Deposit of tax deducted at source during the previous month.


Title: 1. Last Date for KVAT Deposit of tax deducted at source during the previous month.
Date: 2015-06-15

8. Last Date for Income Tax Payment on transfer of certain immovable property other than agricultural land


Title: 8. Last Date for Income Tax Payment on transfer of certain immovable property other than agricultural land
Date: 2015-06-05

7. Income Tax Submission of copy of declaration forms received from deductee by the deductor for non deduction of TDS under section 197A before the Chief Commissioner or Commissione


Title: 7. Income Tax Submission of copy of declaration forms received from deductee by the deductor for non deduction of TDS under section 197A before the Chief Commissioner or Commissione
Date: 2015-06-05

6. Income Tax Last date of submission of declaration i.e., for no TCS u/s 206C(1A) obtained from manufacturer to the Commissioner/Chief Commissioner of Income Tax as the case may be


Title: 6. Income Tax Last date of submission of declaration i.e., for no TCS u/s 206C(1A) obtained from manufacturer to the Commissioner/Chief Commissioner of Income Tax as the case may be
Date: 2015-06-05

5. Last Date for KVAT Issue of TDS certificates for the tax deducted at source – 7 days from the date of deposit of TDS


Title: 5. Last Date for KVAT Issue of TDS certificates for the tax deducted at source – 7 days from the date of deposit of TDS
Date: 2015-06-05

4. Last date for income Tax Monthly payment of TCS u/s 206C (other than government assessee)


Title: 4. Last date for income Tax Monthly payment of TCS u/s 206C (other than government assessee)
Date: 2015-06-05

3. Last Date for Monthly payment of TDS on all types of payments (Except in the case where amounted is credited in the Month of March 31)


Title: 3. Last Date for Monthly payment of TDS on all types of payments (Except in the case where amounted is credited in the Month of March 31)
Date: 2015-06-05

2. Due Date for Monthly payment of Central Excise Duties for the previous month For non SSI Units (electronic payment through internet banking mandatory w.e.f. 01-10-2014)


Title: 2. Due Date for Monthly payment of Central Excise Duties for the previous month For non SSI Units (electronic payment through internet banking mandatory w.e.f. 01-10-2014)
Date: 2015-06-06

1. Due Date for 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: 1. Due Date for 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: 2015-06-06

Rajya Sabha panel wants clarity on roll-out of 1% tax over GST : 30-05-2015


A Rajya Sabha committee examining the constitution amendment Bill for a goods and services tax (GST) on Friday asked Revenue Secretary Shaktikanta Das to inform the members by early next month on how the one per cent tax above GST, to help the manufacturing states, will be imposed.

The committee also asked the revenue secretary for greater clarity on the compensation to manufacturing states and the fate of consuming states.

An additional one per cent tax is proposed in the Bill to help manufacturing states. Since GST is a destination-based tax system, manufacturing states such as Gujarat and Tamil Nadu have reservations over it. However, this tax to help GST might have a cascading effect since there is no provision of input credit. Recently, Chief Economic Advisor Arvind Subramanian criticised the provision, suggesting the government reconsider it.

ADVERTISING

At the second meeting of the committee on Friday, the urban development ministry and the panchayati raj ministry made presentations to the committee on the benefits of imposition of a GST regime. The urban development ministry, for instance, emphasized that GST would help boost the coffers of towns and municipalities.

A representative from the Brihanmumbai Municipal Corporation also made a presentation before the committee. The civic body earns as much as Rs 15,000 crore through octroi and local body tax; this would be subsumed once GST is imposed. The revenue secretary made it clear that it was the domain of the states to address this issue.

Incidentally, this being a constitutional amendment Bill, after it is cleared by Parliament it will need to be ratified by at least 50 per cent of all state assemblies.

Meanwhile, to ensure that the views of states, the actual “stakeholders”, are taken into account, the committee will be travelling to Chennai, Kolkata and Mumbai in June.

At the two-hour long meeting on Friday, the finance ministry assured the committee that the federal structure of states will be respected and there won’t be any encroachment on state jurisdiction.

States like Tamil Nadu, a manufacturing state, have opposed the imposition of GST as it would impact the revenues of the state and it affects states’ fiscal autonomy. Tamil Nadu, for instance, wants its concerns to be resolved by the empowered committee of state finance ministers before the Bill is passed.

Source : PTI

Govt confirms fiscal deficit for 2014-15 was 4% of GDP : 30-05-2015


The central government, it was officially confirmed on Friday, managed to rein in its fiscal deficit for 2014-15 at four per cent of Gross Domestic Product (GDP), against the 4.1 per cent pegged in the Budget Estimate (BE) and its Revised Estimate (RE).

Tentative indications in this regard had been issued recently but were awaiting confirmation.

However, in the first month, April, of the new financial year, 2015-16, the deficit was Rs 1.27 lakh crore or 23 per cent of the full-year BE of Rs 5.56 lakh crore, due to front-loading of spending. This was higher than the 21.4 per cent of the BE in April 2014.

In absolute terms, the fiscal deficit was checked at Rs 501,880 crore in 2014-15 against the RE of Rs 512,628 crore and the BE of Rs 531,177 crore.

The deficit is estimated at 3.9 per cent of GDP for 2015-16.

April 2015 had no tax receipts; rather, refunds amounted to Rs 2,813 crore. Non-tax revenue was Rs 28,126 crore or 12.7 per cent of the full-year target of Rs 2.22 lakh crore. Total receipts for the month were Rs 27,094 crore or 2.2 per cent of the full-year BE of Rs 12.22 lakh crore, compared with 0.6 per cent for April 2014.

Non-plan expenditure for the month was Rs 1.19 lakh crore or 9.1 per cent of the full-year target of Rs 13.12 lakh crore. For April 2014, it was eight per cent of the full-year target. Plan spending for April 2015 was Rs 35,160 crore, about 7.6 per cent of the BE of Rs 4.65 lakh crore, compared with four per cent for the year-ago period.

As a norm, successive governments front-load spending for the financial year, while most revenues come during the second half.

Source : Business Standard

Notification No. : File No. 1/16/2013-CL-V Dated: 29-5-2015


Companies (Registration Offices and Fees) Second Amendment Rules, 2015 – File No. 1/16/2013-CL-V – Dated 29-5-2015 – 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 29th May, 2015

G.S. R.    - In exercise of the powers conferred by section 399 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 (Registration Offices and Fees) Rules, 2014, namely:-

1. (1) These rules may be called the Companies (Registration Offices and Fees) Second Amendment Rules, 2015.

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

2. In the Companies (Registration Offices and Fees) Rules, 2014, in rule 15, the following proviso shall be inserted:

“Provided that no person shall be entitled under section 399 to inspect or obtain copies of resolutions referred to in clause (g) of sub-section (3) of  section 117 of the Act.”.

[File No. 1/16/2013-CL-V]

(Amardeep Singh Bhatia)

Joint 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 number. G.S.R. 268(E), dated the 31st March, 2014 and was last amended by notification vide number G.S.R 122(E), dated the 24th February, 2015.

Notification No. : File No. 1/13/2013-CL-V Dated: 29-5-2015


Companies (Incorporation) Second Amendment Rules, 2015. – File No. 1/13/2013-CL-V – Dated 29-5-2015 – 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 29th May, 2015

G.S.R. _ (E). - In exercise of the powers conferred by section 7 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 (Incorporation) Rules, 2014, namely:-

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

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

2.  In the Companies (Incorporation) Rules, 2014,-

(a) in rule  12, the following proviso shall be inserted, namely:-

“Provided that in case pursuing of any of the objects of a company requires registration or approval from sectoral regulators such as Reserve Bank of India, Securities and Exchange Board, registration or approval, as the case may be, from such regulator shall be obtained by the company before pursuing such objects and a declaration in this behalf shall be submitted at the stage of  incorporation of the company.”;

(b) rule 24 shall be omitted;

(c) in the Annexure, -

(File No. 1/13/2013-CL-V)

(Amardeep Singh Bhatia)

Joint 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 number GSR 250 (E) dated the 31st March, 2014 and subsequently amended vide number G.S.R.  ….dated the 1st May, 2015.

 

Notification No. : File No. 1/10/2013-CL-V Dated: 29-5-2015


Companies (Registration of Charges)Amendment Rules, 2015 – File No. 1/10/2013-CL-V – Dated 29-5-2015 – 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 29th May, 2015

G.S.R. (E). - In exercise of the powers conferred by sections 77, 78 and 79 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 (Registration  of  Charges)  Rules, 2014, namely:-

1.   (1) These rules may be called the Companies  (Registration of Charges)  Amendment Rules, 2015.

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

2.    In the Companies (Registration of Charges) Rules, 2014, in rule 3, in sub-rule (4), in clause (a),for the words “under the seal of the company”, the words “under the seal, if any, of the company” shall be substituted;

[File No. 1/10/2013-CL-V]

 (Amardeep Singh Bhatia)

Joint 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 number. G.S.R. 248(E), dated the 31st March, 2014.

Notification No. : File No. 1/6/2015-CL-V Dated: 29-5-2015


Commencement Notification of Companies (Amendment) Act, 2015 – File No. 1/6/2015-CL-V – Dated 29-5-2015 – Companies Law

[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 29th May, 2015

S.O. _ (E).- In exercise of the powers conferred by sub-section (2) of section 1 of the Companies (Amendment) Act, 2015 (21 of 2015), the Central Government hereby appoints the 29th  May, 2015 as the date on which the provisions of sections 1 to 12 and  15 to 23 of the  said Act shall come into force.

[File No.  1/6/2015-CL-V]

AMARDEEP SINGH BHATIA,

Joint Secretary to the Government of India

Notification No. : File No. 1/4/2013 CL-V Dated: 29-5-2015


Companies (Share Capital and Debentures) Second Amendment Rules, 2015. – File No. 1/4/2013 CL-V – Dated 29-5-2015 – 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 29th May, 2015

G.S.R. (E). - In exercise of the powers conferred by sub-sections (1) and (2) of section 469 of theCompanies Act, 2013 (18 of 2013), the Central Government hereby makes the following rules further to amend the Companies (Share Capital and Debentures) Rules, 2014, namely:-

1.  (1) These rules may be called the Companies (Share Capital and Debentures) Second Amendment Rules, 2015.

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

2. In the Companies  (Share Capital and Debentures) Rules,  2014, in rule  5, in sub-rule (3),-

(i)  for the words “issued under the seal of the company”, the words “issued under the seal, if any, of the company” shall be substituted;

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

“(b) the secretary or any person authorised by the Board for the purpose:

Provided that in case a company does not have a common seal, the share certificate shall be signed by two directors or by a director and the Company Secretary, wherever the company has appointed a Company Secretary:

Provided further that, if the composition of the Board permits of it, at least one of the aforesaid two directors shall be a person other than a managing director or a whole-time director:

Provided also that, in case of a One Person Company, every share certificate shall be issued under the seal, if any, of the company, which shall be affixed in the presence of and signed by one director or a person authorised by the Board of Directors of the company for the purpose and the Company Secretary, or any other person authorised by the Board for the purpose, and in case the One Person Company does not have a common seal, the share certificate shall be signed by the persons in the presence of whom the seal is required to be affixed in this proviso.”.

[File No.  1/4/2013 CL-V]

(Amardeep Singh Bhatia)

Joint 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 number G.S.R. 265(E), dated the 31st March, 2014 and was last amended bynotification vide number G.S.R 210 (E), dated the 18th March, 2015.

Notification No. : F. No. 1/31/2013-CL-V-Part Dated: 29-5-2015


Companies (Declaration and Payment of Dividend) Second Amendment Rules, 2015 – F. No. 1/31/2013-CL-V-Part – Dated 29-5-2015 – 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 29th May, 2015

G.S.R. (E). - In exercise of the powers conferred under sub-section (1) of section 123 read withsection 469 of the Companies Act, 2013 (18 of 2013), the Central Government hereby makes the following rules further to amend the Companies (Declaration and Payment of Dividend) Rules, 2014, namely:-

1.    (1) These rules may be called the Companies (Declaration and Payment of Dividend) Second Amendment Rules, 2015.

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

2.    In the Companies (Declaration and Payment of Dividend) Rules, 2014, in rule  3, sub-rule (5)shall be omitted.

[F. No. 1/31/2013-CL-V-Part]

AMARDEEP SINGH BHATIA

Joint 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 number G.S.R. 241(E), dated the 31st March, 2014 and was subsequently amended by notification number G.S.R. 397(E), dated the 12th June, 2014 and number G.S.R. 121 (E), dated the 24th February, 2015.

Notification No. : 31/2015 Dated: 28-5-2015


Seeks to further amend notification no 12/2012 – Central Excise dated 17/03/2012 – 31/2015 – Dated 28-5-2015 – 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. 31/2015-Central Excise

New Delhi, the 28th May, 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, on 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. 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 Annexure to the said notification, in List 11, in item No. 48, for the letters “STPP”, the letters “TPP” shall be substituted.

[F. No. 354/78/2010-TRU(Pt.-II)]

(Anurag Sehgal)

Under Secretary to the Government of India

Note: The principal notification No. 12/2012-Central Excise, dated the 17th March, 2012, was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 163(E), dated the 17th March, 2012 and last amended vide notification No. 24/2015-Central Excise, dated the 30th April, 2015, published vide number G.S.R. 342(E), dated the 30th April, 2015

No. 105 Dated: 28-5-2015


Deferred Payment Protocols dated April 30, 1981 and December 23, 1985 between Government of India and erstwhile USSR – Circular – Dated 28-5-2015 – FEMA

RBI/2014/15/616

A.P. (DIR Series) Circular No. 105

May 28, 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. 99 dated May 14, 2015 wherein the Rupee value of the Special Currency Basket was indicated as ₹ 88.3042 effective from April 30, 2015.

2. AD Category-I banks are advised that a further revision has taken place on May 05, 2015 and accordingly, the Rupee value of the Special Currency Basket has been fixed at ₹ 77.6331180 with effect from May 06, 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 sections 10(4) and 11(1) of theForeign 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. 104 Dated: 28-5-2015


Exim Bank’s GoI supported Line of Credit of USD 100 million to the Government of Republic of Mali – Circular – Dated 28-5-2015 – FEMA

RBI//2014-15/615

A.P. (DIR Series) Circular No.104

May 28, 2015

To

All Category – I Authorised Dealer Banks

Madam / Sir,

Exim Bank’s GoI supported Line of Credit of USD 100 million  to the Government of Republic of Mali

Export-Import Bank of India (Exim Bank) has entered into an Agreement dated January 11, 2012 with the Government of Republic of Mali, for making available to the latter, a Line of Credit (LOC) of USD 100 million (USD One Hundred million) for financing a power transmission project connecting Bamako and Sikasso via Bougouni in Mali. The goods, machinery, equipment and services including consultancy services from India for export 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 April 17, 2015 and the date of execution of Agreement is January 11, 2012. 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 January 10, 2018 (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 towww.eximbankindia.in

6. The Directions contained in this circular have been issued under sections 10(4) and 11(1) of theForeign 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

FDI may be allowed in sectors with high employment scope : 28-05-2015


Hinting at opening up of more sectors to foreign investment, Prime Minister Narendra Modi on Wednesday said areas with high employment potential and strong local talent would be the focus to woo foreign investment and expressed confidence that reforms measures like the Goods and Services Tax (GST) and land acquisition Bill will be passed in “a matter of time”.

On the land Bill, which the government wants to push early but has now been referred to a parliamentary committee, he said the government would accept any suggestions that benefit “Gaon, Garib, Kisan (village, poor and farmer)”.

In a wide-ranging interview to PTI, Modi asserted that measures already taken in past one year had increased the attractiveness of India as an investment destination and investor confidence had improved.

He also dismissed suggestions of differences between finance ministry and Reserve Bank saying the central bank has its functional autonomy which the government “will always respect and preserve”.

“Wherever there is high employment potential and wherever we have strong local talent, for example, in research and development: those will be the areas of focus for foreign direct investment (FDI).

“We have created the National Infrastructure Investment Fund. This is a major step which will increase the flow of foreign investments into all infrastructure sectors, without needing separate sector-by-sector approaches,” he said.

Asked whether obstacles to reforms measures like GST Bill and amendment to Land Acquisition Bill was hurting the economy, the Prime Minister said both the GST and the proposed Land Acquisition Bill were beneficial for the country.

“The core essence of these Bills should be appreciated by all the parties keeping aside political motives. Long term interest of the nation should be foremost.”

“The fact that the States have agreed to the GST design, shows the maturity of our federal system and the GST Bill has already been passed by the Lok Sabha. It is a matter of time before these laws are passed,” he said.

To a question what kind of a message would it send to foreign investors if reform measures are not pushed fast, the Prime Minister said, “One of the peculiarities of Delhi is that the term ‘reform’ is associated only with passing of laws in Parliament.

“In fact, the most important reforms needed are those without new laws at various levels of Government, in work practices and procedures.”

Modi said the government has initiated a number of major reforms which include decontrol of diesel prices, direct transfer of cooking gas subsidy, enhancement of FDI limits, revamping of railways and many others.

“The truth is that reform has actually been pushed very fast and in fact as a result FDI has already witnessed an increase of 39 per cent in the period April, 2014 to February, 2015 compared to the previous year,” he said.

He also maintained that the success of steps that the government had taken and the positive response of the people to them in the first year “have encouraged us to do even more”.

“Our focus will be on P2G2, i.e. Pro-active, Pro-people Good Governance reforms. Another aspect we will emphasize and strengthen is that the State and the Centre are one team which has to work together for reforms to be effective,” he said.

Asked about reports of RBI and finance ministry on the same page on issues, Modi said, “I am surprised that an important and credible media agency like PTI is drawing an incorrect inference based on remarks made in different contexts. RBI has its functional autonomy which the Government and the Finance Ministry always respect and preserve”.

On the economic growth prospects for the current year, Modi said based on experience of the last year and the enthusiasm of the people give confidence that all economic indicators will exceed the targets.

“I do not want to undermine the potential and the efforts by giving any figure which may turn out to be too low,” he said.

To a question about Opposition accusation that the government was pro-corporates while some in industry like Deepak Parekh say nothing is happening on ground, he said, “The answer is to be found in your question itself. If opponents are accusing us of being pro-corporate but the Corporates are saying we are not helping them, then I take it that our decisions and initiatives are pro-people and in the long term interests of the nation”.

On the issue of making progress on the BJP’s election promise on stringent action against back blackmoney, he said the very first decision of the Government after taking office was to constitute the Special Investigation Team to pursue black money.

“This step had been pending for years with no action and we executed it in our very first Cabinet meeting.

Subsequently, we have also brought a new Bill which will combat black money held abroad and it prescribes stiff penalties.

“Thanks to our efforts, an agreement was reached at the G-20 summit in November 2014 to curb tax evasion and in particular to exchange information between countries. This will help us to trace black money. These are very strong and concrete actions,” he said.To a question on the agrarian crisis in the country, the Prime Minister said suicide by farmers has been a serious concerns for several years.

“Political point-scoring through comparing how many suicides occurred under which government will not solve the problem. For a government of any party, and for every one of us, even one suicide is worrisome,” he said.

WHAT MODI SPOKE

  • Dismisses suggestions of differences between finance ministry and RBI, saying the central bank has its functional autonomy which the govt ‘always respects and preserves’
  • On GST Bill and amendment to land Bill, he said core essence of these should be appreciated by all the parties keeping aside political motives. Long term interest of nation should be foremost
  • On what’s next, he said that success of steps that the govt had taken and the positive response of the people to these in the first year ‘have encouraged the govt to do even more’

Source : The Economic Times

CAG to audit coal e-auction, results in 6 months : 28-05-2015


The Comptroller and Auditor General (CAG) of India will audit the recently concluded two rounds of coal block e-auction. The audit is likely to be completed in six months.

The audit would review the conditions set for the auctions and the reserve prices decided by the government for various blocks. Sources said details and files pertaining to the auction had been sought.

The audit is also expected to review the decision by the government to let companies put multiple bids through subsidiaries or various units.

Neither the CAG nor the coal ministry officially responded to queries on the audit.

The National Democratic Alliance (NDA) government had claimed that the auctions would generate Rs 2.85 lakh crore over the duration of the mining.

Two rounds of bidding for coal blocks were conducted between February 14 and March 8, 2015, and 40 mines were awarded. A decision to auction the mines was taken after the Supreme Court had in August 2014 cancelled 204 coal block allocated by the previous United Progressive Alliance and NDA governments.

Among the coal blocks earmarked for negative bidding for the power sector, all companies bid either at or below the reserve price of Rs 100 a tonne. The government had claimed this would save consumers Rs 90,000 crore in power bills. The power ministry had told the Central Electricity Regulatory Commission the revision of tariff should not lead to higher total tariff than what was permitted under the existing power purchase agreements.

In case of the unregulated sectors — steel, aluminium and iron ore — the auctions were done on the basis of forward bidding, with the highest bidder winning the block.

After reviewing nine winning bids, the coal ministry cancelled three blocks (won by two companies), claiming the bids had not attained a fair value but claimed the process had been transparent. The two companies, Jindal Power (with two blocks) and BALCO, moved the Delhi High Court to contest the government’s decision.

The bids for good quality blocks were in some cases found to be lower than the similar ones in other cases. Though the government cancelled the winning bids in three cases, it continued to claim that the companies were best placed to make their best bids and it was not for it to judge or review.

Apart from this, 41-odd cases have been filed by various companies on every step of the coal block re-allocation process. There have been independent requests to investigate the bidding of the players who bid too low or when bidding concluded in too less time.

The ministry is currently planning a third round of auction of blocks. It is also planning e-auction of coal linkages and also opening up some blocks to commercial mining.

Source : PTI

National IPR Policy to be delayed further : 28-05-2015


The much-awaited National Intellectual Property Rights (IPR) Policy might be delayed further, with the draft getting stuck at the inter-ministerial consultation level and inputs from key ministries yet to come.

The department of industrial policy and promotion (DIPP), under the ministry of commerce and industry, had prepared and circulated the draft policy and invited public comments last year. The draft is now with ministries, which were expected to respond with feedback by the middle of this month.

The ministries whose inputs are crucial for the policy but are yet to respond include finance, external affairs, health and family welfare, commerce and the departments of pharmaceuticals.

An official said on condition of anonymity the department of pharmaceuticals and the ministry of health and family welfare have apparently locked horns with the draft  policy.

DIPP is optimistic that it can collate all feedback by the month-end, a senior official told Business Standard. “We did our work and the draft policy was ready on time. The draft has now been circulated for consultations. Some of key ministries are yet to respond, and we have given them until the end of May to do so.”

Minister for commerce and industry Nirmala Sitharaman had announced in September last year that the government would roll out a National IPR Policy “soon”. However, the government, which has been on office for a year now, is yet to roll out a policy to safeguard the country’s national interests and bring greater clarity to intellectual property and patent laws.

India had come under  pressure from the US, the drug manufacturers there, which believe the country has a weak IPR and patents regime.

“The draft policy was an important statement from the government on the work it is doing in the IPR front,” said Patrick Kilbride, executive director, Global Intellectual Property Center, US Chamber of Commerce. “It is an important starting point. However, patents still remain a big concern for the US as far as affordable medicine is concerned. Many American companies have been denied patents in India. This is keeping new and affordable medicines off the Indian markets. This is anti-competitive.”

Ranjana Smetacek, director-general of the Organisation of Pharmaceutical Producers of India, said the government should come out with a robust policy, after investing so much time on it. In its latest Special 301 IPR report, the US trade representative had again kept India under the category of ‘Priority Watch List’ and threatened to take “further actions” if the intellectual property climate does not improve.

Source : Business Standard

India to sign G20 pact on June 3, will get more data on bank accounts : 27-05-2015


NEW DELHI: Months after it failed to sign the G20 information sharing agreement, India is set to sign the global treaty on June 3 which will enable it to access data related to bank accounts from across the world, including tax havens that were earlier refusing to cooperate.

While information under the agreement, finalized at the Organisation for Economic Cooperation and Development (OECD), will start flowing in from 2017, the government is also ready to sign Foreign Account Tax Compliance Act (FATCA) with the US, which will be effective from September and is expected to result in additional data flow, sources said. Presently the modalities of the FATCA are being worked out with the US.

Both the agreements had o be signed last year but the government had to drop its plans at the last minute in the wake of a Supreme Court observation related to confidentiality clause in the treaties as well as double taxation avoidance agreements. But with the legal hurdle out of the way, the Cabinet has now endorsed the two pacts. India has been at the forefront of the efforts at OECD to get countries to share all bank information with tax authorities on an annual basis.

Currently , countries can seek information from others but the new mechanism will allow automatic exchange of information on an annual basis, which will include the account balance and all income that has accrued during the course of the year.

Source : The Economic Times

Threshold for service tax is based on current, last year’s turnover : 27-05-2015


Anybody who provides a service is liable to pay service tax. These could be professionals like lawyers, doctors, chartered accountants or owners of beauty parlours, coaching classes, fitness centres, etc. But unlike income tax, service tax is not charged automatically and there are some exemptions.

If you are a small entrepreneur providing a service, you have to pay service tax to the government once the amount billed to customers or turnover crosses Rs 10 lakh in a year.

From June 1, service tax will increase to 14% from 12.36%.

The service provider has the option of not registering for service tax as long as the amount billed to customers does not cross Rs 9 lakh in a year. But there are some advantages of registering, even if your billed amount is less than Rs 9 lakh. For instance, government departments or offices looking for any kind of service, typically insist on registered service providers, says Sanjeev Gokhale, a Mumbai-based Chartered Accountant.

So, if you own a company that provides housekeeping services and are vying for a government project, it is better to register yourself with service tax authorities to avoid getting rejected.

Even after registering, you don’t have to pay service tax till the billed amount crosses Rs 10 lakh in a year. But once it does then you have to pay service tax.

The threshold value for service tax is calculated taking into account the previous year’s turnover as well as the current year’s turnover.

So, assuming the aggregate value of your or your firm’s services is Rs 11 lakh for the year 2014-15. You have to pay service tax since the threshold value of Rs 10 lakh has been exceeded.

If the value of services for 2015-16 crosses Rs 8 lakh, you still have to pay service tax, since the aggregate value of service is calculated on the previous year. Then if in 2016-17, the aggregate value of service comes to Rs 7 lakh, then you have the option of not paying service tax, because in the previous year (2015-16) the threshold was less than Rs 10 lakh (Rs 8 lakh in this case). But if in 2016-17, the aggregate value of service exceeds Rs 10 lakh, then you will have to pay service tax.

This exemption of not paying service tax is given to small-scale entrepreneurs so that they are not forced to increase charges to their customers.

But if you charge your customers service tax, then you are liable to pay the same to the government, even if your turnover does not increase Rs 10 lakh, says Bipin Sapra, tax partner, EY.

“One way businesses try to reduce their tax burden is by splitting their companies or firms and keeping the turnover below Rs 10 lakh,” Sapra says.

Another condition to keep in mind is that if you are the franchise of a chain, then you are liable to pay service tax from day one, irrespective of the turnover. Taking the same example of a beauty parlour, if it is a standalone one, service tax is applicable only if the aggregate value of service crosses Rs 10 lakh. But if it is a franchise of a chain, say, L’oreal, then service tax is applicable from day one.

“The rationale behind this is that as franchise of a big chain, you already have an advantage of a big brand. Whereas the exemption is given only to encourage small-scale entrepreneurs,” Sapra says.

To reduce the tax burden, many salon owners carve out a separate premises for the bigger brand and register it as a separate entity.

Today, service tax is paid online. For a company the payment has to be done monthly and for propriety or partnership firms on a quarterly basis. The returns have to be filed on a half-yearly basis.

1% tax above GST may hurt Make in India: CEA : 27-05-2015


Chief Economic Advisor Arvind Subramanian has criticised the proposal to impose a one per cent levy over the Goods and Services Tax (GST) to help manufacturing states.

The government should reconsider this levy as it could make intra-state movement of goods expensive and hurt the Make in India campaign, he told reporters here on Tuesday. “Think of a good going from Gujarat to Tamil Nadu, crossing four states. The good would embody an additional tax of about four-five per cent, because it is one per cent in every state. That might make it easier to import into Tamil Nadu from Bangkok,” Subramanian said.

The chief economic advisor (CEA) also said the time was right for the Reserve Bank of India (RBI) to cut the policy rate as inflation had moderated and the fiscal deficit was contained.

To address manufacturing states’ concerns, the Constitution amendment Bill on GST had provided for an additional one per cent tax for two years. The tax was proposed to bring on board manufacturing states, as these were against the destination-based GST. The Bill has been referred to a Rajya Sabha select committee, which is expected to submit its report at the beginning of the next session of Parliament. The Lok Sabha had cleared the Bill.

“It (the one per cent additional tax) has the potential to undermine Make in India. That is why we need to look at this provision carefully. This period that we have gained, some of these issues need to be looked at again,” Subramanian said. The government plans to roll out GST from April 2016.

On repo rate, he said: “Looking at the analysis of what is the inflation forecast, what is the fiscal consolidation, what is the international environment … and how the monetary policy should respond, I think there is scope for monetary easing.” RBI is scheduled to announce its second bi- monthly policy on June 2.

Subramanian said: “Inflation…is going to be lower than the RBI’s target. Fiscal policy is supportive and that (will have) implications for interest rates.”

Since January, RBI has cut the key policy rate or repo rate twice, by 0.50 per cent, to 7.5 per cent as inflationary pressures eased. Adequate food stocks would help contain inflation, even if the monsoon turns out to be weak, Subramanian said. The meteorological department had said monsoon would be slightly below normal. But private weather forecaster Skymet had said it would be close to excess.

Subramanian said India should take action to keep its currency competitive, in view of the aggressive rate cut policy of China and other countries.

“It is not that everything that China does should be imitated but that’s a lesson we need to learn….” Moreover, he added, most countries are trying to keep their currencies competitive and cheap. “The question is how should we respond. We should take defensive action. At the very least, we should not allow our currency to become more uncompetitive. We should keep it (Rupee) competitive if we want Make in India to be a long-term success. We have to have a very supportive currency policy.”

Source : PTI

Notification No. : 341/2015-RB Dated: 26-5-2015


Foreign Exchange Management (Permissible Capital Account Transactions) (Third Amendment) Regulations, 2015 – 341/2015-RB – Dated 26-5-2015 – Foreign Exchange Management

RESERVE BANK OF INDIA

(Foreign Exchange Department)

(CENTRAL OFFICE)

NOTIFICATION NO. FEMA. 341/2015-RB

Mumbai, the 26th May, 2015

Foreign Exchange Management (Permissible Capital Account Transactions) (Third Amendment) Regulations, 2015

G.S.R. 425(E).-In exercise of the powers conferred by sub-section (2) of Section 6, Sub-Section (2) of Section 47 of the Foreign Exchange Management Act, 1999 (42 of 1999) the Reserve Bank of India, in consultation with Central Government, makes the following Regulations to amend theForeign Exchange Management (Permissible Capital Account Transactions) Regulations, 2000, (Notification No. FEMA 1/ 2000–RB dated May 3, 2000) namely:-

1. Short title and commencement.-These Regulations may be called the Foreign Exchange Management (Permissible Capital Account Transactions) (Third Amendment) Regulations, 2015.

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

2. Amendment to the Regulations.-In the Foreign Exchange Management (Permissible Capital Account Transactions) Regulations, 2000, in Regulation 4, in sub-regulation (a), for the existing provisos, the following shall be substituted:-

“PROVIDED that-

(a) subject to the provisions of the Act or the rules or regulations or directions or orders made or issued thereunder, a resident individual may, draw from an authorized person foreign exchange not exceeding USD 250,000 per financial year or such amount as decided by Reserve Bank from time to time for a capital account transaction specified in Schedule I.

Explanation: Drawal of foreign exchange as per item number 1 of Schedule III to Foreign Exchange Management (Current Account Transactions) Rules, 2000 dated 3rd May, 2000 as amended from time to time, shall be subsumed within the limit under proviso (a) above.

(b) Where the drawal of foreign exchange by a resident individual for any capital account transaction specified in Schedule I exceeds USD 250,000 per financial year, or as decided by Reserve Bank from time to time as the case may be, the limit specified in the regulations relevant to the transaction shall apply with respect to such drawal.

PROVIDED FURTHER that no part of the foreign exchange of USD 250,000, drawn under proviso (a) shall be used for remittance directly or indirectly to countries notified as non-cooperative countries and territories by Financial Action Task Force (FATF) from time to time and communicated by the Reserve Bank of India to all concerned.”

B. P. KANUNGO, Principal Chief General Manager

Foot Note : The Principal Regulations were published in the Official Gazette vide No. G.S.R. No. 384(E) dated May 5, 2000 in Part II, Section 3, sub-section (i) and subsequently amended vide:

G.S.R. 207(E) dated March 23, 2004

G.S.R. 14(E) dated January 5, 2008

G.S.R. 551(E) dated August 14, 2013

G.S.R. 488(E) dated July 11, 2014

Notification No. : 1/6/EM/2015 Dated: 26-5-2015


Foreign Exchange Management (Current Account Transactions) Amendment Rules, 2015 – 1/6/EM/2015 – Dated 26-5-2015 – Foreign Exchange Management

MINISTRY OF FINANCE

(Department of Economic Affairs)

NOTIFICATION

New Delhi, the 26th May, 2015

G.S.R. 426(E).-In exercise of the powers conferred by section 5 and sub-section (1) and clause (a) of sub-section (2) of section 46 of the Foreign Exchange Management Act, 1999 (42 of 1999), and in consultation with Reserve Bank, the Central Government having considered it necessary in the public interest, makes the following amendment to the Foreign Exchange Management (Current Account Transactions) Rules, 2000, namely:-

1.   (1) These rules may be called the Foreign Exchange Management (Current Account Transactions) Amendment Rules, 2015.

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

2.   In the Foreign Exchange Management (Current Account Transactions) Rules, 2000,-

(i) for rule 5, the following rule shall be substituted, namely:-

“5. Prior approval of Reserve Bank.-Every drawal of foreign exchange for transactions included in Schedule III shall be governed as provided therein:

Provided that this rule shall not apply where the payment is made out of funds held in Resident Foreign Currency (RFC) Account of the remitter.”;

(ii) for Schedule III, the following shall be substituted, namely:-

“SCHEDULE III (See rule 5)

Facilities for individuals-

1. Individuals can avail of foreign exchange facility for the following purposes within the limit of USD 2,50,000 only. Any additional remittance in excess of the said limit for the following purposes shall require prior approval of the Reserve Bank of India.

(i)  Private visits to any country (except Nepal and Bhutan).

(ii)  Gift or donation.

(iii)  Going abroad for employment.

(iv)  Emigration.

(v)  Maintenance of close relatives abroad.

(vi)  Travel for business, or attending a conference or specialised training or for meeting expenses for meeting medical expenses, or check-up abroad, or for accompanying as attendant to a patient going abroad for medical treatment/ check-up.

(vii) Expenses in connection with medical treatment abroad.

(viii) Studies abroad.

(ix) Any other current account transaction:

Provided that for the purposes mentioned at item numbers (iv), (vii) and (viii), the individual may avail of exchange facility for an amount in excess of the limit prescribed under the Liberalised Remittance Scheme as provided in regulation 4 to FEMA Notification 1/2000-RB, dated the 3rd May, 2000 (here in after referred to as the said Liberalised Remittance Scheme) if it is so required by a country of emigration, medical institute offering treatment or the university, respectively:

Provided further that if an individual remits any amount under the said Liberalised Remittance Scheme in a financial year, then the applicable limit for such individual would be reduced from USD 250,000 (US Dollars Two Hundred and Fifty Thousand Only) by the amount so remitted:

provided also that for a person who is resident but not permanently resident in India and –

(a) is a citizen of a foreign State other than Pakistan; or

(b) is a citizen of India, who is on deputation to the office or branch of a foreign company or subsidiary or joint venture in India of such foreign company,

may make remittance up to his net salary (after deduction of taxes, contribution to provident fund and other deductions).

Explanation: For the purpose of this item, a person resident in India on account of his employment or deputation of a specified duration (irrespective of length thereof) or for a specific job or assignments, the duration of which does not exceed three years, is a resident but not permanently resident:

provided also that a person other than an individual may also avail of foreign exchange facility, mutatis mutandis, within the limit prescribed under the said Liberalised Remittance Scheme for the purposes mentioned herein above.

Facilities for persons other than individual -

2. The following remittances by persons other than individuals shall require prior approval of the Reserve Bank of India.

(i) Donations exceeding one per cent. of their foreign exchange earnings during the previous three financial years or USD 5,000,000, whichever is less, for-

(a) creation of Chairs in reputed educational institutes,

(b) contribution to funds (not being an investment fund) promoted by educational institutes; and

(c) contribution to a technical institution or body or association in the field of activity of the donor Company.

(ii) Commission, per transaction, to agents abroad for sale of residential flats or commercial plots in India exceeding USD 25,000 or five percent. of the inward remittance whichever is more.

(iii) Remittances exceeding USD 10,000,000 per project for any consultancy services in respect of infrastructure projects and USD 1,000,000 per project, for other consultancy services procured from outside India.

Explanation:-For the purposes of this sub-paragraph, the expression “infrastructure’ shall mean as defined in explanation to para 1(iv)(A)(a) of Schedule I of FEMA Notification 3/2000-RB, dated the May 3, 2000.

(iv) Remittances exceeding five per cent of investment brought into India or USD 100,000 whichever is higher, by an entity in India by way of reimbursement of pre-incorporation expenses.”

3.   Procedure

The procedure for drawal or remit of any foreign exchange under this schedule shall be the same as applicable for remitting any amount under the said Liberalised Remittance Scheme.

[F. No. 1/6/EM/2015]

MANOJ JOSHI, Jt. Secy. (Financial Market)

Squeeze parallel economy in a fair manner: FM Arun Jaitley to taxmen : 26-05-2015


Finance Minister Arun Jaitley today asked taxmen to squeeze the parallel economy but gave an assurance that while doing so honest taxpayers may have nothing to fear about the new black money law.

“The parallel economy has to be squeezed…and (it) has to be done in very fair manner, not in a harsh manner. In doing so, as senior officers you have to… maintain the highest standard of integrity,” he said while addressing a conference of top officials of the Central Board of Direct Taxes (CBDT).

On the new black money law which seeks to bring back the illicit funds stashed abroad, Jaitley said, “No honest taxpayer has anything to fear. It’s targeted only against those who have stashed assets abroad.”

The minister further told the tax officers, “Every well meaning advisor will tell you, tax base has to be expanded. Black money has to be squeezed out and at the same time if you take steps to do that, you have to listen to the taunt of draconian steps which are being taken.”

The government, the minister said, has taken a host of measures to curb the menace of black money. These include passage of the black money law by Parliament and introduction of Benami Transactions (Prohibition) bill to deal with the unaccounted domestic wealth.

“Black money has to be squeezed”, he said, adding only those who have defied the system in the past and intend to defy the compliance window to come clean have to worry.

Jaitley further said that improvement in tax collection will increase the ability of the government to step up spending on social and infrastructure projects and provide relief to individual taxpayers.

For the current financial year, the minister said, direct tax collection was likely to improve by 14-15 per cent and there was possibility of government improving upon the fiscal deficit target of 3.9 per cent.

However, he added that the government would prefer to increase expenditure on social sector schemes instead of improving its fiscal deficit target.

The objective is not to better fiscal deficit number, he said, adding, “…we want to increase expenditure because increased expenditure leads to growth.”

“We would like larger revenue collections to be invested in areas of infrastructure, irrigation, in the social sectors to bring larger dividends back to the economy.”

As regards black money, the Finance Minister said that several steps have been announced and the government would come out with more measures in future to squeeze the quantum of illicit wealth.

“There are steps which have been announced and some may be announced in future, with regard to squeezing quantum of black money.

“If the base increases, collection increases and those who have to pay taxation are compelled to pay it, the ability of government to give concession, in terms of rates to honest tax payers also increases,” he added.

Observing that there are no grey areas in taxation, the Finance Minister said, “Either a tax is payable or it’s not payable. If it’s not payble no attempt has to be made to recover it but if it is payable then there is no scope for any other collateral consideration why it must not be recovered for the government.”

The policy has to be “crystal clear” that nobody should be harassed, but the evader must not succeed, he said, adding “within the parameters of the policy we continue to do our job…a very unenviable job.”

Government, Jaitley said, has already taken various initiatives on the taxation front which include roll out of the Goods and Services Tax (GST), reduction of corporate tax rate from 30 per cent to 25 per cent over the next four years and removal of exemptions to the extent possible.

As regards indirect taxes, Jaitley said, “The process of introduction of GST is on. A lot of work has been done, a lot of work remains to be done and we have only few months to accomplish the task.”

Rajya Sabha recently referred the GST Bill to a select committee which is expected to give its report to the House at the start of the next session. The government plans to roll out the GST from April 1, 2016.

On direct tax front, Jaitley said, “Our effort over the next four years will be to bring down the taxation to global levels and phase out the exemptions to the extent it is possible.”

Efforts would also be made to expand the tax base and encourage non-filers to file tax returns, he said and added that individual taxpayers would continue to enjoy certain set of exemptions so that they could spend more and add to the economic growth.

“We are also trying to ensure that segments need a certain sets of exemptions so that we can encourage them to spend more. We should all be conscious of fact that even when we talk of expansion of the base, there are in-built limitations,” he said.

“If 55-60 per cent of India lives on agriculture that’s the number of families which are out of tax base. …there are several initiatives which we have taken. Every advisor will tell you, tax base has to be expanded.”

“I do understand that the CBDT is also working on simplification in many areas including the forms which will be a great asset to the taxpayer itself,” the minister said.

Earlier, Revenue Secretary Shaktikanta Das said the Rs 7.98 lakh crore direct collection target for the current fiscal is “very much achievable and very realistic”.

With regard to HSBC list on alleged black money holders abroad, he said all the assessment that had to be completed before March 31, 2015 have been completed.

Source : PTI

Notification No. : 16/2015 Dated: 26-5-2015


Addition of Mundra Port in para vii of Notification No. 44/2001-CE (NT) dated 26.06.2001 – 16/2015 – Dated 26-5-2015 – 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)

Notification No.  16/2015 – Central Excise (N.T.)

New Delhi, the 26th May, 2015

G.S.R.  (E).____In exercise of the powers conferred by sub-rule (3) read with sub-rule (2) of rule 19of the Central Excise Rules, 2002, the  Central  Government  hereby  makes  the following  amendments  in  the  notification  of  the  Government  of  India  in  the  Ministry  of Finance,  Department of Revenue,  No. 44/2001-Central Excise (N.T.), dated the 26th June, 2001,  published  in  the  Gazette  of  India,  Extraordinary,  Part  II,  section 3,  Sub-section (i), vide number G.S.R. 473(E), dated the 26th June, 2001, namely:-

1.  In the said notification, in the opening paragraph, in sub-paragraph (vii), in clause (a), for the word “Visakhapatnam”, the words “Visakhapatnam, Mundra” shall be inserted.

2.  This notification shall come in to force on the date of its publication in the Official Gazette.

[F. No. 201/02/2014-CX.6]

(ROHAN)

Under Secretary to the Govt. of India

Note:- The principal notification was published in the Gazette of India, Extraordinary, part II, section 3, sub-section (i), vide number G.S.R. 473(E), dated 26th June, 2001 and was last amended bynotification no. 28/2011-C.E. (N.T.), dated 5th December, 2011 vide number G.S.R. 864(E), dated 5th December, 2011.

Notification No. : 30/2015 Dated: 25-5-2015


Seeks to amend Notification No. 22/2003-Central Excise, dated the 31st March, 2003 – 30/2015 – Dated 25-5-2015 – 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.  30/2015-Central Excise

New Delhi, the  25th May, 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) and sub-section (3) of section 3 of Additional Duties of Excise (Textiles and Textile Articles) Act, 1978 (40 of 1978), 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 erstwhile Ministry of Finance and Company Affairs (Department of Revenue) No. 22/2003-Central Excise, dated the 31st March, 2003, published in the Gazette of India Extraordinary, Part II, Section 3, sub-section (i) vide number G.S.R 265 (E), dated the 31st March, 2003, namely:-

In the said notification,-

(a)       in the opening paragraph, in condition (4), in clause (a), for sub-clauses (i) and (ii), the following sub-clauses shall be substituted, namely:-

“(i)  in the case of capital goods, such goods are not proved to the satisfaction of the said officer to have been installed or otherwise used within the user industry, within the period of validity of the Letter of Permission (LoP);

(ii)  in the case of goods other than capital goods, such goods as are not proved to the satisfaction of the said officer to have been used in connection with the production or packaging of goods for export out of India or cleared for home consumption within the period of validity of the Letter of Permission (LoP);”;

(b)       in paragraph 3, for clause (iii), the following clause shall be substituted, namely:-

“(iii) capital goods, raw material, consumables, spares, goods manufactured, processed or packaged, and scrap or waste or remnants or rejects are destroyed within the unit after intimation to Customs authorities or destroyed outside the unit with permission of Customs authorities:

Provided that the remnants, remains or scrap after such destruction, if cleared into Domestic Tariff Area, applicable duty shall be levied on such goods:

Provided further that this provision shall not apply to gold, silver, platinum, diamond, precious and semi precious stones.”;

(c)      in paragraph 13, in Explanation, after clause (xiii), the following clause shall be inserted, namely:-

“ (xiv)    “Letter of Permission (LoP)” has the same meaning as assigned in Chapter 6 of the Foreign Trade  Policy 2015-20 notified by the Government of India in the Ministry of Commerce and Industry, published in the Gazette of India, Extraordinary, Part-II, Section 3, Sub-section (ii) vide notification No. 01/2015-2020, dated the 1st April, 2015.”.

(F.No: DGEP/FTP/23/2014-EOU & G&J)

(SANJAY  KUMAR)

Under secretary to the Government of India

Note:- The principal notification No. 22/2003-Central Excise, dated the 31st March, 2003 was published in the Gazette of India Extraordinary, Part II, Section 3, sub-section (i) vide number G.S.R 265 (E), dated the 31st March, 2003 and last amended by notification No. 28/2015-CE dated the 15th May, 2015, published vide number G.S.R. 388 (E), dated the 15th May, 2015.

StatsGuru: Factors RBI will consider while deciding monetary policy : 25-05-2015


The Reserve Bank of India (RBI), as it approaches its review of monetary policy on June 2, will have noted that, as shown in Table 1, both wholesale and retail inflation have been steadily declining. Wholesale Price Index (WPI)-based inflation, in fact, is now in negative territory. As shown in Table 2, this reflects a moderation of food inflation – and a feared increase in food inflation as unseasonable rain has not come to pass. Meanwhile, news from the output side of the economy is not great. The index of industrial production, shown in Table 3, continues to be anaemic. Net profit percentage for India Inc has failed to recover solidly, as shown in Table 4. One of the major reasons is a steadily increasing percentage of interest costs, as shown in Table 5. Credit growth, as shown in Table 6, has also failed to pick up and is still hovering two percentage points below deposit growth.

RBI, however, will also take note of the impact of rates on the rupee and competitiveness. India’s inflation, while decisively lower now than Indonesia’s or Russia’s, is still well above the global norm including that of a country like Vietnam, as shown in Table 7. Fund flows into India, as shown in Table 8, appears to have declined in the very recent past. Table 9 shows the downward trend of the rupee against the dollar.

Source : Business Standard

Government mulls “painless” kerosene subsidy revamp likely to aid fuel reforms : 25-05-2015


NEW DELHI: The Narendra Modi government is considering a “painless” revamp of the kerosene subsidy to complete the fuel pricing reforms that have resulted in significantly reducing the burden on the exchequer.

A plan prepared by the Expenditure Management Commission (EMC) is being examined as one of many options, a senior government official told ET. Chief Economic Advisor Arvind Subramanian has been asked to evaluate the formulation, which acknowledges the need for subsidised fuel  to the rural poor. The key aim of the plan is reducing pilferage and a gradual shift to direct benefit transfer.

The oil marketing companies made a total loss of Rs 24,799 crore in FY15 for selling kerosene at below cost. In addition, the government provided a few thousand crore rupees for kerosene sold through the public distribution system. The oil companies currently sell kerosene at a loss of Rs 16.32 per litre. The EMC called for reforming subsidies that cater to the poor  without hurting them in its January interim report.

It sought a scientific estimation of kerosene consumption based on National Sample Survey Organisation (NSSO) data for the allocation of quotas to states. States are responsible for the distribution of subsidised kerosene through the public distribution system, widely known to be prone to leakages.

Even with a 30-40% increase over NSSO consumption numbers, the government could easily bring down its kerosene subsidy bill substantially because the fuel will only go to those who deserve it. Kerosene consumption has been steadily declining with wider availability of cooking gas and electricity–consumption declined to 70.8 lakh tonnes in FY15 from 102.3 lakh tonnes in FY04. The fuel is used in rural areas for both lighting and cooking.

A switch to direct benefit transfer as in the  case of LPG could drive this down further. A pilot scheme in Alwar district of Rajasthan saw a 67% cut in demand for kerosene under the direct benefit transfer system, indicating the extent of its diversion for fuel adulteration.

A key difficulty has been overcome thanks to the Pradhan Mantri Jan Dhan Yojana providing extensive banking coverage. Most households now have a bank account that can be used for direct transfer of subsidies and other social benefits. The kerosene subsidy  reform is part of a wider strategy to bring to an end so-called ‘underrecoveries’, which refer to the difference between the market price of fuel and the subsidised rate.

Diesel and petrol are no longer subsidized. The cooking gas subsidy is being given directly to bonafide consumers through their Aadhar-linked bank accounts. Everyone else buys at the market price.

Eventually, the same thing will be done for kerosene. Expenditure secretary Ratan Wattal had said earlier that the government is looking at reforming the kerosene subsidy.

Source : The Economic Times

FM Arun Jaitley says drop in March quarter NPAs only an initial indicator, fingers crossed : 23-05-2015


NEW DELHI: Terming NPAs at 5.2 per cent as high, Finance Minister Arun Jaitley today said it’s too early to consider the improvement in the bad loan situation last quarter as a “turnaround” and was keeping his fingers crossed.

“I would take it (drop in March quarter NPAs) only as an initial indicator. At times, when you try to revive the economy, some indicators can always be patchy… I am not drawing any final conclusion from this,” Jaitley said

“If this pattern continues over 2-3-4 quarters, then I will draw a conclusion that there is a pattern. I am keeping my fingers crossed,” he said.

Addressing a press meet on one year of the Modi government, he said: “A good signal has emerged that the quarter that ended in March 2015, NPAs have started coming down… This is the first quarter, NPAs in banks were increasing, they have started coming down.”

Non-performing assets or bad loans of the total advances had reached a high of 5.64 per cent but period ending March “it has come down to 5.2 per cent… these (5.2 per cent NPA) are also high”, he said.

From the decline in one quarter it cannot be concluded that this was a turnaround, he said.

As of December 2014, gross NPAs of PSU banks were at Rs 2,60,531 crore or 5.6 per cent of the total advances.

Echoing similar views the Reserve Bank Governor Raghuram Rajan had had said last week that there was no danger of any financial crisis but it may be early to declare that the worst was over on the NPA front.

The Governor said resolution of NPAs will be possible only with higher economic growth, which he termed as “slow” and the actions which the banks take.

The Finance Minister too said that when economy picks up, a “turnaround has to take place” in the banking sector.

Notification No. : 342/RB-2014 Dated: 23-4-2015


Foreign Exchange Management (Export of Goods & Services) (Amendment) Regulations, 2015 – 342/RB-2014 – Dated 23-4-2015 – Foreign Exchange Management

RESERVE BANK OF INDIA

(Foreign Exchange Department)

(CENTRAL OFFICE)

NOTIFICATION NO. FEMA 342/RB-2014

Mumbai, the 23rd April, 2015

Foreign Exchange Management (Export of Goods & Services) (Amendment) Regulations, 2015

G.S.R. 326(E).-In exercise of the powers conferred by clause (a) of sub-section (1), sub-section (3) of Section 7 and sub-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) (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 amendments shall be made, namely:-

In Regulation 3, for the Sub-Regulation (1), the following shall be substituted, namely:-

(i) “(1) In case of exports taking place through Customs manual ports, every exporter of goods or software in physical form or through any other form, either directly or indirectly, to any place outside India, other than Nepal and Bhutan, shall furnish to the specified authority, a declaration in one of the forms set out in the Schedule and supported by such evidence as may be specified, containing true and correct material particulars including the amount representing –”

(ii) In Regulation 6, the word “SDF”, wherever appear, shall be deleted

(iii) In the Schedule, the following shall be deleted,

“Form SDF: To be completed in duplicate and appended to the shipping bill, for exports declared to Customs Offices notified by the Central Government which have introduced Electronic Data Interchange (EDI) system for processing shipping bills notified by the Central Government.”

B. P. KANUNGO, Principal 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.

  1.  G.S.R. No. 199 (E) dated March 21, 2001
  2.  G. S. R. No. 473 (E) dated July 8, 2002
  3.  G. S. R. No. 773 (E) dated September 29, 2003
  4.  G. S. R. No. 900 (E) dated November 22, 2003
  5.  G. S. R. No. 279 (E) dated April 23, 2004
  6.  G. S. R. No. 352 (E) dated June 8, 2004
  7.  G. S. R. No. 576 (E) dated August 5, 2008
  8.  G. S. R. No. 896 (E) dated December 17, 2012
  9.  G. S. R. No.342 (E) dated May 29, 2013
  10.  G. S. R. No.362 (E) dated May 27, 2014
  11.  G. S. R. No.434 (E) dated July 8, 2014

Taxing premature PF withdrawals of over Rs 30k may be kept in abeyance : 22-05-2015


NEW DELHI: The finance ministry is reconsidering its Budget provision to tax premature provident fund (PF) withdrawals of Rs 30,000 or more, even as the Finance Act of 2015 has been notified and deduction of tax at source from PF accounts settled before five years of service, comes into force on June 1.

“The government is mulling two options to hold back the implementation of this tax, after the PF office pointed out that it would be unfair to tax retirement savings of people whose income is less than the personal income tax threshold of Rs 2.5 lakh,” said a senior government official. The finance ministry, the official said, may issue a directive to put the implementation of this clause in the Finance Act in abeyance or raise the Rs 30,000 trigger for tax deductions from PF accounts.

While a decision is expected by the end of this month, the PF department has asked all offices to gear up for deducting tax from all premature PF claims settled from June 1.

“Tax will be deducted at 10% if members submit their PAN card details and at the maximum marginal tax rate of 34.608% if a member fails to submit PAN. Only in cases where a member submits Form 15G or 15H, no tax will be deducted,” the official said.

Form 15G is a self-declaration document for individuals having non-taxable income, while Form 15H is a similar declaration by senior citizens (over the age of 60 years). However, these forms won’t be accepted as a valid defense for avoiding  tax deductions in case of PF accounts with balances of Rs 2.5 lakh (for those with no taxable income) and Rs 3 lakh for retirees.

The Employees’ Provident Fund Organisation ( EPFO) has also said that no tax will be deducted if the PF savings are transferred to another PF account. Similarly, if an employee had to leave service due to ill health or other factors beyond their control such as a slowdown or shutting down of the employer’s business, no tax will be deducted on their PF withdrawals.

Personal income tax is payable for those earning Rs 2.5 lakh or more annually. An EPF account is mandatory for all employees earning up to Rs 15,000 per month in firms employing over 20 workers. As per the law, 24% of an employee’s salary is diverted to her or his PF account.

Source  : Business Line

Confident of support, Amit Shah rules out land bill changes : 22-05-2015


NEW DELHI: BJP President Amit Shah said there was little scope for the Narendra Modi government to make more changes to the land acquisition Bill and that the legislation in its current form balances the rights of farmers and development. He rejected allegations of bias towards companies.

“I don’t see any pro-corporate element in this. It is a reality that for development you need land, and land will come from the farmer,” Shah told ETin an interview on Thursday. “The government’s duty is to give the right compensation to the farm-

Shah strongly defended the government’s performance, saying it had managed to repair some of what he termed was the harm inflicted by the previous United Progressive Alliance administration. “People had lost faith in the government and the bureaucracy,” he said. “Even the judiciary did not have faith in the system due to which, in several cases, the judiciary also made-…valid interventions. I believe that the damage-control exercise that should be done has been done.” He said the Modi government’s moves had helped slow down inflation while ensuring faster growth. Shah said BJP had pledged to root out corruption. “In 10 years of UPA rule, (there were) Rs 12 lakh crore worth of scams but in the past one year there’s not been a single scam,” Shah said.

“We have run the government in a transparent manner. The earlier government had come to power on the promise of ending price rise within 100 days but failed to do so in 10 years.” He also said the Modi government would not use the Central Bureau of Investigation as a tool to drum up political support for crucial Bills.

“Some say that this (resistance by the Opposition) is happening as we do not misuse CBI,” Shah said. “If CBI is used to manufacture majority and this is given the beautiful term of ‘floor management’, then at least BJP does not believe in it.” Shah also distanced himself from provocative statements made by BJP and Sangh Parivar leaders in the past year that had put the government in an awkward situation. “Some such leaders were also served notices and they have replied.

These replies will be given to the party’s disciplinary committee, which will look into them. But to say that progress has been affected by these remarks is not correct. The pace of building roads or providing power to people has not slowed due to them,” he said.
Source : Economic Times

 

Notification No. : 29/2015 Dated: 22-5-2015


Seeks to further amend notification No. 6/2005-CE dated 1.3.2005 – Additional duty on Waters, including mineral waters and aerated waters, containing added sugar or other sweetening matter or flavoured withdrawn in consequence to increase in rate of duty from 12 to 18 – 29/2015 – Dated 22-5-2015 – 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.  29/2015-Central Excise

New Delhi, the 22nd  May, 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 85 of Finance Act, 2005 (18 of 2005), the Central Government on 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. 6/2005-Central Excise, dated the 1st  March, 2005, published in the Gazette of India, Extraordinary, vide number G.S.R. 126(E), dated the 1st March, 2005, namely :-

In the said notification, in the Table, S. No. 1A and the entries relating thereto shall be omitted.

[F. No.341/ 10 /2015-TRU]

(Pramod Kumar)

Under Secretary to the Government of India

Note. - The principal notification was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 126 (E), dated the 1st March, 2005 and last amended bynotification No.  9/2015-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. 139 (E) dated the 1st March, 2015.

No. 103 Dated: 21-5-2015


External Commercial Borrowings (ECB) denominated in Indian Rupees (INR) – Mobilisation of INR – Circular – Dated 21-5-2015 – FEMA

RBI/2014-15/608

A. P. (DIR Series) Circular No. 103

May 21, 2015

To

All Category-I Authorised Dealer Banks

Madam / Sir,

External Commercial Borrowings (ECB) denominated in Indian Rupees (INR) – Mobilisation of INR

Attention of Authorized 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, A.P. (DIR Series) Circular No.63 dated December 29, 2011 and A.P. (DIR Series) Circular No. 25 dated September 3, 2014.

2. In terms of A.P. (DIR Series) Circular No. 25 dated September 3, 2014, recognised non-resident ECB lenders may extend loans in Indian Rupees subject to, inter alia, the lender mobilising Indian Rupees through a swap undertaken with an AD Cat-I bank in India. To facilitate ECB lending denominated in INR by overseas lenders, it has now been decided that such lenders may enter into swap transactions with their overseas bank which shall, in turn, enter into a back-to-back swap transaction with any AD Cat-I bank in India as per the procedure given below:

(i) The recognised non-resident lender approaches his overseas bank with appropriate documentation as evidence of an underlying ECB denominated in INR with a request for a swap rate for mobilising INR for onward lending to the Indian borrower.

(ii) The overseas bank, in turn, approaches an AD Cat-I bank for a swap rate along with documentation furnished by the customer that will enable the AD bank in India to satisfy itself that there is an underlying ECB in INR (scanned copies would be acceptable).

(iii) A KYC certification on the end client shall also be taken by the AD bank in India as a one-time document from the overseas bank.

(iv) Based on the documents received from the overseas bank, the AD bank in India should satisfy itself about the existence of the underlying ECB in INR and offer an indicative swap rate to the overseas bank which, in turn, will offer the same to the non-resident lender on a back-to-back basis.

(v) The continuation of the swap shall be subject to the existence of the underlying ECB at all times.

(vi) On the due date, settlement may be done through the Vostro account of the overseas bank maintained with its counterparty bank in India.

(vii) All other Operational Guidelines, Terms and Conditions as contained in the annex to A.P. (DIR Series) Circular No.63 dated December 29, 2011 governing hedging of ECBs denominated in INR shall apply, mutatis mutandis.

(viii) The concerned AD Cat-I bank shall keep on record all related documentation for verification by Reserve Bank.

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

4. The directions contained in this circular have been issued under sections 10(4) and 11(1) of theForeign 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. 102 Dated: 21-5-2015


Rupee Drawing Arrangement – Increase in trade related remittance limit – Circular – Dated 21-5-2015 – FEMA

 

RBI/2014-15/603

A. P. (DIR Series) Circular No. 102

May 21, 2015

To,

All Authorised Dealer Category – I Banks

Madam / Sir,

Rupee Drawing Arrangement – Increase in trade related remittance limit

Attention of Authorised Dealer Category – I (AD Category – I) banks is invited to Part (B) of Annex-I to the A.P. (DIR Series) Circular No. 28 [A. P. (FL/RL Series) Circular No. 02] dated February 6, 2008on Memorandum of Instructions for Opening and Maintenance of Rupee/ Foreign Currency Vostro Accounts of Non-resident Exchange Houses and A.P. (DIR Series) Circular No.111 dated March 13, 2014, as amended from time to time.

2. On a review of the permitted transactions under the Rupee Drawing Arrangements (RDAs), it has been decided to increase the limit of trade transactions from the existing ₹ 5,00,000/- (Rupees Five Lakh only) per transaction to ₹ 15,00,000/- (Rupees Fifteen Lakh only) per transaction, with immediate effect.

3. Further, it has been decided to permit AD banks to regularise payments exceeding the prescribed limit under RDA provided that they are satisfied with the bonafide of the transaction. Further they must take additional steps as under:

  1. AD banks must ensure the remittances received under RDA are from FATF compliant countries,
  2. KYC/AML/CFT and other due diligence concerns should be taken care of by AD banks,
  3. Individual Exchange Houses which are frequently sending large value trade related remittances must be reviewed and reported to the Reserve Bank of India,
  4. AD banks must contact their correspondents that maintain accounts for, or facilitate transactions on behalf of Exchange Houses in order to request additional information regarding high value trade related transactions and the parties involved. The collected details should be kept on record and it may be made available for scrutiny,
  5. AD banks must ensure that the proceeds of export payment through RDA is applied to the outstanding export finance if any, availed by the exporter from any bank for the concerned export transaction and obtain a declaration to that effect from the exporter.

4. All other instructions issued vide A.P. (DIR Series) Circular No. 28 [A. P. (FL/RL Series) Circular No. 02] dated February 6, 2008, as amended from time to time, will remain unchanged.

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 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

Expectations from Narendra Modi govt were ‘probably unrealistic’: RBI Governor Raghuram Rajan : 21-05-2015


RBI Governor Raghuram Rajan said in the minds of the people, Narendra Modi’s image was that of ‘Ronald Reagan on a white horse’ coming to slay anti-market forces…

The expectations from the Narendra Modi government when it came to power last year were “probably unrealistic” but it has taken steps to create an environment for investment and is “sensitive” to concerns of investors, RBIGovernor Raghuram Rajan has said.

“This government came in with tremendous expectations and I think the kind of expectations were probably unrealistic for any government,” Rajan said responding to questions after his address to the Economic Club of New York yesterday.

He said in the minds of the people, Prime Minister Narendra Modi’s image was that of “Ronald Reagan on a white horse” coming to slay anti-market forces and such comparison was “probably not appropriate.”

Rajan, however, said the government has “taken steps to create the environment for investment, which I think is important.”

The government is “sensitive” to the concerns of investors and is looking into addressing economic issues, he said.

Rajan’s remarks come as the Modi-led government completes one year in office this month, having received a commanding majority from an electorate that wanted jobs, economic development and respite from rising prices and corruption.

The Reserve Bank of India Governor said a “big part” of the business environment is taxes and the government has said it will not bring retrospective taxation again.

“However once the tax authority levies a demand on you, there is a quasi-judicial nature of that proceeding and therefore it has to go through the courts before it is resolved. The government cannot intervene,” Rajan said.

“Legacy issues are winding their way through the courts, including issues based on laws that existed before they were changed,” he said.

The corporate tax rate will also come down one per cent every year going forward, he added.

The former International Monetary Fund chief economist said “perhaps” India could have done a “better job” in handling these issues but “going forward the government says no more of this kind of stuff we will do.”

Rajan said there are several areas where the government has taken more “serious and significant” advances to improve investor confidence and propel growth.

On the issue of subsidies, he said petrol and diesel subsidies have gone.

“Going forward these subsidies will be transferred directly into bank accounts,” he said, adding that already the cooking gas subsidy is being transferred directly to bank accounts.

Rajan said there is a “broad consensus” for the Goods and Services Tax (GST) and while he had hoped for the GST Bill to have passed in the just concluded session of Parliament, he feels there is “enough momentum” that “it will be done well in time and roll out by March 31 or April 1 next year.”

“In fact (the government) is going ahead with the apparatus to ensure that it is actually done,” Rajan said.

Another key legislation that the government is focussing on is the Land Acquisition Bill, which is important from the perspective of certain public works, Rajan said.

He said that since different states have their own land acquisition bills, some commentators have suggested the possibility that the states should decide for themselves as to how to implement their respective land acquisition provisions.

There are tremendous plans for investment, particularly in the Mumbai-Delhi industrial corridor and freight corridors, the RBI Governor said.

“My sense is that things are happening,” he said.

Rajan also called the government’s spending cuts “significant,” and said “there has been some amount of fiscal consolidation over and above what the government is owning up to.”

He said inflation “has come down tremendously in India” and rupee has basically stayed relatively flat since the beginning of the year.”

“…if you look at rupee’s volatility relative to other currencies, you’d have to argue that the rupee has been one of the most stable currencies (against) the dollar,” Rajan said.

“It’s been much stronger than other currencies,” he said.

With the Current Account Deficit also projected to come down from more than four per cent to 1.5 per cent this year, Rajan said “the big deficit numbers have come down” and the focus is on growth.

He, however, said while investment intention and investment is picking up, the pace can be faster.

Rajan noted that the problem to some extent lies in the week balance sheet of banks and there is no supply problem as banks are willing to lend.

The government is pushing the banks very hard to clean up the balance sheet and to improve the governance structure of the banks, including separate chairman and Managing Director positions. Banks are also being encouraged to elect new people as Chairman, may be from outside the system, he said.

Source : Business Standard

Service tax: Prepare to shell out 14% for dining out, movies : 21-05-2015


In Budget 2015-16, the government had hiked the service tax to 14 per cent from the current 12.36 per cent.

Come June 1, consumers will have to shell out more for eating out, using credit and debit cards, cabs and mobile phones. The finance ministry on Tuesday notified the increased service tax rate of 14 per cent effective from the next month.However, the Swachchha Bharat Cess is yet to be notified. The government had put an enabling provision in the Service Tax Act to empower the Centre to impose this cess on all or certain taxable services at a rate of 2 per cent. The proceeds from this will be used for Swachh Bharat initiatives.

With the notification, several services including cable and DTH services, beauty parlour charges, courier service, laundry services, ordering stock broking, asset management and insurance will become expensive. In Budget 2015-16, the government had hiked the service tax to 14 per cent from the current 12.36 per cent. “To facilitate a smooth transition to levy of tax on services by both the Centre and the states, the service tax rate is being increased from 12 per cent plus education cesses to 14 per cent.

The education cess and secondary and higher education cess shall be subsumed in the new service tax rate,” finance minister Arun Jaitley had said. However, there are no changes in the abatement rules.

The change in tax rate was done as a step towards GST though a deviation from the recommendation of the 13th finance commission. However, the hike will not impact packaged fruits and vegetables as pre-cooling, ripening, retail packing and labelling of these items was exempted from the service tax in the Budget.

In the Budget negative list was pruned to include services provided by way of access to amusement facility, admission to entertainment events like concerts and pageants if the amount charged for admission is more than Rs 500, admission to circus, dance etc, service by way of carrying out any processes as job work for production or manufacture of alcoholic liquor among others to be chargeable for service tax.

Source : The Financial Express

No. F. No. 134/11/2015-TPL Dated: 21-5-2015


Draft scheme of the proposed rules for computation of Arm’s Length Price (ALP) of an International Transaction or Specified Domestic Transaction undertaken on or after 01.04.2014 – Circular – Dated 21-5-2015 – Income Tax

F. No. 134/11/2015-TPL

Government of India

Ministry of Finance

Department of Revenue

Central Board of Direct Taxes

21st  May, 2015

Subject: – Draft scheme of the proposed rules for computation of Arm’s Length Price (ALP) of an International Transaction or Specified Domestic Transaction undertaken on or after 01.04.2014.

Section 92C of the Income Tax Act, 1961 (the “Act”) provides for computation of Arm’s Length Price (ALP) of an international transaction or specified domestic transaction.

2.   The Finance Minister in his Budget speech, while introducing the Finance (No. 2) Bill 2014, had made an announcement that “range concept” for determination of ALP would be introduced in the Indian transfer pricing regime however, the arithmetic mean concept will continue to apply where the number of comparables is inadequate. Further, it was announced that use of multiple year data would be permitted for undertaking comparability analysis. Consequent to the announcement, section 92C (2) of the Act was amended by the Finance (No. 2) Act, 2015 to provide that where more than one price is determined by application of the most appropriate method, the arm’s length price in relation to an international transaction or specified domestic transaction undertaken on or after the 1st day of April, 2014 shall be computed in such manner as may be prescribed.

3.   Therefore, the manner of computation of ALP is proposed to be provided through the amendment of Income-tax Rules. The proposed mechanism and conditions under which the multiple year data and ‘range’ concept would be used for determination of ALP shall be as under: -

A.  Adoption of the Range Concept

i. The ‘Range’ concept shall be used only in case the method used for determination of ALP is Transactional Net Margin Method (TNMM), Resale Price Method (RPM) or Cost Plus Method (CPM).

ii. The following steps would be required to construct the range: -

a) A minimum of 9 entities are required to be selected as comparable entities of the tested party, based on the similarity of their functions, assets and risks (FAR) with that of the tested party;

b) 3-year data of these 9 entities (or more) would be considered and the weighted average of such 3-year data of each company would be used to construct the data set. In certain circumstances, data of 2 out of 3 years could also be used. Thus, the data set or series would have a minimum of 9 data points;

c) For calculating the weighted average, the numerator and denominator of the chosen Profit Level Indicator (PLI) would be aggregated for all the years for every comparable entity and the margin would be computed thereafter; and

d) The data points lying within the 40th to 60th percentile of the data set of series would constitute the range.

iii. If the transfer price of the tested party falls outside the range as constructed above, the median of the range would be taken as ALP and adjustment to transfer price shall be made. If the transfer price is within the range no adjustment shall be made. There shall not be two different data sets – one for testing and one for making adjustments.

B.  Use of Multiple Year Data

i. The multiple year data would be used only in case determination of ALP is by Transactional Net Margin Method (TNMM), Resale Price Method (RPM) or Cost Plus Method (CPM);

ii. The multiple year data should comprise three years including the current year i.e. (year in which transaction has been undertaken) and its use for above mentioned methods shall be mandatory;

iii. In case of non-availability of data for 3 years for any of the following reasons: -

  • Data of the current year of the comparables may not be available on the databases at the time of filing of returns of income by taxpayers;
  • A comparable may fail to clear a quantitative filter in any one out of the three years; and
  • A comparable may have commenced operations only in the last two years or may have closed down operations during the current year.

the use of data of two out of relevant three years shall be permitted.

iv. The data of the current year, however, can be used during the transfer pricing audit by both the taxpayer and the department if it becomes available at the time of audit.

C.  Continued use of Arithmetic Mean

In cases where ‘range’ concept does not apply, the arithmetic mean concept shall continue to apply in the same manner as it applied before the amendment to section 92C (2) by theFinance (No. 2) Act 2014 alongwith benefit of tolerance range. Further, in cases where multiple year data is to be used, the same would apply whether “range” concept is used or arithmetic mean is used for determining the ALP. Therefore, in such cases the arithmetic mean of the multiple year data of comparable will be considered for computation of ALP.

4.  The comments and suggestion of stakeholders and general public on the above draft scheme are invited. The comments and suggestions may be submitted by 31st  May, 2015 at the email address (dirtpl1@nic.in  or by post at the following address with “Comments on draft transfer pricing rules“ written on the envelop:

Director (Tax Policy & Legislation)-I

Central Board of Direct Taxes,

Room No. 147-D,

North Block,

New Delhi – 110001

New 14% service tax from June 1 : 20-05-2015


The Central Board of Direct Taxes on Tuesday said the newservice tax of 14 per cent would be applicable from June 1.

Now, eating out, using a mobile phone and travelling by air, among other things, would cost more from June.

The notification comes after the passage of the finance Billearlier this month.

The Budget had announced an increase in service tax from 12.36 per cent to 14 per cent for 2015-16. It had also announced widening of the definition of service tax.

This proposal was floated by the government to facilitate the roll out of the national Goods and Services Tax, expected to be rolled out from April 2016.

This step would help the government earn 24.76 per cent more revenues from services at Rs 2.09 lakh crore in 2015-16 against Rs 1.68 lakh crore in the revised estimate for the current financial year.

Source : Business Standard

No. Minutes of the 65th meeting of the SEZ Dated: 19-5-2015


Minutes of the 65th meeting of the Board of Approval for SEZs held on 19th May 2015 to consider proposals for setting up Special Economic Zones and other miscellaneous proposals. – Dated 19-5-2015 – SEZ

he Sixty fifth (65th) meeting of the Board of Approval (BoA) for Special Economic Zones (SEZ) was held on 19th May, 2015 under the Chairmanship of Shri Rajeev Kher, Secretary, Department of Commerce, at 3.00 P.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. 65.1: Requests for extension of validity of formal approvals

BoA, in its meeting held on 14th September, 2012, while examining similar cases had observed as under: -

“The Board advised the Development Commissioners to recommend the requests for extension of formal approval beyond 5th year and onwards only after satisfying that the developer has taken sufficient steps towards operationalisation of the project and further extension is based on justifiable reasons. Board also observed that extensions may not be granted as a matter of routine unless some progress has been made on ground by the developers. The Board, therefore, after deliberations, extended the validity of the formal approval to the requests for extensions beyond fifth years for a period of one year and those beyond sixth year for a period of 6 months from the date of expiry of last extension”

(i) Request of M/s. Uralungal Labour Contract Co Operative Society Limited (ULCCS Ltd.) for further extension of the validity period of formal approval, granted for setting up of sector specific SEZ for IT/ITES at Nellikode Village, Kozhikode, Kerala, beyond 30th June 2015

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

(ii) Request of M/s. Karnataka Industrial Areas Development Board (KIADB) for further extension of the validity period of formal approval, granted for setting up of sector specific SEZ for IT/ITES at Mangalore, Karnataka, beyond 26th June 2015

The Board after deliberations extended the validity of the formal approval up to 26th June, 2016.

(iii) Request from M/s. Bagmane Developers Private Limited (BDPL) (SEZ–I), developer of IT/ITES SEZ at Mahadevapura K.R. Puram, Bangalore, Karnataka for extension of validity of formal approval, beyond 30th June, 2015

The Board after deliberations extended the validity of the formal approval up to 30th June, 2016.

(iv) Request of M/s. Gulf Oil Corporation 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 Kattigenahalli and Venkatala villages, Yelahanka Hobli, Bangalore, Karnataka, beyond 17th June, 2015

The Board after deliberations extended the validity of the formal approval up to 17th June, 2016.

 (v) Request of M/s. Vedanta Aluminium Limited for extension of the validity period of formal approval, granted for setting up of sector specific SEZ for Manufacture and Export of Aluminium at village Bhurkamunda & Bhagkipalli Tehsil & District Jharsuguda, Orissa beyond 22nd May, 2015

The Board after deliberations extended the validity of the formal approval up to 22nd May, 2016.

(vi) Request of M/s Kandla Port Trust, developer of multi product SEZ at Kandla and Tuna, Gujarat for further extension of the validity period of formal approval, beyond 6th May 2015

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

(vii) Request of M/s. SNP Infrastructure Private Limited for further extension of the validity period of formal approval, granted for setting up of sector specific SEZ for IT/ITES at Zamin Pallvaram village, Chinglepet Taluk, Kanchipuram District, Tamil Nadu, beyond 24th June, 2012

The Board after deliberations condoned the delay and extended the validity of the formal approval up to 24th June, 2016.

(viii) Request of M/s. Velankani Technology Park (P) Ltd. for further extension of the validity period of formal approval, granted for setting up of sector specific SEZ for Electronic Hardware and Software including ITES at Sriperumbudure, Chennai, Tamil Nadu, beyond 22nd May 2014.

The Board after deliberations condoned the delay and extended the validity of the formal approval up to 22nd May, 2016.

(ix) Request of M/s. Nagarjuna Oil Corporation Ltd., for further extension of the validity period of formal approval, granted for setting up of sector specific SEZ for Pharmaceuticals and Petroleum at Kayalattu Village, Cuddalore, Tamil Nadu, beyond 26th February 2015.

The Board after deliberations extended the validity of the formal approval up to 25th February, 2016.

(x) Request of M/s. Ascendant Estates 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 Bhondsi, Tehsil Sohna, Gurgaon, Haryana, beyond 5th November, 2014

The Board noted that the DC, NSEZ had not recommended the proposal for further extension and after deliberations rejected the request for extension of formal approval of the Developer.

 (xi) Request of M/s. G.P. Realtors Pvt. Ltd. for further extension of the validity period of formal approval, granted for setting up of sector specific SEZ for Electronic Hardware & IT/ITES at Village Ghata, Behrampur and Balola, Gurgaon, Haryana, beyond 25th January, 2015.

The Board after deliberations extended the validity of the formal approval up to 25th January, 2016.

(xii) Request for further extension of LoA from M/s. Mayar Infrastructure Development Pvt. Ltd. for setting up of Biotechnology SEZ at village Rahaka & Nimoth District Gurgaon, Haryana beyond 13th July, 2015.

The Board after deliberations extended the validity of the formal approval up to 13th July, 2016.

(xiii) Request of M/s. Indiabulls Industrial Infrastructure Limited for further extension of the validity period of formal approval, granted for setting up of multi product SEZ at village Sinnar, District Nashik, Maharashtra, beyond 24th June, 2015

The Board after deliberations extended the validity of the formal approval up to 24th June, 2016 with the condition that the Developer shall furnish necessary clarifications to the State Government of Maharashtra on the issues raised by it.

(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 Ulwe, District Raigad, Maharashtra, beyond 26th February 2015.

The Board after deliberations extended the validity of the formal approval up to 26th February, 2016 with the condition that the Developer shall furnish necessary clarifications to the State Government of Maharashtra on the issues raised by it.

(xv) 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 Gems & Jewellery at Ulwe, District Raigad, Maharashtra, beyond 26th February 2015

The Board after deliberations extended the validity of the formal approval up to 26th February, 2016 with the condition that the Developer shall furnish necessary clarifications to the State Government of Maharashtra on the issues raised by it.

(xvi) Request of M/s. DLF Info Park (Pune) Ltd. for further extension of the validity period of formal approval, granted for setting up of sector specific SEZ for IT/ITES at Rajiv Gandhi Infotech Park, Phase II, Pune, Maharashtra, beyond 26th June, 2015

The Board after deliberations extended the validity of the formal approval up to 26th June, 2016.

Item No. 65.2 : Requests for extension of validity of in-principle approval

(i) Request of M/s. Venkatesh Coke & Power Ltd. for extension of the validity of inprinciple approval, granted for setting up of Free Trade Warehousing Zone (FTWZ) at Athipattu, Nandiambakkam and Puludivakkam villages, Ponneri Taluk, Thiruvallur Dist, Tamil Nadu, beyond 12th May, 2015

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

Item No. 65.3 : Requests for extension of LoP beyond 3rd Year onwards

(i) Request of M/s. Indofil Industries Limited, a unit in the multi product SEZ being developed by M/s. Dahej SEZ at Bharuch, Gujarat for extension of LoP beyond 13th March 2015.

The Board after deliberations extended the validity of the LoP up to 13th March, 2016.

(ii) Request of M/s. Anushakti Specialities LLP, a unit in the multi product SEZ being developed by M/s. Dahej SEZ at Bharuch, Gujarat for extension of LoP beyond 13th March 2015.

The Board after deliberations extended the validity of the LoP up to 13th March, 2016.

(iii) Request of M/s. Godrej & Boyce Manufacturing Company Limited, a unit in the multi product SEZ being developed by M/s. Dahej SEZ at Bharuch, Gujarat for extension of LoP beyond 29th May 2015.

The Board after deliberations extended the validity of the LoP up to 29th May, 2016.

(iv) Request of M/s. Tatva Chintan Pharma Chem Pvt. Ltd., a unit in the multi product SEZ being developed by M/s. Dahej SEZ at Bharuch, Gujarat for extension of LoP beyond 22nd May 2015

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

(v) Request of M/s P&J Cretechem (P) Ltd., a unit in multi product SEZ developed by Dahej at Bharuch 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.

(vi) Request of M/s. Sajjan Specialty Ltd., a unit in Dahej SEZ for extension of Letter of Permission (LoP) beyond 08th November, 2014

The Board after deliberations extended the validity of the LoP up to 8th November, 2016.

 (vii) Request of M/s. Marsons Industries Pvt. Ltd., a unit in the sector specific SEZ for Engineering SEZ being developed by M/s. Mahindra World City (Jaipur) Ltd. at village Kalwara, Tehsil Sanganer, Distt. Jaipur, Rajasthan for extension of Letter of Permission (LOP) beyond 12th March, 2015

The Board after deliberations extended the validity of the LoP up to 12th September, 2015.

(viii) Request of M/s. KPIT Technologies Limited, a unit in MIDC SEZ for extension of Letter of Permission (LoP) beyond 28th June, 2013

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

(ix) Request of M/s Yash Technologies Pvt. Ltd., a unit in MIDC at Plot No. 23/1, Rajiv Gandhi Infotech Park, Hinjewadi, Phase-III, Pune, Maharashtra for extension of validity period of its LoP beyond 10th November 2014.

The Board after deliberations extended the validity of the LoP up to 10th May, 2016.

(x) Request of M/s Hospira Healthcare India Pvt. Ltd., a unit in Ramky Pharmacity India Limited SEZ for manufacture of Injectables Formulations at Parawada, Visakhapatnam District, Andhra Pradesh for extension of validity period of its LoP beyond 25th June 2015

The Board after deliberations extended the validity of the LoP up to 25th June, 2016.

(xi) Request of M/s Dr. Reddy’s Laboratories Limited – FTO, a unit in Dr. Reddy’s Laboratories SEZ for manufacture of Pharmaceuticals & APIs at Devunipatavalsa village, Ranasthalam Mandal, Srikakulam District, Andhra Pradesh for extension of validity period of its LoP beyond 18th April, 2015.

The Board after deliberations extended the validity of the LoP up to 18th April, 2016.

Item No. 65.4 : Requests for co-developer

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 are as under:-

(i) Request of M/s. Infoparks Kerala for co-developer in the sector specific SEZ for IT/ITES at Muringur Thekkumuri Village, Koratty Panchayathu, Mukundapuram Taluk, Thrissur District, Kerala, being developed by M/s. Kerala State IT Infrastructure Ltd.

After deliberations, the Board approved the proposal of M/s. Infoparks Kerala for codeveloper for construction of 3.3 lakh sqft IT building and utility building, construction of roads, drain, cable trench, ground water sump and sewage treatment plant for the building, over an area of 2.4282 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).

(ii) Request of M/s. MSEZ Power Limited for co-developer in Multi Product SEZ at Baikampady, Mangalore, Karnataka, being developed by M/s. Mangalore SEZ Ltd.

After deliberations, the Board approved the proposal of M/s. MSEZ Power Limited for Co-developer to carry on the power distribution activities to the units in the SEZ Zone. The Co-developer has informed that that the power will be procured from Bangalore Electric Supply Company (BESCOM). The power distribution activities are currently being perused by the developer itself and upon receipt of the required co-developer approval, further activities will be carried out by the proposed co-developer MSEZPL, 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) .

(iii) 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.

The Board noted that the co-developer had not furnished details of ‘other services’ and that the lease period proposed exceeded 30 years. After deliberations, the Board sought details of ‘other services’ from the developer and deferred the proposal.

(iv) Request of M/s. Sands Infrabuild 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. Sands Infrabuild Pvt. Ltd. for co-developer for IT/ITES infrastructure development, operation and maintenance of buildings and supportive infrastructure projects, over an area of 12.74 acres, in accordance with the co-developer agreement entered into with the developer subject to standard terms and conditions as per SEZ Actand Rules provided that the lease period be reduced to a period not exceeding 30 years (Renewable).

(v) Request of M/s. Volupia Developers Pvt. Ltd. for co-developer in Multi Services SEZ at Ratanpur, District Gandhinagar, Gujarat, being developed by M/s. GIFT SEZ Ltd.

After deliberations, the Board approved the proposal of M/s. Volupia Developers Pvt. Ltd. as co-developer to develop, maintain and operate office building for units to undertake export of services in the processing area, over a built up area of 2,50,000 sq.ft., in accordance with the co-developer agreement entered into with the developer subject to standard terms and conditions as per SEZ Actand Rules provided that the lease period be reduced to a period not exceeding 30 years (Renewable).

(vi) Request of M/s. Mundra Solar Technopark Pvt. Ltd. for co-developer in the multi product SEZ at Mundra, Kutch, Gujarat, being developed by M/s. Adani Ports and Special Economic Zone Ltd.

After deliberations, the Board approved the proposal of M/s. Mundra Solar Technopark Pvt. Ltd. as co-developer to develop, operate and maintain Electronics Manufacturing Cluster (EMC) and related infrastructure facilities & services for electronic products including solar energy equipments, its ancillaries etc, over an area of 207.20 hectares, in accordance with the co-developer agreement entered into with the developer subject to standard terms and conditions as per SEZ Act and Rulesand also subject to the project being approved by the DeitY.

(vii) Request of M/s. Wipro Limited for co-developer in the sector specific SEZ for IT/ITES at Thenmelpakkam village, Chengalpattu, Kancheepuram District, Tamil Nadu, being developed by M/s. Mahindra World City Developers Limited

After deliberations, the Board approved the proposal of M/s. Wipro Limited as codeveloper 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 first aid centre and crèche & employee business stay facilities, cafeteria, fuel storage, software development/office bldg. and other activity as may be required in processing area, over an area of 90.19 acres (36.50 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).

(viii) Request of M/s. Wipro Limited for co-developer in the sector specific SEZ for IT/ITES at Coimbatore, Tamil Nadu, being developed by M/s. Electronics Corporation of Tamil Nadu Limited (ELCOT)

After deliberations, the Board approved the proposal of M/s. Wipro Limited as codeveloper 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 first aid centre and crèche & employee business stay facilities, cafeteria, fuel storage, software development/office bldg. and other activity as may be required in processing area, over an area of 9.50 acres (3.84451 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).

Item No. 65.5 : Proposals for setting up of SEZs

(i) Proposal of M/s. Infosys Limited, for setting up of a sector specific SEZ for IT/ITES at Gokul Village, within the limits of Hobli, Hubli Taluk, District Dharward, Near Airport Hubli, Karnataka, over an area of 17.422 hectares.

The Board noted that the Developer is in possession of the land. The Government of Karnataka has also recommended the proposal vide their letter dated 15.09.2014. Accordingly, the Board decided to grant formal approval to the proposal of M/s. Infosys Limited, for setting up of a sector specific Special Economic Zone for IT/ITES at Gokul Village, within the limits of Hobli, Hubli Taluk, District Dharward, Near Airport Hubli, Karnataka, over an area of 17.422 hectares.

 (ii) Proposal of M/s. Mantri Developers Private Limited, for setting up of a sector specific SEZ 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.

The Board noted that the Developer is in possession of the land. The Government of Telangana has conveyed its in-principle approval vide their letter dated 16.05.2015. Accordingly, the Board decided to grant in-principle 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. The Board also noted that there were pre-existing buildings/structures on the land proposed for the SEZ. As such buildings were vacant in terms of SEZ Rules, not having been put to commercial use, the BOA approved the proposal subject to no duty benefits being granted to the developer for pre existing buildings/structures.

Item No. 65.6 : Miscellaneous Cases

(i) Request of M/s. Manyata Promoters Pvt. Ltd., developer of sector specific SEZ for IT/ITES in Karnataka for change in shareholding pattern

After deliberations, the Board approved the request of the 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 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 examine and assess the taxability 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.

(ii) Request of M/s. Leela Soft Pvt. Limited a co-developer in the sector specific SEZ for IT/ITES at Kochi, Kerala being developed by M/s. Infopark SEZ for change of name and transfer of 100% of equity shares.

After deliberations, the Board approved the request for change of name of the codeveloper from Leela Soft Pvt. Limited to M/s. Carnival Soft Pvt. Ltd., and transfer of 100% of equity shares to M/s. Carnival India Pvt. 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 examine and assess the taxability 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 Torrent Energy Ltd. (co-developer in Dahej SEZ), for amalgamation/merger with M/s. Torrent Power Ltd.

The BOA, after deliberations, decided to defer the request of the Co-developer till the new power guidelines are finalized.

(iv) Proposal of M/s. MPAKVN (Indore) Ltd. developer in the multi product SEZ at Indore, Madhya Pradesh for approval of authorized operation in the non-processing area of the SEZ

After deliberations, the Board approved the proposal of the developer for the following authorized operations in the non-processing area of the SEZ subject to the condition that the authorized operation shall be available for use of the SEZ only.

S. No. Authorized Operations

No. of Units

Area per unit (in sqm.) as per

FSI / FAR

norms as applicable

Total area (in sqm.)/ capacity (in MW)

1.

Restaurant

1

NA

240.18 sqm.

2.

Shops

1

NA

159.30 sqm./8 Nos

3.

Dormitory

1

NA

281.26 sqm./20 beds

4.

Sulabh Complex (Public Toilet Facility)

1

NA

73.60 sqm.

The Board also directed that it may be examined that henceforth the power to take decisions on such matters may be delegated to the Department of Commerce.

(v) Proposal of M/s. Larsen & Toubro Ltd. in sector specific SEZ for IT/ITES at Vadodara, Gujarat for temporary two additional access gates during construction activities

After deliberations, the Board approved the proposal for two temporary additional access gates during construction activities.

 (vi) Request of M/s. La Spirit Liquor Trading Company, KASEZ for extension of LoP and conversion of the authorized trading activity from all sorts of liquor to warehousing for worn and used clothe/waste plastic etc.

After deliberations, the BOA approved the extension of LOA upto 19th May, 2016 and deferred the request of the Unit for conversion of the authorized trading activity from all sorts of Liquor to ‘Warehousing for Worn and Used Clothes/Waste Plastic etc.

(vii) Request of M/s. Sarthak Warehousing & Trading Co., KASEZ to cut the material into wipers which left over during the process of their service activity.

The unit has sought permission to carry out manufacturing process on behalf of overseas client i.e. to cut the material into wipers which are left over during the process of their service activity, which is not permitted under Rule 18 (4) (c) of SEZ Rules, 2006. After deliberations, the BOA decided to reject the proposal.

(viii) Request of M/s. Ashmeer Global, KASEZ for setting up of a unit for manufacturing of Gutkha, Scented Khaini, Flavoured Chewing Tobacco & Pan Masala

The BOA directed the Department to examine the policy of permitting units for manufacture of Gutkha, Scented Khaini, Flavoured Chewing Tobacco & Pan Masala etc, in consultation with DIPP and till such time deferred the proposal.

(ix) Appeal of M/s. Integrated Warehousing Kandla Project Development Pvt. Ltd. (IWKPDPL), co-developer for FTWZ at Kandla against BoA decision dated 18.09.2014

The Board after deliberations decided to revoke its earlier decision taken in 63rd BOA held on 18th September, 2014 for cancellation of co-developer status of M/s. IWKPDPL and restored the co-developer approval granted to M/s. Integrated Warehousing Kandla Project Development Pvt. Ltd. (IWKPDPL), co-developer for FTWZ at Kandla.

(x) Proposal of M/s. Tidel Park Coimbatore Ltd. a co-developer in the sector specific SEZ for IT/ITES at Vilankurichi, Coimbatore, Tamil Nadu, being developed by M/s. ELCOT SEZ for approval of authorized operation in the processing area of the SEZ

The Board after deliberations deferred the proposal of the co-developer for approval of authorized operations in the processing area of the ELCOT SEZ.

(xi) Request of M/s. Dr. Fresh SEZ Phase I Private Limited, a co-developer in the sector specific SEZ for IT/ITES at village Ghamroj, Tehsil Sohna, District Gurgaon, Haryana being developed by M/s. Dr. Fresh Health Care Pvt. Ltd. for increase in area

The Board, after deliberations, approved the request of M/s. Dr. Fresh SEZ Phase I Private Limited, a co-developer in the sector specific SEZ for IT/ITES at village Ghamroj, Tehsil Sohna, District Gurgaon, Haryana being developed by M/s. Dr. Fresh Health Care Pvt. Ltd. for addition of 0.634 hectares land thereby making the total area of the SEZ to 1.794 hectares in the processing area of SEZ, subject to the contiguity of the land in the SEZ being maintained.

(xii) Request of M/s. Ranbaxy Laboratories Ltd. developer for sector specific SEZ for Pharmateutical at A-41, Industrial Area, Phase-VIII-A, Mohali, Punjab, for change of name & transfer of assets & liabilities to M/s. Sun Pharmaceutical Industries Ltd. consequent to amalgamation approved by Hon’ble High Court of Punjab & Haryana and Hon’ble Court of Gujarat

The Board approved the request of M/s. Ranbaxy Laboratories Ltd. for change of name & transfer of assets & liabilities to M/s. Sun Pharmaceutical Industries Ltd. pursuant to amalgamation of M/s. Ranbaxy Laboratories Ltd. with M/s. Sun Pharmaceutical Industries Ltd., consequent upon amalgamation order issued by High Court of Punjab and Haryana on 09.03.2015 and High Court of Gujarat on 14.11.2014 subject to:-

(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 examine and assess the taxability 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.

(xiii) Renewal of LoP for next 5 years in respect of M/s. Plastic Processors & Exporters Private Limited, a unit in NSEZ

The Board, after deliberations, deferred the proposal.

(xiv) Request of M/s Pune Embassy Projects Pvt. Ltd., developer of sector specific SEZ for IT/ITES in Hinjewadi, Pune, Maharashtra for change in shareholding pattern

After deliberations, the Board approved the request of the developer for change in shareholding pattern of the company, 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 examine and assess the taxability 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.

(xv) Request of M/s. Sunny Vista Realtors Pvt. Ltd. developer of sector specific SEZ for multi services at Panvel, Maharashtra for change of ownership to M/s. Persipina Developers Pvt. Ltd. (PDPL) and permission for Dual Use Residential Building in Nonprocessing area of SEZ

BOA, after deliberation approved the request of M/s. Sunny Vista Realtors Pvt. Ltd for change of ownership to M/s. Persipina Developers Pvt. Ltd. as developer of SEZ, 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 examine and assess the taxability 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.

The BOA did not approve the proposal for grant tof permission for dual use of infrastructure and directed the Developer to denotify the total area of 1077419 sq.ft. (100094 sqm.) in the Non-processing area where 1012 residential units have been built from the said SEZ, subject to payment of duty benefits availed after obtaining NOC from the State Government.

(xvi) Request of M/s Virtusa India Pvt. Limited, co-developer in M/s. APIIC Ltd. IT/ITES SEZ at Nanakramguda Village, Serlingampally Mandal, Ranga Reddy District, Telangana for merger of their company into M/s. Virtusa Consulting Services Pvt. Ltd.

The Board after deliberations approved the request of M/s. Virtusa India Pvt. Limited for merger of their company into M/s. Virtusa Consulting Services Pvt. Ltd. consequent upon their merger, 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 examine and assess the taxability 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.

(xvii) Proposal of M/s Senpet (India) Ltd., an EOU under Falta SEZ for Denotification of SEZ land on which the EOU is located and swapping of private land with SEZ land.

The matter was deliberated and the Board after deliberations did not approve the proposal of M/s Senpet (India) Ltd. It further directed the Department of Commerce to pass a speaking order in the matter.

Item No. 65.7 : Request for partial de-notification

(i) 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

After deliberation, the Board decided to defer the proposal as the matter was under consideration of the Department of Commerce.

Item No. 65.8 : Cancellation of Formal Approvals

The Board examined the 22 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 22 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/codeveloper Sector Date of formal approval Zone
1. M/s. Hall Marc Technopark (P) Ltd.

(Coimbatore District, Tamil Nadu)

IT/ITES 27.02.2007 MEPZ
2. M/s. Tamilnadu Industrial Development Corporation Ltd.

(Ennore, Tiruvallur District, Tamil Nadu)

Multi Product 23.07.2007 MEPZ
3. M/s. Platinum Holdings Pvt. Ltd. (Navallur, Chennai, Tamil Nadu) Hardware and Software 6.11.2006 MEPZ
4. M/s. True Developers Pvt.

Ltd. (Palladam Taluka, Coimbatore District, Tamil Nadu)

Electronic Hardware including IT/ITES 30.07.2007 MEPZ
5. M/s. KPR Developers Ltd. (Coimbatore District, Tamilnadu) IT/ITES and Electronic Hardware 27.02.2009 MEPZ
6. M/s. Haaciendaa Realtors Pvt. Ltd.

(Kancheepuram District, Tamil Nadu)

IT/ITES 25.10.2008 MEPZ
7. M/s. DSRK Holding (Chennai) Pvt. Ltd.

(Kancheepuram District, Tamil Nadu)

IT/ITES 30.10.2008 MEPZ
8. M/s. R.C. Infosystems Pvt. Ltd. (Tech Zone, Greater Noida) IT/ITES 27.02.2008 NSEZ
9. M/s. Rose View Promoters Pvt. Ltd. (IMT Manesar, Distt Gurgaon, Haryana) IT/ITES 29.11.2010 NSEZ
10. M/s. IVR Prime IT SEZ Pvt. Ltd. (Sector – 144, Noida, Uttar Pradesh) IT/ITES 01.07.2008 NSEZ
11. M/s. Sohna Buildcon Pvt. Ltd. (Dist. Gurgaon, Haryana) IT/ITES 14.01.2008 NSEZ
12. M/s. Mohan Investment and Properties Pvt. Ltd.  (Badshapur, District Gurgaon, Haryana) IT/ITES 26.07.2007 NSEZ
13. M/s. Sarv-Mangal Real Tech Pvt. Ltd.

(Sector 140-A, Noida, Uttar Pradesh)

IT/ITES 18.02.2008 NSEZ
14. M/s. Sunwise Properties Pvt. Ltd. (Gurgaon, Haryana) IT/ITES 21.04.2008 NSEZ
15. M/s. Uppal Housing Ltd. (Knowledge Park–V, Greater Noida) IT/ITES 15.02.2008 NSEZ
16. M/s. Mikado Realtors Pvt.

Ltd. (Village Behrampur & Balola, District Gurgaon, Haryana)

IT/ITES 30.10.2008 NSEZ
17. M/s. GHI Finlease and Investment Ltd. (Village Bhonsi, Distt. Gurgaon, Haryana) IT/ITES 25.08.2006 NSEZ
18. M/s. Progressive Buildestate Pvt. Ltd. (Tehsil Sohna, Distt. Gurgaon, Haryana) IT/ITES 01.07.2008 NSEZ
19. M/s. Township Developers India Pvt. Ltd. (Pune, Maharashtra) Engineering 26.02.2009 SEEPZ
20. M/s. APIIC Ltd. (Putlampally Village, Andhra Pradesh) IT/ITES 30.07.2007 VSEZ
21. M/s. APIIC Ltd. (Kurukalava Village, Renigunta, Andhra Pradesh) IT/ITES 12.10.2007 VSEZ
22. M/s. Raaga Mayuri Builders Pvt. Ltd. (Tadakannapalli Kurnol Dist., Andhra Pradesh) IT/ITES 10.09.2008 VSEZ

Item No. 65.9 : Appeals before BoA

(i) Appeal of M/s. Usha Global Corporation, a unit in Noida SEZ against order dated 17th October, 2014 of the UAC.

The Board heard the petitioner but found no merit in the contentions made by the appellant and rejected the appeal.

(ii) Appeal of M/s. Gujeswori Apparels, a unit in Noida SEZ against order dated 25thNovember, 2014 of the UAC

The Board heard the petitioner and after deliberations, decided to remand the case back to DC NSEZ to reconsider his recommendation and after giving the opportunity to the appellant for personal hearing, pass a speaking order after examining all relevant facts of the case and the applicable Rule position.

(iii) Appeal of M/s. Backbay Clothing, a unit in Noida Special Economic Zone, U.P against order dated 22nd August, 2014 of UAC.

The Board heard the petitioner and after deliberations, decided to remand the case back to DC NSEZ to reconsider his recommendation and after giving the opportunity to the appellant for personal hearing, pass a speaking order after examining all relevant facts of the case and the applicable Rule position.

(iv) Appeal of M/s. Asian Latex Limited, a unit in Noida Special Economic Zone, U.P against order dated 25th November, 2014 of UAC.

The Board heard the petitioner however it found no merit in the contentions made by the appellant and rejected the appeal.

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

Since no representative from the appellant appeared for personal hearing, the Board decided to give another opportunity to the appellant.

(vi) Appeal of M/s. RGN Global Enterprises a unit in Jaipur SEZ against order dated 31st March, 2015 of the UAC, Jaipur SEZ.

The Board noted that the unit had requested to withdraw the appeal. Accordingly, the Board allowed the appeal to be withdrawn.

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

Since no representative from the appellant appeared for personal hearing, the Board decided to give another opportunity to the appellant.

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

On the request of the appellant to adjourn the hearing to any day after three weeks or till next BOA meeting, the Board deferred the appeal till next BOA meeting.

(ix) W.P. (C) No. 431/2012 filed by M/s Futuristic Trading Pvt. Ltd. before the Hon’ble High Court of Delhi

(x) W.P (C) No. 442/2012 filed by M/s Globus Metal Trading Pvt. Ltd. before the Hon’ble High Court of Delhi.

Brief Background of the above petitions

Both the above mentioned petitioners had submitted their proposals for setting up of units in the Kandla SEZ to carry on (a) Import of scrap material to the warehouse; (b) Segregation of material by labours; (c) Unbundling of scrap; (d) Cutting of scrap to make it usable as per customer requirement; (e) Polishing and welding; and, (f) Bundling if required by customer.

The KASEZ UAC rejected their requests and the petitioners filed an appeal before 48th meeting of the BoA held on 19.09.2011. The Board rejected the appeal as it was against the provision of Rule 18(4) (d) of the SEZ Rules, 2006. Aggrieved by the decision of BoA the petitioners filed writ petitions before the Hon’ble Court of Delhi. The Delhi High Court on 19.01.2015, gave its verdict which is reproduced below:-

“Accordingly, the impugned orders are set aside. The appellate authority is directed to accord a hearing to the petitioners. The appellate authority will send an appropriate notice in that behalf to the petitioners indicating the date, time and venue. The notice will be sent in this behalf to the petitioner no later than ten (10) days from today. A decision will be taken on the appeal of the petitioner, as expeditiously as possible, though no later than six (6) weeks from today……”

The Board heard the lawyer representing both M/s. Futuristic Trading Private Ltd. and M/s. Globus Trading Pvt. Ltd. The Board also observed that these Units’ proposed activities, inter alia include cutting of scrap as well as polishing and welding. The representative of the appellant companies also submitted written arguments in support of its contention. It was noted that the “Recycling Process” involves some or all of the steps including Sorting, Baling, Shearing, Media separation, Melting etc. The Board noted that the activities proposed to be carried out by the appellant companies amounted to recycling of waste attracting the prohibition enshrined in Rule 18(4) (d) which provides, “No proposal shall be considered for import of other used goods for recycling.” The Board thus rejected the appeal of the SEZ Units.

Decision on Supplementary Agenda

Item No. 65.10 : Requests for co-developer

(i) Request of M/s. Electronics Technology Parks-Kerala (Technopark) for codeveloper in the sector specific SEZ for IT/ITES at Mulavana Village, Kollam District, Kerala, being developed by M/s. Kerala State Information Technology Infrastructure Limited

After deliberations, the Board approved the proposal of M/s. Electronics Technology Parks-Kerala (Technopark) for construction of a total of 5 lakhs sq.ft. IT/ITES Building, power/water, road and other infrastructure for the park, over an area of 01.80 hectares, in accordance with the co-developer agreement entered into with the developer subject to standard terms and conditions as per SEZ Actand Rules provided that the lease period be reduced to a period not exceeding 30 years (Renewable).

Item No. 65.11 : Cases for ratification by the BoA

(i) Request of M/s. Lupin Ltd., a unit in MIHAN SEZ, for extension of Letter of Permission (LoP) beyond 22nd April 2015

The Board after deliberations ratified the proposal for extension of validity period of LoP up to 22nd April, 2016.

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 19th May, 2015 under the Chairmanship of Commerce Secretary, Department of Commerce

1. Shri Rajeev Kher, Chairman, BoA & Commerce Secretary, Department of Commerce

2. Shri Ram Tirath, DGEP, Department of Revenue, Ministry of Finance

3. Dr. L. B. Singhal, Additional DGFT, Dte. General of Foreign Trade

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

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

6. Shri Anwar Ali, Deputy Director, DGEP

7. Ms. Abha Shukla, Resident Commissioner, Government of Maharashtra

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

9. Dr. Namrata Pathak, Director/SC-F, Department of Science & Technology

10. Shri Dinesh Kumar, Deputy Secretary, Ministry of Shipping

11. Shri Hardyal Sehrawat, Additional Director Industries, Department of Industries & Commerce, Haryana

12. Shri Sanjiv Bawa, ED, (PSIEC), Government of Punjab

13. Shri N.K. Singh, HOD (Industries), Noida, Government of Uttar Pradesh

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

15. Shri Ajay Kumar, Research Assistant, TCPO, Ministry of Urban Development, Vikas Bhawan, IP. Estate, New Delhi

LIST OF DEVELOPMENT COMMISSIONERS

16. Shri Sumeet Jerath, Development Commissioner, Noida SEZ

17. Dr. Safeena AN, Development Commissioner, CSEZ

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

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

20. Shri A.K. Choudhary, Development Commissioner, MEPZ

21. Shri Upendra Vashisht, Development Commissioner, KASEZ

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

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

24. Shri Rakesh kumar, Deputy Development Commissioner, Noida SEZ

LIST OF PARTICIPANTS FROM DEPARTMENT OF COMMERCE

25. Shri A.K. Bhalla, Additional Secretary, Department of Commerce

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

27. Shri Sanjeet Singh, Director, Department of Commerce

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

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

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

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

No. D.O.F.No.334/5/2015-TRU Dated: 19-5-2015


The increase in Service Tax rate will come into effect from 1st June, 2015. – Except (i) services provided by the Government or local authority to a business entity and (ii) Swachh Bharat Cess – Date in respect of these two shall be notified later. – Dated 19-5-2015 – Service Tax

Government of India
Ministry of Finance
Department of Revenue
Tax Research Unit

D.O. F. No. 334/5/2015-TRU

New Delhi, May 19, 2015

Dear Principal Chief Commissioner / Chief Commissioner / Director General,

The Finance Bill, 2015, has received the assent of the Honorable President and has been notified. In the Budget, 2015, certain amendments in the Finance Act, 1994 have been incorporated through theFinance Act, 2015, which will come into effect from a date to be notified. In this regard, 1st June, 2015 is being notified as the date on which the provisions as specified in paragraph 2 below will come into effect. Certain provisions in some notifications already issued, will also come into effect from 1st June, 2015.

2. Following provisions will come into effect from 1st June, 2015.

2.1 Section 66B of the Finance Act, 1994, prescribes the service tax rate. It has been amended bySection 108 of the Finance Act, 2015. The rate of Service Tax is being increased from 12% to 14% (including cesses). The increase in Service Tax rate will come into effect from 1st June, 2015.(Notification No.14/2015-Service Tax, dated 19th May, 2015 refers)

2.2  Sections 153 and 159 of the Finance Act, 2015 provide that section 95 of the Finance (No.2) Act, 2004 and section 140 of the Finance Act, 2007, levying Education Cess and Secondary and Higher Education Cess, respectively, on taxable services, shall cease to have effect from a date to be notified by the Central Government. The above provisions levying Education Cess and Secondary and Higher Education Cess should also cease to have effect from 1st June, 2015. (Notification No.14/2015-Service Tax, dated 19th May, 2015 refers), that is the date with effect from which the increase in the Service Tax rate comes into effect.

2.3 The Negative List entry [section 66D (j)] that covers “admission to entertainment event or access to amusement facility” is to be omitted vide section 109 (4) of The Finance Act, 2015. Section 65B (9)and 65B (24) of the Finance Act, 1994 defines amusement facility and entertainment event, respectively. These entries in the definitions have been omitted by the Section 107 (a) and (c) of theFinance Act, 2015. These changes will come into effect from 1st June, 2015. The implication of these changes are as follows,-

(a) Service Tax shall be levied on the service provided by way of access to amusement facility providing fun or recreation by means of rides, gaming devices or bowling alleys in amusement parks, amusement arcades, water parks and theme parks.

(b) Service tax shall be levied on service by way of admission to entertainment event of concerts, pageants, musical performances concerts, award functions and sporting events other than the recognized sporting event, if the amount charged is more than ₹ 500 per person for the right to admission to such an event.

This levy would come into effect from 1st June, 2015. (Notification No.14/2015-Service Tax, dated 19th May, 2015 refers)

2.3.1 However, the existing exemption, by way of the Negative List entry, to service by way of admission to entertainment event, namely, exhibition of cinematographic film, circus, recognized sporting event, dance, theatrical performance including drama and ballet shall be continued, through the route of exemption. Entry 47 and definition of “recognised sporting event” [paragraph 2 entry ‘zab’] has been inserted in notification No. 25/2012-ST vide S.No.1.(xii) and S. No. 2.(b) respectively of notification No. 06/2015-ST dated 1st March, 2015. This entry will also come into effect from 1st June, 2015. (Notification No.16/2015-Service Tax, dated 19th May, 2015)

2.4 The entry in the Negative List [section 66D (f)] that covers service by way of any process amounting to manufacture or production of goods has been amended vide section 109(2) of Finance Act, 2015, to exclude any service by way of carrying out any processes for production or manufacture of alcoholic liquor for human consumption. Consequently, Service Tax shall be levied on contract manufacturing/job work for production of potable liquor for a consideration. In this context, the definition of the term “process amounting to manufacture or production of goods” [section 65 B (40)] has also been amended vide section 107 (f) of the Finance Act, 2015. This levy would come into effect from 1st June, 2015. (Notification No.14/2015-Service Tax, dated 19th May, 2015 refers)

2.4.1 A consequential amendment in S. No. 30 of notification No. 25/2012-ST dated 20th June, 2012, to exclude intermediate production of alcoholic liquor for human consumption from ambit of the exemption, will also come into effect from 1st June, 2015. [Notification No. 06/2015-ST dated 1st March 2015 Entry at Sl. No. 1.(ix)] (Notification No.16/2015-Service Tax, dated 19th May, 2015refers)

2.5 An entry in the Negative list covers betting, gambling or lottery [Section 66D (i)]. This entry has been amended by section 109 (3) of the Finance Act, 2015 so as to include an explanation that “betting, gambling or lottery” shall not include the activity carried out by a lottery distributor or selling agent in relation to promotion, marketing, organising, selling of lottery or facilitating in organising lottery of any kind, in any other manner. The objective of making these exclusions was to make it explicitly clear that while lottery per se is not subject to service tax, aforesaid services in relation to lottery will be taxable. This will come into effect from 1st June, 2015. (Notification No.14/2015-Service Tax, dated 19th May, 2015 refers)

2.6 In respect of certain services like money changing service, service provided by air travel agent, insurance service and service provided by lottery distributor and selling agent, the service provider has been allowed to pay service tax at an alternative rate subject to the conditions as prescribed under rules 6(7), 6(7A), 6(7B) and 6(7C) of the Service Tax Rules, 1994. Consequent to the upward revision in Service Tax rate, the said alternative rates shall also be revised proportionately.

2.6.1 Amendments to this effect have been made in the Service Tax Rules which will also come into effect from 1st June, 2015, that is the date with effect from which the increase in the Service Tax rate is made effective. [Notification No. 05/2015-ST 1st March 2015 Entry at Sl. No. 2(a)(e)(ii)] (Notification No.15/2015-Service Tax, dated 19th May, 2015 refers)

3. Presently, services provided by Government or a local authority, excluding certain services specified under clause (a) of section 66D, are covered in the Negative List. An enabling provision has been made, by amending section 66D (a) (iv), to exclude all services provided by the Government or local authority to a business entity from the Negative List [section 109(1) of Finance Act, 2015]. Consequently, the definition of “support service” [section 65 B (49)] is also to be omitted from date to be notified [section 107(h) of Finance Act, 2015]. As and when this amendment is given effect to, all services provided by the Government or local authority to a business entity, except the services that are specifically exempted, or covered by any another entry in the Negative List, shall be liable to service tax. The date from which this amendment would come into effect will be notified in due course.

4. An enabling provision has been incorporated in the Finance Act, 2015 vide section 117 (Chapter VI) to impose a Swachh Bharat Cess on all or any of the taxable services at a rate of 2% or lower on the value of such taxable services. This cess shall be levied on such services at such rate from such date as may be notified by the Central Government. The date from which this amendment would come into effect will be notified in due course.

5. In other words, date of effect of the provisions discussed in para 3 & 4 above are not being notified at present.

6. Amendments have been made by Sections 113, 114 and 115 in the Finance Act, 1994, in order to impart greater clarity and align the service tax provisions with those in Central Excise by adding provisions relating to closure of proceedings in sections 76, 78 and 78B. A similar alignment with the central excise provisions has been done in sections 76(2) and 78(2) with respect to cases where the appellate authority increases the duty or penalty. These changes have come into effect immediately after enactment of Finance Bill, 2015.

7. All the above changes may be brought to the notice of trade and industry and wide publicity may be made in this regard.

(Alok Shukla)
Joint Secretary (TRU-I)

Notification No. : 15/2015 Dated: 19-5-2015


Amends notification no. 12/2014 CE(NT) – Refund of Unutilized Cenvat Credit under Rule 5B of Cenvat Credit to the Service Provider – No refund in respect of supply of manpower for any purpose or security services w.e.f. 1-6-2015 – 15/2015 – Dated 19-5-2015 – 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 & CUSTOMS

NOTIFICATION No 15/2015-Central Excise (N.T.)

New Delhi, the 19th May 2015

G.S.R. (E). - In exercise of the powers conferred by rule 5B of the CENVAT Credit Rules, 2004, the Central Board of Excise and Customs hereby makes the following amendments in the notification No. 12/2014-C.E (N.T.), dated 3rd March, 2014, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 139 (E), dated the 3rd March, 2014, except as thing done or omitted to be done with respect to supply of manpower for any purpose or security services upto and including 31st March, 2015, namely:-

In the said notification,

(i) In paragraph 1, relating to safeguards, conditions and limitations, in sub-paragraph (a), clause (ii) shall be omitted;

(ii) In Form A, in paragraph (a), in the table, Sl. No. 2 and the entries relating thereto shall be omitted.

[F.No. 334 /5/ 2015-TRU]

(Akshay Joshi)
Under Secretary to the Government of India

Note:-The principal notification was published in the Gazette of India, Extraordinary, vide notification No. 12/2014-C.E (N.T.), dated 3rd March, 2014, vide number G.S.R139 (E), dated the 3rd March, 2014.

Govt mulls linking DBT schemes to one account : 19-05-2015


Transferring all subsidies into single account could reduce subsidy leakage.

In a bid to plug subsidy leakage, the finance ministry is planning to link all Direct Benefits Transfer (DBT) schemes into one account.

According to sources, the Department of Economic Affairs has written to the Department of Financial Services seeking comments on ways to prevent subsidy leakage.

“Allowing all the subsidies an individual is entitled to should be transferred to only one account, as against multiple accounts that are linked to different schemes; this would reduce leakage of subsidy leakage,” said a senior official.

Leakages refer to the subsidised goods that do not reach the intended beneficiary. Leakages not only have the direct costs of wastage, but also the opportunity cost of how the government could otherwise have deployed its fiscal resources.

This move is part of the JAM (Jan Dhan, Aadhaar and Mobile) trinity, which was proposed in the economic survey for FY16 to prevent subsidy leakage. “If  the JAM Number Trinity can be seamlessly linked, and all subsidies rolled into one or a few monthly transfers, real progress in terms of direct income support to the poor may finally be possible,” stated the Economic Survey for 2015-16.

The finance ministry believes that transferring all subsidies in one account will reduce the monthly transfer of subsidies substantially in some cases to as low as one monthly transfer. “Our endeavour is to reduce any duplicity while transferring direct benefits to consumers and we are mulling on ways to reduce that. One such step is to transfer all the subsidies in one bank account. However, we want more accounts to be Aadhaar-seeded,” said another ministry official.

As of December 2014, about 720 million citizens had been allocated an Aadhaar card. These enrolments are increasing at 20 million a month. The government had seeded about 100 million bank accounts with registered Aadhaaar numbers by December 2014. The government currently transfers cooking gas subsidy to nearly 100 million consumers directly to their banks accounts.

Of the 120 million accounts opened under the Pradhan Mantri Jan Dhan Yojana, 40 per cent are linked to Aadhaar and according to officials, more accounts are being linked. Nearly 36 DBT schemes are linked to bank accounts and subsidy is directly transferred in these

According to the survey, 41 per cent of the subsidies transferred through kerosene sold in ration shops were lost due to leakage. The fiscal cost of excess transfer of subsidy on kerosene led to a loss of Rs 10,044 crore for 2011-12. “Value of the fiscal savings – due to lower leakages is eight times greater than the cost of implementing the programme,” stated the survey.

Source : PTI

Notification No. : 14/2015 Dated: 19-5-2015


Amends Rule 6 of the Cenvat Credit Rules, 2004 – Rate of amount of reversal of Credit increased from 6 to 7 – 14/2015 – Dated 19-5-2015 – 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 & CUSTOMS
NOTIFICATION No 14/2015-Central Excise (N.T.),

New Delhi, the 19th May 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 (Third Amendment) Rules, 2015.

(2) They shall come into force with effect from 1st of June, 2015.

2. In the CENVAT Credit Rules, 2004, in rule 6, in sub-rule (3), -

(a) in clause (i), after the words “goods and”, the words “seven per cent. of value of the” shall be inserted.

(b) in the second proviso, for the word “six”, the word “seven” shall be substituted.

[F. No. 334/5/2015-TRU]

(Akshay Joshi)
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. 12/2015 – Central Excise (N.T.) dated 30th April, 2015 published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), by number G.S.R. 346(E), dated the 30th April, 2015.

Notification No. : 17/2015 Dated: 19-5-2015


Exempts taxable services provided under the Power System Development Fund Scheme of the Ministry of Power – 17/2015 – Dated 19-5-2015 – 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)

NOTIFICATION No 17/2015-ST

New Delhi, the 19th May 2015

G.S.R. (E). - In exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts taxable services provided under the Power System Development Fund Scheme of the Ministry of Power (hereinafter referred to as the Scheme), from the whole of the service tax leviable thereon under section 66B of the said Act:-
by way of,-

(A) re-gasification of Liquefied Natural Gas imported by the Gas Authority of India Limited (GAIL);

(B) transportation of the incremental Re-gasified Liquefied Natural Gas (RLNG) (e-bid RLNG) to the power generating companies or plants as specified in the Annexure-I and Annexure -II to this notification,

subject to the following conditions, namely:-

(a) GAIL is appointed as the ‘e-bid RLNG Operator’ for the gas based plants outside Gujarat and Gujarat State Petroleum Corporation Limited (GSPCL) will be ‘e-bid RLNG Operator’ for the gas based plants within Gujarat and GAIL will be the only agency for the procurement of e-bid RLNG under the Scheme;

(b) supply of imported spot RLNG ‘e-bid RLNG’ to the Stranded gas based plants as well as the plants receiving domestic gas, will be upto the target Plant Load Factor (PLF) selected through a reverse e-bidding;

(c) the eligible gas based power plants under the Scheme shall be the Stranded gas based power plants and those plants receiving domestic gas whose actual average PLF achieved during April-January 2014-15 was below the target PLF;

(d) in case of plants receiving domestic gas (Annexure-II), Power System Development Fund Scheme (PSDF) support being made available only for incremental generation of electricity during the relevant period over and above the PLF achieved during April- January 2014-15, for example, if the PLF actually achieved during April-January 2014-15 is 20%, and if during the relevant period the PLF is 25% from all sources including that from e-bid RLNG, then PSDF support will be made available for the electricity corresponding to 25- 20 = 5% PLF, but limited to the actual generation from e-bid RLNG during that relevant period;

(e) the person liable to pay service tax produces the following certificates as verified by the Empowered Pool Management Committee (EPMC) constituted by Ministry of Power vide Office Memorandum No. 4/2/2015-Th-1 dated 27th March, 2015, within a period of three months, or such extended period not exceeding a further period of six months as the Assistant Commissioner or Deputy Commissioner of Central Excise or Service Tax, may allow, before the jurisdictional Central Excise officer:-

(i) certification by Central Electricity Authority (CEA) for each participating gas based plant regarding the quantum of electricity to be generated per unit of gas based on the technical parameters of that plant;

(ii) certification by GAIL regarding quantity of e-bid RLNG gas supplied during the relevant period;

(iii) self-certification by the participating gas based plant regarding the quantity of e-bid RLNG gas actually utilised during the relevant period for generation of electricity, and Discom-wise supply of such electricity; and

(iv) certification by participating Discoms regarding the quantum of e-bid RLNG based electricity purchased during the relevant period from participating gas based plants;

(f) the person, failing to produce the aforesaid certificates before Central Excise Officer within the stipulated period, would pay the duty leviable on such services along with the applicable interest thereon;

Provided that the exemption shall not be available if such Re-gasified Liquefied Natural Gas (RLNG) and Liquefied Natural Gas (LNG), is used for generation of electrical energy by captive generating plant as defined in clause (8) of section 2 of the Electricity Act, 2003 (36 of 2003):
Provided further that nothing contained in this notification shall apply on or after the 1st day of April, 2017.

Annexure – I
LIST OF STRANDED GAS BASED POWER PLANTS

S. No. Name of Power Station Name of the State
(1)
(2) (3)
1
RATNAGIRI (RGPPL-DHABHOL) MAHARASHTRA
2
PRAGATI CCGT-III DELHI
3
DHUVARAN CCPP(GSECL) GUJARAT
4
UTRAN CCPP (GSECL) GUJARAT
5
PIPAVAV CCPP GUJARAT
6
DHUVARAN CCPP(GSECL) GUJARAT
7
HAZIRA CCPP EXT GUJARAT
8
VATWA CCPP (TORRENT) GUJARAT
9
RITHALA CCPP(NDPL) DELHI
10
ESSAR CCPP GUJARAT
11
UNOSUGEN CCPP GUJARAT
12
DGEN Mega CCPP GUJARAT
13
GAUTAMI CCPP ANDHRA PRADESH
14
GMR – KAKINADA (Tanirvavi) ANDHRA PRADESH
15
JEGURUPADU CCPP (GVK) ANDHRA PRADESH
16
KONASEEMA CCPP ANDHRA PRADESH
17
KONDAPALLI EXTN CCPP ANDHRA PRADESH
18
VEMAGIRI CCPP ANDHRA PRADESH
19
SRIBA INDUSTRIES ANDHRA PRADESH
20
RVK ENERGY ANDHRA PRADESH
21
SILK ROAD SUGAR ANDHRA PRADESH
22
LVS POWER ANDHRA PRADESH
23
GMR Vemagiri Exp ANDHRA PRADESH
24
Kondapalli Exp St-III ANDHRA PRADESH
25
Samalkot Exp ANDHRA PRADESH
26
CCGT by Panduranga ANDHRA PRADESH
27
Gas Engine by Astha TELANGANA
27
Kashipur Sravanthi St-I&II UTTARAKHAND
28
Beta Infratech CCGT UTTARAKHAND
29
Gama Infraprop CCGT UTTARAKHAND
30
CCGT by Pioneer Gas Power Ltd. MAHARASHTRA

Annexure – II
LIST OF PLANTS RECEIVING DOMESTIC GAS
(Average PLF during April, 2014-January, 2015)

S. No. Name of Power Station Installed Capacity (MW) Name of the State PLF (%) (April- January, 2014-15)
(1)
(2)
(3)
(4)
(5)
1
NTPC, FARIDABAD CCP 431.59 HARYANA
42.3
2
NTPC, ANTA CCP 419.33 RAJASTHAN
47.9
3
NTPC, AURAIYA CCPP 663.36 UTTAR PRADESH
28.5
4
NTPC, DADRI CCPP 829.78 UTTAR PRADESH
34.6
5
NTPC, GANDHAR (JHANORE) 657.39 GUJARAT
31.0
6
NTPC, KAWAS CCPP 656.2 GUJARAT
31.8
7
I.P.CCPP 270 DELHI
41.2
8
PRAGATI CCGT-III 750 DELHI
33.5
9
PRAGATI CCPP 330.4 DELHI
66.2
10
DHOLPUR CCPP 330 RAJASTHAN
31.2
11
DHUVARAN CCPP(GSECL) 106.42 GUJARAT
17.1
12
HAZIRA CCPP(GSEG) 156.1 GUJARAT
16.0
13
UTRAN CCPP(GSECL) 144 GUJARAT
10.4
14
URAN CCPP(MAHAGENCO) 672 MAHARASHTRA
60.0
15
TROMBAY CCPP (TPC) 180 MAHARASHTRA
78.5
16
BARODA CCPP (GIPCL) 160 GUJARAT
3.1
17
GODAVARI (SPECTRUM) 208 ANDHRA PRADESH
28.4
18
JEGURUPADU CCPP (GVK) 235.4 ANDHRA PRADESH
25.4
19
KONDAPALLI CCPP (LANCO) 350 ANDHRA PRADESH
19.8
20
PEDDAPURAM (BSES) 220 ANDHRA PRADESH
11.6
21
VIJESWARAN CCPP 272 ANDHRA PRADESH
24.8
22
PEGUTHAN CCPP (GTEC) 655 GUJARAT
5.4
23
SUGEN CCPP (TORRENT) 1147.5 GUJARAT
25.6

[F. No.334/5/2015 -TRU]

(Akshay Joshi)
Under Secretary to the Government of India

Notification No. : 16/2015 Dated: 19-5-2015


Amendment in the Mega Exemption Notification relating to (i) Job work (alcoholic liquors for human consumption) and (ii) Services by way of right to admission shall be effective from 1-6-2015 – 16/2015 – Dated 19-5-2015 – 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)

NOTIFICATION No 16/2015-ST

New Delhi, the 19th May 2015

G.S.R. (E). - In exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby appoints the 1st day of June, 2015 as the date on which the provisions of sub-paragraphs (ix) and (xii) of paragraph 1 and sub-paragraph (b) of paragraph 2 of the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 06/2015 – Service Tax, dated the 1st March, 2015, published in the Gazette of India, Extraordinary, vide number G.S.R. 160(E), dated the 1st March, 2015 shall come into force.

[F. No.334/5/2015 -TRU]

(Akshay Joshi)
Under Secretary to the Government of India

Notification No. : 15/2015 Dated: 19-5-2015


Revised rates of compounded levy of service tax under Rule 7, 7A, 7B and 7C shall be effective from 1.6.2015 – 15/2015 – Dated 19-5-2015 – 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)

NOTIFICATION No 15/2015-ST

New Delhi, the 19th May 2015

G.S.R. (E). - In exercise of the powers conferred by sub-section (1) read with sub-section (2) of section 94 of the Finance Act, 1994 (32 of 1994), the Central Government hereby appoints the 1st day of June, 2015 as the date on which the provisions of sub-clauses (a), (b) and (c) and item (A) of sub-clause (d) of clause (ii) of sub-paragraph (e) of paragraph 2 of the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 05/2015 – Service Tax, dated 1st March, 2015, published in the gazette of India, Extraordinary, vide number G.S.R. 159(E), dated 1st March, 2015 shall come into force.

[F. No.334/5/2015 -TRU]

(Akshay Joshi)
Under Secretary to the Government of India

Notification No. : 14/2015 Dated: 19-5-2015


Increased rate of service tax from 12.36 to 14 shall be effective from 1-6-2015 – Date in respect of (i) services provided by the Government or local authority to a business entity and (ii) Swachh Bharat Cess shall be notified later – Prescribes effective date as 1-6-2015 on which the provisions of clauses (a), (c) and (f) of section 107, section 108, sub-sections (2), (3) and (4) of section 109, section 153 and section 159 of the Finance Act, 2015 shall come into force. – 14/2015 – Dated 19-5-2015 – 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)

NOTIFICATION No 14/2015-ST

New Delhi, the 19th May 2015

G.S.R. (E). - In exercise of the powers conferred by clauses (a), (c) and (f) of section 107, section 108, sub-sections A (2), (3) and (4) of section 109, section 153 and section 159 of the Finance Act, 2015 (No. 20 of 2015), the Central Government hereby appoints the 1st day of June, 2015 as the date on which the provisions of clauses (a), (c) and (f) of section 107, section 108, sub-sections (2), (3) and (4) of section 109, section 153 and section 159 of the said Act shall come into force.

[F.No. 334/5/2015 - TRU]

(Akshay Joshi)
Under Secretary to the Government of India

Notification No. : 13/2005 Dated: 19-5-2015


Amends Abatement Notification no. 26/2012 ST dated 20-6-2012 – Removes the entry related to Chits in the definition part – 13/2005 – Dated 19-5-2015 – 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)

NOTIFICATION No 13/2015-ST,

New Delhi, the 19th May 2015

G.S.R. (E). - In exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby makes the following further amendments in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No.26/2012-Service Tax, dated the 20th June, 2012, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 468 (E), dated the 20th June, 2012, namely:-

In the said notification, in the paragraph 2 relating to definitions, clause ‘a’ shall be omitted.

[F.No. 334/5/2015 - TRU

(Akshay Joshi)
Under Secretary to the Government of India

Note: The principal notification No. 26/2012 – Service Tax, dated 20th June, 2012, was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-Section (i) vide number G.S.R. 468 (E), dated the 20th June, 2012 and was last amended by notification No.08/2015- Service Tax, dated the 1st March, 2015, vide G.S.R. 162(E), dated the 1st March, 2015.

Shah Committee to go into all ‘legacy’ tax issues: Jaitley : 19-05-2015


FM blames foreign investors for inviting MAT levy on themselves by approaching Authority of Advance Rulings in 2012.

The Shah Committee, constituted to go into levy of minimum alternate tax (MAT) on FIIs (foreign institutional investors), will look into all important “legacy” cases, Finance Minister Arun Jaitley said, blaming conflicting judicial rulings for the controversy on the issue that has riled foreign investors.

He also said foreign investors had invited the levy of MAT on themselves by approaching the Authority of Advance Rulings (AAR) in 2012 and since the issue is now stuck in judiciary, the government cannot provide any exemption.

“The only thing we have done is to exempt (MAT levy for the) future. The past is not of our making. You go to a Tribunal and you invite a verdict against yourself. So, if the 2012 verdict had not been invited, the 2010 verdict would have stood,” said Jaitley.

While the tax department has already sent draft notices totalling Rs 602.83 crore to 68 FIIs for previous years, Jaitley, in Budget 2015-16, exempted them from paying the levy with effect from April 1, 2015.

“There is nothing that this government has done. It is a clear legacy issue. As far as the future is concerned, I have completely put the whole issue to rest,” said Jaitley.

The AAR had, in 2010, ruled that MAT did not apply to foreign companies which did not have an office in India.

But 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.

Adding, “On all the important legacy issues, the Justice Shah panel, which comprises experts outside the government, can take a more dispassionate view. If you have only views coming from the revenue department they are too revenue- centric.”

“If you have it coming from the chambers they are too assessee-friendly. So let there be a panel outside which advise the government as to what the correct position appears to be,” Jaitley said.

Source : Business Standard

Notification No. : 14/2015 Dated: 19-5-2015


Amends Rule 6 of the Cenvat Credit Rules, 2004 – Rate of amount of reversal of Credit increased from 6 to 7 – 14/2015 – Dated 19-5-2015 – 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 & CUSTOMS
NOTIFICATION No 14/2015-Central Excise (N.T.),

New Delhi, the 19th May 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 (Third Amendment) Rules, 2015.

(2) They shall come into force with effect from 1st of June, 2015.

2. In the CENVAT Credit Rules, 2004, in rule 6, in sub-rule (3), -

(a) in clause (i), after the words “goods and”, the words “seven per cent. of value of the” shall be inserted.

(b) in the second proviso, for the word “six”, the word “seven” shall be substituted.

[F. No. 334/5/2015-TRU]

(Akshay Joshi)
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. 12/2015 – Central Excise (N.T.) dated 30th April, 2015 published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), by number G.S.R. 346(E), dated the 30th April, 2015.

Rupee gains momentum, up 4 paise against dollar : 18-05-2015


The rupee appreciated by another 4 paise to 63.47 against the US dollar in the early trade today, extending its winning streak for the fourth day on continued selling of the American currency by exporters.

Forex dealers said that apart from sustained selling of the American currency by exporters, dollar’s weakness against other currencies overseas backed up the rupee at the Interbank Foreign Exchange.

Furthermore, a higher opening in the domestic equity markets put the rupee on a strong footing.

The local currency had gained 14 paise to close at 63.51 on Friday.

Meanwhile, the benchmark BSE Sensex rose 126.47 points, or 0.460%, to 27,450.47 in early trade.

Source : PTI

Fiscal deficit was 4% of GDP in FY15, says FinMin : 18-05-2015


The central government’s fiscal deficit for 2014-15 was four per cent of gross domestic product (GDP), according to provisional figures released by the finance ministry on Sunday.

The revised estimate presented in late February had put it at 4.1 per cent. The Centre had to resort to more cuts in plan expenditure to rein in fiscal deficit. The revenue deficit would be 2.8 per cent of GDP in 2014-15, against the revised estimate (RE) and earlier Budget estimate of 2.9 per cent.

Final data on the central government accounts for 2014-15 would be issued by this month-end, which would modify the RE for the year, issued at end-February when this year’s Budget was presented. The finance ministry on Sunday issued its provisional estimates of these RE revisions. These are based on the anticipated adjustments from various ministries and revenue figures of the year.

The controller general of accounts will give the final figures of the fiscal accounts and there would be a slight change in those, compared to what was given on Sunday.

According to these latter figures, the Centre’s fiscal deficit finally would be Rs 501,880 crore, about 98 per cent of the Rs 512,628 crore RE for 2014-15. The revenue deficit would be Rs 358,306 crore, about 99 per cent of the Rs 362,486 crore RE for 2014-15.

“The government is firmly committed to the path of fiscal consolidation and this is a step forward,” the ministry said.

Gross tax collections at Rs 12,45,037 crore showed growth of nine per cent as compared to 2013-14. Devolution of tax collections to states at the end of 2014-15 was Rs 3,37,808 crore. This implied net collections were Rs 9,07,229 crore, slightly lower than the Rs 9,08,463 crore in the RE. Non-tax revenue was Rs 196,959 crore, about 90 per cent of the RE at Rs 217,831 crore. Non-debt capital receipts, which includes disinvestment, was Rs 43,439 crore or 103 per cent of the RE.

Plan expenditure at the end of 2014-15 was Rs 435,621 crore, around Rs 32,000 crore lower than the RE at Rs 467,934 crore. The RE was already lower than the BE by a little over Rs 1 lakh crore.

Non-plan expenditure was Rs 11,91,140 crore or 99.8 per cent of the RE at Rs 12,13,224 crore.

Source : Business Standard

No. HRD/CM/220/14/2013-14/(Pt-II)/1008 Dated: 18-5-2015


Meeting to review the progress in implementation of N.R. Parmar judgment of the Supreme Court and the decisions taken-reg. – Circular – Dated 18-5-2015 – Income Tax

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

CENTRAL BOARD OF DIRECT TAXES

DIRECTORATE OF INCOME TAX

(HUMAN RESOURCE DEVELOPMENT)

ICADR Building, Plot No. 6, Vasant Kunj Institutional Area Phase-II

New Delhi – 110070. Ph. 26130592, Fax 26130594.

HRD/CM/220/14/2013-14/(Pt-II)/1008

Dated: 18.05.2015

To,

All Pr. CCsIT(CCA)

Subject :- Meeting to review the progress in implementation of N.R. Parmar judgment of the Supreme Court and the decisions taken-reg.

Sir/Madam,

To ascertain the status of implementation of the Supreme Court judgment in N.R Parmar and the guidelines issued by CBDT in the form of FAQs, meetings chaired by DGIT (HRD) were held on 30.3.2015 and 10-04-2015, with representatives of all CCAs and ITEF. The representatives from Bihar & Jharkhand and Kerala and ITGOA were not present in the meetings. The highlights of the meeting are as below.

2. The DGIT (HRD) impressed upon the participants that the implementation task was important for finalizing the All India Seniority list of ITOs which in turn was essential for promotion from ITO to ACIT grade.

3, DGIT (HRD) sought inputs from the participants about the process being followed by them for implementation of N.R. Parmar  judgment. The representatives – were unanimous in saying that the process being followed was re-fixing the seniority list followed by review DPCs starting from the lowest grade and progressing upwards. It was explained by them that this bottom-to-top approach was the more preferable method, than undertaking the fixation of seniority list of Inspectors and ITOs first and then progressing downwards, since the latter method would involve a review of the review DPCs, which would add to the confusion and would extend the period of implementation

4. M.P & Chhattisgarh and U.P (East) have already carried out the entire task of implementation of the N.R Parmar decision in all the cadres. In NER, few minor objections post review DPCs were received, which will be finalized soon.

5. Rajasthan region raised a query regarding Examination year 1992 and 1993, whether the Vacancy year and the Examination year in the above years should be treated as 1992-93 and 1993-94 respectively, contrary to the seniority fixed in the Advisory issued by the Board, as some representations had been received from the employees. The DIT (HRD)-II, clarified that decision of the Apex Court clearly states that the seniority is to be counted with respect to the date of requisition, and not the exam year.

6. In A.P & Telengana region, representations were received regarding fixation of seniority in the case of employees selected through Sports and Compassionate quota on the basis of N.R Parmar judgment. They were informed the apex court decision in N.R Parmar is applicable only for the direct recruits selected through the open examination, Sports & Compassionate quota appointments are to be dealt with as per separate instructions.

7. For UP (West) region, the representatives informed that they were not able to trace the records from 1986 to 1991 i.e. for the period, the requisition was made directly by CCIT office to the Staff Selection Commission. DGIT (HRD) advised UP (West) region to obtain the dates of requisition made by them to SSC, by looking into the dossiers of the selected candidates of those years, as the dossiers would contain details of the requisition letters. SSC regional offices or even neighboring regions may be consulted to get a clue.

8. Mumbai also Informed about lack of desired data, as the same were lost during the massive floods which ravaged Mumbai few years back. A Task Force assisted by subcommittees for various cadres has been constituted to prepare and finalize the seniority list. Mumbai proposed to complete all the review DPCs within next 5-6 months.

9. Odisha too was facing the problem of lack of documents. The files of the previous DPCs could not be traced, however, necessary steps were being taken to address the issue.

10. In the other regions, the process of implementation of the N.R Parmar judgment was at various stages like finalization of the seniority list, circulation of the seniority list, completion of review DPCs in some cadres etc. The time frame sought by the regions for completing the remaining work varied from 5-6 months as the total number of review DPCs Involve 28 years i.e DPCs held since 1986,(which is the cut off year), and involves about 120 review DPCs.

11. Measures to accelerate the entire process were also discussed. It was suggested, that the circulation of the seniority list, should be for 3-4 days against duration of week or more, being followed by various regions. This would save time. It was also emphasized that the representatives of the associations at local level should also assist in the exercise, specially at the stage of addressing and resolving of objections to the seniority list circulated, DGIT (HRD) requested the President, ITEF to sensitize ITEF representatives to cooperate with the local administration to expedite the process. President, ITEF agreed to do so.

12. Following decisions were taken in the meeting:

I) Bottom-to-top approach would be followed by all the regions in implementing the decision, which entails re-fixing the seniority list followed by review DPCs starting from the lowest grade and progressing upwards rather than undertaking the fixation of seniority list of Inspectors and ITOs first and then progressing downwards, since the latter method would involve a review of the review DPCs, which would add to the confusion and would extend the period of implementation.

II) All the regions to finish the task of implementation of the N.R Parmar Judgement by 31-07.2015 and also to send the compliance report to DGIT (HRD).

III) Directorate of HRD will monitor the progress of DPCs on regular basis with all cadre controlling authorities.

13. This issues with the approval of Member (P&V), CBDT.

(Surabhi Sharma)

Dy. Director of Income Tax (HRD)

Notification No. : 28/2015 Dated: 15-5-2015


Amendment in Notification Nos. 22/2003- Central Excise and 23/2003- Central Excise dated 31st March, 2003 – 28/2015 – Dated 15-5-2015 – 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.  28/2015 – Central Excise

New Delhi, the 15th May, 2015

G.S.R. 388 (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) and sub-section (3) of section 3 of Additional Duties of Excise (Textile and Textile Articles) Act, 1978 (40 of 1978), the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby directs that each of the notifications of the Government of India, Ministry of Finance (Department of Revenue), specified in column (2) of the Table hereto annexed shall be amended or further amended, as the case may be, in the manner specified in the corresponding entry in column (3) of the said Table, namely:-

TABLE

Serial number

Notification number and Date

Amendments

(1)

(2)

(3)

1.

22/2003- Central Excise, dated the 31st March, 2003 [G.S.R. 265 (E), dated the 31stMarch, 2003] In the said notification,-

(1)   in para 2, in sub-para (2b), the following shall be added at the end, namely :-

“such transferred goods may also be returned by the second unit to the original unit in case of rejection without payment of duty after giving prior intimation to the said officer and by following the re-warehousing procedure.”;

(2)  after para 2B, the following para shall be inserted namely:-

“(2C)  In respect of a group of EOUs or EHTPs or STPs or as the case may be, BTP units which source inputs centrally in order to obtain bulk discount and, or, reduce cost of transportation and other logistics cost and, or, to maintain effective supply chain, inter unit transfer of goods and services may be permitted on a case-to-case basis by the Unit Approval Committee. In case inputs so sourced are imported and, then, transferred to another unit, then value of the goods so transferred shall be taken as inflow for the unit transferring these goods and as outflow for the unit receiving these goods , for the purpose of calculation of NFE.”;

(3)   in para 8, in the Explanation, after clause (3), the following shall be inserted namely :-

“(4) unit which has not availed any duty benefit on procurement of raw material, capital goods, etc., may be provided fast track de-bonding or exit from the STP or EHTP scheme.”;

(4)  in para 9, the following shall be added at the end, namely :-

“The said officer subject to the approval of the Commissioner of Customs or Commissioner of Central Excise, as the case may be, may also allow sharing of infrastructural facilities among EOUs in accordance with and subject to the terms and conditions specified inpara 6.12(g) of Foreign Trade Policy 2015-2020.”;

(5)   after para 9, the following para shall be inserted, namely :-

“9A  An EOU which intends to set up warehousing facilities outside the EOU premises and outside the jurisdiction of Development Commissioner, at a place near to the port of export, to reduce lead time for delivery of goods overseas and to address unpredictability of supply orders, is permitted to do so subject to the provisions ofnotification No. 46/2001-CE (N.T.) dated  the 26th June, 2001as amended from time to time.”;

(6)    in para 10A, after clause (i), the following clause shall be inserted namely :-

“(ia) the exemption contained herein shall also apply to procurement of spares or components, upto 2% of the value of manufactured articles, cleared into DTA, during the preceding year, for supply to the same consignee or buyer for the purpose of after-sale service. The same can be cleared in DTA on payment of applicable duty but such clearances shall be within the overall entitlement of the unit for DTA sale at concessional rate of duty as prescribed in Para 6.08 (a)of Foreign Trade Policy 2015-2020.”;

(7)    in the Explanation  occurring after paragraph 13,-

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

“(iii) ‘Foreign Trade Policy’ means Foreign Trade Policy,  2015 – 2020 notified by the Government of India in the Ministry of Commerce and Industry published in the Gazette of India, Extraordinary, Part-II, Section 3, Sub-section (ii) vide notification No. 01/2015-2020 dated the 1st April, 2015;”;

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

“(vi) ‘Handbook of Procedures’ means Handbook of Procedures notified by the Government of India in the Ministry of Commerce and Industry published in the Gazette of India, Extraordinary, Part-I, Section 1 vide Public Notice No. 01/2015-2020, dated the 1st April, 2015;”;

(c) for clause (x), the following clause shall be substituted, namely:-

“(x) ‘Status holder’ means importer recognised as One Star Export House, Two Star Export House, Three Star Export House, Four Star Export House or as the case may be, Five Star Export House,  in terms of the Foreign Trade Policy;”;

(d) in clause (xi), for the words and figures “Para  6.5 of Foreign Trade Policy and Para 6.9.1 of Handbook of Procedure Volume 1”, the words and figures “Para  6.04 of Foreign Trade Policy and Para 6.10 of Handbook of Procedure” shall be substituted.

2.

23/2003- Central Excise, dated the 31st March, 2003 [G.S.R. 266 (E), dated the 31st March, 2003] In the said notification,-

in Explanation I occurring after paragraph 3,-

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

“(ii) ‘Foreign Trade Policy’ means Foreign Trade Policy,  2015 – 2020 notified by the Government of India in the Ministry of Commerce and Industry published in the Gazette of India, Extraordinary, Part-II, Section 3, Sub-section (ii) vide notification No. 01/2015-2020 dated the 1st April, 2015;”;

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

“(v) ‘Handbook of Procedures’ means Handbook of Procedures notified by the Government of India in the Ministry of Commerce and Industry published in the Gazette of India, Extraordinary, Part-I, Section 1, vide Public Notice No. 01/2015-2020, dated the 1st April, 2015;”.

(F.No: DGEP/FTP/23/2014-EOU & G&J)

( SANJAY KUMAR )

Under secretary to the Government of India

Note:-

(1)    The principal notification No. 22/2003-Central Excise, dated the 31st March, 2003 was published in the Gazette of India Extraordinary, Part II, Section 3 (i) vide G.S.R 265 (E), dated the 31st March, 2003 and last amended by notification No. 25/2009-CE dated 14.09.2009 published vide G.S.R. 673 (E), dated the 14th September,  2009 ;

(2)   The principal notification No. 23/2003-Central Excise, dated the 31st March, 2003 was published in the Gazette of India Extraordinary, Part II, Section 3 (i) vide G.S.R 266 (E), dated the 31st March, 2003 and last amended by notification No. 18/2014-CE dated 11.07.2014 published vide G.S.R. 449 (E), dated the 11th July, 2014.

 

Land bill: Modi government ready to consider UPA clause, says Birender Singh : 16-05-2015


THIRUVANANTHAPURAM: The Narendra Modi government is not averse to reviewing any aspect of the contentious Land Bill, including bringing back the UPA-inspired consent clause, Rural Development Minister Choudhary Birender Singh told ET on Friday.

“Nothing is ruled out. Things can be sorted out only when discussed with an open mind… Any good suggestions, concerning any clause, even consent clause, if it is in the interest of the farmer, we are ready. What I mean is considering if consent should be based on number of landowners or acreage (quantum of land owned),” Singh told ET in an exclusive interview.

Land acquisition is impossible under UPA’s act: Birender Singh

Singh — a veteran Congress leader who crossed over to BJP months before the 2014 general elections that brought Narendra Modi to power — admitted that he had supported the earlier land acquisition Act brought by the UPA regime, which is now being amended by the NDA government.

Referring to the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, that had came into force on January 1, 2014 — months before UPA was voted out of power — Singh said: “I had told Sonia Gandhi about the ‘Change in Land Use’ practice in Haryana when there was a Congress CM and she agreed, but did not act against this.”

“The manner in which it was done was like dacoity,” he added. The controversial ‘Change in Land Use’ practice in Haryana had acquired political tones as it was allegedly used in land deals involving companies floated by Robert Vadra, son-in-law of Congress president Sonia Gandhi.

But Singh said his real problem with UPA’s land law was more with the “mistakes” in the original Act. “It is true that I supported the UPA law. But when I became minister, would you believe that the first time I sat with my ministry people, I found 54 clerical, grammatic and spelling mistakes? When you had to say ‘act’, you were using ‘part’, for instance,” he said.

The Modi government had taken it as a priority legislation to amend clauses of the UPA bill, especially the one seeking consent of 70-80% of those whose land is being acquired.
Almost the entire Opposition and some allies of the ruling NDA are against various provisions of the amendment bill brought by the government and the resistance has given a new lease of life to the down-and-out Congress party. The government, which has since promulgated the ordinance on the bill twice, has agree to refer it to a joint select committee to be headed by former Union minister SS Ahluwalia.

Source : Economic Times

 

Instruction No. 84 – 16-4-2015


Simplification of SEZ Rules- Inter Unit Transfers – Dated 16-4-2015 – SEZ

Instruction No. 84

No. H.2/4/2014-SEZ

Government of India

Ministry of Commerce & Industry

Department of Commerce

SEZ Section

Udyog Bhawan, New Delhi

Dated: 16th April, 2015

To

All Development Commissioners

Special Economic Zones

Subject: Simplification of SEZ Rules- Inter Unit Transfers – regarding.

Sir/Madam,

With reference to above cited subject, I am directed to refer to provision laid· down under Rule 50 ofSEZ Rules, 2006 which allows units to transfer goods to DTA or abroad for repair, replacement, testing, calibration, quality testing and research and development purposes under intimation to the Specified Officer, on maintenance of records for movement of such goods, or to any recognized laboratory or institution on giving an undertaking to the authorized officer for the return of such goods.

2. With a view to promote the ease of doing business further, it is advised that SEZ Units are now allowed to remove goods for repair, replacement, testing, calibration, quality testing and research and development purposes also on self attestation basis under intimation to the Specified Officer and on giving an undertaking to the Authorised Officer for return of such goods. A record of these will be maintained by the unit as per SEZ Rules.

3. This will take immediate effect.

Yours faithfully,

(Kabiraj Sabraj)

Under Secretary to the Govt. of India

Tel. 23062496

e-mail: kabiraj.sabar@nic.in

COPY to: Shri Ram Tirath, Director General, DGEP, Hotel Janpath, Janpath, New Delhi.

PM Modi: China, India to explore mutually acceptable resolution of border dispute : 15-05-2015


Prime Minister Narendra Modi on Friday urged the Chinese leadership to adopt a fresh approach to contentious issues affecting relations between India and China so that the two sides could play a greater role on the world stage.

Modi described the India-China relationship in recent decades as “complex” but said both sides are committed to set a “new direction between the two largest Asian countries”.

Speaking alongside his Chinese counterpart Li Keqiang after the two countries signed 24 agreements, Modi said both sides had agreed to continue to explore a “fair, reasonable and mutually acceptable resolution” of their dragging border dispute. He also sought tangible progress on issues related to the visa policy and trans-border rivers.

“I am pleased to visit China in the first year of my government. This is one of our most important strategic partnerships…The re-emergence of India and China and their relationship will have a profound impact on the two countries and the course of this century,” he said.

He said he had found the Chinese leadership “responsive” to his suggestion that China take a strategic and long-term view of bilateral relations. “I stressed the need for China to reconsider its approach on some of the issues that hold us back from realising full potential of our partnership,” he added.

“On the boundary question, we agreed that we continue to explore a fair, reasonable and mutually acceptable resolution. We both reiterated our strong commitment to make all efforts to maintain peace and tranquility in the border region,”  he said.

Source : The Hindu

Starting FY16 on a disinflationary note : 15-05-2015


The fall in the wholesale price index (WPI) steepened in April “dropping to -2.7 per cent from -2.3 per cent in March. This is the sixth consecutive decline in WPI inflation, signaling mounting disinflationary pressures in the economy. A major part of this has come from a decline in fuel and power inflation ” averaged at -10.6 per cent since November 2014. In April, along with fuel inflation, primary article (-0.5 per cent) and manufacturing inflation (-0.5 per cent) also turned into the negative category. However, as fuel prices start to firm up from their lows in the last quarter, fuel inflation might see a moderate uptick in the coming months.

Measures of core inflation, “the non-food manufacturing inflation was negative at -0.4 per cent and the CRISIL Core inflation Indicator (CCII) also fell to a decade low of -0.1 per cent in the month. As the economic recovery continues to remain fragile, demand side pressures remain benign on inflation as indicated by the core indicators.

Lower readings for both WPI and CPI this month, along with weak IIP data, opens up room for the RBI to reduce the policy rate further. We expect RBI to reduce the repo rate by 25bps on June 2 ” the next monetary policy meeting. An out of policy rate cut in the next few days cannot be ruled out.

Headline inflation was pulled down by falling fuel price and power prices (inflation fell to -13.0 per cent). Prices remained unchanged in coal while dropping sharply in mineral oils (-19.1 per cent). The latter was influenced by low prices of LPG (-6.1 per cent), Petrol (-18.4 per cent) and High speed diesel (-14.4 per cent). Crude oil prices have firmed up in recent months however we believe this uptick will be temporary. We expect oil prices to average at $60-65/barrel (Brent) in 2015-16 from an estimated average of $85/barrel in 2014-15.

Turning to primary articles, food inflation softened to 5.7 per cent from 6.3 per cent in March as a drop in fruits and vegetable inflation (7.4 per cent from 11.3 per cent in march) offset the pickup in food grain inflation (+80 bps). Despite this it was worrying to see that inflation in pulses shot up to 15.4% in April, signalling that the impact of unseasonal rains is filtering through. This trend was missing in the CPI data released on May 12 and is likely to raise food grain inflation in May.

Core inflation, ” an indicator of demand-side pressure on prices, ” continued its downward journey in April. Non-food manufacturing inflation remained negative at -0.4 per cent with the following items recording negative inflation ” textiles (-2.0 per cent), basic metals (-2.7 per cent), chemicals (-1.6 per cent), rubber (-1.3 per cent) and leather (-2.1 per cent). In other categories such as paper & paper products, and machinery and machine tools inflation moderated in the month.

CRISL Core inflation Indicator (CCII), ” an alternative measure of core inflation which is calculated by removing metal prices from the prices of manufactured articles” turned negative to -0.1 per cent from 0.4 per cent in March. The reason that metals are excluded from the CCII is that metal prices are mostly determined by changing global demand-supply dynamics and volatility in exchange rate rather than domestic conditions alone. In April, overall basic metals prices was negative (-2.7 per cent) with inflation in non- ferrous metals declining (0.4 per cent) while being negative for ferrous metals (-3.6 per cent). As a result, CCII and the non-food manufacturing inflation were at variance. Some of this gap was filled with falling manufactured food inflation, ” an item included in the CCII. Manufactured food inflation turned negative to -1.0 per cent from 0.6 per cent previously. This came on the back of declining sugar and tea and coffee prices. The decline in sugar prices is in line with the fall witnessed in global sugar prices in recent months.

Source : PTI

Govt to keep the option of joint Parliament session open for Land Bill: Jaitley : 15-05-2015


The govt had conceded to opposition demands to send Bill to a 30-member joint select committee day before yesterday.

Finance Minister Arun Jaitley, on Thursday, said sending the proposed amendments on the land acquisition Bill to a joint committee of Parliament was the fastest way possible for the amendments to be legislated. He added that the government would keep all options open on the contentious Bill, including a joint session of both Houses of Parliament.

The government had conceded to opposition demands to send the land Bill to a 30-member joint committee on Tuesday. The committee is expected to give its report in the first week of the monsoon session of Parliament. “The road map that we have now developed of sending it to the joint committee is probably the fastest route to get the land Bill through. Now, if there are some good suggestions that come from the joint committee they are always welcome,” said Jaitley, in an interaction with reporters in the finance ministry.

“Having conducted various dialogues with the regional and other opposition parties, I think the joint committee will be the first route possible. In that sense, it is a productive session,” he said.

When asked if the government would be open to a joint session of Parliament to push the amendments through, Jaitley said no option was being ruled out.

The interaction was also attended by Finance Secretary Rajiv Mehrishi, Revenue Secretary Shaktikanta Das, and Chief Economic Advisor Arvind Subramanian.

Apart from the land Bill, the government had also agreed to the opposition’s demand for sending the constitution amendment Bill to the Goods and Services Tax to a Rajya Sabha committee. The Bill was earlier passed by the Lok Sabha. “Even in the Lok Sabha, the principal opposition party wanted to send the Bill to a committee. That proposal would have been defeated since it requires a majority vote. Hence, as plan B, the principal opposition resorted to disrupting the proceedings,” Jaitley said.

“I would have been much happier if the Rajya Sabha also approved the (Constitution Amendment to) GST. In that sense, I would not have been cutting it to fine with regard to the April 1, 2016 deadline. I would only hope that the principal opposition party had realised the significance of this timeline at this moment.”

Jaitley added that he was confident that the select committee will give “overwhelming support” to GST and that the centre and the states will now have to work overtime to meet the deadline. “I remain very hopeful that the deadline for rollout will be met.”

Additionally, Revenue Secretary Das confirmed that the compliance window provision before the black money law comes into force will be in this financial year. “The Central Board of Direct Taxes (CBDT) is working on the timeline for compliance window. They will be getting notified in a matter of 2-3 weeks,” Das said.

The Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Bill, 2015, which got the nod of the Rajya Sabha on Wednesday, two days after the Lok Sabha passed it, seeks to unearth unaccounted wealth stashed abroad.

On the apprehensions being expressed that the new black money law is tough and could create hardship for people, Jaitley said: “Those who don’t have illegal money or assets abroad have nothing to worry. Amongst those who express very very serious apprehensions, there is a give-away in that.”

Source : Business Standard

Markets take a beating on stuck GST, land bills : 14-05-2015


Wiping out more than half of its gains in the last two sessions, BSE’s benchmark Sensex plunged 630 points on Tuesday as stocks across the board tanked amid worries that key land acquisition and GST reforms would be delayed and another sell-off in global bond markets. The rupee also tumbled by 32 paise to close at 64.17 on fresh dollar demand and capital outflows.

With the market doubting the success of important reform measures, the BSE Sensex plunged below the 27,000 level and closed 2.29 per cent lower at 26,877.48 points after two days of straight gains. The 50-share NSE Nifty also slipped below the 8,200-level by plunging 198.30 points to close at 8,126.95. Investors wealth, or market capitalisation, fell by over Rs 2 lakh crore.

Tuesday’s sell-off was triggered by a stiff political opposition to the government’s ambitious reform proposals on the GST and land acquisition. The government was forced to send the Land Bill to a joint parliamentary committee, while the Bill for roll-out of long-pending Goods and Services Tax also got referred to a Select Committee in Rajya Sabha, disappointing the markets.

Volatility in the bond markets weighed on stocks across the region, adding to existing investor anxiety over the perilous state of Greece’s finances. Even as shares in Europe and Asia fell, traders have blamed the surge on a rise in inflation expectations, higher oil prices, and restricted liquidity caused by ECB purchases.

Vinod Nair, head-fundamental research, Geojit BNP Paribas, said, “the culmination of several factors led to the sharp correction. The correction was led by FIIs in spite of the government setting up a high level committee to decide the MAT issue. Factors like increase in Europe bond yield, outperformance by other emerging markets and currency depreciation have impacted global inflows. Besides, as the domestic earnings are being downgraded and outcome from parliament session is shaky — especiall on the GST and Land Bill — the market is not taking it well.”

“FIIs have remained in the sell mode since mid-April, which has been one of the key reasons for the weakness in Indian equities. Today’s weakness can also be attributed to the global cues with the Asian and European indices trading weak. Sustained depreciation in the rupee against the dollar coupled with the ongoing weak corporate earnings season have also created nervousness. Further, the not-so-encouraging management commentaries post the results have also dented the sentiments,” said Hitesh Agrawal, head research, Reliance Securities.

Source : Business Line

PM arrives in China; to hold talks with President Xi Jinping : 14-05-2015


XI’AN, MAY 14:

Prime Minister Narendra Modi today arrived here on a three-day visit to China during which he will hold summit talks with Chinese President Xi Jinping on a range of issues, including the festering border dispute and China’s plans for infrastructure projects in PoK.

Modi, who is undertaking his first visit to China as Prime Minister, would begin his day here with a visit to the famous Terracotta Warriors museum which has a large collection of terracotta sculptures depicting the armies of Qin Shi Huang, the first Emperor of China.

He would later visit the famous Buddhist Dashang temple in Shaanxi province, the home province of President Xi, who has restored its old glory by making it the headquarters of his mega Silk Road projects.

Xi will join Modi in the afternoon and the two leaders would spend nearly about five hours with restricted as well as informal talks to build on their rapport discussing the most contentious issues like border dispute and China’s big push to rope in reluctant India into the Silk Road projects, specially the Maritime Silk Road (MSR) over which India has strong reservations.

India has raised with China its concerns over huge Chinese investments in Pakistan-occupied Kashmir (PoK) following President Xi Jinping’s trip to Pakistan last month.

In Xi’an, Modi will be hosted by Xi, departing from normal protocol to reciprocate the gesture by Modi in Ahmedabad when the Chinese leader visited India in September last year.

Xi would accompany him to the famous Wild Goose Pagoda, the magnificent structure built in sixth century to commemorate the visit of a spiritual structure build to highlight the famous Chinese Buddhist monk Xuan Zang’s 17-year-long journey.

Modi would also be accorded traditional Tang dynasty welcome followed by a banquet by Xi.

The two countries are set to announce a multi-million joint film production to reconstruct Xuan’s epic journey.

After informal interaction with the Chinese President, Modi will leave for Beijing late in the evening.

He is scheduled to hold talks with Premier Li Keqiang next day and go to Shanghai where he would address a business get-together, inaugurate the first Mahatma Gandhi chair at Fudan University and address the Indian community.

He is being accompanied by National Security Advisor Ajit Doval, Foreign Secretary S Jaishankar and senior officials.

China is the first leg of Modi’s three-nation tour that will also take him to Mongolia and South Korea.

Source : PTI

No. 99 Dated: 14-5-2015


Deferred Payment Protocols dated April 30, 1981 and December 23, 1985 between Government of India and erstwhile USSR – Circular – Dated 14-5-2015 – FEMA

RBI/2014-15/597

A.P. (DIR Series) Circular No. 99

May 14, 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. 96 dated April 30, 2015 wherein the Rupee value of the Special Currency Basket was indicated as ₹ 85.4813 effective from April 16, 2015.

2. AD Category-I banks are advised that a further revision has taken place on April 27, 2015 and accordingly, the Rupee value of the Special Currency Basket has been fixed at ₹ 88.3042 with effect from April 30, 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 sections 10(4) and 11(1) of theForeign 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

No. 98 Dated: 14-5-201


Foreign Currency (Non-Resident) Account (Banks) (FCNR (B)) Scheme – Circular – Dated 14-5-2015 – FEMA

RBI/2014-15/596

A.P. (DIR Series) Circular No. 98

May 14, 2015

To

All Category – I Authorised Dealer Banks

Madam / Sir,

Foreign Currency (Non-Resident) Account (Banks) (FCNR (B)) Scheme

Attention of Authorised Dealer Category-I (AD Category-I) banks is invited to Schedule 2 of theForeign Exchange Management (Deposit) Regulations, 2000, notified vide Notification No. FEMA 5/2000-RB dated May 3, 2000, as amended from time to time, in terms of which instructions regarding opening and maintenance of FCNR (B) deposit have been stipulated.

2. It has come to our notice that Authorised Dealer banks are insisting on different requirements at the time of closure of FCNR (B) deposits and subsequent remittance of funds as under:

i. Submission of A2 form

ii. Insisting on physical presence of the account holder

iii. Asking for purpose of remittance

3. In this connection it is clarified that A2 form is to be filed at the time of purchase of foreign exchange using rupee funds and hence is not applicable while remitting FCNR (B) funds. Further, banks, with the help of technology, will have to devise better alternatives/ methods for ensuring bonafides of the transaction rather than insisting on physical presence of the account holder, in order to ensure hassle free remittance of funds to the account holder.

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

5. The directions contained in this circular have been issued under Sections 10(4) and 11(1) of theForeign Exchange Management Act, 1999 (42 of 1999) and is without prejudice to permissions / approvals, if any, required under any other law.

Yours faithfully,

(A. K. Pandey)

 Chief General Manager

No. 101 Dated: 14-5-2015


Export of Goods and Services- Declaration of Exports of Goods/Software – Circular – Dated 14-5-2015 – FEMA

RBI//2014-15/599

A.P. (DIR Series) Circular No. 101

May 14, 2015

To

All Authorised Dealers in Foreign Exchange

Madam / Sir,

Export of Goods and Services- Declaration of Exports of Goods/Software

Attention of the Authorised Dealers is invited to Regulation 6 of the Notification No.FEMA 23/2000-RB dated May 3, 2000 viz. Foreign Exchange Management (Export of Goods and Services) Regulations, 2000, as amended from time to time, in terms of which every exporter of goods or software has to declare the same in one of the forms stated therein.

2. To further liberalise and simplify the procedure, it has been decided to dispense with the requirement of declaring the export of Goods /Software in the SDF in case of exports taking place through the EDI ports, as the mandatory statutory requirements contained in the SDF have been subsumed in the Shipping Bill format.

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 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

No. 100 Dated: 14-5-2015


Exim Bank’s Line of Credit of USD 1 billion to the Government of Nepal – Circular – Dated 14-5-2015 – FEMA

RBI/2014-15/598

A.P. (DIR Series) Circular No. 100

May 14, 2015

To

All Category – I Authorised Dealer Banks

Madam / Sir,

Exim Bank’s Line of Credit of USD 1 billion  to the Government of Nepal

Export-Import Bank of India (Exim Bank) has entered into an Agreement dated November 25, 2014 with the Government of Nepal, for making available to the latter, a Line of Credit (LOC) of USD 1 billion (USD One billion) for financing of hydropower, irrigation and infrastructure development projects in Nepal. 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 per cent of the contract price shall be supplied by the seller from India except from civil works for which 50% of the contract price shall be supplied by the Seller from India.

2. The Credit Agreement under the LOC is effective from March 27, 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 November 24, 2020 (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 towww.eximbankindia.in

6. The Directions contained in this circular have been issued under sections 10(4) and 11(1) of theForeign 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. 08/2015 Dated: 14-5-2015


Procedure for response to Arrear demand By Taxpayer And Verification and Correction Demand by AOs – Circular – Dated 14-5-2015 – Income Tax

CIRCULAR NO 08/2015

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

DEPARTMENT OF REVENUE

CENTRAL BOARD OF DIRECT TAXES

North Block, ITA-II, Division

New Delhi the 14.05.2015

SubjectProcedure for response to Arrear demand By Taxpayer And Verification and Correction Demand by AOs-regarding.

The CBDT vide Instruction No. 4 of 2014 dated 7th April 2014, inter-alia, prescribed Standard Operating Procedure for Verification and Correction of Demand available or uploaded by AOs in CPC Demand Portal. Further a facility has been made available to taxpayers on the E-filing website (www.incometaxidiaefiling.gov.in) to provide online responses to such demands. The actions required to be performed by the taxpayer and the AO are being consolidated in this circular as under:

2. Action To be performed by Taxpayers

i. Login to e-Filing website with User ID. Password, Date of Birth/ Date of incorporation and Capicha

ii. Go to E-file menu and click on “Response to Outstanding Tax Demand”.

iii. Following details would be displayed.

  • Assessment Year
  • Section Code
  • Demand Identification Number (DIN)
  • Date on which demand is raised
  • Outstanding demand amount
  • Uploaded By
  • Rectification Rights
  • Response- Submit and View

iv. Taxpayer must click on “Submit” link under Response column for the respective AY in order to submit the response. Taxpayer has to select one of the options from the radio button.

  • Demand is correct
  • Demand is partially correct
  • Disagree with demand

v. If taxpayer selects “Demand is correct”, than pop up is displayed as “If you confirm” Demand is correct then you cannot ‘Disagree with the demand’. Click on “Submit” A success message is displayed.

  • If any refund is due, the outstanding demand along with interest will be adjusted against the refund due.
  • In any other case taxpayer has to immediately pay the demand.

vi. If taxpayer selects “Demand is partially correct”, then “Amount which is correct” and ” Amount which is incorrect” has to entered.

vii. If tapayer selects ‘amount which is incorrect’ then he should mandatorily fill one or more reasons for stating so as listed below:

  • Demand has been already Paid -
  • Demand paid and Challan has CIN (Challan Identification Number)
  • Demand paid and Challan has no CIN
  • Demand has already been reduced by rectification/revision
  • Demand has already been reduced by Appellate Order but appear effect has to be given by Department
  • Appeal has been filed and
  • Stay petition has been filed with
  • Stay has been granted by
  • Instalment has been granted by
  • Rectification / Revised Return has been filed at CPC
  • Rectification has been filed with Assessing Officer
  • Others

viii. Based on the reasons selected, the taxpayer need to provide additional information as per the table given below.

Reason Selected Additional Detail Required
Demand paid and Challan has CIN BSR Code
Date of payment
Serial Number of challan
Amount
Remarks (any comments of taxpayer can be included)
Demand paid and Challan has no CIN Date of payment
Amount
Remarks (any comments of taxpayer can be included)
Upload copy of Challan
Demand already reduced by rectification / Revision Date of Order
Demand of AO who has rectified or revised
Upload Rectification / Giving appeal effect order passed by AO
Demand already reduced by Appellate Order but appeal effect to be given Date of Order
Appellate Order passed by (details of CIT (A) etc)
Reference Number of Order
Appeal has been filed: Stay petition has been filed Date of filing of appeal
Appeal Pending with (details of CIT (A) etc)
Stay petition filed with (details of office etc)
Appeal has been filed: Stay has been granted Date of filling of appeal
Appeal Pending with
Stay granted by
Upload copy of Stay Order
Appeal has been filed Instalment has been granted Date of filing of appeal
Appeal Pending with (details of CIT (A) etc)
Instalment granted by (details or office etc)
Upload copy of stay/instalment order
Rectification / Revised Return filed at CPC Filing Type
e-Filed Acknowledgement No
Remarks (any comments of taxpayer can be included)
Upload Challan Copy
Upload TDS Certificate
Upload Letter requesting rectification copy
Upload Indemnity Bond
Rectification filed with AO Date of application
Remarks (any comments of taxpayer can be included)
Other Reasons Others (any comments of taxpayer can be included)

ix. If taxpayer selects “Disagree with the Demand” then taxpayer must furnish the details of disagreement along with reasons Details / Reasons are same as provided under “Demand is partially correct”.

x. After the taxpayer submits the response the success screen would be displayed along with the Transaction ID.

xi. The taxpayers can click on ‘View’ link under Response column to view the response submitted. The following details are displayed:

  • Serial Number
  • Transaction ID
  • Date of Response
  • Response Type

(Note 1: Where the taxpayer has not registered on the Income Tax Department’s e-filing website -www.incometaxindiaefiling.gov.in. he may do so to get details of outstanding demand and also to submit any response.

Note 2: Wherever the taxpayer finds it difficult to access income tAx Department Website, he or she may make necessary application to the Assessing Officer along with above referred details as applicable in this case.

Note 3: In case of individual taxpayers if CIN is not available or payment is made prior to the period of introduction of CIN, the taxpayer may submit the documents as referred in para 4.1 or 4.2)

3. Action on the Part of the Department

The Assessing Officer or CPC Bangalore after verification should reduce/remove/confirm the demand in appropriate cases as per procedure outlined in para 4 below and in accordance with earlier instructions issued by CBDT. However, following cases are to be verified on priority:

a) Taxpayer has furnished information in response to notice u/s 245 of the Act; or

b) Taxpayer has requested for reduction/removal of demand; or

c) Information regarding demand reduction/removal is available in Department Records; or

d) Details are already available in the system, such as additional TDS credits reported by Deductor in case of earlier TDS mismatch.

4. Handling Different Scenarios during Verification and Confirmation of Demand;

The Assessing Officer (AO) should handle different scenarios during verification and confirmation of demand in following manner:

4.1 Demand or tax has been paid:

(a) If the taxpayer’s reply or Departmental records show that demand or tax has already been paid and challan (Challan identification number (CIN)) is available on the system.

i. The AO should reduce the demand by posting the challan or passing rectification order u/s 154 on the system.

ii. If the demand is prior to 01/04/2010, the demand has to be reduced directly on the CPC-FAS system.

b) If CIN is not available or payment is made prior to the period of introduction of CIN, the reduction can be made only in case of Individuals and HUFs provided outstanding demand does not exceed Rs.1,00,000 for that AY. The AO should follow the steps as under:

i. The reduction can be made after obtaining of the document showing evidence of payment in form of taxpayer counterfoil or bank certificate or any communication from Department in respect of payment or adjustment of refund. In case where taxpayer is a senior citizen and taxpayer is not able to obtain bank certificate as the place of payment of tax is different from the current place of taxpayer, the AO should obtain the certificate from the bank directly.

ii. In case the outstanding demand is more than ₹ 25000/- for that AY irrespective of the quantum of demand being reduced under paragraph 4.1 (b) i. above, the AO should obtain an indemnity bond (in the format given in Annexure A) from the taxpayer.

iii. Additionally, in case the demand being reduced under paragraph 4.1 (b).i. above exceeds ₹ 50,000/- for that AY for the assessee, besides obtaining the indemnity bond, approval of Range Head should be taken on file before removing/reducing the demand.

iv. If the payment relates to mismatch of advance tax or self assessment tax, order u/s 154 of the Act needs to be passed.

4.2 Demand due to TDS Mismatch:

(a) If the taxpayer’s reply or Departmental records show that the demand is an account of TDS mismatch and TDS credits are available in the system, the AO should follow steps as under:

i. The AO should reduce the demand by passing rectification order u/s 154 on the system after taking into account the TDS credits available on the system.

ii. If the demand is prior to 01/04/2010, the demand has to be reduced directly on the CPC-FAS system after rectification u/s 154.

(b) If the credits are not available in 26AS: The reduction can be done only in the cases ofIndividuals and HUFs. Further, the amount of reduction should not exceed Rs.1,00,000 for that AY and AO should take following steps.

i. AO should pass order u/s 154 manually after obtaining the TDS certificate from the assessee ont he basis of which claim has been made.

ii. In case, the outstanding demand is more than ₹ 25,000 for that AY, irrespective of the quantum of demand being reduced, the AO should obtain an indemnity bond (in the format given in Annexure A)

iii) Additionally, in case the demand being reduced under paragraph 4.2. (b)i above, exceeds ₹ 50,000/- for that AY for the assessee, besides obtaining the indemnity bond, approval of Range Head should be taken or file before removing/reducing the demand.

4.3 Demand already reduced or action is pending:

(a) If the taxpayer’s reply or Departmental records show that demand has already been reduced by way of an order (rectification order, appeal effect order etc.), the demand has to be reduced directly on the CPC-FAS system.

(b) In case where rectification or giving effect order to reduce demand is pending, the same should be completed and revised demand should be reflected.

(c) It is also clarified that after taking action as per para 4.1 of 4.2, if any refund becomes due to the taxpayer, the same may also be issued.

Enclosure: As above

 (Rohit Garg)
Deputy Secretary to the Government of India

(F.No.225/151/2014/ITA.II)

 

No. 04/2015 Dated: 14-5-2015


Modification of Instruction No. 3 of 2007 – Order-Instruction – Dated 14-5-2015 – Income Tax

Instruction No. 4/2015

F. No.246/94/2013-A&PAC.I

Government of India

Ministry of Finance

Department of Revenue

Central Board of Direct Taxes

New Delhi, the 14th May, 2015

To

All CCsIT (CCA), CCsIT/DGsIT

Sub: Modification of Instruction No. 3 of 2007

1.  The annual target of audit of minimum number of cases to be audited has been prescribed byparagraph III of the Instruction No. 3 of 2007 which reads as under:

III   Internal Audit   Auditable Cases: Norms and Targets

i.   The minimum number of cases to be audited by each Additional CIT, SAP or IAP in a year shall be as under:

Additional CIT : 50
SAP : 300
IAP : 600 (Corporate Cases); & 700 (Non- corporate Cases)

      

The Identical text has also been used in paragraph 3.1.(i) of the Chapter 3 of the Audit Manual 2011.

2.   After the cadre restructuring, number of assessment units which are subject to audit both by the C&AG and the Internal Audit have increased substantially leading to increased workload of auditable cases. Accordingly, annual targets of auditable cases by Internal Audit have been re-examined. Currently the annual target of auditable cases by AddICIT/ JCIT has been fixed at 50 cases per annum i.e the monthly workload of the audit is only 4 cases. Taking into account increased workload of auditable cases and current annual target, it has been decided to enhance annual target of auditable cases for the AddI CIT/JCIT from 50 cases to 150 cases per annum. The annual target will give monthly workload of audit of 12 to 13 cases by the AddI CIT/JCIT. In cases, where posts of AddICIT/JCIT(Audit) are held as additional charge,  Pr.CCIT may suitably adjust the annual target.

3.  The C&AG while examining the wording of annual target for IAP has pointed out that word “&” between 600 (corporate cases) and 700   (non-corporate cases) in Instruction No.3 of 2007 gives the impression that the annual target of audit of minimum number of cases by IAP is fixed at 1300 cases ( 600 corporate cases & 700 non-corporate cases). The Board has clarified to the C & AG the annual target for auditable cases by the IAP is 600 corporate or 700 non-corporate cases. It has been decided to modify the wordings of the paragraph III (i) of Instruction No. 3 of 2007 relating to annual target for IAP by replacing the word “&” by “or” between 600 (Corporate Cases) and 700 (Non-corporate cases) to clarify the target of IAPs.

4.  In view of above, sub paragraph (i) of paragraph III of Instruction No. 03 of 2007 dated 16.04.2007and paragraph 3.1.(i) of the Chapter 3 of the Audit Manual, 2011 are modified as under:

i.  The minimum number of cases to be audited by each Additional CIT, SAP or IAP in a year shall be as under:

Additional CIT (Audit) : 150
SAP : 300
lAP : 600 (Corporate Cases) or 700 (Non- corporate Cases)

5.  The Instruction no 3 of 2007 is amended and supplemented with immediate effect.

6.  This may be brought to notice of all officers   working under your jurisdiction for compliance.

7.  Hindi version of the Instruction will follow.

(Sunita Singh)

Director (A&PAC)

Copy to:-

1) Chairperson, CBDT

2) All Members, CBDT

3) All other officers of CBDT of the rank of Under Secretary and above

4) DIT(PR,PP&OL), Mayur Bhawan, New Delhi

5) The Comptroller and Auditor General of India

6) The DGIT (Vigilance), New Delhi

7) The DGIT (NADT), Nagpur

8) ITCC Division, CBDT (3 copies)

9) Web manager irsoffrcersonline.gov.in

10) Hindi Section – for Hindi translation

(Sunita Singh)

Director (A&PAC)

No. Instruction No. 04/2015 Dated: 14-5-2015


Modification of Instruction No. 3 of 2007 – Order-Instruction – Dated 14-5-2015 – Income Tax

Instruction No. 4/2015

F. No.246/94/2013-A&PAC.I

Government of India

Ministry of Finance

Department of Revenue

Central Board of Direct Taxes

New Delhi, the 14th May, 2015

To

All CCsIT (CCA), CCsIT/DGsIT

Sub: Modification of Instruction No. 3 of 2007

1.  The annual target of audit of minimum number of cases to be audited has been prescribed byparagraph III of the Instruction No. 3 of 2007 which reads as under:

III   Internal Audit   Auditable Cases: Norms and Targets

i.   The minimum number of cases to be audited by each Additional CIT, SAP or IAP in a year shall be as under:

Additional CIT : 50
SAP : 300
IAP : 600 (Corporate Cases); & 700 (Non- corporate Cases)

      

The Identical text has also been used in paragraph 3.1.(i) of the Chapter 3 of the Audit Manual 2011.

2.   After the cadre restructuring, number of assessment units which are subject to audit both by the C&AG and the Internal Audit have increased substantially leading to increased workload of auditable cases. Accordingly, annual targets of auditable cases by Internal Audit have been re-examined. Currently the annual target of auditable cases by AddICIT/ JCIT has been fixed at 50 cases per annum i.e the monthly workload of the audit is only 4 cases. Taking into account increased workload of auditable cases and current annual target, it has been decided to enhance annual target of auditable cases for the AddI CIT/JCIT from 50 cases to 150 cases per annum. The annual target will give monthly workload of audit of 12 to 13 cases by the AddI CIT/JCIT. In cases, where posts of AddICIT/JCIT(Audit) are held as additional charge,  Pr.CCIT may suitably adjust the annual target.

3.  The C&AG while examining the wording of annual target for IAP has pointed out that word “&” between 600 (corporate cases) and 700   (non-corporate cases) in Instruction No.3 of 2007 gives the impression that the annual target of audit of minimum number of cases by IAP is fixed at 1300 cases ( 600 corporate cases & 700 non-corporate cases). The Board has clarified to the C & AG the annual target for auditable cases by the IAP is 600 corporate or 700 non-corporate cases. It has been decided to modify the wordings of the paragraph III (i) of Instruction No. 3 of 2007 relating to annual target for IAP by replacing the word “&” by “or” between 600 (Corporate Cases) and 700 (Non-corporate cases) to clarify the target of IAPs.

4.  In view of above, sub paragraph (i) of paragraph III of Instruction No. 03 of 2007 dated 16.04.2007and paragraph 3.1.(i) of the Chapter 3 of the Audit Manual, 2011 are modified as under:

i.  The minimum number of cases to be audited by each Additional CIT, SAP or IAP in a year shall be as under:

Additional CIT (Audit) : 150
SAP : 300
lAP : 600 (Corporate Cases) or 700 (Non- corporate Cases)

5.  The Instruction no 3 of 2007 is amended and supplemented with immediate effect.

6.  This may be brought to notice of all officers   working under your jurisdiction for compliance.

7.  Hindi version of the Instruction will follow.

(Sunita Singh)

Director (A&PAC)

Copy to:-

1) Chairperson, CBDT

2) All Members, CBDT

3) All other officers of CBDT of the rank of Under Secretary and above

4) DIT(PR,PP&OL), Mayur Bhawan, New Delhi

5) The Comptroller and Auditor General of India

6) The DGIT (Vigilance), New Delhi

7) The DGIT (NADT), Nagpur

8) ITCC Division, CBDT (3 copies)

9) Web manager irsoffrcersonline.gov.in

10) Hindi Section – for Hindi translation

(Sunita Singh)

Director (A&PAC)

How govt could meet April deadline on GST : 13-05-2015


Govt can advance the dates of the convening of the monsoon session of Parliament to early July.

There is still hope that the Goods and Services Tax will be rolled out by next April, despite it being referred to a Rajya Sabha select committee on Tuesday. But such a feat would require a favourable interplay of the schedules of the monsoon sessions of Parliament and 29 state legislatures. Half of these legislatures, or 15, need to ratify the Bill for it to become a law.

The Narendra Modi government, if it so wants, can advance the dates of the convening of the monsoon session of Parliament to early July, instead of the usual end-July or first week of August. The monsoon session of Parliament started in the first week of July in 2014 and 2009, but it is more common for Parliament to meet in the last week of July (in 2010) or first week of August (in 2011, 2012 and 2013). The President notifies the dates of a Parliament session on the advice of the Parliamentary Affairs Minister.

The Rajya Sabha select committee is to give its report on the Bill by the last day of the first week of the session. An early July session could give the government ample time to ensure passage of the Bill and transfer it to state legislative Assemblies.

Parliament and state legislatures hold a minimum of three sessions in a year. “The terms ‘monsoon’ or ‘winter’ sessions have been given by us for convenience. They do not find mention in the Constitution,” constitutional expert Subhash C Kashyap says.

Source : PTI

Bill on GST referred to select committee : 13-05-2015


The 21-member panel will give its report by the last day of the first week of the Monsoon session

A Constitution Amendment Bill providing for roll out of the Goods and Services Tax (GST) was on Tuesday referred to a select committee after the Opposition insisted on its legislative scrutiny of the proposed legislation in Rajya Sabha where the government faces the numbers crunch.

The 21-member panel will give its report by the last day of the first week of the Monsoon session.

Finance Minister Arun Jaitley moved the motion for referring the Bill (The Constitution One Hundred and Twenty-second Amendment Bill, 2014 to the Select Committee.

The Committee constitutes of Bhupender Yadav, Chandan Mitra and Ajay Sancheti (of BJP), Madhusudan Mistry, Mani Shankar Aiyar and Bhalchandra Mungekar (of Congress), Naresh Agrawal (SP), K C Tyagi (JD-U), Derek O’Brien (Trinamool Congress), Satish Chandra Misra (BSP), A Navaneethakrishnan (AIADMK), K N Balagopal (CPI-M), Dilip Kumar Tirkey (BJD), C M Ramesh (TDP), Praful Patel (NCP), Kanimozhi (DMK), Anil Desai (Shiv Sena), Naresh Gujral (SAD), Mohammad Fayaz (PDP), D Raja (CPI), Rajeev Chandrasekhar (Independent). The GST Bill was approved by Lok Sabha on Wednesday last after a walkout by Congress. Congress floor managers in the Rajya Sabha had made it clear to the government that it will not be possible for them to back the bill in the Upper House without referring it to a Select Committee.

While AIADMK was the only party to have declared its opposition to the economic reform measure, the Congress was adamant that it should be sent to a Select Committee for examining the changes that were brought into it by the NDA dispensation.

Source : PTI

Land bill goes to joint committee, government sets sights on joint sitting : 13-05-2015


The government on Tuesday referred the land acquisition bill to a joint committee of Parliament, paving the way for its passage in a joint sitting of Parliament after the monsoon session.

Rural development minister Birender Singh moved the motion for sending the bill to the joint panel after a detailed discussion forced by the opposition.

The discussion had Rahul Gandhi lead the Congress attack on the bill, amplifying his charge that Modi government’s changes to the UPA law were aimed at distributing land as largesse to crony capitalists while the Centre rejected the allegation to claim the bill was “pro farmer”.

The 30-member committee will comprise 20 MPs from Lok Sabha and 10 MPs from Rajya Sabha.

Sources said Congress took a late decision on joining the committee as there were two opinions in the party. While one group felt the party should not join the panel as it was against any changes to the 2013 law, the other felt Congress’ absence  could give the government a free run. The names of KV Thomas and Rajiv Satav were then suggested.

The panel is likely to submit its report in the first week of the monsoon session – roughly by the end of July. It will result in the convening of a joint sitting by August or September.

Though lacking numbers in the upper House, the Centre is not concerned about the defeat of the bill but is keen that it is disposed of. The conditions laid out by Parliament rules for calling a joint sitting state that it can take up a legislation which has been rejected by one of the two Houses.

The Centre is confident that it will have the numbers to push the bill through in the joint sitting of Lok Sabha and Rajya Sabha.

Eager to retrieve the bill from the parliamentary quagmire owing to its minority in the upper House, the choice of a joint committee appears deliberate. Such a panel has to submit its report in the first week of the next Parliament session while a  select committee can discuss indefinitely.

Moreover, a joint panel will have a majority from Lok Sabha, thereby giving the Centre an upper hand in the voting over provisions to be accepted.

A joint committee will preempt the possibility of a vetting panel sitting on the bill as a select committee can do. It will ensure that the government can table the bill in Lok Sabha in the monsoon session. Its passage in Lok Sabha is assured and its rejection in the upper House will clear the hurdles for a joint sitting.

Source : The Economic Times

 

Notification No. : S.O. 1051(E) Dated: 13-4-2015


Set up a sector specific Special Economic Zone for Engineering and related industries (formerly, light engineering including automotive/automotive components ) at Kalwara, Bhamboriya, Bagru Khurd and Jhai Village, Tehsil Sanganer, District Jaipur, in the State of Rajasthan – S.O. 1051(E) – Dated 13-4-2015 – Special Economic Zone

MINISTRY OF COMMERCE AND INDUSTRY

(Department of Commerce)

NOTIFICATION

New Delhi, the 13th April, 2015

S.O. 1051(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 Engineering and related industries (formerly, light engineering including automotive/automotive components ) at Kalwara, Bhamboriya, Bagru Khurd and Jhai Village, 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 103.1775 hectares and 119.4955 hectares at above Special Economic Zone vide Ministry of Commerce and Industry Notification Numbers S.O. 37(E), dated 6th January, 2009 and S.O 341(E) dated 28th February, 2012 respectively;

And, whereas, the Central Government in exercise of the powers conferred by second proviso tosubsection (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 16.42 hectares and de-notified an area of 4.404 hectares vide Ministry of Commerce and Industry Notification Number S.O. 3253(E) dated 23rd October, 2013.

And, whereas, M/s. Mahindra World City (Jaipur) Limited, has now proposed to include an area of 0.201 hectares and decrease an area of 1.522 hectares from the above Special Economic Zone;

Now, therefore, in exercise of the powers conferred by second proviso to sub-section (1) of section 4of 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 0.201 hectares and de-notifies an area of 1.522 hectares, thereby making total area of the Special Economic Zone as 233.368 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

Bhambhoriya

1007

0.010

2

1045

0.070

3

1095

0.010

4

1108

0.014

5

1109

0.014

6

1110

0.013

7

1111

0.050

8

1113

0.020

Total

0.2010 hectares

TABLE FOR DE NOTIFICATION

S. No.

Name of the Village

Khasra No.

Area (in Hectares)

1

Bhambhoriya

947

0.020

2

960

0.840

3

1025

0.015

4

1044

0.012

5

1107

0.008

6

1123

0.001

7

1124

0.001

8

1141

0.008

9

1152

0.055

10

1154

0.082

11

957

0.050

12

Bagru Khurd

928

0.430

Total

1.522 hectares

Grant total of the SEZ area after addition and denotification

233.368 hectares

[F. No. F.1/280/2007-SEZ]

Dr. GURUPRASAD MOHAPATRA, Jt. Secy.

Breather for FIIs: Centre puts MAT notices on hold : 12-05-2015


In yet another relief for the Foreign Institutional Investors (FIIs), the tax authorities have put on hold issuance of new notices as well as action on already issued notices.

“In the light of Finance Minister’s announcement (made in Rajya Sabha on May 7), no coercive action be taken for recovery of demand already raised by invoking provisions of MAT (Minimum Alternate Tax) in the cases for foreign companies. Issue of fresh notices for re-opening of cases as also completion of assessment should also be put on hold unless the case is getting barred by limitation,” a Central Board of Direct Taxes said.

A directive issued to Principal Chief Commissioners and Chief Commissioners (International Taxation) in Delhi, Mumbai, and Bengaluru was sent on Monday. This was in response to the Finance Minister’s announcement about constituting a Committee headed by Justice AP Shah to look into the issue of MAT on FIIs. The Committee is expected to give its report on this issue expeditiously.

The Finance Bill had proposed exempting MAT on FII or FPI (Foreign Portfolio Investors) from April 1, 2015. However, the controversy began when tax authorities issued ₹602.83 crore demand notices in 68 cases of overseas funds to pay MAT for ‘untaxed gains’ made by them in the Indian markets over the past years. This shocked the market which witnessed sharp withdrawal of funds by FIIs.

The Income-Tax Department has imposed 20 per cent MAT on capital gains made by FPIs. All these along with weak global signals shook the market and it is estimated that overseas investors pulled out nearly ₹10,000 crore from the Indian capital markets last week.

Commenting on the latest move, Rajesh H Gandhi, Partner, Deloitte Haskins, said “FIIs should therefore be relieved to know that no further notices will be issued till the committee issued its report,” he said.

Echoing similar sentiment, Sameer Gupta, Tax leader for financial services, EY India said that there are a few blocks moving finally. The Castleton case is now set for early hearing by the Supreme Court in August.

Shah panel may look at ‘Vodafone type’ tax disputes

The Finance Ministry is likely to consider including Vodafone type of disputes in Terms of Reference (TOR) for the Justice A P Shah Panel. TOR is expected to be announced soon. Inclusion of Vodafone kind of cases is because of legacy which is making things difficult for the Government in providing relief to foreign companies.

Source : Business Line

Land Bill to go to joint committee, GST to Rajya Sabha : 12-05-2015


A 30-member joint committee will be set up to look into the land bill and will be headed by Darjeeling BJP MP S.S. Ahluwalia.

The controversial Land Acquisition Bill will be referred to a joint committee of both Houses of the Parliament on Tuesday, while the Goods and Services Tax (GST) Bill will be referred to a select committee of the Rajya Sabha.

A 30-member joint committee will be set up to look into the land bill and will be headed by Darjeeling Bharatiya Janata Party (BJP) MP S.S. Ahluwalia. The committee will have 20 members from the Lok Sabha and 10 members from the Rajya Sabha.

Opposition parties are persistently objecting to the Land Bill, dubbing the legislation as ‘anti-farmer’ and the Prime Minister Modi led-Government has apprehensions over its passage in the Rajya Sabha, where it is in minority.

Meanwhile, the GST Bill is also expected to be sent to a select committee of the Rajya Sabha. The select committee on GST could have either 15 or 21 members.

All India Anna Dravida Munnetra Kazhagam (AIADMK) is the only party to oppose the GST Bill, while the Congress insists that it should be sent to a select committee to examine the changes brought in it by the NDA regime.

The GST Bill seeks to create a comprehensive new indirect tax regime to levy taxes on manufacture, sale and consumption of goods as well as services at the national level.

Earlier this week, the GST Bill was passed in the Lok Sabha.
Source : Business Standard
 

No. Circular 1 of 2015 Dated: 12-5-2015


Consolidated FDI Policy – FDI GUIDELINES – Dated 12-5-2015 – FEMA

Government of India

Ministry of Commerce & Industry

Department of Industrial Policy & Promotion

Consolidated FDI Policy Circular of 2015

Subject: Consolidated FDI Policy

The “Consolidated FDI Policy” is attached.

2. This Circular will take effect from May 12, 2015.

(Atul Chaturvedi)

Joint Secretary to the Government of India


D/o IPP F. No. 5(1)/2015-FC-1 Dated the 12th May, 2015

Copy forwarded to:

1. Press Information Officer, Press Information Bureau- for giving wide publicity to the above circular.

2. NIC, DIPP for uploading the circular on DIPP’s website.

3. Department of Economic Affairs, Ministry of Finance, New Delhi.

4. Reserve Bank of India, Mumbai.

5. Hindi Section for Hindi Translation.

Consolidated_FDI_Policy_Circular_of_2015

No. FTS No. 96370/2015 Dated: 11-5-2015


Imposition of Minimum Alternate Tax (MAT) on foreign companies particularly FIIs. – Circular – Dated 11-5-2015 – Income Tax

FTS No. 96370/2015

Government of India

Ministry of Finance

Department of Revenue

Central Board of Direct Taxes

Dated 11th May, 2015

To,

PCCIT(International Taxation), Delhi

CCIT(International Taxation), Mumbai

CCIT(International Taxation), Bengaluru

Sub: Imposition of Minimum Alternate Tax (MAT) on foreign companies particularly FIIs.

Finance Minister has, while responding to the discussions on the Finance Bill in Rajya Sabha on 7th May, 2015, announced constitution of a Committee headed by Justice A.P. Shah to look into, inter alia, the issue of MAT on FIIs. The Committee is expected to give its report on this issue expeditiously.

In the light of FM’s announcement, no coercive action be taken for recovery of demand already raised by invoking provisions of MAT in the cases for foreign companies. Issue of fresh notices for reopening of cases as also completion of assessment should also be put on hold unless the case is getting barred by limitation.

This issues with the approval of Chairperson, CBDT

(Dr. B.K. Sinha)

CIT(C&S), CBDT

Will not take coercive action against FIIs on MAT: Govt : 09-05-2015


The move comes a day after the ministry announced it would set up a panel to look into the issue.

The finance ministry on Friday said the income tax department wouldn’t adopt coercive methods for recovery of minimum alternate tax (MAT) dues from foreign investors. “Field officers will not push for any coercive demand on MAT claims right now,” said a ministry official.

The move comes a day after the ministry announced it would set up a panel to look into the issue. While the ministry is drafting the terms of reference of the panel, to be announced in four days, sources said the panel’s report would give a “policy direction to tax officers on applicability of MAT on FIIs (foreign institutional investors)”.

On Friday, Revenue Secretary Shaktikanta Das met Law Commission Chairman A P Shah, who is to head the panel on recovery of MAT dues from FIIs. The committee would primarily comprise tax experts, sources said, adding the ministry was working on a time limit for the committee to submit a report.

The report wouldn’t be binding on the government, they said, adding as cases pertaining to the matter were pending in courts, the report would give a direction to the government to resolving these disputes. The tax department has issued notices to 68 FIIs, totalling Rs 602 crore, for non-payment of MAT at 20 per cent of the profits earned.

Besides MAT, the committee will also look into the direct tax policies and legacy issues that lead to uncertainty in tax administration.

Source : PTI

GST preparations: Green signal for IT network : 09-05-2015


Finance ministers’ panel says this work needn’t wait; discusses proposed rate for tax but no decision; asks Centre for more foreign study

State finance ministers on Friday authorised GST Network, a non-profit company, to start work on an information technology (IT) ‘backbone’ for the proposed national goods and services tax (GST).

The cost of the network would be, it was decided, shared equally by Centre and states. April 1 next year is the Centre’s target date for the GST.

The Empowered Committee of State Finance Ministers (EC) concluded a two-day meeting in Thiruvananthapuram on Friday. It could  not decide on the key issue of a GST rate.

It decided to ask the Centre to allow its members to visit some countries having a GST.

The two-day meet approved a sub-committee’s report on an integrated GST (I-GST) to be imposed on interstate movement of goods and services. The tax will be collected by the Centre and distributed to the states. The EC did not take up the issue of whether to raise the one per cent tax meant to help manufacturing states.

The committee got different views on a sub-panel report on registration, returns and refunds. It asked a panel to review the report.

“We have authorised the GST Network to go ahead with their work, based on the reports presented and discussed. Small changes, if needed, could be made after the revised reports. GSTN can always tweak the IT platform to incorporate the changes,” K M Mani, the EC chairman and Kerala finance minister, told journalists.

He exuded confidence that the required IT platform would be ready by the time GST was introduced. “This is the most crucial work,” he said.

The committee agreed to share the cost of GSTN, as mentioned earlier, by states and Centre equally. “The modalities of payment by states is to be decided by a sub-committee proposed to be constituted for this purpose,” Mani said.

GSTN is a company set up to provide IT infrastructure and services to the central and state governments, and other stakeholders, for implementation of GST. The Centre and states hold 24.5 per cent each in the company; 51 per cent equity is with non-government financial institutions.

The EC discussed the issue of a GST rate. An EC sub-committee had recommended an almost 27 per cent ‘revenue-neutral’ rate (RNR, meaning no revenue loss to states after subsuming existing taxes in the proposed system). The state GST (SGST) component would be 13.91 per cent; central GST was to be 12.77 per cent. The committee had also proposed a narrow band for the SGST component.

The recommendations were referred by the EC to the National Institute of Public Finance and Policy, since it was based on revenue collection figures of 2011-12. Union finance minister Arun Jaitley had on Wednesday said, “I straightaway concede that 27 per cent would be very high…after this (rate) was born, states and Centre  decided to keep alcohol out.”

As mentioned earlier, the committee decided to request the Centre to depute EC members to visit some countries where GST has been implemented, to understand the method. “This will be useful for efficient implementation in India,” Mani said.

EC members have already toured  Canada, Japan and South Africa to study GST models there.

Meanwhile, Y Ramakrishnudu, finance minister in Andhra Pradesh, ruled by an ally of the ruling coalition at the centre, criticised the Constitution amendment bill on GST for keeping petroleum and tobacco within the legislation’s ambit.

He said at Friday’s meeting that despite repeated requests to the Union government to not include advertisement tax collected by local bodies and betting and gambling taxes under the GST regime, the legislation includes these.

Source : Business Standard

Notification No. 44/2015 Dated: 8-5-2015


U/s. 80-IA of the IT Act, 1961 – Deductions – Profits and gains from industrial infrastructure undertakings, etc. – 44/2015 – Dated 8-5-2015 – Income Tax

[TO BE PUBLISHED IN PART-II, SECTION 3,

SUB-SECTION (ii) OF THE GAZETTE OF INDIA]

MINISTRY OF FINANCE

(DEPARTMENT OF REVENUE)

(CENTRAL BOARD OF DIRECT TAXES)

NOTIFICATION NO. 44/2015

New Delhi, the 8th May, 2015

S.O.  - Whereas the Central Government in exercise of the powers conferred by clause (iii) of sub-section (4) of section 80-IA of the Income-tax Act, 1961)(43 of 1961)(hereinafter referred to as the said Act), has framed and notified a scheme for industrial park, by the notifications of the Government of India vide number S.O. 50 (E), dated the 8th January, 2008 subsequently amended vide Notification No. S.O. 1605 (E), dated 2nd July, 2008 and vide Notification S.O. No. 1210(E), dated 21.5.2010.

And whereas M/s Dosti Corporation (Pinnacle) having its registered office at Lawrence & Mayo House, 1st Floor, 276, Dr. D.N. Road, Fort, Mumbai is developing an Industrial Park named “Dosti Pinnacle” placed at Plot No.E-7, MIDC, Road No.22, Wagle Industrial Area, Panchpakhdi, Thane (West), Maharashtra.

Now, therefore, in exercise of the powers conferred by clause (iii) of sub-section (4) of section 80-IAof the said Act, the Central Government hereby notifies the undertaking from the date of commencement i.e. 29-3-2011, being developed and being maintained and operated by M/s Dosti Corporation (Pinnacle), as an undertaking and the project named “Dosti Pinnacle” placed at Plot No. E-7, MIDC, Road No.22, Wagle Industrial Area, Panchpakhdi, Thane (West), Maharashtra for the purposes of the said clause (iii) subject to the terms and conditions mentioned in the annexure of the notification.

ANNEXURE

The terms and conditions on which the approval of the Government of india has been accorded for setting up of an industrial park by M/s. Dosti Corporation (Pinnacle), Mumbai.

(i)

Name of the Industrial : Dosti Corporation (Pinnacle), Mumbai

(ii)

Proposed location : E-7, MIDC, Road No.22, Wagle Industrial Area, Panchpakhdi, Thane (West), Maharashtra

(iii)

Minimum Constructed Floor Area : 15,000 square meters.

(iv)

Proposed industrial activities : As defined in Industrial Park Scheme, 2008

(v)

Percentage of allocable area earmarked for Industrial use : 75% or more

(vi)

Percentage of allocable area earmarked for commercial use : 10% or less

(vii)

Minimum number of industrial units : 30 Units

(viii)

Date of commencement : 29-3-2011

2. The Industrial Park shall be construed as developed on the date of commencement i.e. 29-3-2011 as mentioned in the Certificate furnished by the undertaking and issued by the Maharashtra Industrial Development Corporation, Thane.

3. The Industrial Park should be owned by one undertaking.

4. The tax benefits under the Act will be available to the undertaking only after minimum number of thirty industrial units are located in the Industrial Park. For the purpose of computing the minimum number of industrial units, all units of a person and his associated enterprises will be treated as a single unit.

5. No industrial unit, alongwith the units of an associated enterprise, shall occupy more than twenty five per cent of the allocable area.

6. The tax benefits under the Act will be available only to the undertaking notified vide this notification and not to any other person who may subsequently develop, develops and operates or maintains and operates the notified industrial park, for any reason.

7. The undertaking subject to the fulfilment of other conditions, may at its option claim deduction under section 80-IA (4)(iii) of the Income tax Act, 1961 for any ten consecutive assessment years out of fifteen years beginning from the assessment year relevant to the date of commencement of industrial park mentioned in this notification.

8. The Industrial units located in the industrial park shall undertake only those activities as specified in Industrial Park Scheme, 2008.

9. The undertaking must keep separate books of account for the industrial park and must file its income tax returns by the due date to the income-tax department.

10. The notification will be invalid and Dosti Corporation (Pinnacle), Mumbai shall be solely responsible for any repercussions of such invalidity, if

(i)    the application on the basis of which the approval is accorded by the Central Government contains wrong information/misinformation or some material information has not been provided in it.

(ii)   it is for the location of the industrial park for which approval has already been accorded in the name of another undertaking.

11. The undertaking shall furnish an annual report to the Central Board of Direct Taxes in Form IPS-II.

12. The conditions mentioned in this notification as well as those included in the Industrial Park Scheme, 2008 should be adhered to during the period for which benefits under this scheme are to be availed. The Central Government may withdraw the above approval in case the undertaking, fails to comply with any of the conditions.

13. Any amendment of the project plan without the approval of the Central Government or detection in future, or failure on the part of the applicant to disclose any material fact, will invalidate the approval of the industrial park.

[F. No. 178/06/2011-ITA-I]

(DEEPSHIKHA SHARMA)

Director to the Govt. of India

Notification No. : F. No. 334/5/2015-TRU Dated: 8-5-2015


Corrigendum – Notification No. No.26/2015 and 27/2015 Central Excise, dated the 30th April, 2015 – F. No. 334/5/2015-TRU – Dated 8-5-2015 – 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 8th  May, 2015

Corrigendum

G.S.R. (E).- In the notification of the Government of India, in the Ministry of Finance (Department of Revenue),-

(i) No.26/2015-Central Excise, dated the 30th April, 2015 published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 344(E) dated the 30th April, 2015, in page 13, in line 37, for “shall apply” read “shall also apply”.

(ii) No.27/2015-Central Excise, dated the 30th April, 2015 published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 345(E) dated the 30th April, 2015, in page 14, in line 27, for “shall apply” read “shall also apply”.

[F. No. 334/5/2015-TRU]

(Akshay Joshi)

Under Secretary to the Government of India

Raise additional tax to 2% and make it permanent: Congress on GST : 08-05-2015


CHANDIGARH: Haryana Congress today termed the Constitutional Amendment Bill for rolling out the Goods and Services Tax, passed by the Lok Sabha yesterday, as “riddled with intrinsic flaws” saying, which, if not plugged, are bound to dent the finances and adversely affect the state’s economy.

“It seeks to punish Haryana on two counts for being a producing state and for being the second largest contributor to the central grain pool in the country,” Haryana Congress Legislature Party (CLP) leader Kiran Choudhry said.

In a statement here, the former Excise and Taxation Minister said that a fundamental flaw with the Bill that needed to be fixed immediately is the one per cent additional tax producing states will be allowed to impose on the goods exported.

“This provision will hurt Haryana and should be amended to raise the additional tax to two per cent. Besides, the imposition of tax should not be limited to two years only but built into the Act for ever. If not done, it will seek to disincentivize the producing states which would act as a drag on the economy,” she demanded.

“GST will be levied on buyers of goods and services or where the service is consumed. It means that big consuming states such as UP, West Bengal, Kerala  could get a high share of the taxes at the expense of the manufacturing states which defies logic,” she said.

She said that while the four per cent purchase tax on grains, levied by Haryana will be subsumed in GST, other charges like rural development fee, market fee (mandi tax), infrastructure development tax and commission to societies and sub-agents may continue in the new regime.

“I, as Excise and Taxation Minister, kept pressing more than four years that the purchase tax on foodgrains should not be subsumed. If it has been, what inbuilt mechanism has been put in place in the measure to compensate the states for the loss, especially Haryana, which will be among the biggest sufferers? We will lose several thousand crores of rupees on this account alone,” she added.

Source : PTI

MAT: Cases of individual companies will not be referred, says Shaktikanta Das : 08-05-2015


NEW DELHI: The high level committee, announced by Finance Minister Arun Jaitley today, would give its first recommendations on the issue of imposition of MAT on foreign investors, Finance Ministry said today.

“Issue of MAT on FIIs is being referred (to the Committee) with a request to give report expeditiously,” Revenue Secretary Shaktikanta Das told PTI.

The government will soon notify the Terms of Reference of the Committee, he said.

“Cases of individual  companies will not be referred. Only policy issues will be referred,” Das added.

Replying to a debate on Finance Bill in the Rajya Sabha, Jaitley had announced that a high-level committee, headed by Justice AP Shah, the chairman of the Law Commission, will look into the controversial issue of payment of Minimum Alternate Tax (MAT) by FIIs.
The committee would also look into few other tax issues, which are essentially legacy issues.

“The Government will consider the recommendation of the committee and take an appropriate decision as early as possible,” Jaitley had said.

Following a decision of the Authority of Advance Ruling (AAR), Income Tax department had slapped notices on 68 foreign portfolio investors (FPI) saying they have to pay 20 per cent MAT totalling Rs 602.83 crore on untaxed capital gains made by them  over the past three years.

Following that some FPIs have approached the courts against the tax department.

While foreign investors have been exempted from paying MAT from current fiscal, the tax demands of previous fiscals still stands in view of the 2012 decision of the AAR.

Source : PTI

Independent public debt management office may be set up in phased manner : 08-05-2015


NEW DELHI: India is proposing to set up an independent debt management office in a phased manner and will begin discussions with the Reserve Bank of India (RBI) on its contours after the completion of the ongoing budget session, a government official said.

The finance ministry has already drawn up a road map for transfer of public debt management and government borrowing functions from the RBI to the proposed agency. The proposal has been shared with the central bank.

Finance minister Arun Jaitley had withdrawn proposals moved in the finance bill to create an independent public debt management agency or PDMA. The central bank, which manages the government’s debt, had expressed reservations despite several rounds of discussions and agreeing to its inclusion as a budget proposal. Some RBI officials had written to lawmakers and state chief ministers raising concerns over the proposal.

Many members had subsequently opposed the inclusion of the key reform in the finance bill.

The government is, however, firm on seeing the proposal through. “Having an independent debt management office is also the best international practice in countries like the US and the UK,” finance minister Arun Jaitley had said in Lok Sabha while withdrawing the provision from the finance bill. Public debt management and regulation of government securities and other derivatives aren’t handled by the central banks in those countries, he had said.

“Since the RBI has been handling public debt management, the government in consultation with the RBI will prepare a detailed roadmap separating the debt-management function and the market infrastructure from the RBI and having a unified financial market,” he had said. The idea, seen as crucial to efficient functioning of the new inflation targeting monetary policy framework, was mooted by the RBI itself for the first time in its 2000-0 01 annual report.

Source : The Economic Times

GST rates likely to be in the range of 20-23% : 07-05-2015


NIPFP working on this and Jaitley tells Lok Sabha 27% is too high; also says will be ensuring against cascade effect of origin tax; finance ministers’ panel meets today.

The proposed national goods and services tax (GST) rates could be 20-23 per cent, if recommendations of the National Institute of Public Finance and Policy (NIPFP) are accepted by the Centre and states.

Sources said NIPFP is going to recommend this range to the Empowered Committee (EC) of State Finance Ministers. The panel meets in Thiruvananthapuram on Thursday and this item might be discussed, though the report has not been given yet. The meet will also take up the issue of compensation to states and an information technology ‘backbone’ for the GST, termed GST-Network.

In the Lok Sabha, on the GST amendment Bill, Finance Minister Arun Jaitley said the rates would be much below the 27 per cent recommended by a sub-panel of the EC. “I straightaway concede that 27 per cent would be very high…after this 27 per cent (revenue-neutral rate or RNR, at which no revenue loss to states is likely on adoption of GST) was born, the states and the Centre have decided to keep alcohol out,” he said. Adding that both had the same view on this.

“We have decided to keep petroleum out and no state is interested in imposing higher taxes on its people and neither the central government. Therefore, this (RNR) figure is going to be much more diluted compared to the figure (27 per cent) mentioned,” he said.

He said the 13th Finance Commission had suggested 18 per cent as a possible figure. However, it had also suggested a different model of GST compared to what is being considered now.

Currently, the Union excise duty rate is 12 per cent on most goods, while value-added tax (VAT) is 12.5 per cent in most states. This combines to 24.5 per cent. Then, there are purchase taxes in some states and a central sales tax of two per cent on inter-state movement of goods. From this point of view, a goods tax at 27 per cent seems too high, given that VAT also gives input credit and so does excise duty in most cases.

Service tax will, however, be 14 per cent from June and making it 27 per cent would again be too high a rate. Currently, only the Centre can impose service tax.

On the 27 per cent RNR recommended earlier by a EC panel, the state GST (SGST) component was recommended at 13.91 per cent and central GST at 12.77 per cent. The committee had also proposed a narrow band for the SGST component.

The recommendations were referred by the EC to NIPFP, since it was based on revenue collection figures of 2011-12.

Prashant Deshpande, Senior Director, Deloitte in India, said 27 per cent GST rate would be a non-starter. “The rate should address the issue of all — industry, states and consumers,” Deshpande said.

GST rates are not part of the constitutional amendment Bill. It would be decided later by the proposed GST Council, comprising the Union and state finance ministers.

The Bill also tries to allay the concerns of manufacturing states. It seeks to impose a one per cent origin tax, to be given to these states. However, there are concerns that this tax will have a cascade effect and, hence, work against the overall theme of a GST. Jaitley assured the Lok Sabha that this was being worked out, to ensure this did not happen.

Harishanker Subramaniam, national leader-indirect tax services, EY India, says: “The FM’s statement that the one per cent origin tax will not be cascading, though welcome, needs to be reflected in fine print.”

The Lok Sabha rejected many amendments moved by opposition parties, including keeping petroleum outside a GST and imposition of an environmental tax for mineral-rich states like Odisha.

Jaitley assured the states that their losses would be met by the Centre through a tapering mechanism for five years. The Centre would give the states full compensation for the first three years, 75 per cent in the fourth year and 50 per cent in the fifth. Some opposition parties, such as Tamil Nadu’s AIADMK, wanted to know what would happen to states after five years. Jaitley tried to convince them that they’d not incur losses in the first place because they’d be imposing a service tax as well.

Source : PTI

Changes in FEMA okayed to facilitate REITs : 07-05-2015


NEW DELHI, MAY 6:

The Cabinet on Wednesday gave its approval to allow the Real Estate Investment Trusts (REITs) as an eligible financial instrument/structure under the Foreign Exchange Management Act (FEMA) 1999. “This is expected to enable foreign investment inflows into the completed rent yielding real estate projects, which is, as of now, prohibited under the FEMA Regulations,” an official statement said.

As a result of this decision, entities registered and regulated under the SEBI (REITs) Regulations 2014 will be able to access foreign investments which as of now are prohibited under the FEMA Regulations. This will help real estate companies such as DLF, among others, which intend to set up REITs.

This is the second booster for the instrument after Finance Minister Arun Jaitley had proposed some benefits in the Budget this year. He proposed rationalising the capital gains regime for the sponsors exiting at the time of listing of the units of REIT, subject to payment of Securities Transaction Tax (STT).

The rental income of REITs from their own assets will have pass through facility, he had said.

He also recently provided exemption from Minimum Alternate Tax (MAT) to REIT during amendment in the Finance Bill.

Source : Business Line

Modi backed Raghuram Rajan, RBI in turf war with finance ministry : 07-05-2015


Prime Minister Narendra Modi sank his finance minister’s plans to strip powers from the Reserve Bank of Inida (RBI) last week, sources told Reuters, evidence of a new-found respect for the bank’s governor and a recognition that Modi needs his calming influence on markets.

When Modi came to power just under a year ago, the position of central bank boss Raghuram Rajan, an appointee of the outgoing Congress government, looked precarious.

Senior members of Modi’s Bharatiya Janata Party (BJP) chided Rajan for his tough stance on interest rates, which threatened the Prime Minister’s pledge to reboot economic growth, and the governor in turn cautioned the government against putting too much faith in exports through its ‘Make in India’ policy.

But when Finance Minister Arun Jaitley, one of Modi’s closest allies, dropped plans on Thursday to remove the bank’s authority to regulate the government bond market and manage public debt, a senior government source who was privy to discussions said the decision “came from the very top”.

A senior BJP figure confirmed that Modi had intervened on Rajan’s behalf.

The prime minister’s office and the finance minister did not respond to requests for comment.

Jaitley now intends to consult the RBI and come up with a detailed roadmap on the issue, a process that could take at least a year, officials say.

There were signs last month of the changing dynamics in the relationship between 52-year-old Rajan and Modi, 64, when the prime minister publicly praised Rajan for “perfectly” explaining complex economic issues to him in regular one-on-one meetings.

Source : PTI

Notification No. : 45/2015 Dated: 22-5-2015


Section 90 of the Income-tax Act, 1961 – Double Taxation Agreement – Agreement for avoidance of double taxation and prevention of fiscal evasion with foreign countries Denmark Amendment in Notification No. GSR 853(E), dated 25-9-1989 – 45/2015 – Dated 22-5-2015 – Income Tax

MINISTRY OF FINANCE

(Department of Revenue)

NOTIFICATION NO. 45/2015

New Delhi, the 22nd May, 2015

S.O.1371(E).-Whereas, a Protocol amending the Convention between the Republic of India and the Kingdom of Denmark  for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income and on Capital, and the Protocol on provisions on clarification of the Convention which were signed at Copenhagen on the 8th  March, 1989 (hereinafter referred to as the said Protocol) as set out in the Annexure to this notification, was entered into between the Government of the Republic of India and the Government of the Kingdom of Denmark and was signed on the 10th day of October, 2013;

And whereas, the date of entry into force of the said Protocol is the 1st February, 2015, being the date of the first day of the month following the date of receipt of the later of the notifications of completion of the procedures as required for the bringing into force the said Protocol, in accordance with paragraph 1 of article 3 of the said Protocol;

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 the provisions of the said Protocol between the Government of the Republic of India and the Government of the Kingdom of Denmark as set out in the Annexure hereto, shall be given effect to in the Union of India with effect from the first day of February, 2015.

[F. No. 503/02/ 1998-FTD-I]

AKHILESH RANJAN, Jt. Secy.

PROTOCOL

AMENDING THE CONVENTION BETWEEN THE REPUBLIC OF INDIA AND THE KINGDOM OF DENMARK FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME AND ON CAPITAL, AND THE PROTOCOL ON PROVISIONS ON CLARIFICATION OF THE CONVENTION WHICH WERE BOTH SIGNED AT COPENHAGEN ON 8TH  MARCH, 1989.

The Government of the Republic of India

and

the Government of the Kingdom of Denmark;

Desiring to conclude a Protocol (hereinafter referred to as “Amending Protocol”) to amend the Convention between the Republic of India and the Kingdom of Denmark for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income and on Capital, and the Protocol on provisions on clarification of the Convention which were both signed at Copenhagen on 8th March, 1989 and which entered into force on 13th June, 1989 (hereinafter referred to as “the Convention” and “the Protocol on provisions on clarification of the Convention” respectively);

Have agreed on the following provisions which shall have effect between India and Denmark and in accordance with the protocol extending the Convention to apply in its entirety to the Faroe islands which was signed at Copenhagen on 8th  March, 1989 also between India and the Faroe islands:

Article 1

Article 26 of the Convention shall be deleted and replaced by the following Article:

“Article 26

EXCHANGE OF INFORMATION

1   The competent authorities of the Contracting States shall exchange such information (including documents or certified copies of the documents) as is foreseeably relevant for carrying out the provisions of this Convention or to the administration or enforcement of the domestic laws concerning taxes of every kind and description imposed on behalf of the Contracting States, or of their political subdivisions or local authorities thereof, insofar as the taxation thereunder is not contrary to the Convention. The exchange of information is not restricted by Articles 1 and 2.

2.   Any information received under paragraph 1 by a Contracting State shall be treated as secret in the same manner as information obtained under the domestic laws of that State and shall be disclosed only to persons or authorities (including courts and administrative bodies) concerned with the assessment or collection of, the enforcement or prosecution in respect of, the determination of appeals in relation to the taxes referred to in paragraph 1, or the oversight of the above. Such persons or authorities shall use the information only for such purposes.  They may disclose the information in public court proceedings or in judicial decisions. Notwithstanding the foregoing, information received by a Contracting State may be used for other purposes when such information may be used for such other purposes under the laws of both Contracting States and the Competent Authority of the Supplying State authorises such use.

3.  In no case shall the provisions of paragraphs 1 and 2 be construed so as to impose on a Contracting State the obligation:

(a) to carry out administrative measures at variance with the laws and administrative practice of that or of  the other Contracting State;

(b) to supply information (including documents or certified copies of the documents) which is not  obtainable under the laws or in the normal course of the administration of that or of the other  Contracting State;

(c) to supply information which would disclose any trade, business, industrial, commercial or professional  secret or trade process, or information the disclosure of which would be contrary to public policy  (ordre public).

4.  If information is requested by a Contracting State in accordance with this Article, the other Contracting State shall use its information gathering measures to obtain the requested information, even though that other State may not need such information for its own tax purposes. The obligation contained in the preceding sentence is subject to the limitations of paragraph 3 but in no case shall such limitations be construed to permit a Contracting State to decline to supply information solely because it has no domestic  interest in such information.

5.  In no case shall the provisions of paragraph 3 be construed to permit a Contracting State to decline to supply information solely because the information is held by a bank, other financial institution, nominee or person acting in an agency or a fiduciary capacity or because it relates to ownership interests in a person.”

Article 2

The following paragraph 3 shall be inserted after paragraph 2 of the Protocol to the Convention on provisions on clarification of the Convention:

“3.  With reference to Article 26, it is understood that as stated in paragraph 9.1 of OECD  commentary on Article 26, the new wordings (as per 2010 version) of Article 26 covers Tax Examinations Abroad.”

Article 3

1. Each of the Contracting States shall notify to the other the completion of the procedures required as far as it is concerned for the bringing into force of this Protocol. The Protocol shall enter into force on the first day of the month following t4 e date of receipt of the later of these notifications.

2. The provisions of this Protocol shall remain in force as long as the Convention remains in force.

Done in duplicate at Copenhagen on 10th October, 2013 in the Hindi, Danish and English languages, all three texts being authentic. In case of divergent interpretation of the Hindi and the Danish text the English text shall prevail.

For the Government of Republic of India

For the Government of Kingdom of Denmark

(Niraj Srivastava)

Ambassador

(Holger K. Nielsen)

Minister of Taxation

No. 1003/10/2015-CX Dated: 5-5-2015


Clarification regarding Cenvat Credit in transit sale through dealer – Dated 5-5-2015 – Central Excise

Circular No. 1003/10/2015-CX

F.No.267/29/2015-CX-8

Government of India

Ministry of Finance

Department of Revenue

Central Board of Excise and Customs

Dated 05.05.2015

Sub: Clarification regarding Cenvat Credit in transit sale through dealer – reg.

Kind attention is invited to Notification No. 8/2015 – Central Excise (NT) dated 1-3-2015 amending Central Excise Rules, 2002 (CER). Representations have been received from trade regarding the scope and purpose of third and fourth proviso inserted in sub-rule (2) of rule 11 particularly with reference to procedural requirement after the amendment where an indenting or unregistered  dealer negotiates transit sale. For ease of reference these two provisos are reproduced below -

“ Provided also that if the goods are directly sent to any person on the direction of the registered dealer, the invoice shall also contain the details of the registered dealer as the buyer and the person as the consignee, and that person shall take CENVAT credit on the basis of the registered dealer’s invoice:

Provided also that if the goods imported under the cover of a bill of entry are sent directly to buyer’s premises, the invoice issued by the importer shall mention that goods are sent directly from the place or port of import to the buyer’s premises. “

2.  Clarification has also been requested by the trade regarding continued applicability of circular no 96/7/95-CX dt 13-2-1995, 137/48/95-CX dt 18-7-1995 and 218/52/96-CX dt 4-6-1996, in so far as these circulars pertain to availment of credit on strength of original manufacturer’s invoice where a dealer including an indenting dealer has procured order and has arranged direct transport of the goods from the premises of the manufacturer to the premises of the consignee. Further, clarification has also been sought regarding change in the requirement of registration for dealers consequent upon amendment in the rules.

3.     The issue involved has been examined. It is clarified that the purpose of inserting the third

and fourth provisos in sub-rule (2) of Rule 11 of CER is to allow an additional facility for direct transport of goods from the manufacturer or the importer to the consignee where the consignee avails Cenvat Credit on the basis of the Cenvatable invoice issued by the registered dealer or the registered importer. This facility obviates the need for the goods to be brought to the premises of the registered importer or the registered dealer for subsequent transport of the goods to the consignee.

4.   It is further clarified that the provisions of the circulars on the issues referred in Para 3 would continue to apply as no amendment has been made in rule 9 of the Cenvat Credit Rules, 2004 which prescribes the document on the basis of which Cenvat Credit can be availed. No amendments have been made regarding registration requirements also.

5.   Various specific issues referred to by the trade are clarified as follows -

(i)   Where a registered dealer negotiates sale of an entire consignment from a manufacturer or a registered importer and orders direct transport of goods to the consignee, credit can be availed by the consignee on the basis of invoice issued by the manufacturer or the registered importer. In such cases no Cenvatable invoice shall be issued by the registered dealer in favour of the consignee though commercial invoice can be issued. Where a registered dealer negotiates sale of goods from the total stock ordered on a manufacturer or an importer to multiple buyers and orders direct transportation of goods to the consignees and the manufacturer or the importer is willing to issue individual invoices for each sale in favour of the consignees for such individual sale, the same procedure shall apply.

(ii)  Where a registered dealer negotiates sale by splitting a consignment procured from a manufacturer or a registered importer and issues Cenvatable invoices for each of the sale, it would now be possible for the dealer to order direct transport of the consignments as per the individual sales to the consignee without bringing the goods to his godown. This would save time and transportation cost for the dealer adding to ease of doing business. This is a new facility which flows from the amended provisions. Procedure as prescribed in the third proviso of rule 11(2) shall be applicable in such case.

(iii) Where a un-registered dealer negotiates sale of an entire consignment from a manufacturer or a registered importer and orders direct transport of goods to the consignee, credit can be availed by the consignee on the basis of invoice issued by the manufacturer or the registered importer. As the dealer is not registered, there is no question of issuing any Cenvatable invoice by him . Such dealers as in the past can continue to be un-registered.

(iv) Where goods are sold by the registered importer to an end-user (say a manufacturer) who would avail credit on the basis of importer’s invoice and the goods are transported directly from the port or warehouse at the port to the buyer’s premises, the amendment prescribes that for such movement the factum of such direct transport to the buyer’s premises needs to be recorded in the invoice.

6. It may be noted that the new provisos are meant to improve the ease of doing business by providing an additional facility to the registered dealer or importer for direct dispatch of goods from the manufacturer to the consignee, when he is issuing Cenvatable invoice,. They do not withdraw any past facility. These amendments should therefore be harmoniously interpreted with the existing rules and circulars in conformity with the legal provisions, keeping the intention of the Government in mind. Difficulty faced, if any, should be brought to the notice of the Board. Hindi version would follow.

Shankar Prasad Sarma

Under Secretary to the Government of India

Govt. may find going tough on Bills : 04-05-2015


BJP managers in for rough ride on building consensus.

As the Narendra Modi government prepares to celebrate its first year in office later this month, it has lined up a heavy legislative agenda for Parliament when it resumes on Tuesday after a four-day break.

Eager to flaunt some game-changing reforms, the government is pinning its hopes on getting approval for the Goods and Service Tax (GST) Bill, besides another for tracking black money stashed away abroad.

Other key draft legislation scheduled for consideration and passage before the close of the Budget Session on Friday include the land acquisition Bill, the amendment to the Juvenile Justice (JJ) Act to treat 16-to-18 year-olds as adults in the cases of heinous crimes, and the India-Bangladesh land swap deal.

While the BJP’s floor managers are eager to push through these Bills, all indications suggested a rough ride ahead. More than the time constraint — just four working days — it is the absence of political consensus and a perception in the Opposition of being “bulldozed” that is making floor management an uphill task.

Congress sceptical

Though the GST, land swap with Bangladesh and amendments to the JJ Act are Bills originally drafted by the UPA government, the changes introduced in the first two have made the Congress sceptical. The Land Acquisition Bill — which the Communist Party of India (Marxist) has rechristened the ‘Land Grab Bill’ — is staring at a return to the ordinance route for the third time in five months as opposition to it has only increased since the Lok Sabha passed it in March during the pre-recess part of the Budget Session.

Despite the clear majority the BJP has in the Lok Sabha, as opposed to the fragmented Opposition, the government’s floor managers are being increasingly given a tough time in the Lower House as was evident on April 24 when Union Finance Minister Arun Jaitley sought to move The Constitution (122nd Amendment) Bill to introduce GST even before the Finance and Appropriation Bills were passed. With the Opposition — led by Deputy Speaker M. Thambi Durai — digging its heels in, Speaker Sumitra Mahajan requested Mr. Jaitley to defer it till the Finance and Appropriation Bills were passed.

Source : The Hindu

New income tax return form has lens only on multiple foreign visits : 04-05-2015


NEW DELHI: The tax department is readying the contours of the new income tax returns form which may require only those with overseas personal visits exceeding a certain number to disclose spending details, sparing a majority from making detailed disclosures.

Sources indicated that only those who go beyond six or seven personal visits in a fiscal year will need to file expenditure details in the returns form. Those going on business or official trips won’t have to reveal spending details in the returns form. Those going on business or official trips won’t have to reveal spending details.

The controversial 14-page form released last month had sought details of spending during overseas trips and data on domestic and foreign bank accounts, prompting finance minister Arun Jaitley to order an immediate review.

The revised form, which will be unveiled soon, will require taxpayers to file returns in three or four pages. Only those with income from specific sources, which would come under the lens in normal course, or those required to make certain disclosures would need to go beyond the first few pages, sources said.

The new form released last month had come in for severe criticism as it required individuals to disclose personal spending during overseas trips and data on domestic bank accounts in addition to details of foreign bank accounts, investments in entities abroad as well as information related to interests in trusts. This had prompted finance minister Arun Jaitley to order an immediate review.

Jaitley was then in the US to attend the annual meetings of the World Bank and the International Monetary Fund and the decision had been taken at the official level following a recommendation made by the Special Investigation Team on black money that had been set up by the BJP government following a Supreme Court observation.

The government has already held consultations with industry representatives as well as internally and the minister told Parliament last week that the new forms  would be released soon.

“Recently, a controversy did come up. There is an old income tax form of 12 pages which was made 13.5 pages. I was out of the country when it was done. I had it stopped. I am having the entire matter reviewed and very soon you will hear of an extremely simplified procedure coming from us,” he said in Lok Sabha while replying to the debate on the finance bill.

Source : The Economic Times

Govt should have clarified on FIIs past MAT dues: Experts : 02-05-2015


NEW DELHI, MAY 1:

Finance Minister Arun Jaitley’s announcement of MAT exemption on certain incomes of foreign firms was a relief but the government should have clarified on the tax treaty benefits for past dues, tax experts said today.

Replying to a debate on Finance Bill in Parliament, the Minister said all capital gains from sale of securities as well as royalties, interest, technical services fee earned by foreign companies will be exempt from MAT, if the normal tax rate on such income is lower than 18.5 per cent.

Commenting on this, PwC Partner (Tax and Regulatory Services) Suresh Swamy said, “Finance Minister could have clarified that FPIs with treaty benefits would be exempt from paying MAT for past year. That would have given more confidence to foreign investors“.

He said probably clarity on these past tax notices would come after six months when the Supreme Court decides on the case of Mauritius—based Castleton Investment Ltd.

EY Leader (Business Tax) Sunil Kapadia said the foreign investors were looking for certainty and clarity in taxation matters from the Minister.

“The clarification does not provide what happens for taxation of past period. That still remains a controversial area,” Kapadia said.

This issue between foreign investors and government cropped up last year when the tax department started sending notices to FIIs to cough up MAT.

These notices were based on a decision by Authority for Advance Ruling, which directed Castleton to pay MAT in India on their book profits.

So far, the government has sent MAT notices for over Rs. 602 crore to 68 foreign investors.

The amendments to Finance Bill would bring relief to debt funds because interest income of debt funds will also be exempt from MAT from April this year.

Deloitte Haskins & Sells Partner Rajesh Gandhi said the announcement is positive for debt funds as MAT on interest would have been costly for them.

“The government has made it clear that going forward MAT would not be applied on foreign investors. Some clarification on FIIs being able to avail treaty benefits and not be subject to MAT should have been made clear,” Gandhi said.

Source : Business Line

Govt hopeful of getting GST Bill passed in Lok Sabha next week : 02-05-2015


NEW DELHI, MAY 1:  The government is hopeful of getting the GST Constitution Amendment Bill passed in the Lok Sabha next week, paving the way for implementation of the new indirect tax regime from April 2016.

“We are hopeful of getting the GST Bill passed next week,” a top government official said.

The GST Constitution Amendment Bill was introduced in Lok Sabha in December and is likely to be taken up for consideration and passage by the House on Tuesday.

Sources said the Revenue Neutral Rate (RNR) of 27 per cent as proposed by a sub-panel was way too high and needs to be worked.

RNR is the rate at which there will be no revenue loss to the states after GST implementation.

The re-calculation of RNR is necessary as the present rate does not take into account the taxation of petroleum products as also the 1 per cent additional tax which states can levy as part of the GST Bill.

“The GST rate at 27 per cent is outlandish. A final decision on the rate will be taken by the GST Council in June or July,” another official said.

The GST Council will have the Union Finance Minister Arun Jaitley as its Chairman and comprise two-third of its members from states and one-third from the Centre.

The Centre is working towards addressing concerns of all states for rolling out the GST on the scheduled date.

“Almost there is a consensus with all states,” the source added.

Once implemented, GST will be the biggest tax reform since 1947. A single rate GST will replace central excise, state VAT, entertainment tax, octroi, entry tax, luxury tax and purchase tax on goods and services to ensure seamless transfer of goods and services.

Jaitley had last week said in the Lok Sabha that “GST is going to lead to a win-win situation as far as the Centre and states are concerned. It is going to up India’s GDP. It is going to up India’s revenue.”

Seeking to assuage fears of states that they will lose out on revenues once GST is implemented, he said the Centre and states will have concurrent power to levy tax on goods and services.

Source : PTI

Notification No. : F. No. 01/13/2013 CL-V (Part-I) Dated: 1-5-2015


Companies (Incorporation) Amendment Rules, 2015 – F. No. 01/13/2013 CL-V (Part-I) – Dated 1-5-2015 – Companies Law

[To be published in the Gazette of India, Extraordinary,

Part II, Section 3, Subsection (i)]

GOVERNMENT OF INDIA

MINISTRY OF CORPORATE AFFAIRS

NOTIFICATION

New Delhi 1st May, 2015

G.S.R -In exercise of the powers conferred by section 3, section 4, sub-sections (5) and (6) of section 5, section 6, sub-section (1) and (2) of section 7, sub-sections (1) and (2) of section 8,clauses (a) and (b) of sub-section (1) of section 11, sub- sections (2), (3), (4) and (5) of section 12,sub-sections (3), (4) and the proviso to sub-section (5) of section 13, sub-section (2) of section 14,sub-section (1) of section 17, sub-sections (1) and (2) of section 20 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  amendments to the Companies (Incorporation) Rules, 2014, namely: -

1.  (1) These rules may be called the Companies (Incorporation) Amendment Rules, 2015.

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

2. In the Companies (Incorporation) Rules, 2014,-

(a) rule 5 shall be omitted;

(b) in rule 6, for sub-rule (11), for the words “having paid up share capital of fifty lakhs rupees or less or average annual turnover”, the words “having paid up share capital of fifty lakhs rupees or less and average annual turnover” shall be substituted;

(c) in rule 7, in sub-rule (1), for the words “having paid up share capital of fifty lakhs rupees or less or average annual turnover”, during the relevant period is, the words “having paid up share capital of fifty lakhs rupees or less and average annual turnover during the relevant period” shall be substituted;

(d) after rule 7, the following rules shall be inserted, namely:-

“7A. Penalty.- If a One Person Company or any officer of such company contravenes any of the provisions of these rules, the One Person Company or any officer of the such Company shall be punishable with fine which may extend to five thousand rupees and with a further fine which may extend to five hundred rupees for every day after the first offence during which such contravention continues”;

(e) in rule 8, in sub-rule (2), in clause (b), in sub-clause (xi), in the proviso, after the words and figures “under section 248 of the Act”, the words, figures and brackets “or under section 560 of theCompanies Act, 1956 (1 of 1956)” shall be inserted;

(f) in rule 16, in sub-rule (1), for clause (q), the following shall be substituted, namely:-

“(q) the promoter or first director shall self attest his signature and latest photograph in Form No.INC. 10″.

(g) after rule 35, the following rules shall be inserted namely: -

36. Integrated Process for Incorporation.-(1) For the purpose of simplifying the filing of forms for incorporation of a company, the integrated process shall apply  with effect from 01/05/2015.

(2) For the purposes of sub-rule  (1), the application for allotment of Director

Identification Number upto three Directors, reservation of a name, incorporation of company and appointment of Directors of the proposed company shall be filed in Integrated Form No. INC-29,for One Person Company, private company, public company and Producer Company, with the Registrar within whose jurisdiction the registered office of the company is proposed to be situated, along with the fee of rupees two thousand in addition to the registration fee as specified inCompanies (Registration of Offices and Fees) Rules, 2014.

(3)  For the purposes of filing Integrated Incorporation form, the particulars of  maximum of three directors shall be allowed to be filled in INC-29 and allotment of  Director Identification Number of maximum of three proposed directors shall be permitted in Form INC-29 in case of proposed directors not having approved Director Identification Number.

(4)The promoter or applicant of the proposed company shall propose only one name in e-form No. INC-29.

(5) The promoter or applicant of the proposed company may prepare Memorandum of Association as per templates in Form INC-30 and may opt for templates of Articles of Association in Form INC-31 in accordance with the provisions of rule 13 for preparation of Memorandum of Association and Article of Association.

(6) The promoter or the applicant shall sign and witness, the Memorandum of Association and Articles of Association in the forms downloaded from the portal of the Ministry of Corporate Affairs and scanned legibly and attach to e-form INC-29 in accordance with the provisions of rule 13 for preparation of Memorandum of  Association and Articles of Association.

(7) The facility to file Integrated application for incorporation in Form INC-29 is available as an option to the process for separate applications for allotment of Director Identification Number, reservation of name and Incorporation of a company as provided in these rules.

(8) For an application filed using the Integrated process of incorporation as provided in this rule, the provisions of sub-clause (i) of sub-section (5) of section 4 of the Act and rule 9 of these rules shall not apply.

(9) A company using the provisions of this rule may furnish verification  of its registered office undersub-section (2) of section 12 of the Act by filing e-Form INC- 29 in which case the company shall attach along with such e-Form INC-29, any of the documents referred to in sub-rule (2) of rule 25.

(10) The requirement of filing e-form INC-28  may be dispensed with if, the  proposed company maintains its registered office at the given correspondence  address.

(11) The Registrar within whose jurisdiction the registered office of the company is proposed to be situated shall process INC-29 including application for allotment of Director Identification Number.

(12) (a) Where the Registrar, on examining e-form INC-29, finds that it is necessary to call for further information or finds such application or document to be defective or incomplete in any respect, he shall give intimation to the applicant to remove the defects and re-submit the e-form within fifteen days from the date of such intimation given by the Registrar.

(b) After the resubmission of the document, if the registrar still finds that the document is defective or incomplete in any respect, he shall give one more  opportunity of fifteen days to remove such defects or deficiencies.

(c) In case, the Registrar is of the opinion that the document is defective or incomplete in any respect after giving such two opportunities, the e-form INC-29 of the proposed company shall be rejected.

(13) The Certificate of Incorporation shall be issued by the Registrar in Form No. INC-11.

(14) in Annexure, in Form No. INC-11, for the words, figures and brackets “and rule 8 of theCompanies (Incorporation) Rules, 2014″, the words, figures and brackets “and rule 18 of theCompanies (incorporation) Rules, 2014″, shall be substituted.

(15) in Annexure,-

(a) for Form No. INC-7, INC-10, INC-11 and INC-22, the following form shall, respectively be substituted, namely:-

No. F. No. 201/03/2015-CX.6 Dated: 30-4-2015


Instructions regarding expeditious clearance of export goods to Nepal in the wake of emergency relief operations undertaken in India – Dated 30-4-2015 – Central Excise

F. No. 201/03/2015-CX.6

Government of India

Ministry of Finance

Department of Revenue

Central Board of Excise & Customs

New Delhi, dated 30th April 2015

To,

The Chief Commissioner of Central Excise (All)

Sub : Instructions regarding expeditious clearance of export goods to Nepal in the wake of emergency relief operations undertaken in India-reg.

Madam/ Sir,

The Ministry of External Affairs has announced “Operation Maitree” under which India has embarked upon massive rescue, relief and evacuation operations in Nepal. A number of organizations/ individuals as a part of their contribution to the relief operations may be required to procure relief items for export to Nepal.

2.   In this regard, it is hereby directed that field formations may be instructed to ensure all possible facilitation for expeditious procurement of goods meant for cross border supplies to Nepal from India. All procedural formalities, relating to export of relief items under bond or duty free procurement of relief items for export, may be expeditiously completed in order to  facilitate export of relief items to Nepal on an urgent basis and where necessary, temporary orders may be issued by the Chief Commissioner to remove difficulty in complying with the procedures prescribed.

3.  This issues with the approval of the Adviser (CBEC).

Yours faithfully

(ROHAN)

Under Secretary (CX-6)

No. D.O.F.No.334/5/2015-TRU Dated: 30-4-2015


Finance Bill, 2015 – Changes in Central Excise and Customs duty rates – Dated 30-4-2015 – Central Excise

Government of India

Ministry of Finance

Department of Revenue

Tax Research Unit

*****

Alok Shukla

Joint Secretary (TRU-I)

Tel: 23092687

Fax: 23092031

Email: alok.shukla@nic.in

D.O.F.No.334/5/2015-TRU

New Delhi, the 30th April, 2015.

Dear Principal Chief Commissioner / Chief Commissioner / Director General,

While replying to the discussions on the Finance Bill, 2015 in Lok Sabha today, Finance Minister has announced certain further changes in Central Excise and Customs duty rates. Notifications No.23 toNo.27/2015-Central Excise and notifications No.28 to No.30/2015-Customs, all dated 30th April, 2015have been issued to give effect to these announcements. Notifications No.12 and No.13/2015-Central Excise (N.T.), dated 30th April, 2015 has also been issued in this regard. As regards Service Tax, notification No.12/2015-Service Tax, dated 30.04.2015 has been issued.

2. The changes introduced through these notifications are summarised below. In addition, a clarification regarding applicability of customs duty exemption notifications has also been provided. Unless otherwise stated, all changes in rates of duty take effect from the midnight of 29th April / 30th April, 2015.

CUSTOMS:

1) Basic Customs Duty on raw and refined / white sugar has been increased from 25% to 40%.S.Nos.76, 77 and 78 of notification No.12/2012-Customs, dated 17.03.2012 as amended bynotification No.28/2015-Customs, dated 30.04.2015 refer.

2) Basic Customs Duty on Colemanite and other Boron ores has been reduced from 2.5% to Nil.S.No.113 of notification No.12/2012-Customs, dated 17.03.2012 as amended by notification No.28/2015-Customs, dated 30.04.2015 refers. S.No.113A has been omitted since ulexite ore, being a boron ore, will be eligible for Nil duty under S.No.113.

3) Basic Customs Duty on natural rubber (NR) has been increased from 20% or ₹ 30 per kg., whichever is lower, to 25% or ₹ 30 per kg., whichever is lower. S.No.252 of notification No.12/2012-Customs, dated 17.03.2012 as amended by notification No.28/2015-Customs, dated 30.04.2015refers.

4) Basic Customs Duty on raw silk (not thrown) has been reduced from 15% to 10%. S.No.276 of notification No.12/2012-Customs, dated 17.03.2012 as amended by notification No.28/2015-Customs, dated 30.04.2015 refers.

5) All Digital Still Image Video Cameras (DSC) falling under tariff item 8525 80 20 irrespective of their specification [including the restriction with reference to video recording time] and their parts are being exempted from Basic Customs Duty. S.No.428A and 429 of notification No.12/2012-Customs, dated 17.03.2012 as amended by notification No.28/2015-Customs, dated 30.04.2015 refer.

6) Export duty on iron ore fines (below 58% Fe content) [falling under tariff lines 2601 11 41 and2601 11 42] has been reduced from 30% to 10%. There is no change in the export duty rate on iron ore other than iron ore fines (below 58% Fe content). Notification No.27/2011-Customs, dated 01.03.2011 as amended by notification No.30/2015-Customs, dated 30.04.2015 [new S.No.20A refers].

7) Exemption from additional duty of customs levied under section 3 of the Customs Tariff Act (both CVD and SAD) in respect of certain entries of notification No.39/96-Customs, dated 23.07.1996 are being withdrawn. Exemption from Basic Customs Duty in respect of these entries, however, would continue. Paragraph 2 of the notification No.39/96-Customs, dated 23.07.1996 as amended bynotification No.29/2015-Customs dated 30.04.2015 refers. Further, exemption from Basic Customs Duty, CVD and SAD in respect of direct imports by the Government of India and the State Governments would continue. Notification No.39/96-Customs, dated 23.07.1996 as amended bynotification No.29/2015-Customs dated 30.04.2015 [amended S. Nos.9 and 10] refer. These changes, however, will be effective from 01.06.2015.

EXCISE:

1) The speed range for ‘jarda scented tobacco’ has been divided into two ranges (as in case of chewing tobacco),

a. first upto 300 pouches per minute; and

b. second from 301 onwards,

and the deemed capacity and duty payable have been notified accordingly. Notification No.11/2010-Central Excise (N.T.), dated 27.02.2010 [The Chewing Tobacco and Unmanufactured Tobacco Packing Machines (Capacity Determination and Collection of Duty) Rules, 2010] as amended bynotification No.13/2015-Central Excise (N.T.), dated 30.04.2015 [for deemed capacity of production] and notification No.16/2010-Central Excise, dated the 27.02.2010 as amended by notification No.25/2015-Central Excise, dated the 30.04.2015 [for duty payable per machine per month] refer.

2) Excise duty exemption on finishing agents, dye carriers to accelerate the dyeing or fixing of dye-stuffs, printing paste and other products and preparations of any kind used in the same factory for the manufacture of textiles and textile articles has been withdrawn. S.No.133 of notification No.12/2012-Central Excise, dated 17.03.2012 as omitted by notification No.24/2015-Central Excise, dated 30.04.2015 refers.

3) The concessional excise duty (and hence, CVD) of 6% on Hard disk, CD ROM drive, DVD drive or writer, Combo drive, flash memory, microprocessors has been restricted only to actual users for manufacture of computer (PCs/desktops) falling under heading 8471. S.No.255/2012-Central Excise, dated 17.03.2012 as amended by notification No.24/2015-Central Excise, dated 30.04.2015 refers.

4) Excise duty exemption presently available to Ordnance Factories is being withdrawn. S.No.1 and 6 of notification No.62/95-CE dated 16.03.1995 as omitted by notification No.23/2015-Central Excise, dated 30.04.2015 refers. Further, excise duty exemption presently available to Defence PSUs is being withdrawn. S.No.2 and 16 of notification No.63/95-CE dated 16.03.1995 as omitted bynotification No.23/2015-Central Excise, dated 30.04.2015 refers. These changes, however, will be effective from 01.06.2015.

5) An Explanation has been inserted in notifications No.14/2015-Central Excise and 15/2015-Central Excise, both dated 01.03.2015 to provide that exemption from Education Cess and Secondary & Higher Education Cess contained therein will also apply to DTA clearances of excisable goods from 100% EOU. Notification No.14/2015-Central Excise, dated 01.03.2015 as amended by notification No.26/2015-Central Excise, dated 30.04.2015; and notification No.15/2015-Central Excise, dated 01.03.2015 as amended by notification No.27/2015-Central Excise, dated 30.04.2015 refers.

The CENVAT Credit Rules, 2004 (CCR, 2004):

1) Rule 3(7)(b) of the CCR, 2004 has been amended so as to allow utilisation of credit of Education Cess and Secondary & Higher Education Cess for payment of basic excise duty in the following situations:

a. Education Cess and Secondary & Higher Education Cess on inputs or capital goods received in the factory of manufacture of final product on or after the 1st day of March, 2015;

b. Balance 50% Education Cess and Secondary & Higher Education Cess on capital goods received in the factory of manufacture of final product in the financial year 2014-15; and

c. Education Cess and Secondary & Higher Education Cess on input services received by the manufacturer of final product on or after the 1st day of March, 2015.

Notification No.12/2015-Central Excise (N.T.), dated 30.04.2015 refers.

CLARIFICATION: The issue as to whether an importer can simultaneously avail the exemption benefits under two notifications, one for Basic Customs Duty and the other for CVD was examined in the Ministry in the matter of import of coal from Indonesia and vide Circular No.41/2013-Customs dated 21.10.2013 it was clarified that an importer while availing of BCD exemption on steam coal under notification No.46/2011-Customs, dated 01.06.2011 can simultaneously avail of concessional CVD at 2% under S.No.123 of notification No.12/2012-Customs, dated 17.03.2012. Drawing the same analogy, in the case of muriate of potash and urea for use in the manufacture of other fertilizers, it was clarified to the Central Excise zone of Visakhapatnam and Bhubaneswar that importers can simultaneously avail benefit of S.No.198 or 203 of notification No.12/2012-Customs, dated 17.03.2012 for concessional rate of BCD and S.No.127 of notification No.12/2012-Central Excise for CVD exemption. Representations have been received regarding divergence in assessment practice in respect of such imports. It is, therefore, clarified that importers can avail of the benefit ofnotification No.12/2012-Customs, dated 17.03.2012 for the purposes of BCD [i.e. S.No.197 to 203 as amended by notification No.46/2012-Customs, dated 17.08.2012] and simultaneously avail benefit ofS.No.127 of notification No.12/2012-Central Excise, dated 17.03.2012 for the purposes of CVD where such imports are for use in the manufacture of other fertilizers.

SERVICE TAX:

1) Service tax on services of Life Insurance business provided under Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) have been exempted.

2) Service tax on services of Life Insurance business provided under Pradhan Mantri Jan Dhan Yojana (PMJDY) have been exempted.

3) Service tax on services of General Insurance business provided under Pradhan Mantri Suraksha Bima Yojana (PMSBY) have been exempted.

4) Service tax on services by way of collection of contribution under Atal Pension Yojana (APY) have been exempted.

[Notification No.25/2012-Service Tax, dated 20.06.2012 as amended by notification No.12/2015-Service Tax, dated 30.04.2015 [item (p) of entry.26 and items (e) and (f) of entries 26A and 26B refer.]

With warm regards,

Yours sincerely,

(Alok Shukla)

Joint Secretary (TRU-I)

To:

All Principal Chief Commissioners,

All Chief Commissioners / Directors General,

Copy to:

All Principal Commissioners,

All Commissioners,

Director DPPR / Logistics / Legal Affairs / Data Management.

No. D.O.F.No.334/5/2015-TRU Dated: 30-4-2015


Finance Bill, 2015 – Changes in Service Tax, Central Excise and Customs duty rates – Dated 30-4-2015 – Service Tax

Government of India

Ministry of Finance

Department of Revenue

Tax Research Unit

*****

Alok Shukla

Joint Secretary (TRU-I)

Tel: 23092687

Fax: 23092031

Email: alok.shukla@nic.in

D.O.F.No.334/5/2015-TRU

New Delhi, the 30th April, 2015.

Dear Principal Chief Commissioner / Chief Commissioner / Director General,

While replying to the discussions on the Finance Bill, 2015 in Lok Sabha today, Finance Minister has announced certain further changes in Central Excise and Customs duty rates. Notifications No.23 toNo.27/2015-Central Excise and notifications No.28 to No.30/2015-Customs, all dated 30th April, 2015have been issued to give effect to these announcements. Notifications No.12 and No.13/2015-Central Excise (N.T.), dated 30th April, 2015 has also been issued in this regard. As regards Service Tax, notification No.12/2015-Service Tax, dated 30.04.2015 has been issued.

2. The changes introduced through these notifications are summarised below. In addition, a clarification regarding applicability of customs duty exemption notifications has also been provided. Unless otherwise stated, all changes in rates of duty take effect from the midnight of 29th April / 30th April, 2015.

CUSTOMS:

1) Basic Customs Duty on raw and refined / white sugar has been increased from 25% to 40%.S.Nos.76, 77 and 78 of notification No.12/2012-Customs, dated 17.03.2012 as amended bynotification No.28/2015-Customs, dated 30.04.2015 refer.

2) Basic Customs Duty on Colemanite and other Boron ores has been reduced from 2.5% to Nil.S.No.113 of notification No.12/2012-Customs, dated 17.03.2012 as amended by notification No.28/2015-Customs, dated 30.04.2015 refers. S.No.113A has been omitted since ulexite ore, being a boron ore, will be eligible for Nil duty under S.No.113.

3) Basic Customs Duty on natural rubber (NR) has been increased from 20% or ₹ 30 per kg., whichever is lower, to 25% or ₹ 30 per kg., whichever is lower. S.No.252 of notification No.12/2012-Customs, dated 17.03.2012 as amended by notification No.28/2015-Customs, dated 30.04.2015refers.

4) Basic Customs Duty on raw silk (not thrown) has been reduced from 15% to 10%. S.No.276 of notification No.12/2012-Customs, dated 17.03.2012 as amended by notification No.28/2015-Customs, dated 30.04.2015 refers.

5) All Digital Still Image Video Cameras (DSC) falling under tariff item 8525 80 20 irrespective of their specification [including the restriction with reference to video recording time] and their parts are being exempted from Basic Customs Duty. S.No.428A and 429 of notification No.12/2012-Customs, dated 17.03.2012 as amended by notification No.28/2015-Customs, dated 30.04.2015 refer.

6) Export duty on iron ore fines (below 58% Fe content) [falling under tariff lines 2601 11 41 and2601 11 42] has been reduced from 30% to 10%. There is no change in the export duty rate on iron ore other than iron ore fines (below 58% Fe content). Notification No.27/2011-Customs, dated 01.03.2011 as amended by notification No.30/2015-Customs, dated 30.04.2015 [new S.No.20A refers].

7) Exemption from additional duty of customs levied under section 3 of the Customs Tariff Act (both CVD and SAD) in respect of certain entries of notification No.39/96-Customs, dated 23.07.1996 are being withdrawn. Exemption from Basic Customs Duty in respect of these entries, however, would continue. Paragraph 2 of the notification No.39/96-Customs, dated 23.07.1996 as amended bynotification No.29/2015-Customs dated 30.04.2015 refers. Further, exemption from Basic Customs Duty, CVD and SAD in respect of direct imports by the Government of India and the State Governments would continue. Notification No.39/96-Customs, dated 23.07.1996 as amended bynotification No.29/2015-Customs dated 30.04.2015 [amended S. Nos.9 and 10] refer. These changes, however, will be effective from 01.06.2015.

EXCISE:

1) The speed range for ‘jarda scented tobacco’ has been divided into two ranges (as in case of chewing tobacco),

a. first upto 300 pouches per minute; and

b. second from 301 onwards,

and the deemed capacity and duty payable have been notified accordingly. Notification No.11/2010-Central Excise (N.T.), dated 27.02.2010 [The Chewing Tobacco and Unmanufactured Tobacco Packing Machines (Capacity Determination and Collection of Duty) Rules, 2010] as amended bynotification No.13/2015-Central Excise (N.T.), dated 30.04.2015 [for deemed capacity of production] and notification No.16/2010-Central Excise, dated the 27.02.2010 as amended by notification No.25/2015-Central Excise, dated the 30.04.2015 [for duty payable per machine per month] refer.

2) Excise duty exemption on finishing agents, dye carriers to accelerate the dyeing or fixing of dye-stuffs, printing paste and other products and preparations of any kind used in the same factory for the manufacture of textiles and textile articles has been withdrawn. S.No.133 of notification No.12/2012-Central Excise, dated 17.03.2012 as omitted by notification No.24/2015-Central Excise, dated 30.04.2015 refers.

3) The concessional excise duty (and hence, CVD) of 6% on Hard disk, CD ROM drive, DVD drive or writer, Combo drive, flash memory, microprocessors has been restricted only to actual users for manufacture of computer (PCs/desktops) falling under heading 8471. S.No.255/2012-Central Excise, dated 17.03.2012 as amended by notification No.24/2015-Central Excise, dated 30.04.2015 refers.

4) Excise duty exemption presently available to Ordnance Factories is being withdrawn. S.No.1 and 6 of notification No.62/95-CE dated 16.03.1995 as omitted by notification No.23/2015-Central Excise, dated 30.04.2015 refers. Further, excise duty exemption presently available to Defence PSUs is being withdrawn. S.No.2 and 16 of notification No.63/95-CE dated 16.03.1995 as omitted bynotification No.23/2015-Central Excise, dated 30.04.2015 refers. These changes, however, will be effective from 01.06.2015.

5) An Explanation has been inserted in notifications No.14/2015-Central Excise and 15/2015-Central Excise, both dated 01.03.2015 to provide that exemption from Education Cess and Secondary & Higher Education Cess contained therein will also apply to DTA clearances of excisable goods from 100% EOU. Notification No.14/2015-Central Excise, dated 01.03.2015 as amended by notification No.26/2015-Central Excise, dated 30.04.2015; and notification No.15/2015-Central Excise, dated 01.03.2015 as amended by notification No.27/2015-Central Excise, dated 30.04.2015 refers.

The CENVAT Credit Rules, 2004 (CCR, 2004):

1) Rule 3(7)(b) of the CCR, 2004 has been amended so as to allow utilisation of credit of Education Cess and Secondary & Higher Education Cess for payment of basic excise duty in the following situations:

a. Education Cess and Secondary & Higher Education Cess on inputs or capital goods received in the factory of manufacture of final product on or after the 1st day of March, 2015;

b. Balance 50% Education Cess and Secondary & Higher Education Cess on capital goods received in the factory of manufacture of final product in the financial year 2014-15; and

c. Education Cess and Secondary & Higher Education Cess on input services received by the manufacturer of final product on or after the 1st day of March, 2015.

Notification No.12/2015-Central Excise (N.T.), dated 30.04.2015 refers.

CLARIFICATION: The issue as to whether an importer can simultaneously avail the exemption benefits under two notifications, one for Basic Customs Duty and the other for CVD was examined in the Ministry in the matter of import of coal from Indonesia and vide Circular No.41/2013-Customs dated 21.10.2013 it was clarified that an importer while availing of BCD exemption on steam coal under notification No.46/2011-Customs, dated 01.06.2011 can simultaneously avail of concessional CVD at 2% under S.No.123 of notification No.12/2012-Customs, dated 17.03.2012. Drawing the same analogy, in the case of muriate of potash and urea for use in the manufacture of other fertilizers, it was clarified to the Central Excise zone of Visakhapatnam and Bhubaneswar that importers can simultaneously avail benefit of S.No.198 or 203 of notification No.12/2012-Customs, dated 17.03.2012 for concessional rate of BCD and S.No.127 of notification No.12/2012-Central Excise for CVD exemption. Representations have been received regarding divergence in assessment practice in respect of such imports. It is, therefore, clarified that importers can avail of the benefit ofnotification No.12/2012-Customs, dated 17.03.2012 for the purposes of BCD [i.e. S.No.197 to 203 as amended by notification No.46/2012-Customs, dated 17.08.2012] and simultaneously avail benefit ofS.No.127 of notification No.12/2012-Central Excise, dated 17.03.2012 for the purposes of CVD where such imports are for use in the manufacture of other fertilizers.

SERVICE TAX:

1) Service tax on services of Life Insurance business provided under Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) have been exempted.

2) Service tax on services of Life Insurance business provided under Pradhan Mantri Jan Dhan Yojana (PMJDY) have been exempted.

3) Service tax on services of General Insurance business provided under Pradhan Mantri Suraksha Bima Yojana (PMSBY) have been exempted.

4) Service tax on services by way of collection of contribution under Atal Pension Yojana (APY) have been exempted.

[Notification No.25/2012-Service Tax, dated 20.06.2012 as amended by notification No.12/2015-Service Tax, dated 30.04.2015 [item (p) of entry.26 and items (e) and (f) of entries 26A and 26B refer.]

With warm regards,

Yours sincerely,

(Alok Shukla)

Joint Secretary (TRU-I)

To:

All Principal Chief Commissioners,

All Chief Commissioners / Directors General,

Copy to:

All Principal Commissioners,

All Commissioners,

Director DPPR / Logistics / Legal Affairs / Data Management.

Notification No. : 12/2015 Dated: 30-4-2015


Seeks to amend notification No. 25/2012-ST dated the 20th June, 2012 so as to exempt certain specified services. – 12/2015 – Dated 30-4-2015 – Service Tax

[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY,

PART II, SECTION 3, SUBSECTION (i)]

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

(DEPARTMENT OF REVENUE)

NOTIFICATION No. 12/2015-Service Tax

New Delhi, the 30th April, 2015

G.S.R.….(E).- In exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby makes the following further amendments in the notification of the Government of India in the Ministry of Finance (Department of Revenue) No.25/2012-Service Tax, dated the 20th June, 2012, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 467 (E), dated the 20th June, 2012, namely:-

1. In the said notification,-

(i) in entry 26, after item (o), the following items shall be inserted, namely:-

“(p) Pradhan Mantri Suraksha Bima Yojna;”

(ii) in entry 26A, after item (d), the following items shall be inserted, namely:-

“(e) Pradhan Mantri Jeevan Jyoti Bima Yojana;

(f) Pradhan Mantri Jan Dhan Yogana;”;

(iii) after entry 26A, the following entry shall be inserted, namely:-

“26B Services by way of collection of contribution under Atal Pension Yojana (APY).”

[F. No.334/5/2015 -TRU]

(Akshay Joshi)

Under Secretary to the Government of India

Note:- The principal notification was published in the Gazette of India, Extraordinary, by notification No. 25/2012 – Service Tax, dated the 20th June, 2012, vide number G.S.R. 467 (E), dated the 20th June, 2012 and last amended vide notification No. 06/2015 – Service Tax, dated the 1st March, 2015 vide number G.S.R. 160(E), dated the 1st March, 2015.

Modi govt takes the lead in labour reforms : 30-04-2015


As industry presses for labour reforms, the National Democratic Alliance government has proposed allowing companies hiring up to 300 workers to lay them off without seeking official sanction. Currently, industries with up to 100 workers were allowed to do this.

The Centre is following the Rajasthan government, which had made a similar change to its labour laws five months ago.

The Union labour ministry will integrate three laws —  the Trade Unions Act, the Industrial Disputes Act and the Industrial Employment (Standing Orders) Act — into a single code for industrial relations.

The notice period for establishments to fire employees or shut down a unit is proposed to be increased to three months from one month now.

Retrenched workers are to be paid an average salary of 45 days, instead of the 15 days at present. A worker will be allowed to object to being laid off within three years, against no clear period specified in the law now.

The proposals are designed to make hiring flexible and bring more workers under labour legislation.

“We are re-examining the labour laws on two aspects — strengthening the social security net of the labours and ensuring compliance be such that no employer is harassed,” Union Labour Secretary Shankar Aggarwal told Business Standard.

Aggarwal said in the name of compliance, because of stringent labour laws, small and big establishments were not able to set up factories in India and there was a lack of flexibility.

The ministry has invited comments on its proposals by May 26. It will hold consultations with trade unions and industry before sending the proposals for Cabinet approval.

Only employees will be allowed to form unions. In the unorganised sector, two officials from outside can become members of a union.

“Politicisation of unions will be significantly restricted. This will also maintain genuine representation of workers,” said a labour ministry official who did not wish to be named.

During conciliatory proceedings, workers in all industrial sectors will not be permitted to go on a strike. The ministry has proposed scrapping various arbitration forums, including the labour court. “The industrial tribunal will continue, but the labour court, the board of arbitration and the tribunal court will cease to exist,” the official said.

Further, strikes will not be allowed without a six-week notice. Now, only workers at public utilities need to provide such a notice to employers.

Mass casual leave will be considered a strike. The proposal says if more than half the workers are on casual leave, it will be treated a strike.

“This will reduce harassment of employers because workers tend to go on casual leave and not call it a strike,” the official added.

Source : PTI

Economy no longer about controls: Jaitley : 30-04-2015


NEW DELHI, APRIL 30: The economy is no longer the economy of controls, said Finance Minister Arun Jailtey.

He said civil servants must understand the policies of the Government but distance themselves from political thinking.

Source : Business Line

No. 97 Dated: 30-4-2015


Merchanting Trade to Nepal and Bhutan – Circular – Dated 30-4-2015 – FEMA

RBI/2014-15/580

A.P. (DIR Series) Circular No. 97

April 30, 2015

To

All Category – I Authorised Dealer Banks

Madam / Sir,

Merchanting Trade to Nepal and Bhutan

Attention of Authorised Dealer Category-I (AD Category-I) banks is invited to A.P. (DIR Series) Circular No. 115 dated March 28, 2014. In terms of the revised merchanting trade guidelines stipulated therein, for a trade to be classified as merchanting trade, goods acquired should not enter the Domestic Tariff Area and the state of the goods should not undergo any transformation. Further, the goods involved in the merchanting trade transaction would be the ones that are permitted for exports / imports under the prevailing Foreign Trade Policy (FTP) of India, as on the date of shipment and all the rules, regulations and directions applicable to exports (except Export Declaration Form) and imports (except Bill of Entry), should be complied with for the export leg and the import leg respectively.

2. As Nepal and Bhutan are landlocked countries, there is a facility of transit trade whereby goods are imported from third countries by Nepal and Bhutan through India under the cover of Customs Transit Declarations in terms of the Government of India Treaty of Transit with these two countries. In consultation with Government of India, it is clarified herein that goods consigned to the importers of Nepal and Bhutan from third countries under merchanting trade from India would qualify as traffic-in-transit, if the goods are otherwise compliant with the provisions of the India-Nepal Treaty of Transit and Indo-Bhutan Treaty of Transit respectively.

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

4. The directions contained in this circular have been issued under sections 10(4) and 11(1) of theForeign 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. 96 Dated: 30-4-2015


Deferred Payment Protocols dated April 30, 1981 and December 23, 1985 between Government of India and erstwhile USSR – Circular – Dated 30-4-2015 – FEMA

RBI/2014-15/579

A.P. (DIR Series) Circular No. 96

April 30, 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. 29 dated September 12, 2014 wherein the Rupee value of the Special Currency Basket was indicated as ₹ 80.580297 effective from September 09, 2014.

2. AD Category-I banks are advised that a further revision has taken place on April 10, 2015 and accordingly, the Rupee value of the Special Currency Basket has been fixed at ₹ 85.4813 with effect from April 16, 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 sections 10(4) and 11(1) of theForeign 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

Notification No. : 27/2015 Dated: 30-4-2015


Seeks to amend notification No. 15/2015-Central Excise, dated the 1st March, 2015 – 27/2015 – Dated 30-4-2015 – 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. 27/2015-Central Excise

New Delhi, the 30th April, 2015

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 sections 136 and 138 of the Finance Act, 2007 (22 of 2007), the Central Government being satisfied that it is necessary in the public interest so to do, hereby makes the following amendment in the notification of the Government of India in the Ministry of Finance (Department of Revenue) No.15/2015-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. 145(E), dated the 1st March, 2015, namely:-

In the said notification, after the paragraph, the following Explanation shall be inserted, namely:-

“Explanation.- The exemption contained in this notification shall apply to excisable goods which are produced or manufactured by a hundred per cent. export oriented unit and brought to any other place in India in accordance with the provisions of Foreign Trade Policy.”.

[F. No. 334/5/2015-TRU]

(Akshay Joshi)

Under Secretary to the Government of India

Note.- The principal notification was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide notification No.15/2015-Central Excise dated the 1st March, 2015 vide number G.S.R. 145(E) dated the 1st March, 2015.

Notification No. : 26/2015 Dated: 30-4-2015


Seeks to amend notification No. 14/2015-Central Excise, dated the 1st March, 2015 – 26/2015 – Dated 30-4-2015 – 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. 26/2015-Central Excise

New Delhi, the 30th April, 2015

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 sections 91 and 93 of the Finance (No.2) Act, 2004 (23 of 2004), the Central Government being satisfied that it is necessary in the public interest so to do, hereby makes the following amendment in the notification of the Government of India in the Ministry of Finance (Department of Revenue) No.14/2015-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. 144(E), dated the 1st March, 2015, namely:-

In the said notification, after the paragraph, the following Explanation shall be inserted, namely:-

“Explanation.- The exemption contained in this notification shall apply to excisable goods which are produced or manufactured by a hundred per cent. export oriented unit and brought to any other place in India in accordance with the provisions of Foreign Trade Policy.”.

[F. No. 334/5/2015-TRU]

(Akshay Joshi)

Under Secretary to the Government of India

Note.- The principal notification was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide notification No.14/2015-Central Excise dated the 1st March, 2015 vide number G.S.R. 144(E) dated the 1st March, 2015

Notification No. : 25/2015 Dated: 30-4-2015


Seeks to amend notification No. 16/2010-Central Excise, dated the 27th February, 2010 – 25/2015 – Dated 30-4-2015 – 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. 25 /2015-Central Excise

New Delhi, the 30th April, 2015

G.S.R. (E).- In exercise of the powers conferred by sub-section (3) of section 3A of the Central Excise Act, 1944 (1 of 1944), the Central Government hereby makes the following further amendments in the notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 16/2010-Central Excise, dated the 27th February, 2010, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 118 (E), dated the 27th February, 2010, namely :-

In the said notification, in the first paragraph,-

(i) for the portion beginning with the words “having maximum speed” and ending with the words, brackets, figures and letter “or column (4b) of Table-2”, the words, brackets, figures and letters “having maximum packing speed as specified in column (3) or column (4) or column (5) of Table-1 or column (3) or column (4) or column (5) of Table-2, as the case may be, at which they can be operated for packing of specified goods which are packed in pouches of retail sale prices as specified in column (2) of Table-1 or Table-2, as the case may be, the rates of duty specified in the corresponding entry in column (3a) or column (3b) or column (4a) or column (4b) or column (5) of the said Table-1 or column (3) or column (4) or column (5a) or column (5b) of the said Table-2”, shall be substituted;

(ii) for Table-2 and the Illustration thereto, the following shall be substituted, namely :-

“TABLE-2

S.
No.

Retail sale price (per pouch)

Rate of Duty per packing machine per month (rupees in lakh)

Jarda Scented Tobacco

Unmanufactured Tobacco

Upto 300 pouches per minute

301 pouches per minute and above

Any speed

(1)

(2)

(3)

(4)

(5)

Without lime tube/lime pouches

With lime tube/lime pouches

(5a)

(5b)

1

Up to Re.1.00

27.05

82.11

13.30

12.63

2

Exceeding Re.1.00 but not exceeding ₹ 1.50

40.57

123.16

19.95

18.95

3

Exceeding ₹ 1.50 but not exceeding ₹ 2.00

48.68

147.79

23.94

22.61

4

Exceeding ₹ 2.00 but not exceeding ₹ 3.00

73.03

221.69

35.91

33.91

5

Exceeding ₹ 3.00 but not exceeding ₹ 4.00

90.88

275.88

44.68

42.02

6

Exceeding ₹ 4.00 but not exceeding ₹ 5.00

113.60

344.84

55.85

52.53

7

Exceeding ₹ 5.00 but not exceeding ₹ 6.00

136.32

413.81

67.03

63.04

8

Exceeding ₹ 6.00 but not exceeding ₹ 7.00

216.37

656.85

106.39

99.74

9

Exceeding ₹ 7.00 but not exceeding ₹ 8.00

216.37

656.85

106.39

99.74

10

Exceeding ₹ 8.00 but not exceeding ₹ 9.00

216.37

656.85

106.39

99.74

11

Exceeding ₹ 9.00 but not exceeding ₹ 10.00

216.37

656.85

106.39

99.74

12

Exceeding ₹ 10.00 but not exceeding ₹ 15.00

305.09

926.15

150.01

142.51

13

Exceeding ₹ 15.00 but not exceeding ₹ 20.00

382.37

1160.78

188.01

178.61

14

Exceeding ₹ 20.00 but not exceeding ₹ 25.00

449.29

1363.92

220.91

209.87

15

Exceeding ₹ 25.00 but not exceeding ₹ 30.00

506.80

1538.50

249.19

236.73

16

Exceeding ₹ 30.00 but not exceeding ₹ 35.00

555.79

1687.22

273.28

259.61

17

Exceeding ₹ 35.00 but not exceeding ₹ 40.00

597.08

1812.56

293.58

278.90

18

Exceeding ₹ 40.00 but not exceeding ₹ 45.00

631.41

1916.78

310.46

294.94

19

Exceeding ₹ 45.00 but not exceeding ₹ 50.00

659.47

2001.97

324.26

308.05

20

Above ₹ 50.00

659.47+13.19 x (P-50)

2001.97+40.04 x (P-50)

324.26+6.49
x (P-50)

308.05+6.16
x (P-50)

where ‘P’ above represents retail sale price of the pouch for which rate of duty is to be determined.”;

Illustration: – The rate of duty per packing machine per month for a jarda scented tobacco pouch having retail sale price of ₹ 55.00 (i.e. „P‟) packed with the aid of a machine having maximum packing speed, at which it can be operated for packing jarda scented tobacco pouch of the said retail sale price, of 250 pouches per minute, shall be =Rs. 659.47+13.19 x (55-50) lakh = ₹ 725.42 lakh.”.

[F.No. 334/5/2015 -TRU]

(Pramod Kumar)

Under Secretary to the Government of India

Note: – The principal notification No. 16/2010-Central Excise, dated the 27th February, 2010 was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 118 (E), dated the 27th February, 2010 and was last amended vide notification No.5/2015-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.135 (E), dated the 1st March, 2015.

Amendments to companies law okayed by cabinet : 30-04-2015


The cabinet on Wednesday approved amendments to companies law that seek to bring it in conformity with the rules that go beyond the provisions of the act.

The new Companies Act, passed in 2014, had put many restrictions on companies and left out many issues pertaining to ease of doing business that were later addressed through rules.

The amendments seek to bring the act and the rules in conformity, partner at Economic Laws Practice Darshan Upadhyay said.

“The amendments seek to rationalise the procedure for laying draft notifications granting exemptions to various classes of companies or modifying provisions of the act in Parliament to ensure speedier issue of final notifications,” a statement after the cabinet meeting said.

The amendments are also likely to bring the Companies Act and rules of Sebi that apply to listed companies at par. In some cases Sebi provisions are more stringent while in others compliance with Companies Act is tougher.

The amendments could also restore the difference between public and private companies in terms of compliance as it was in the Companies Act of 1956 that was superceded by the new act. In the new act both private and public companies are treated equally.

The new law had earlier barred companies from extending loans to subsidiaries or to other firms where directors have an interest. The rules under the act, however, allowed them to provide loans or guarantees to wholly owned subsidiaries. The amendments could make these rules part of the act.

Source : The Financial Express

Notification No. : 24/2015 Dated: 30-4-2015


Seeks to amend notification No. 12/2012- Central Excise, dated the 17th March, 2012 – 24/2015 – Dated 30-4-2015 – 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. 24/2015-Central Excise

New Delhi, the 30th April, 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 Table,-

(i) Sl. No. 133 and the entries relating thereto shall be omitted;

(ii) against Sl. No. 255, -

(a) in column (3), for the words and figures “The following goods, namely:-”, the words and figures “The following goods for use in manufacture of computer falling under the heading 8471, namely:-” shall be substituted;

(b) for the entry in column (5), the entry “2” shall be substituted.

[F. No. 334/5/2015-TRU]

(Pramod Kumar)

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. 22/2015-Central Excise, dated the 17th April, 2015, published vide number G.S.R. 303(E), dated the 17th April, 2015.

Notification No. : 23/2015 Dated: 30-4-2015


Seeks to amend notification No. 62/95 Central Excise, dated the 16th March, 1995 and notification No. 63/95- Central Excise, dated the 16th March, 1995 – 23/2015 – Dated 30-4-2015 – 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. 23/2015 – Central Excise

New Delhi, the 30th April, 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, on being satisfied that it is necessary in the public interest so to do, hereby directs that each of the notifications of the Government of India in the Ministry of Finance (Department of Revenue), specified in column (2) of the Table hereto annexed shall be further amended, in the manner specified in the corresponding entry in column (3) of the said Table, namely :-

Table

S. No.

Notification number and date Amendments
(1) (2) (3)

1.

62/1995-Central Excise, dated the 16thMarch, 1995[G.S.R. 254(E), dated the 16th March, 1995] In the said notification, in the TABLE, -(i) S.No. 1 and the entries relating thereto shall be omitted;

(ii) S.No. 6 and the entries relating thereto shall be omitted.

 

2.

63/1995-Central Excise, dated the 16thMarch, 1995[G.S.R.255(E), dated the 16th March, 1995] In the said notification, in the TABLE, -(i) S.No. 2 and the entries relating thereto shall be omitted;

(ii) S.No.16 and the entries relating thereto shall be omitted.

2. This notification shall come into force with effect from the 1st day of June, 2015.

[F.No. 334/5/2015-TRU]

(Akshay Joshi)

Under Secretary to the Government of India

Note.-

1. The principal notification No. 62/95-Central Excise, dated the 16th March, 1995, published in the Gazette of India, Extraordinary, vide number G.S.R. 254(E), dated the 16th March, 1995, was last amended vide notification No. 42/2011-Central Excise, dated 30th December, 2011 published vide number G.S.R. 937(E), dated 30th December, 2011.

2. The principal notification No. 63/95-Central Excise, dated the 16th March, 1995 was published in the Gazette of India, Extraordinary, vide number G.S.R.255(E), dated the 16th March, 1995, and was last amended by notification No. 29/2011-Central Excise, dated the 24th March, 2011 published vide number G.S.R. 241(E), dated the 24th March, 2011.

Notification No. : 13/2015 Dated: 30-4-2015


Seeks to amend the Chewing Tobacco and Unmanufactured Tobacco Packing Machines (Capacity Determination and Collection of Duty) Rules, 2010 – 13/2015 – Dated 30-4-2015 – 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)

Notification No. 13 /2015–Central Excise (N.T.)

New Delhi, the 30 April, 2015

G.S.R (E). - In exercise of the powers conferred by sub-sections (2) and (3) of section 3A of theCentral Excise Act, 1944 (1 of 1944), the Central Government hereby makes the following rules further to amend the Chewing Tobacco and Unmanufactured Tobacco Packing Machines (Capacity Determination and Collection of Duty ) Rules, 2010, namely :-

1. (1) These rules may be called the Chewing Tobacco and Unmanufactured Tobacco Packing Machines (Capacity Determination and Collection of Duty) Amendment Rules, 2015.

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

2. In the Chewing Tobacco and Unmanufactured Tobacco Packing Machines (Capacity Determination and Collection of Duty) Rules, 2010, -

(i) in rule 5,-

(a) for the portion beginning with the words “The quantity of notified goods” and ending with the words “or column (4b) of the said Table-2, as the case may be”, the following shall be substituted, namely:-

“The quantity of notified goods, having retail sale prices as specified in column (2) of Table-1 or Table-2 below, deemed to be produced by use of one operating packing machine, having maximum packing speed at which it can be operated for packing of notified goods as specified in column (3) or column (4) or column (5) of the said Table-1, or column (3) or column (4) or column (5) of the said Table-2, as the case may be, per month shall be as is equal to the corresponding entry specified in column (3a) or column (3b) or column (4a) or column (4b) or column (5) of the said Table-1, or column (3) or column (4) or column (5a) or column (5b) of the said Table-2, as the case may be”;

(b) for the Table-2 and the entries relating thereto, the following shall be substituted, namely:-

“TABLE-2

S.
No.

Retail sale price (per pouch)

Capacity of production per packing machine per month for Jarda Scented Tobacco and Unmanufactured Tobacco (number of pouches)

Jarda Scented Tobacco

Unmanufactured Tobacco

Upto 300 pouches per minute

301 pouches per minute and above

Any speed

(1)

(2)

(3)

(4)

(5)

Without lime tube/lime pouches

With lime tube/lime pouches

(5a)

(5b)

1

Up to Re.1.00

6988800

21216000

4992000

4742400

2

Exceeding Re.1.00 but not exceeding ₹ 1.50

6988800

21216000

4992000

4742400

3

Exceeding ₹ 1.50 but not exceeding ₹ 2.00

6289920

19094400

4492800

4243200

4

Exceeding ₹ 2.00 but not exceeding ₹ 3.00

6289920

19094400

4492800

4243200

5

Exceeding ₹ 3.00 but not exceeding ₹ 4.00

5870592

17821440

4193280

3943680

6

Exceeding ₹ 4.00 but not exceeding ₹ 5.00

5870592

17821440

4193280

3943680

7

Exceeding ₹ 5.00 but not exceeding ₹ 6.00

5870592

17821440

4193280

3943680

8

Exceeding ₹ 6.00 but not exceeding ₹ 7.00

5591040

16972800

3993600

3744000

9

Exceeding ₹ 7.00 but not exceeding ₹ 8.00

5591040

16972800

3993600

3744000

10

Exceeding ₹ 8.00 but not exceeding ₹ 9.00

5591040

16972800

3993600

3744000

11

Exceeding ₹ 9.00 but not exceeding ₹ 10.00

5591040

16972800

3993600

3744000

12

Exceeding ₹ 10.00 but not exceeding ₹ 15.00

5255578

15954432

3753984

3566285

13

Exceeding ₹ 15.00 but not exceeding ₹ 20.00

4940243

14997166

3528745

3352308

14

Exceeding ₹ 20.00 but not exceeding ₹ 25.00

4643828

14097336

3317020

3151169

15

Exceeding ₹ 25.00 but not exceeding ₹ 30.00

4365199

13251496

3117999

2962099

16

Exceeding ₹ 30.00 but not exceeding ₹ 35.00

4103287

12456406

2930919

2784373

17

Exceeding ₹ 35.00 but not exceeding ₹ 40.00

3857090

11709022

2755064

2617311

18

Exceeding ₹ 40.00 but not exceeding ₹ 45.00

3625664

11006481

2589760

2460272

19

Exceeding ₹ 45.00 but not exceeding ₹ 50.00

3408124

10346092

2434375

2312656

20

Above ₹ 50.00

3408124

10346092

2434375

2312656″ ;

(iii)  in rule 6, in sub-rule (3), after the fourth proviso, the following proviso shall be inserted, namely:-

“Provided also that the annual capacity of production for the 30th day of April, 2015  shall be calculated on pro-rata basis based on the total number of days in the month of April, 2015.”

[F No.334//2015-TRU]

(Pramod Kumar)
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), dated the 27th February, 2010 by notification No.11/2010-Central Excise (N.T.), dated the 27th February, 2010, vide number G.S.R.127 (E), dated the 27th February, 2010 and were last amended by notification No.4/2015-Central Excise (N.T.), dated the 1st March, 2015, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-Section (i), vide number G.S.R.179 (E), dated the 1st March, 2015.

Notification No. : 12/2015 Dated: 30-4-2015


Seeks to amend CENVAT Credit Rules, 2004 – 12/2015 – Dated 30-4-2015 – 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)

Notification No. 12/2015-Central Excise (N.T.)

New Delhi, the 30th April, 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 (Second 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 3, in sub-rule (7), in clause (b), after the second proviso, the following shall be substituted, namely:-

“Provided also that the credit of Education Cess and Secondary and Higher Education Cess paid on inputs or capital goods received in the factory of manufacture of final product on or after the 1st day of March, 2015 can be utilized for payment of the duty of excise leviable under the First Schedule to the Excise Tariff Act:

Provided also that the credit of balance fifty per cent. Education Cess and Secondary and Higher Education Cess paid on capital goods received in the factory of manufacture of final product in the financial year 2014-15 can be utilized for payment of the duty of excise specified in the First Schedule to the Excise Tariff Act:

Provided also that the credit of Education Cess and Secondary and Higher Education Cess paid on input services received by the manufacturer of final product on or after the 1st day of March, 2015 can be utilized for payment of the duty of excise specified in the First Schedule to the Excise Tariff Act.”.

[F. No. 334/5/2015-TRU]

(Akshay Joshi)

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.6/2015-Central Excise (N.T.) dated 1st March, 2015 published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), by number G.S.R. 151(E), dated the 1st March, 2015.

Notification No. : S.O. 1218 (E) Dated: 29-4-2015


De-notification of certain area from sector specific Special Economic Zone for Engineering at village Alwa and Pipalia, Taluka Waghodia, District Vadodara in the State of Gujarat. – S.O. 1218 (E) – Dated 29-4-2015 – Special Economic Zone

MINISTRY OF COMMERCE AND INDUSTRY

(Department of Commerce)

NOTIFICATION

New Delhi, the 29th April, 2015

S.O. 1218 (E). – Whereas, M/s Aspen Infrastructures Ltd., a private organization in the State of Gujarat, has proposed under section 3 of the Special Economic Zones Act, 2005 (28 of 2005), (hereinafter referred to as the said Act) to set up a sector specific Special Economic Zone for Engineering at village Alwa and Pipalia, Taluka Waghodia, District Vadodara 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 the following areas as Special Economic Zone, as per the details given below:-

S. No. Notification No. Date Area Notified(in hectare) Resultant Area(in hectare)
1. S.O. 1084(E) 03.07.2007 100.99.00 100.99.00
2. S.O. 1669(E) 11.07.2008 9.67.61 110.66.61
3. S.O. 1366(E) 27.05.2009 4.97.78 115.64.39

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 de-notified the following areas as Special Economic Zone, as per the details given below:-

S. No. Notification No. Date Area De-notified(in hectare) Resultant Area(in hectare)
1. S.O. 2001(E) 04.08.2014 10.42.41 105.21.98
2. S.O. 2505(E) 27.09.2014 52.45.88 52.76.10

And, Whereas, M/s Aspen Infrastructures Ltd. has now proposed to de-notify 1.21.30 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/1045772 dated 24th February, 2015;

And Whereas, the Development Commissioner, Kandla Special Economic Zone has recommended the proposal for de-notification of an area of 1.21.30 hectares of the Special Economic Zone;

And, 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 4of 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 1.21.30 hectares, thereby making resultant area as 51.54.80 hectare, comprising the survey numbers and the area given below in the table, namely:-

TABLE

S. No.

Survey No.

Notified Area

(in hectare)

Area being

de-notified

(in hectare)

Resultant Area

(in hectare)

1

178/13

1.7009

1.7009

2

170

0.4350

0.4350

3

178/5

0.8827

0.8827

4

164

1.9020

1.9020

5

178/17

1.2346

1.2346

6

178/2

0.0630

0.0630

7

177

0.4654

0.4654

8

178/3

2.6682

2.6682

9

178/6

0.1809

0.1809

10

178/7

1.7098

1.7098

11

178/19

0.9510

0.9510

12

169

0.5969

0.5969

13

74/1

0.2125

0.2125

14

74/3

0.9915

0.9915

15

168/1

0.2023

0.2023

16

171/1

0.2023

0.2023

17

53/2

0.1215

0.1215

18

54/1

0.5868

0.5868

19

72

0.0045

0.0045

20

73

0.3727

0.3727

21

178/14

0.0395

0.0395

22

94

0.5868

0.5868

23

74/2

0.7183

0.7183

24

71

0.0433

0.0433

25

178/15

0.0727

0.0727

26

27

1.3152

1.3152

27

28

1.5075

1.5075

28

29

2.6912

2.6912

29

31

0.6363

0.1510

0.4853

30

42

0.6302

0.6302

31

44

0.9409

0.9409

32

45

1.6795

1.6795

33

46

2.6305

2.6305

34

64

0.0739

0.0739

35

65

0.2023

0.2023

36

66

0.8671

0.8671

37

67

0.3946

0.3946

38

68

0.1123

0.1123

39

69

0.0222

0.0222

40

23

0.2642

0.2642

41

30

3.1170

3.1170

42

43

1.2748

1.2748

43

47

1.4872

1.4872

44

48

0.2630

0.2630

45

52

0.3440

0.3440

46

175

0.3696

0.3696

47

56

0.1315

0.1315

48

106

1.3962

1.3962

49

109

0.4047

0.4047

50

107

0.3440

0.3440

51

51

0.3237

0.3237

52

53/1

0.5564

0.5564

53

54/2

1.0927

1.0927

54

57

0.6020

0.6020

55

105

0.2870

0.2870

56

58

0.1271

0.1271

57

60

0.2732

0.2732

58

53/3

0.1683

0.1683

59

110

0.1235

0.1235

60

26

1.6417

1.6417

61

49

0.8397

0.8397

62

50

0.0911

0.0911

63

55

0.2529

0.2529

64

59

0.1518

0.1518

65

39

1.1085

0.5359

0.5726

66

108

0.4050

0.4050

67

32

1.0938

0.2675

0.8263

68

38

0.2586

0.2586

0.0000

69

163

1.4164

1.4164

70

168/2

0.4755

0.4755

71

171/2

0.6180

0.6180

72

178/18

0.7791

0.7791

Total

52.7610

1.2130

51.5480

F. No. F.2/248/2006-SEZ]

Dr. GURUPRASAD MOHAPATRA, Jt. Secy.

Notification No. : F. No. 1/2/2013-CL-V Dated: 29-4-2015


Applicability of provisions of section 458 of the Companies Act, 2013 except proviso to subsection (1) to a limited liability partnership firm – F. No. 1/2/2013-CL-V – Dated 29-4-2015 – Companies Law

MINISTRY OF CORPORATE AFFAIRS

NOTIFICATION

New Delhi, the 29th April, 2015

G.S.R. 333(E).- In exercise of the powers conferred by sub-section (1) of Section 67 of the Limited Liability Partnership Act, 2008 (6 of 2009), the Central Government hereby directs that the provisions of section 458 of the Companies Act, 2013 (18 of 2013), [except proviso to subsection (1)] shall apply to a limited liability partnership from the date of publication of this notification in the Official Gazette.

[F. No. 1/2/2013-CL-V]

AMARDEEP SINGH BHATIA, Jt. Secy.

Why has ST refund mechanism failed so miserably? : 28-04-2015


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

THIS is indeed a billion dollar question, literally. One had hopes that the new Government would take some effective steps to ensure the flow of refunds to exporters. Sadly, in the last two Budgets, the woes of the exporters in terms of refunds have been totally ignored with the result that the refund mechanism has gone from bad to worse.

I have been handling issues related to refund claims of my clients over the last few years. Sadly enough, I have seen no improvement in the manner the Department handles refund claims of exporters. In facts, things would seem to have gone really bad in the recent months following the re-structuring of the service tax department and in many cases, the refund related files have been misplaced with the refund claimants being asked to re-submit claims. Following the restructuring, the Assistant and Deputy Commissioners who are vested with powers to handle refund claims also feign ignorance as to their jurisdiction to handle cases as the entire Department seems to be in a mess.

In many cases, show cause notices have not been issued on the quarterly refund claims filed for years now. Even in cases where show cause notices have been issued, the Assistant and Deputy Commissioners who are required to call for personal hearings are happily sitting on the these files (I mean this in a literal sense as it is understood that, these officers would find it more comfortable to use these files as chairs, in the absence of furniture being made available to them) for months and years together. In very few cases where personal hearings have been conducted, the officers are not willing to pass adjudication orders. In many instances, tens of box files containing important documents related to refund claims are claimed to be untraceable.

At the level of the First Appellate Authorities, there would seem to be a general reluctance on the part of the Appellate Commissioners to handle appeals involving refund claims as there is a marked preference for handling appeals related to adjudication of tax. In many cases, where the appeal cases have been reverted (the Appellate Commissioners are smart enough not to use the prohibited word ‘remand’), it is seen that the Assistant and the Deputy Commissioners sit on these cases for months and years together. Even in exceptional cases where a Departmental Officer would have granted a refund, it is often seen that the Department goes on appeals against these orders, to the CESTAT.

The very adjudication process followed by the offices of the Service Tax Department vary from one Commissionerate to another. There is an absolute lack of uniformity in the manner refund claims are handled by the Service tax Commissionerates. Recently a services exporter with delivery offices in multiple cities was seen complaining that the Service Tax Commissionerates located at different cities are treating his claim on service tax refunds, differently. I was informed that the Service Tax Commissionerate of the IT capital was refusing even to consider that the rent paid for the premises from where the software services was exported was an ‘input service’ while he had no such issues in the Commissionerate of the country’s commercial capital.

Handling the very process of applying for a refund could be one of the most depressing and demoralizing experiences for an exporter and especially, a services exporter. At least, the goods exporter would already have acclimatized himself to the ways of the Central Excise Department. The services exporter, on the other hand, finds it too scary to receive a ‘show cause notice’ asking him to explain the nexus between the input service involving payment of rent for his premises from which exports of output service are undertaken and threatening him that any further action can be taken under the law. Most small time services exporters find it prudent not to needle the Central Government for being daring enough to find a refund claim.

The requirements of the Service Tax Department for processing a refund claim could be endless, as we know. Apart from getting certificates from the service providers that they have remitted the service tax collected from the exporter, the hapless exporter would be required to produce multiple reconciliation statements involving the export invoices, softex forms, inward remittance certificates, bank realization certificates, etc. In some cases, the Department also wants the exporter to confirm that his client has indeed received the services. I recently came across a requirement asking the exporter to justify as to why his refund claim for a particular quarter was above a certain percentage of his export turnover.

When asked to justify the ‘nexus’ between the input service being rent paid for the premises and the output services, I was informed by my Departmental friend, of the audacity of the refund claimant who had replied to the SCN that, without the premises, his staff would be forced to sit on the road outside the Service Department’s office in Bangalore and try and undertake software programming so that, the very efficient direct IRS recruit of the Department who wanted the exporter to prove the nexus could convince himself that it is not possible for the exporter to render output services without the safety and security of a building.

Be that as it may…….it is sad to note that even the brilliant direct recruits of the Department are not inclined to take a risk, insofar as the granting of refunds to exporters are concerned. It is a sad reflection that our brilliant civil servants are forced to use their intellectual prowess to be used in a highly negative rather than, in a positive manner, in the matter of handling refund claims. No amount of prodding by the Finance Ministry is going to work, vis-à-vis our great Babus, unless the various systemic issues are solved. One of my friends at the level of the Commissioner told me that though he was convinced that a particular services exporter who was claiming a huge amount as refund of service tax was entitled to the refund, he did not want to take a risk of having the CBI to knock at his doors given the quantum of the refund.

I would presume that the Government would be sitting on tens of thousands of crores of service tax refunds, for sure. While I am one of the few who would still want to believe that the current political dispensation would ultimately prove to be better than its predecessor, it does seems that the current Government has no interest whatsoever in ensuring that the refund mechanism works, if the complete lack of action on its part, on this front, is any proof.

Before parting…

One could easily have given up hope of a positive change in our indirect tax bureaucracy, with particular reference to the processing of refund claims involving service tax. This state of affairs is in complete contrast to the very efficient system involving processing of refunds by the Income tax Department, where, the refunds claims based on income tax returns are handled by a computer system.

Perhaps, it is time for a complete rethink on the current system…. we need to introduce a system which can grant refunds, as a percentage of the export realizations. Though the new Foreign Trade Policy has introduced a similar system for services exporters, sadly enough, this is not applicable to services exporters operating as 100% EOUs and SEZ units who constitute the bulk of the services exports from India. And, like under the income tax law, there should be a system of interest to be paid for the delay, to be calculated from the date of filing of the refund claims.

If the exporters have got some relief in terms of refunds, it is undoubtedly because of the judicial bodies like the Courts and the CESTAT Benches.

In the longer run the fact that the service tax refund system is so non-operational to be of any practical use to the exporter it is bound to negatively affect new investments in the country under the Make-In-India/Made-In-India initiative.

The PM had very recently talked of a political intervention in bureaucracy to make it more accountable, responsible and transparent. This intervention is very urgently required in our indirect tax bureaucracy.

On the flip side…..the largest beneficiaries of the current system involving the filing of refund claims on a quarterly basis are, of course, the CAs and Advocates (like me). We have a good time in handling litigation arising out of each and every quarterly refund claim filed by our clients, the hapless exporters.

No. 1001/8/2015-CX.8 Dated: 28-4-2015


Clarification on rebate of duty on goods cleared from DTA to SEZ – Dated 28-4-2015 – Central Excise

Circular No.1001/8/2015-CX.8

F. No.267/18/2015-CX.8

Government of India

Ministry of Finance

Department of Revenue

Central Board of Excise and Customs

New Delhi, the 28th April, 2015

To,

Principal Chief Commissioners/Chief Commissioners of Central Excise (All),

Principal Chief Commissioners/Chief Commissioners of Service Tax (All),

Principal Chief Commissioners/Chief Commissioners of Customs (All),

Director General, Directorate General of Central Excise Intelligence,

Web-master, CBEC

Madam/Sir,

Sub: Clarification on rebate of duty on goods cleared from DTA to SEZ – reg.

Kind attention is invited to Notifications No. 6/2015-CE (NT) and 8/2015-CE (NT), both dated 01.03.2015, vide which the meaning of export has been elaborated in both rule 5 of CENVAT Credit Rules, 2004 and rule 18 of Central Excise Rules, 2002.  Post these amendments, apprehensions have been expressed by the trade as to whether the following benefits would be available after these amendments:

i.    Benefit of rebate of duty on goods cleared from DTA to SEZ.

ii.   Refund of accumulated CENVAT credit when goods are cleared from DTA to SEZ.

2.    It is seen that:

i.    Section 2 (m) (ii) of the SEZ Act, 2005 defines export to, inter-alia, mean “supplying goods,   or providing services, from the Domestic Tariff Area to a Unit or Developer”.

ii.   Section 26 (1) (d) of SEZ Act, 2005 mentions that subject to the provisions of the sub-section (2), every Developer and entrepreneur shall be entitled to drawback or such other benefits as may be admissible from time to time on goods brought or services provided from the Domestic Tariff Area into Special Economic Zone or Unit or services provided in a Special Economic Zone or Unit by the service providers located outside India to carry on the authorized operations by the Developer or entrepreneur.

iii.   Section 51 (1) of the SEZ Act mandates that “The Provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force or in any instrument having effect by virtue of any law other than this Act”.

iv.    Section 53 (1) of the SEZ Act mentions that “A Special Economic Zone shall, on and from the appointed day, be deemed to be a territory outside the customs territory of India for the purposes of undertaking the authorized operations”.

v.   Rule 30 (1) of the SEZ Rules, 2006 reads as under-

“The Domestic Tariff Area supplier supplying goods to a Unit or Developer shall clear the goods, as in the case of exports, either under bond or as duty paid goods under claim of rebate on the cover of ARE-1 referred to in Notification number 42/2001-Central Excise (NT) dated the 26th June, 2001 in quintuplicate bearing running serial number beginning from the first day of the financial year”.

3.    It can thus be seen that according to the SEZ Act, supply of goods from DTA to the SEZ constitutes export.  Further, as per section 51 of the SEZ Act, the provisions of the SEZ Act shall have over riding effect over provisions of any other law in case of any inconsistency.  Section 53 of the SEZ Act makes an SEZ a territory outside the customs territory of India.  It is in line of these provisions that rule 30 (1) of the SEZ rules, 2006 provides that the DTA supplier supplying goods to the SEZ shall clear the goods either under bond or as duty paid goods under claim of rebate on the cover of ARE-1.

4.    It was in view of these provisions that the DGEP vide circulars No. 29/2006-customs dated 27/12/2006 and No. 6/2010 dated 19/03/2010 clarified that rebate under rule 18 of the Central Excise Rules, 2002 is admissible for supply of goods made from DTA to SEZ.  The position as explained in there circulars does not change after amendments made vide Notification No. 6/2015-CE (NT) and 8/2015-CE (NT) both dated 01.03.2015, since the definition of export, already given in rule 18 of Central Excise Rules, 2002 has only been made more explicit by incorporating the definition of export as given in the Customs Act, 1962.  Since SEZ is deemed to be outside the Customs territory of India, any licit clearances of goods to an SEZ from the DTA will continue to be export and therefore be entitled to the benefit of rebate under rule 18 of CER, 2002 and of refund of accumulated CENVAT credit under rule 5 of CCR, 2004, as the case may be.

5.    Any difficulty in the implementation of this circular may be brought to the notice of the Board. Hindi version will follow.

(Shankar Prasad Sarma)

Under Secretary to the Government of India

Notification No. 43/2015 Dated: 24-4-2015


Notification u/s 35(1) (ii) – Approved organization – Pandit Deendayal Petroleum University Raisan Gandhi Nagar Gujarat – 43/2015 – Dated 24-4-2015 – Income Tax

(TO BE PUBLISHED IN PART II, SUB-SECTION (ii) OF

SECTION 3 OF THE GAZETTE OF INDIA)

Ministry of Finance

(Department of Revenue)

(Central Board of Direct Taxes)

Notification No. 43/2015

New Delhi, the 24th April, 2015

S. O. …. (E) - It is hereby notified for general information that the organization Pandit Deendayal Petroleum University Raisan Gandhi Nagar Gujarat, (PAN- AABTP3856A) has been approved by the Central Government for the purpose of clause (ii) of sub-section (1) of section 35 of the Income-tax Act 1961 (said Act), read with rules 5C and 5E of the Income-tax Rules, 1962 (said Rules), from AY- 2014-2015 and onwards under the category ‘University. College or Other Institution’, for the Departments/schools under its aegis which are engaged in scientific research activities only, subject to the following conditions, namely:-

(i)    The sums paid to the approved organization shall be utilized for scientific research;

(ii)    The approved organization shall carry out scientific research in the above fields through its faculty members or its enrolled students;

(iii)    The approved organization shall maintain separate books of account in respect of the sums received by it for scientific research, reflect therein the amounts used for carrying out research, get such books audited by an accountant as defined in the explanation to sub-section (2) of section 288 of the said Act and furnish the report of such audit duly signed and verified by such accountant to the Commissioner of Income-tax or the Director of Income-tax having jurisdiction over the case, by the due date of furnishing the return of income under sub-section (1) of section 139 of the said Act;

(iv)    The approved organization shall maintain a separate statement of donations received and amounts applied for scientific research in respect of concerned Departments and a copy of such statement duly certified by the auditor shall accompany the report of audit referred to above.

2. The Central Government shall withdraw the approval if the approved organization:-

(a)    fails to maintain separate books of account referred to in sub-paragraph (iii) of paragraph 1; or

(b)    fails to furnish its audit report referred to in sub-paragraph (iii) of paragraph 1; or

(c)    fails to furnish its statement of the donations received and sums applied for scientific research referred to in sub-paragraph (iv) of paragraph 1; or

(d)    ceases to carry on its research activities or its research activities are not found to be genuine; or

(e)    ceases to conform to and comply with the provisions of clause (ii) of sub-section (1) of section 35 of the said Act read with rules 5C and 5E of the said Rules.

[F. NO. 203/11/2014/ITA-II]

No. F. No. 500/36/2015-FTD I Dated: 24-4-2015


Claim of treaty benefits by Foreign Institutional Investors under the provisions of Double Taxation Avoidance Agreements – Order-Instruction – Dated 24-4-2015 – Income Tax

F. No. 500/36/2015-FTD I

Government of India

Ministry of Finance

Department of Revenue

Central Board of Direct Taxes

Foreign Tax & Tax Research Division-I

Dated the 24th April, 2015

To

All Principal Chief Commissioners of Income Tax

Madam/Sir,

Subject: Claim of treaty benefits by Foreign Institutional Investors under the provisions of Double Taxation Avoidance Agreements-regarding

It has come to the notice of the Board that several Foreign Institutional Investors receiving income from transactions in securities claim such income as exempt from tax under the Income Tax Act, 1961(‘the Act’) by availing benefit provided in the Double Taxation Avoidance Agreements(‘DTAAs’) signed between India and their respective countries of residence.

2.  Since the issue involved in such cases is limited, such claims should be decided expeditiously. Accordingly, it has been decided that in all cases of Foreign Institutional Investors seeking treaty benefits under the provisions of respective DTAAs, decision may be taken on such claims within one month from the date such claim is filed.

3.  This may be brought to the notice of all concerned for strict compliance.

Yours faithfully,

(Dinesh Antil)

Dy. Commissioner of Income-tax(OSD)

[FT & TR-I(2)]

Copy to:

1.  Chairperson, Members and all other officers in CBDT of the rank of Under Secretary and above

2.  Database Cell for uploading on IRS Officers website

3.  Media Coordinator and Official Spokesperson for CBDT

4.  Guard File

No. 07/2015 Dated: 23-4-2015


Requirement of tax deduction at source in case of corporations whose income is exempt under section 10 (26BBB) of the Income-tax Act, 1961- Exemption thereof. – Circular – Dated 23-4-2015 – Income Tax

Circular No. 07/2015

F. No. 275/50/2006 IT (B)

Government of India

Ministry of Finance

Department of Revenue

Central Board of Direct Taxes

North Block, New Delhi

23 April, 2015

Subject: Requirement of tax deduction at source in case of corporations whose income is exempt under section 10 (26BBB) of the Income-tax Act, 1961- Exemption thereof.

The Central Board of Direct Taxes (the Board) had earlier issued Circular No. 4/2002 dated 16.07.2002 which laid down that in case of such entities, whose income is unconditionally exempt under section 10 of the Income-tax Act (the Act) and who are statutorily not required to file return of income as per section 139 of the Act, there would be no requirement for tax deduction at source (TDS) from the payments made to them since their income is anyway  exempt under the Act.

2.     Section  10(26BBB) came into existence after the issue of the said Circular dated 16.07.2002. The said section was inserted in the Income-tax Act vide Finance Act, 2003 (w.e.f. 01.04.2004) unconditionally exempting any income of a corporation established by a Central, State or Provincial Act for the welfare and economic upliftment of ex-servicemen being the citizens of India. The corporations covered under section 10(26BBB) are also statutorily not required to file return of income as per section 139 of the Act. References have been received in the Board requesting for extension of the aforesaid exemption from TDS granted vide Circular No.4/2002 to the corporations covered under section 10(26BBB) as well.

3.     The matter has been examined by the Board. It has now been decided that since the corporations covered under section 10(26BBB) satisfy the two conditions of Circular No.4/2002 i.e. unconditional exemption of income under section 10 and no statutory liability to file return bf income sunder section 139, any corporation whose income is exempt under section 10 (26BBB) of the Act will also be entitled to the benefit of the said Circular. Hence there would be no requirement for tax deduction at source from the payments made to such corporations since their income is anyway exempt under the Act.

4. Hindi version shall follow.

(Sandeep Singh)

Under Secretary to the Government of India

Notification No.42/2015 dated 16-04-2015


Notification u/s 35(1) (ii) – Approved organization – Institute of Chemical Technology, Mumbai – 42/2015 – Dated 16-4-2015 – Income Tax

(TO BE PUBLISHED IN PART II, SUB-SECTION (ii) OF

SECTION 3 OF THE GAZETTE OF INDIA)

Ministry of Finance

(Department of Revenue)

(Central Board of Direct Taxes)

Notification No. 42/2015

New Delhi, the 16th April, 2015

S.O.  - It is hereby notified for general information that the organization Institute of Chemical Technology, Nathalal Parekh Marg, Matunga, Mumbai (PAN  AAATI4951J) has been approved by the Central Government for the purpose of clause (ii) of sub-section (1) of section 35 of the Income-tax Act, 1961 (said Act), read with Rules 5C and 5E of the Income-tax Rules, 1962 (said Rules), from Assessment year 2014-2015 and onwards under the category “University College or other Institution”, engaged in research activities subject to the following conditions, namely:-

(i)    The sums paid to the approved organization shall be utilized for scientific research;

(ii)   The approved organization shall carry out scientific research through its faculty members or its enrolled students;

(iii)  The approved organization shall maintain separate books of accounts in respect of the sums received by it for scientific research, reflect therein the amounts used for carrying out research, get such books audited by an accountant as defined in the explanation to sub-section (2) of section 288 of the said Act and furnish the report of such audit duly signed and verified by such accountant to the Commissioner of income-tax or the Director of Income-tax having jurisdiction over the case, by the due date of furnishing the return of income under sub-section (1) of section 139 of the said Act;

(iv)  The approved organization shall maintain a separate statement of donations received and amounts applied for scientific research and a copy of such statement duly certified by the auditor shall accompany the report of audit referred to above.

2.    The Central Government shall withdraw the approval if the approved organization:-

(a)  fails to maintain separate books of accounts as referred to in sub-paragraph (iii) of paragraph 1; or

(b)  fails to furnish its audit report as referred to in sub-paragraph (iii) of paragraph 1; or

(c)  fails to furnish its statement of the donations received and sums applied for scientific research as referred to in sub-paragraph (iv) of paragraph 1; or

(d)  ceases to carry on its research activities or its research activities are not found to be genuine; or

(e)  ceases to conform to and comply with the provisions of clause (ii) of sub-section (1) of section 35 of the said Act read with Rules 5C and 5E of the said Rules.

(F. No. 203/13/2014/ITA-II)

(Richa Rastogi)

Under Secretary to the Govt. of India

 

Notification No.41/2015 dated 15-04-2015


Income-tax Rules, 1962 – Several Changes – 41/2015 – Dated 15-4-2015 – 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. 41/2015

New Delhi, the 15th day of April, 2015

S.O. 1014 (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 theIncome-tax Rules, 1962, namely:-

1. (1) These rules may be called the Income-tax (Seventh 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,─

(1) in rule 12,─

(a) in sub-rule (1),-

(A) after the words, brackets, figure and letter “sub-section (4D)” the words, brackets, figure and letter “or sub-section (4E)” shall be inserted;

(B) for the figures “2014”, the figures “2015” shall be substituted;

(C) in clause (a), in the proviso, in clause (I), for sub-clause (ii), the following sub clauses shall be substituted, namely:-

“(ii) signing authority in any account located outside India; or

(iii) income from any source outside India;”;

(D) in clause (ca), in the proviso, in clause (I), for sub-clause (ii) the following sub clauses shall be substituted, namely:-

“(ii) signing authority in any account located outside India; or

(iii) income from any source outside India;”;

(E) in clause (g), after the words, brackets, figure and letter “sub-section (4D)” the words, brackets, figure and letter “or sub-section (4E)” shall be inserted;

(b) for sub-rule(3), the following sub-rule shall be substituted, namely:-

‘(3) The return of income referred to in sub-rule (1) shall be furnished by a person mentioned in column (ii) of the Table below to whom the conditions specified in column (iii) apply, in the manner specified in column (iv) thereof:-

Table

Sl.

Person

Condition

Manner of furnishing return of income

(i)

(ii)

(iii)

(iv)

1 Individual or Hindu undivided family (a) Accounts are required to be audited under section 44AB of theAct; Electronically under digital signature
(b) Where (a) is not applicable and,-

(I) the return is furnished in Form No. ITR-3 or Form No. ITR-4; or

(II) the person, being a resident, other than not ordinarily resident within the meaning of subsection (6) of section 6, has, (A) assets (including financial interest in any entity) located outside India; or (B) signing authority in any account located outside India; or (C) income from any source outside India;

(III) any relief, in respect of tax paid proviso to sub-rule (2) is required to be furnished electronically; or

(V) total income assessable under the Act during the previous year of the person (other than the person, being an individual of the age of 80 years or more at any time during the previous year and furnishing the return in Form ITR-1 or ITR-2),-

(i) exceeds five lakh rupees; or

(ii) any refund is claimed in the return of income; outside India, under section 90 or 90A or deduction of tax under section 91 is claimed; or

(IV) any report of audit referred to in

(A) Electronically under

digital signature; or

(B) Transmitting the data in the return electronically under electronic verification code; or (C) Transmitting the data in the return electronically

and thereafter submitting the

verification of the return in

Form ITR-V.

(c) In any other case. (A) Electronically under digital signature; or

(B) Transmitting the data in the return electronically under electronic verification code; or

(C) Transmitting the data in the return electronically and thereafter submitting the verification of the return in Form ITR-V; or

(D) Paper form;

2. Company In all cases. Electronically under digital signature.
3 A person required to furnish the return inForm ITR-7 (a) In case of a political party; Electronically under digital signature;
(b) In any other case (A) Electronically under digital signature; or

(B) Transmitting the data in the return electronically under electronic verification code; or

(C) Transmitting the data in the return electronically and thereafter submitting the verification of the return in Form ITR-V.

4. Firm or limited liability Partnership or any person (other than a Person mentioned in Sl. 1 to 3 above) who is required to file return inForm ITR-5 (a) Accounts are required to be audited under section 44AB of theAct; Electronically under digital signature;
(b) In any other case. (A) Electronically under digital signature; or

(B) Transmitting the data in the return electronically under electronic verification code; or

(C) Transmitting the data in the return electronically and thereafter submitting the verification of the return in Form ITR-V.

Explanation.- 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).’

(d) in sub-rule (4), for the words and brackets, “Director-General of Income-tax (Systems)”, the words and brackets “Principal Director-General of Income-tax (Systems) or Director-General of Income-tax (Systems)” shall be substituted;

(e) in sub-rule (5), for the figures “2013”, the figures “2014” shall be substituted.

(2) in Appendix-II, for “Forms SAHAJ (ITR-1), ITR-2, SUGAM (ITR-4S) and ITR-V” the “Forms SAHAJ (ITR-1), ITR-2, SUGAM (ITR-4S) and ITR-V” 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 by Income-tax (Sixth Amendment) Rules, 2015 vide notification number S.O. No. 1002(E) dated 13th April, 2015.

Notification No.40/2015 dated 15-04-2015


Approval of Indian Institute of Technology Samantapuri Bhubaneswar for the purpose of clause (ii) of sub-section (1) of section 35 of the Income-tax Act, 1961, read with Rules 5C and 5E of the Income-tax Rules, 1962 – 40/2015 – Dated 15-4-2015 – Income Tax

(TO BE PUBLISHED IN PART 11, SUB-SECTION (ii) OF

SECTION 3 OF THE GAZETTE OF INDIA)

Ministry of Finance

(Department of Revenue)

(Central Board of Direct Taxes)

Notification 40/2015

New Delhi, the 15th April, 2015

S.O.   – It is hereby notified for general information that the organization Indian Institute of Technology Samantapuri Bhubaneswar (PAN – AAAAI2760A) has been approved by the Central Government for the purpose of clause (ii) of sub-section (1) of section 35 of the Income-tax Act, 1961 (said Act), read with Rules 5C and 5E of the Income-tax Rules, 1962 (said Rules), from Assessment year 2014-2015 and onwards under the category of “University College or other Institution”, engaged in scientific research activities subject to the following conditions, namely:-

(i)’ The sums paid to the approved organization shall be utilized only for scientific research; and not for other streams;

(ii) The approved organization shall carry out scientific research through its faculty members or its enrolled students;

(iii) The approved organization shall maintain separate books of accounts in respect of the sums received by it for scientific research, reflect therein the amounts used for carrying out research, get such books audited by an accountant as defined in the explanation to sub-section (2) of section 288of the said Act and furnish the report of such audit duly signed and verified by such accountant to the Commissioner of Income-tax or the Director of Income-tax having jurisdiction over the case, by the due date of furnishing the return of income under sub-section (1) of section 139 of the said Act;

(iv) The approved organization shall maintain a separate statement of donations received and amounts applied for scientific research and a copy of such statement duly certified by the auditor shall accompany the report of audit referred to above.

2. The Central Government shall withdraw the approval if the approved organization:

(a) fails to maintain separate books of accounts as referred to in sub-paragraph (iii) of paragraph 1; or

(b) fails to furnish its audit report as referred to in sub-paragraph (iii) of paragraph 1; or

(c) fails to furnish its statement of the donations received and sums applied for scientific research as referred to in sub-paragraph (iv) of paragraph 1; or

(d) ceases to carry on its research activities or its research activities are not found to be genuine; or

(e) ceases to conform to and comply with the provisions of clause (Ii) of sub-section (1) of section 35of the said Act read with rules 5C and 5E of the said Rules.

(Richa Rastogi)

Under Secretary to the Govt. of India

(F.No.203/32014/ITA-II)

Notification No.39/2015 dated 13-04-2015


Income‐tax (6th Amendment) Rules, 2015 – 39/2015 – Dated 13-4-2015 – 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 39/2015

New Delhi, the 13th April, 2015

S.O. 1002 (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 the Income‐tax Rules, 1962, namely:‐

(1) These rules may be called the Income‐tax (6th Amendment) Rules, 2015.

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

2. In the Income‐tax Rules, 1962, in rule 2BB, in sub‐rule (2), in the Table,‐

(a) against serial number 10, in the entry under column(4),relating to the extent to which allowance is exempt, for the letters, figures and words “Rs.800 per month”, the letters, figures and words “Rs.1600 per month” shall be substituted;

(b) against serial number 11, in the entry under column (4),relating to the extent to which allowance is exempt, for the letters, figures and words “Rs.1600 per month”, the letters, figures and words “Rs.3200 per month” shall be substituted.

[F. No.142/02/2015‐TPL]

(Raman Chopra)

Director (TPL‐II)

Note .-The principal rules were published in the Gazette of India vide notification No. S.O. 969(E), dated the 26th March, 1962, and was last amended by vide notification S.O. No. 995(E) dated 10th April, 2015.

Notification No. : File No. 17/45/2015-CL-V Dated: 10-4-2015


Companies (Auditor’s Report) Order, 2015 – File No. 17/45/2015-CL-V – Dated 10-4-2015 – Companies Law

[TO BE PUBLISHED IN THE GAZETTE OF INDIA EXTRAORDINARY,

PART II, SECTION 3, SUB-SECTION (ii)]

GOVERNMENT OF INDIA

MINISTRY OF CORPORATE AFFAIRS

Order

New Delhi, the 10th April, 2015

S. O. (E).- In exercise of the powers conferred by sub-section  (11)  of section  143  of theCompanies Act, 2013  (  18 of 2013 ) and in supersession of the Companies  (Auditor’s Report) Order,  2003, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 480 (E), dated the  12th June,  2003, except as respects things done or omitted to be done before such supersession, the Central Government, after consultation with the Institute of Chartered Accountants of India, constituted under the Chartered Accountants Act,  1949  (38 of 1949), hereby makes the following Order, namely:-

1.   Short title, application and commencement. - (1) This order may be called the Companies (Auditor’s Report) Order, 2015.

(2)   It shall apply to every company including a foreign company as defined in clause (42) of section 2 of the Companies Act, 2013 (18 of 2013) [hereinafter referred to as the Companies Act], except -

(i)  a banking company as defined in clause (c) of section 5 of the Banking Regulation Act,  1949 (10 of 1949);

(ii)  an insurance company as defined under the Insurance Act, 1938 (4 of 1938);

(iii) a company licensed to operate under section 8 of the Companies Act;

(iv) a One Person Company as defined under clause (62) of section 2 of the Companies Act and a small company as defined under clause (85) of section 2 of the Companies Act; and

(v)  a private limited company with a paid up capital and reserves not more than rupees fifty Iakh and which does not have loan outstanding exceeding rupees twenty five lakh from any bank or financial institution and does not have a turnover exceeding rupees five crore at any point of time during the financial year.

(3)   It shall come into force on the date of its publication in the Official Gazette.

2. Auditor’s report to contain matters specified in paragraphs 3 and 4. -

Every report made by the auditor under section 143 of the Companies Act, on the accounts of every company examined by him to which this Order applies for the financial year commencing on or after 1st  April, 2014, shall contain the matters specified in paragraphs 3 and 4.

3.   Matters to be included in the auditor’s report. - The auditor’s report on the account of a company to which this Order applies shall include a statement on the following matters, namely:-

(i)   (a)  whether  the  company  is  maintaining  proper  records  showing   full particulars, including quantitative details and situation of fixed assets;

(b) whether these fixed assets have been physically verified by the management at reasonable intervals; whether any material discrepancies were noticed on such verification and if so, whether the same have been properly dealt with in the books of account;

(ii)  (a) whether physical verification of inventory has been conducted at reasonable intervals by the management;

(b) are the procedures of physical verification of inventory followed by the management reasonable and adequate in relation to the size of the company and the nature of its business. If not, the inadequacies in such procedures should be reported;

(c) whether the company is maintaining proper records of inventory and whether any material discrepancies were noticed on physical verification and if so, whether the same have been properly dealt with in the books of account;

(iii)   whether the company has granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 189 of the Companies Act. If so,

(a) whether receipt of the principal amount and interest are also regular; and

(b)   if overdue amount is more than rupees one lakh, whether reasonable steps have been taken by the company for recovery of the principal and interest;

(iv)   is there an adequate internal control system commensurate with the size of the company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services. Whether there is a continuing failure to correct major weaknesses in internal control system.

(v)   in case the company has accepted deposits, whether the directives issued by the Reserve Bank of India and the provisions of sections 73 to 76 or any other relevant provisions of the Companies Act. and the rules framed there under, where applicable, have been complied with? If not, the nature of contraventions should be stated; If an order has been passed by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other tribunal, whether the same has been complied with or not?

(vi)  where  maintenance  of cost  records  has  been  specified by the Central Government undersub-section (1) of section  148  of the Companies Act, whether such accounts and records have been made and maintained;

(vii)   (a) is the company regular in depositing undisputed statutory dues including provident  fund,  employees’ state insurance,  income-tax,  sales-tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues with the appropriate authorities and if not, the extent of the arrears of outstanding statutory dues as at the last day of the financial year concerned for a period of more than six months from the date they became payable, shall be indicated by the auditor.

(b) in case dues of income tax or sales tax or wealth tax or service tax or duty of customs or duty of excise or value added tax or cess have not been deposited on account of any dispute, then the amounts involved and the forum where dispute is pending shall be mentioned. (A mere representation to the concerned Department shall not constitute a dispute).

(c)  whether the amount required to be transferred to investor education and protection fund in accordance with the relevant provisions of the Companies Act, 1956 (1  of  1956) and rules made thereunder has been transferred to such fund within time.

(viii) whether in case of a company which has been registered for a period not less than five years, its accumulated losses at. the end of the financial year are not less than fifty per cent of its net worth and whether it has incurred cash losses in such financial year and in the immediately preceding financial year;

(ix)  whether the company has defaulted in repayment of dues to a financial institution or bank or debenture holders? If yes, the period and amount of default to be reported;

(x)   whether the company has given any guarantee for loans taken by others from bank or financial institutions, the terms and conditions whereof are prejudicial to the interest of the company;

(xi)  whether term loans were applied for the purpose for which the loans were obtained;

(xii)   whether any fraud on or by the company has been noticed or reported during the year; If yes, the nature and the amount involved is to be indicated.

4.   Reasons to be stated for unfavourable or qualified answers.-  (1)  Where, in the auditor’s report, the answer to any of the questions referred to in paragraph 3 is unfavourable or qualified, the auditor’s report shall also state the reasons for such unfavourable or qualified answer, as the case may be.

(2) Where the auditor is unable to express any opinion in answer to a particular question, his report shall indicate such fact together with the reasons why it is not possible for him to give an answer to such question.

[File No. 17/45/2015-CL-V]

Amardeep Singh Bhatia

Joint Secretary to the Government of India

Notification No.38/2015 dated 10-04-2015


Income tax (Fifth Amendment) Rules, 2015 – 38/2015 – Dated 10-4-2015 – 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. 38/2015

New Delhi, the 10th day of April, 2015

S.O. 995(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 theIncome-tax Rules, 1962, namely:-

1. (1) These rules may be called the Income tax (Fifth 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, -

(1) in rule 114, -

(a) in sub-rule (1), the following proviso shall be inserted, namely:-

Provided that in case of an applicant, being a company which has not been registered under the Companies Act, 2013 (18 of 2013), the application for allotment of a Permanent Account Number may be made in Form No. INC-7 specified under sub-section (1) of section 7 of the said Act for incorporation of the company.”;

(b) in sub-rule (4),-

(i) in the opening portion, after the words, brackets and figure “referred to in sub-rule (1)” the brackets, words and figure “[other than that referred to in the proviso to sub-rule (1)]” shall be inserted;

(ii) in the TABLE, in column (4),-

(I) against Sl. No. (1), for item (C) the following item shall be substituted, namely:-

“(C) Proof of date of birth-

copy of the following documents if they bear the name, date, month and year of birth of the applicant, namely:–

(a) birth certificate issued by the municipal authority or any office authorised to issue birth and death certificate by the Registrar of Birth and Deaths or the Indian Consulate as defined in clause (d) of sub-section (1) of section 2 of the Citizenship Act, 1955 (57 of 1955); or

(b) pension payment order; or

(c) marriage certificate issued by the Registrar of Marriages; or

(d) matriculation certificate or mark sheet of recognised board; or

(e) passport; or

(f) driving licence; or

(g) domicile certificate issued by the Government; or

(h) aadhar card issued by the Unique Identification Authority of India; or

(i) elector’s photo identity card; or

(j) photo identity card issued by the Central Government or State Government or Central Public Sector Undertaking or State Public Sector Undertaking; or

(k) Central Government Health Service Scheme photo card or Ex-servicemen Contributory Health Scheme photo card; or

(l) affidavit sworn before a magistrate stating the date of birth.”;

(II) against Sl. No. 3, for the words “Copy of Certificate of Registration issued by the Registrar of Companies.”, the following shall be substituted, namely:-

“(a) Copy of Certificate of Registration issued by the Registrar of Companies; or

(b) corporate identity number allotted by the Registrar under section 7 of theCompanies Act, 2013 (18 of 2013).”;

(2) in rule 114A, in sub-rule (1), the following proviso shall be inserted, namely:-

Provided that in case of an applicant, being a company which has not been registered under the Companies Act, 2013 (18 of 2013), the application for allotment of a tax deduction and collection account number may be made in Form No. INC-7 specified under sub-section (1) of section 7 of the said Act for incorporation of the company.”.

 [F.No.142/15/2013-TPL]

[Gaurav Kanaujia]

Director to Government of India

Note:- The principal rules were published vide notification number S.O. 969 (E), dated the 26th March, 1962 and last amended by Income-tax (fourth Amendment) Rules, 2015 vide notification number S.O. 915 (E), dated the 1st  day of April, 2015.

Notification No.37/2015 dated 10-04-2015


U/s. 80-IA of the IT Act, 1961 – Deductions – Profits and gains from industrial infrastructure undertakings, etc. – 37/2015 – Dated 10-4-2015 – 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. 37/2015

New Delhi, the 10th April, 2015

Whereas the Central Government (Ministry of Commerce and Industry) in exercise of the powers under the Industrial Park Scheme, 2002 (hereinafter referred to as the Scheme), as notified vide number S.O. 354(E) dated the 1st April 2002, had granted approval vide letter No.15/13/05-IP&ID dated 17.02.2005 to the undertaking being developed, maintained and operated by M/s Meenakshi Infrastructure Private Ltd., Hyderabad at Survey No.5, 15, 17, Kondapur Village, Serilingampally, Rangareddy District, Andhra Pradesh as an Industrial Park;

And whereas, the Central Government (Ministry of Finance, Department of Revenue, CBDT) in exercise of the powers conferred by clause (iii) of sub-section (4) of section 80-IA of the Income-tax Act, 1961 (43 of 1961),(hereinafter referred to as the Act”) had notified the undertaking being developed and being maintained and operated by M/s Meenakshi Infrastructure Private Ltd., Hyderabad at Survey No. 5, 15, 17, Kondapur Village, Serilingampally, Rangareddy District, Andhra Pradesh as an Industrial Park for the purposes of the said clause (iii), vide notification of the Government of India in the Ministry of Finance, Department of Revenue, vide number S.O. No. 3466, dated the 21st August 2006 published in the Gazette of India, Part II, section 3, sub-section (ii) ;

And whereas M/s Meenakshi Infrastructure Private Ltd., Hyderabad vide their letter dated 2nd August, 2006 filed an application for transfer of Operation and Maintenance of the Industrial Park named “E Park” at Hyderabad to M/s Vijay Infotech Ventures, Secunderabad;

And whereas, the Central Government (Ministry of Commerce & Industry) vide letter no.15/13/05-IP&ID dated 9th August, 2006 considered the request of the undertaking for transfer of operations and maintenance to M/s Vijay Infotech Ventures, Secunderabad, Andhra Pradesh;

And whereas the Central Government (Ministry of Commerce & Industry) vide letter no/15/12/2006-ID dated 10.4.2007, approved amendment at para 7(vii) to the approval accorded vide approval no. 15/13/2005-IP&ID dated 17th February, 2005;

And whereas, subsequently the Central Government (Ministry of Commerce and Industry) vide letter no. 15/12/2006-IP&ID dated 6th February, 2014 has rejected further amendment to the terms and conditions laid down vide its letter no. 15/12/2006-ID dated 10th April, 2007;

And whereas, the undertaking has failed to adhere to the terms and conditions as laid down in the Industrial Park Scheme and by the Central Government vide the Ministry of Finance, Department of Revenue’s Notification Number S.O.No.3466, dated the 21st August 2006 published in the Gazette of India, Part II, section 3, sub-section (ii) and Ministry of Commerce and Industry, Department of Industrial Policy and Promotion’s approval letter no.15/12/2006-ID dated 10th April, 2007;

Now, therefore the Central Government, in exercise of the powers conferred by clause (iii) of sub-section (4) of section 80-IA of the Act read with section 21 of the General Clause Act, 1897 (10 of 1897), hereby rescinds the said Notification No. S.O. 3466, dated the 21st August 2006 issued in the case of the undertaking with effect from 21st August 2006.

[F.NO.178/72/2006-ITA-I]

Notification No.36/2015 dated 10-04-2015


Section 10(46) of the Income-tax Act, 1961 Central Government notifies ‘Punjab State Electricity Regulatory Commission a Commission constituted by the Government of Punjab, in respect of the certain specified income arising to the said Commission. – 36/2015 – Dated 10-4-2015 – 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. 36/2015

New Delhi, the 10th April, 2015

In exercise of the powers conferred by clause (46) of section 10 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby notifies for the purposes of the said clause, the ‘Punjab State Electricity Regulatory Commission’, constituted by the Government of Punjab, in respect of the following specified income arising to that Commission, namely:-

(a)  amount received in the form of processing fee for determination of tariff;

(b)  amount received in the form of licence fee;

(c)  amount in the form of petition fee; and

(d)  amount of interest income earned on bank deposits.

2. This notification shall be applicable for the financial years 2011-12 to 2015-16.

3. The notification shall be effective subject to the conditions that the Punjab State Electricity Regulatory Commission:-

(a)  does not engage in any commercial activity;

(b)  its activities and the nature of the specified income remain unchanged throughout the financial years; and

(c)  it files return of income in accordance with the provision of clause (g) of sub-section (4C) of section 139 of the said Act.

[F.NO.196/42/2012-ITA.1]

Notification No.35/2015 dated 10-04-2015


Section 10(46) of the Income-tax Act, 1961 Central Government notifies ‘Haryana Electricity Regulatory Commission a Commission constituted by the Government of Haryana, in respect of the certain specified income arising to the said body. – 35/2015 – Dated 10-4-2015 – 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. 35/2015

New Delhi, the 10th April, 2015

In exercise of the powers conferred by clause (46) of section 10 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby notifies for the purposes of the said clause, the ‘Haryana Electricity Regulatory Commission’, a Commission constituted under the Haryana Electricity Reform Act, 1997 (Haryana Act No.10 of 1998), in respect of the following specified income arising to that body, namely:-

(a)  grants and loans made by the Government of Haryana;

(b)  fees received under the Electricity Act, 2003 (36 of 2003);

(c)  interest earned on government grants and loans and fees received under the Electricity Act, 2003 (36 of 2003).

2. The notification shall be subject to the conditions that the Haryana Electricity Regulatory Commission:-

(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)  it files return of income in accordance with the provision of clause (g) of sub-section (4C) of section 139 of the said Act.

3. This notification shall be applicable for the Financial Years 2012-13 to 2016-17.

[F.NO.196/48/2012-ITA.1]

Notification No.34/2015 dated 10-04-2015


Section 10(46) of the Income-tax Act, 1961 Central Government notifies ‘Rajasthan State Pollution Control Board a Board constituted by the Government of Rajasthan, in respect of the certain specified income arising to the said Board – 34/2015 – Dated 10-4-2015 – 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. 34/2015

New Delhi, the 10th April, 2015

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, ‘Rajasthan State Pollution Control Board’, a Board constituted under the provisions of Water (Prevention and Control of Pollution) Act, 1974 (6 of 1974) of Rajasthan State Legislature in respect of the following specified income arising to that Board, namely:-

(a)  amount received in the form of government grants;

(b)  amount received as license fees and fines;

(c)  interest earned on government grants, license fees and fines.

2. This notification shall be applicable for the Financial years 2012-13 to 2016-17.

3. The notification shall be effective subject to the conditions that Rajasthan State Pollution Control Board-

(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 139 of the Income-tax Act, 1961.

[F.NO.196/38/2012-ITA.1]

Notification No. : S.O. 1023(E) Dated: 10-4-2015


Set up a Sector Specific SEZ for Information Technology/Information Technology Enabled Services at Global Village , Pattenagere/Mylsandra Villages, Off-Mysore Road, RVCE Post, Bangalore District in the State of Karnataka – S.O. 1023(E) – Dated 10-4-2015 – Special Economic Zone

MINISTRY OF COMMERCE AND INDUSTRY

(Department of Commerce)

NOTIFICATION

New Delhi, the 10th April, 2015

S.O. 1023(E).-Whereas M/s. Tanglin Developments Limited had proposed under Section 3 of theSpecial Economic Zones Act, 2005 (28 of 2005) hereinafter referred to as the Act, to set up a Sector Specific SEZ for Information Technology/Information Technology Enabled Services at “Global Village”, Pattenagere/Mylsandra Villages, Off-Mysore Road, RVCE Post, Bangalore District 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 Act read with rule 8 of the Special Economic Zones Rules, 2006, has notified areas of 26.673 hectares and 0.20 hectares at the above Special Economic Zone vide Ministry of Commerce and Industry Notification S.O. No. 1705(E), dated 5th October, 2006 and S.O. No. 2057(E), dated 11th March, 2014 respectively;

And whereas M/s. Tanglin Developments Limited has now proposed to include an additional area of 0.12 hectares to the above Special Economic Zone;

Now, therefore, in exercise of the powers conferred by second proviso to sub-section (1) of Section 4of the Special Economic Zone Act, 2005 and in pursuance of rule 8 of the Special Economic Zones Rules, 2006, the Central Government hereby notifies an additional area of 0.12 hectares as part of the Special Economic Zone, thereby making total area of the Special Economic Zone as 26.993 hectares, comprising the Survey numbers and the area given in the Table below:-

TABLE

S. No

Village

Survey No.

Area in hectares

1

Mylsandra

12/1 (P)

0.12

Grand Total Area of SEZ after above addition

26.993

[F. No. F. 2/106/2005-SEZ]

BHUPINDER S. BHALLA, Jt. Secy

No. Instruction No. 03/2015 Dated: 10-4-2015


India-UK Convention for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion (DTAC or the Convention) – Suspension of Collection of Taxes during Mutual Agreement Procedure (MAP) – Order-Instruction – Dated 10-4-2015 – Income Tax

Instruction No. 3 /2015

F. No. 500/2/2015-APA-Il

Government of India

Ministry of Finance

Department of Revenue

Central Board of Direct Taxes

Foreign Tax and Tax Research Division-I

APA-II Section

New Delhi, dated the 10th April, 2015

To

All Principal CCsIT and CCsIT

All Principal DsGIT and DsGIT

Subject: India-UK Convention for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion (DTAC or the Convention) – Suspension of Collection of Taxes during Mutual Agreement Procedure (MAP) – Regarding.

Article 27 of the India-UK DTAC provides for a Mutual Agreement Procedure-(MAP) for avoidance of double taxation. Paragraph 4 of Article 27 authorises the Competent Authorities to develop appropriate bilateral procedures, conditions, methods and techniques for implementation of MAP provided for in the Article. Accordingly, with a view to avoid unintended hardship to the taxpayers, as well as for the efficient management of collection of. revenue, the Competent Authorities of India and UK had entered into a Memorandum of Understanding (MoU) regarding suspension of collection of taxes during the pendency of MAP.

2.  This MoU was brought to the notice of the field formation vide Instruction No. 3/2004 dated 19/3/2004, wherein it was stated that the collection of outstanding taxes in the case of a taxpayer, who is a resident of UK and whose request under MAP is under consideration of the Competent Authorities, shall be kept in abeyance subject to furnishing of a bank guarantee of an amount equal to the amount of tax under dispute and interest accruing thereon as per the provisions of the Income-tax Act.

3.  In view of a large number of transfer pricing disputes arising over a period of time and also in view of the stated intention of the MoU to avoid unintended hardship to the taxpayers involved in MAP, it is clarified that the provisions of the MoU are equally applicable to Indian resident taxpayers in cases involving transfer pricing adjustments, where MAP has been invoked by the UK resident. Thus, an Indian resident taxpayer liable to pay taxes on income, due to transfer pricing adjustments, which may have been charged to tax in the hands of its Associated Enterprise (AE) in UK, is covered under the provisions of the aforesaid MoU.

4.  In view of the’ above, Instruction No. 3/2004 dated 19/3/2004 is modified as under:

4.1  On receipt of a formal request for suspension of collection of outstanding tax in terms of the MoU from a taxpayer being a resident of UK, or a resident of India in cases involving transfer pricing adjustments, where MAP has been invoked through the UK Competent Authority, the Assessing Officers are required to keep the enforcement of collection of outstanding taxes in abeyance in respect of such taxpayer subject to fulfillment of the following conditions:

(I) the Foreign Tax and Tax Research Division of the Central Board of Direct Taxes confirms the pendency of MAP; and

(ii)  the taxpayer furnishes a bank guarantee to the Assessing Officer in the model draft format annexed to the MoU for an amount calculated in accordance with the manner indicated therein.

4.2  The effect of the MoU is that the furnishing of the bank guarantee should be treated as sufficient arrangement to qualify for exercising discretion by the Assessing Officer for extension of time limit for payment of taxes in terms of sub-section (3) of Section 220 of the Income-tax Act. The extension, however, shall subsist only fill the time the case is under MAP. In case the Competent Authorities agree that there is no resolution possible, an intimation to this effect shall be given to the Assessing Officer who shall, thereafter, be entitled to invoke the bank guarantee in case the taxpayer fails to pay the demand.

4.3  In cases where a resolution of dispute is arrived at by the Competent Authorities after mutual consultation, the tax payable shall be determined by the Assessing Officer in terms of such resolution as per the procedure laid down in Instruction No. 1 dated 6.11.2002. After the revised notice of demand is sent to the taxpayer, the amount shall be recoverable from the taxpayer. In case the taxpayer fails to pay the demand, the bank guarantee so furnished shall be invoked after seeking the consent of the Indian Competent Authority, which shall grant the some after intimating its counterpart in UK.

4.4  The Assessing Officers as well as their controlling officers are advised to keep a close watch on the limitation of the bank guarantee furnished under the MAP.

5. A copy of the MoU, along with its Annexure containing the model draft format of the bank guarantee, is enclosed.

6.  These instructions are issued under section 119 of the Income-tax Act and the same may be brought to the notice of all the officers in your charge.

(Anchal Khandelwal)

Under Secretary to the Government of India

Copy to:

1. Chairperson and Members of CBDT

2. All Officers in CBDT

3. ITCC Division (3 Copies)

4. Addl. CIT (Data Base Cell) for uploading on the IRS Officers Website

5. Guard File

 

MEMORANDUM OF UNDERSTANDING REGARDING DEFERMENT OF ASSESSMENT AND/OR SUSPENSION OF COLLECTION OF TAXES DURING MUTUAL AGREEMENT PROCEDURE

Having regard to the hardship faced by the taxpayers during the pendency of a mutual agreement procedure, the Competent Authorities of India and the United States under the Convention for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income (the “Convention”) have determined and agreed that efficient processing of Mutual Agreement Procedure (“MAP”) cases will be facilitated by deferring assessment or suspending collection of any amounts of tax, including also any related interest or penalties, for any taxable years which are the subject of MAP proceedings.

WHEREAS:

(A) The Competent Authorities have arranged and desired to agree that with regard to amounts of taxes covered under Article 2 of the Convention and potentially payable to the government of the United States, the Internal Revenue  Service  will  either  defer  assessment  or  suspend  collection proceedings   pursuant  to   its   published   procedures  regarding  MAP proceedings (currently set forth in Rev. Proc. 2002-52 or any successor procedure), until putting into effect a mutually agreed disposition of the MAP proceedings concerning the amounts in question; and

(B) The Competent. Authorities have arranged and desired to agree that with regard to amounts of taxes covered under Article 2 of the Convention and potentially payable to the government of India, the Assessing Officer will suspend collection until putting into effect a mutually agreed disposition of the MAP proceedings concerning the amounts in question.

NOW THEREFORE, in consideration of the premises, covenants and conditions herein contained and in implementing this arrangement:

IT IS HEREBY AGREED between the Competent Authorities as follows:

(1) The fax authorities of India and. the United States shall retain the right to demand security in appropriate cases, as deemed fit and necessary  to avoid prejudicing the interests of their respective governments.

(2) in India, as security, a taxpayer shall provide an irrevocable Bank Guarantee issued by any scheduled bank, or by an Indian branch of a foreign bank approved by the Reserve Bank of India to carry out banking business in India, as per annexure ‘A’ to this Memorandum.

(3) In the United States, as security, a taxpayer shall, upon demand, provide an irrevocable Letter of Credit issued by a United States bank that is a of the Federal Reserve system, or by a United States branch or agency of a foreign bank that is on the National Association of Insurance Commissioners list of banks from which a Letter of Credit may be accepted.

(4) The amount, if any, for which security is demanded under paragraph (2) or (3) above, as the case may be, shall not exceed the amount of additional tax proposed or demanded by the tax authority requiring the security (aggregated for all the period(s) pending before the Competent Authorities), as adjusted by the Assessing Officer in accordance with domestic laws, and subject- to further adjustment for interest on these amounts calculated at the statutory rate on non-payments.

(5) Collection and assessment (if applicable) of any interest or penalty levied from the concerned taxpayer, in relation to amounts suspended’ from collection or deferred from assessment (if applicable) under this Agreement, shall also be suspended.

(6) The amounts of tax(es) identified under. Recitals (A) and (B) above, shall include but are not limited to:

(i)  Tax demands that have arisen as a result of tax audit or appeal proceedings pending at the time of this agreement.

(ii) Tax demands, as a result of a tax assessment or re-assessment proceeding, or a tax appeal; or on a review by a Commissioner of Income Tax of an assessment (or re- assessment) proceeding on the grounds that it is prejudicial to the interests of the revenue that could arise subsequent to this agreement.

(iii) Withholding tax on income or other similar advance taxes that are the subject of MAP proceedings for prior, current or future taxable years.

(7) The Competent Authorities shall endeavour to either resolve or close the case within a period of two years from the date on which one Competent Authority notifies the other that the application from the Taxpayer(s) for assistance under the MAP has been received.

8) Any draw-down upon a Bank Guarantee or letter of Credit referred to in paragraph (2) or (3) above will be authorised only after notice by one Competent Authority to the other.

(9) In the event of a lapse of security under paragraph (2) or (3), the taxpayer shall be permitted to substitute another form of security under such paragraph, provided such substitution takes effect not less than 30 days prior to the lapse of the prior security. Such substitution will relieve the bank which provided the first Bank Guarantee or Letter of Credit from its obligations to the concerned Government of India or the United States under that first security.

(10) The terms of this Memorandum may be reviewed by the Competent Authorities at any time in the future upon the request of either party.

ANNEXURE A

To,

The President of India acting through and represented by

[Designation], Income Tax Department,

Ministry of Finance, Government of India, New Delhi

Bank Guarantee

Bank Guarantee as security for keeping the recovery of tax demand in abeyance during the pendency of a Mutual Agreement Procedure (“MAP”)

[Applicable in case of non-resident assessees, and Indian companies and other entities affiliated with United States companies, who have invoked the Mutual Agreement Procedure] This Deed of Bank Guarantee made this  day of _____, 20__, by

[INSERT name and address of Guaranteeing Bank] (hereinafter called “the Bank”, which expression shall, unless excluded by or repugnant to the context, include its successors and assignees) to the President of India acting through and represented by [Designation], Income Tax Department, Ministry of, Finance, Government of India, New Delhi (hereinafter called “the Government” ).

WHEREAS  the  Government  has  agreed that __[INSERT name,  address, permanent  acccount number of the Assessee]__ (hereinafter called “the Assessee”, which expression shall, unless excluded by or repugnant to the context, include its successors and assignees) shall furnish a Bank Guarantee in respect of a demand of Rs.__[INSERT Amount of Tax in dispute]. for the assessment  year(s) , in lieu of which the recovery of any part of such demand shall not be enforced until 30 days after the Assessing Officer receives written notice of the MAP Agreement between the Competent Authorities of the Governments of India and the United States, and the Assessee will not be treated as in default for the above assessment year(s);

AND WHEREAS THE Bank has at the request of the Assessee agreed to execute these presents:

NOW THEREFORE THIS DEED WITNESSES AS FOLLOWS

In consideration of the Government agreeing to treat the Assessee as not in default for Rs __[INSERT Amount of Tax in dispute, plus interest specified in paragraph (1) below]. for the assessment year(s)__

(1) The Bank irrevocably guarantees and undertakes, for the term provided in paragraph (2) below, that the Bank shall indemnify and keep indemnified the Government to the extent of the said sum of Rs .[INSERT Amount of Tax in dispute]. (Rupees __,[written text]) and interest accruing at the rate specified in the Income Tax Act of 1961 as amended from time to time, for non-payment of taxes on this amount after __[INSERT date from which recovery could otherwise be made]_ or any amount as adjusted by the order of the Assessing Officer which may be passed after the furnishing of the guarantee. On advice from the Government that the Assessee has failed and neglected  to observe any of its obligations to the Government with regard to the terms  and  conditions  of  the  agreements  between  the  Assessee  and the Government that may underlie this Bank Guarantee, the decision of the Government as to whether any amount should be paid out by the Bank to the Government hereunder shall be final and binding.

(2) The Bank further agrees that the guarantee herein contained shall remain in full force and effect for a period of 3 years from the date hereof, i.e., till _[INSERT date] ; and further agrees to renew this guarantee for another 3 years on the following terms: the Bank will provide the Government with written notice no later than 60 days prior to the expiration date of this Bank Guarantee if the taxpayer has not renewed the agreements between the Assessee and the Bank that underlie this Bank Guarantee for an additional period of 3 years. If the Government does not receive a renewal of this Bank Guarantee or a substitute Bank Guarantee for the amounts of tax and  interest in dispute prior to 30 days before the expiration date of this Bank  Guarantee, the Government may instruct the Bank to pay the guaranteed amounts prior to expiration of the Bank Guarantee.  Provided further that, notwithstanding any other things contained herein, the liabilities of the Bank shall be limited to the maximum of the guaranteed amount of Rs.__[INSERT amount of tax in dispute]_ (Rupees _[INSERT written text]-), as increased by interest pursuant to paragraph (1 ) during the term of this Bank Guarantee; and unless a claim in writing is lodged with the Bank, or action to enforce the claim under the guarantee is filed or initiated against the Bank, within six months from the date of expiry of the guarantee period fixed hereunder or where such period is extended under the terms of this guarantee from the date of such extended period as the case may be, all the rights of the Government under this guarantee shall be forfeited and the Bank shall be relieved and discharged from liabilities hereunder.

(3) The obligations of the Bank to the Government under this Bank Guarantee will terminate upon the occurrence of any of the following for the taxable years in question:

(i)  the payment by the Bank or the Assessee to the Government of the guaranteed amounts;

(ii)  the payment by the Assessee to the Government of all amounts owed, as agreed to by the Competent Authorities in a MAP Agreement;

(iii)  a MAP Agreement by the Competent Authorities that the Government will not seek to recover any part of the previously-demanded amounts;

or

(iv)  the Assessee furnishes to the Government similar security from another Bank.

(4) The guarantee herein contained shall not be discharged or affected by any change in the constitution either of the Assessee or of the Bank.

(5) The Government shall have the fullest liberty without affecting the guarantee to postpone for any time, or from time to time, any of the powers exercisable by it against the Assessee, or to either enforce or forbear any of the terms and conditions under this guarantee or under the Income Tax Act and Income Tax Rules, and the Bank shall not be released from its liabilities  under this guarantee by any exercise by the Government of the liberty with reference to the matter aforesaid or by reasons of time being given to the Assessee, or by any other act of forbearance or enforcement on the part of the Government, or by any indulgence by the Government to the Assessee, or by any other matter or thing whatsoever which under the law relating to sureties would but for these provisions have the effect of so releasing the Bank from its such liability. The Bank hereby agrees and undertakes that any claim which the Bank may have against the Assessee shall be subject and subordinate to the prior payment and performance in full of all the obligations of the Bank hereunder and the Bank will not without prior written consent of the Government exercise any legal rights or remedies of any kind in respect of any such payment or performance so long as the obligations of the Bank hereunder remain owing and outstanding, regardless of the insolvency, liquidation or bankruptcy of the Assessee or otherwise howsoever. The Bank will not counter claim or set off against its liabilities to the Government  hereunder  any  sum  outstanding  to  the  credit  of  the Government with it.

(6) This Bank Guarantee shall be governed by and construed in accordance with the laws of the Republic of India (without regard to its principles of conflict of laws).

(7) The Bank undertakes not to revoke this Guarantee during its currency except with the previous consent of the Government in writing.

(8) Notwithstanding anything stated above, liability of the Bank under this guarantee is restricted to Rs._[INSERT Amount of Tax in dispute, plus interest specified in paragraph (1) above) (Rupees_[written text]) and is valid for the period(s) described in paragraph (2) above. Unless a demand or claim under this guarantee is lodged with the Bank on or before  _[INSERT date, as  established in paragraph (2) above]-, all rights of the Government under the said guarantee shall be forfeited and the Bank shall be relieved and discharged from all liabilities thereunder whether or not this document shall have been returned to the Bank.

IN WITNESS WHEREOF, the Bank, through its duly authorized representative, has set its hand stamp on this …….Day of ………….at……………….

Witness For and on Behalf of the Bank

(Signature)  (Designation with Bank Stamp)

Name (Attorney as per power of Attorney No………)

Date

No. F. No. DGIT(S)/DIT(S)-4/ PAN Migration/ 2014-15 Dated: 10-4-2015


Completion of PAN Migration activity as per the new jurisdiction orders post restructuring – Circular – Dated 10-4-2015 – Income Tax

DIRECTOR GENERAL OF INCOME TAX (SYSTEMS)

A.R.A. Centre, Ground Floor, E-2, Jhandewalan Extension

New Delhi -110 055

F. No. DGIT(S)/DIT(S)-4/ PAN Migration/ 2014-15

Dated: 10.04.2015

Dear

Subject: Completion of PAN Migration activity as per the new jurisdiction orders post restructuring -reg.

After the new jurisdiction orders have been passed by you/ your officer’s subsequent to restructuring, the PAN requires to be migrated to the new Ward/ circle as per the new jurisdiction. It appears that this activity has not been completed by some of the field officers. This is causing inconvenience to a large number of taxpayers. The Chairperson CBDT has desired that this activity of migrating PANs must be completed by 25th April, 2015 so that the taxpayers are aware of their jurisdiction and grievances do not arise This is also a priority area as the tax payer need latest jurisdiction for filing of Return of Income.

Furthermore, I request you to provide the new jurisdiction of all ranges, circles and wards of your Region, on the National Website (www.incometaxindia.gov.in ) pages pertaining to your Region, to enable the taxpayers to have easy access to this information. A new button on “Jurisdiction” shall be created on your Regional page on the National Website by 30th April. You are requested to have the jurisdiction document uploaded on the website by 05th May 2015. As you may know, the training to all Regions’ nominated officers to upload and update the regional pages of the website has been imparted by the Directorate of Systems in December, 2014. The user name and password for uploading documents on your Regional pages has already been provided to your officers by the DIT(S)-4 team in January 2015. However, for facilitating this activity, DIT(S)-4 shall be circulating a common format and a step-by-step guide for your convenience. For any assistance with reference to uploading the jurisdiction document Sh. Rajendra Singh, JDIT (Mob.-9013852497) & Sh. Sanjaya Kumar Chaursia, DDIT(Mob.- 9013852864) may be contacted.

This may be given top priority.

Yours

(Nishi Singh)

Tel No. 011-23519077

Fax No. 011-23528887

E-mail : dgit.systems@incometax.gov.in

All Pr. CCIT (CCA)

No. File No. 17/45/2015-CL-V Dated: 10-4-2015


Companies (Auditor’s Report) Order, 2015 – Dated 10-4-2015 – Companies Law

[TO BE PUBLISHED IN THE GAZETTE OF INDIA EXTRAORDINARY,

PART II, SECTION 3, SUB-SECTION (ii)]

GOVERNMENT OF INDIA

MINISTRY OF CORPORATE AFFAIRS

Order

New Delhi, the 10th April, 2015

S. O. (E).- In exercise of the powers conferred by sub-section  (11)  of section  143  of theCompanies Act, 2013  (  18 of 2013 ) and in supersession of the Companies  (Auditor’s Report) Order,  2003, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 480 (E), dated the  12th June,  2003, except as respects things done or omitted to be done before such supersession, the Central Government, after consultation with the Institute of Chartered Accountants of India, constituted under the Chartered Accountants Act,  1949  (38 of 1949), hereby makes the following Order, namely:-

1.   Short title, application and commencement. - (1) This order may be called the Companies (Auditor’s Report) Order, 2015.

(2)   It shall apply to every company including a foreign company as defined in clause (42) of section 2 of the Companies Act, 2013 (18 of 2013) [hereinafter referred to as the Companies Act], except -

(i)  a banking company as defined in clause (c) of section 5 of the Banking Regulation Act,  1949 (10 of 1949);

(ii)  an insurance company as defined under the Insurance Act, 1938 (4 of 1938);

(iii) a company licensed to operate under section 8 of the Companies Act;

(iv) a One Person Company as defined under clause (62) of section 2 of the Companies Act and a small company as defined under clause (85) of section 2 of the Companies Act; and

(v)  a private limited company with a paid up capital and reserves not more than rupees fifty Iakh and which does not have loan outstanding exceeding rupees twenty five lakh from any bank or financial institution and does not have a turnover exceeding rupees five crore at any point of time during the financial year.

(3)   It shall come into force on the date of its publication in the Official Gazette.

2. Auditor’s report to contain matters specified in paragraphs 3 and 4. -

Every report made by the auditor under section 143 of the Companies Act, on the accounts of every company examined by him to which this Order applies for the financial year commencing on or after 1st  April, 2014, shall contain the matters specified in paragraphs 3 and 4.

3.   Matters to be included in the auditor’s report. - The auditor’s report on the account of a company to which this Order applies shall include a statement on the following matters, namely:-

(i)   (a)  whether  the  company  is  maintaining  proper  records  showing   full particulars, including quantitative details and situation of fixed assets;

(b) whether these fixed assets have been physically verified by the management at reasonable intervals; whether any material discrepancies were noticed on such verification and if so, whether the same have been properly dealt with in the books of account;

(ii)  (a) whether physical verification of inventory has been conducted at reasonable intervals by the management;

(b) are the procedures of physical verification of inventory followed by the management reasonable and adequate in relation to the size of the company and the nature of its business. If not, the inadequacies in such procedures should be reported;

(c) whether the company is maintaining proper records of inventory and whether any material discrepancies were noticed on physical verification and if so, whether the same have been properly dealt with in the books of account;

(iii)   whether the company has granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 189 of the Companies Act. If so,

(a) whether receipt of the principal amount and interest are also regular; and

(b)   if overdue amount is more than rupees one lakh, whether reasonable steps have been taken by the company for recovery of the principal and interest;

(iv)   is there an adequate internal control system commensurate with the size of the company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services. Whether there is a continuing failure to correct major weaknesses in internal control system.

(v)   in case the company has accepted deposits, whether the directives issued by the Reserve Bank of India and the provisions of sections 73 to 76 or any other relevant provisions of the Companies Act. and the rules framed there under, where applicable, have been complied with? If not, the nature of contraventions should be stated; If an order has been passed by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other tribunal, whether the same has been complied with or not?

(vi)  where  maintenance  of cost  records  has  been  specified by the Central Government undersub-section (1) of section  148  of the Companies Act, whether such accounts and records have been made and maintained;

(vii)   (a) is the company regular in depositing undisputed statutory dues including provident  fund,  employees’ state insurance,  income-tax,  sales-tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues with the appropriate authorities and if not, the extent of the arrears of outstanding statutory dues as at the last day of the financial year concerned for a period of more than six months from the date they became payable, shall be indicated by the auditor.

(b) in case dues of income tax or sales tax or wealth tax or service tax or duty of customs or duty of excise or value added tax or cess have not been deposited on account of any dispute, then the amounts involved and the forum where dispute is pending shall be mentioned. (A mere representation to the concerned Department shall not constitute a dispute).

(c)  whether the amount required to be transferred to investor education and protection fund in accordance with the relevant provisions of the Companies Act, 1956 (1  of  1956) and rules made thereunder has been transferred to such fund within time.

(viii) whether in case of a company which has been registered for a period not less than five years, its accumulated losses at. the end of the financial year are not less than fifty per cent of its net worth and whether it has incurred cash losses in such financial year and in the immediately preceding financial year;

(ix)  whether the company has defaulted in repayment of dues to a financial institution or bank or debenture holders? If yes, the period and amount of default to be reported;

(x)   whether the company has given any guarantee for loans taken by others from bank or financial institutions, the terms and conditions whereof are prejudicial to the interest of the company;

(xi)  whether term loans were applied for the purpose for which the loans were obtained;

(xii)   whether any fraud on or by the company has been noticed or reported during the year; If yes, the nature and the amount involved is to be indicated.

4.   Reasons to be stated for unfavourable or qualified answers.-  (1)  Where, in the auditor’s report, the answer to any of the questions referred to in paragraph 3 is unfavourable or qualified, the auditor’s report shall also state the reasons for such unfavourable or qualified answer, as the case may be.

(2) Where the auditor is unable to express any opinion in answer to a particular question, his report shall indicate such fact together with the reasons why it is not possible for him to give an answer to such question.

[File No. 17/45/2015-CL-V]

Amardeep Singh Bhatia

Joint Secretary to the Government of India

No. 07/2015 Dated: 10-4-2015


Remuneration to managerial person under Schedule XIII of the Companies Act, 1956 – Clarification with regard to payment for period. – Dated 10-4-2015 – Companies Law

General Circular No. 07/2015

F. No. 1/5/2013-CL-V

Government of India

Ministry of Corporate Affairs

5th Floor, ‘A’ Wing, Shastri Bhavan,

 Dr R.P. Road, New Delhi

Dated: 10th April, 2015

To

All Regional Directors,

All Registrars of Companies,

All Stakeholders.

Subject:   Remuneration to managerial person under Schedule XIII of the Companies Act, 1956 – Clarification with regard to payment for period.

Sir,

Stakeholders have drawn attention to the provisions of Schedule XIII (sixth proviso to Para (C) of Section II of Part II) of the Companies Act, 1956 (Earlier Act) and as clarified vide Circular number  14/11/2012-CL-VII dated 16th  August,  2012, which allowed listed companies and their subsidiaries to pay remuneration, without approval of Central Government, in excess of limits specified in para II Para (C) of such Schedule if the managerial person met the conditions specified therein. Stakeholders have expressed that since similar provisions are not available in the Schedule V of theCompanies Act, 2013, there is a need for a clarification that a managerial person appointed in accordance with such provision of Schedule XIII of Earlier Act may receive relevant  remuneration  for  the  period  as  approved  by  the  company  in accordance with such provisions of Earlier Act.

2.  The matter has been examined in the light of earlier clarifications on transitional matters issued by the Ministry. It is clarified that a managerial person referred to in para  1  above may continue to receive remuneration for his remaining term in accordance with terms and conditions approved by company as per relevant provisions of Schedule XIII of earlier Act even if the part of his/her tenure falls after 1st April, 2014.

3.  This issues with the approval of the competent authority.

Yours faithfully

(K.M.S. Narayanan)

Assistant Director (Policy)

23387263

Copy to:-

1. e-Governance Section and web contents Officer to place this circular on the Ministry website

2. Guard File.

No. 06/2015 Dated: 9-4-2015


Capital gains in respect of units of Mutual Funds under the Fixed Maturity Plans on extension of their term – Circular – Dated 9-4-2015 – Income Tax

Circular No. 6 of 2015

F. No. 133/39/2014-TPL

Government of India

Ministry of Finance

Department of Revenue

Central Board of Direct Taxes

(TPL Division)

Dated 9th April, 2015

Subject: Capital gains in respect of units of Mutual Funds under the Fixed Maturity Plans on extension of their term

As per the provisions of the Income-tax Act, 1961 (hereinafter referred to as the Act) prior to the amendment made by the Finance (No.2) Act, 2014, assets in the nature of shares, listed securities, units of mutual funds and zero coupon bonds qualified as long term capital assets if held for a period of more than twelve months as against the holding period of more than thirty-six months in case of other assets. Accordingly, units of a mutual fund under the Fixed Maturity Plans (FMPs) held for a period of more than twelve months qualified as long term capital asset. The amendment in sub-section (42A) of section 2 of the Act by the Finance (No.2) Act, 2014 changed the period of holding in case of unlisted shares and units of a mutual fund (other than an equity oriented fund) for their qualification as long term capital asset to more than thirty-six months. As a result, gains arising out of any investment in the units of FMPs made earlier and sold/redeemed after 10.07.2014 would be taxed as short-term capital gains if the unit was held for a period of thirty-six months or less.

2.  FMPs are closed ended funds having a fixed maturity date wherein the duration of investment is decided upfront. The funds collected by FMPs are invested by the Asset Management Companies (AMCs) in securities having similar maturity period. To enable the FMPs to qualify as a long-term capital asset, some AMCs administering mutual funds have offered extension of the duration of the FMPs to a date beyond thirty-six months from the date of the original investment by providing to the investor an option of roll-over of FMPs in accordance with the provisions of Regulation 33(4) of the SEBI (Mutual Funds) Regulations, 1996. In this regard representations have been received in the Board seeking clarification regarding applicability of tax on capital gains in the hands of the unit holder at the time of roll over of FMPs that are closed ended schemes.

3. In this matter the Securities and Exchange Board of India (SEBI) has informed that Regulation 33(4) of the SERI (Mutual Funds) Regulations, 1996 allows the rollover of close-ended schemes. Such regulation provides the following:-

“(4) A close ended scheme shall be fully redeemed at the end of the maturity period:  Provided that a close-ended scheme may be allowed to be rolled over if the purpose,  period and other terms of the roll over and all other material details of the scheme  including the likely composition of assets immediately before the roll over, the net assets and net asset value of the scheme, are disclosed to the unitholders and a copy of the same has been filed with the Board:

Provided further that such roll over will be permitted only in the case of those unitholders who express their consent in writing and the unitholders who do not opt for the roll over or have not given Written consent shall be allowed to redeem their holdings in full at net asset value based price.”

SEBI has clarified that in case of roll over in accordance with the aforesaid regulation the scheme remains the same and it does not constitute a different scheme.

4.  In the case of mutual funds, the unit of a mutual fund constitutes a capital asset and any sale, exchange or relinquishment of such unit is a ‘transfer’ under clause (47) of section 2 of the Act. The roll over in accordance with the aforesaid regulation will not amount to transfer as the scheme remains the same. Accordingly, it is hereby clarified that no capital gains will arise at the time of exercise of the option by the investor to continue in the same scheme. The capital gains will, however, arise at the time of redemption of the units or opting out of the scheme, as the case may be.

(Gaurav Kanaujia)

Director 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.

No. 05/2015 Dated: 9-4-2015


Clarification on Interest under Section 17B of Wealth Tax Act, 1957 for non -furnishing of return – Circular – Dated 9-4-2015 – Income Tax

CIRCULAR NO. 5/2015

DATED 9-4-2015

Interest under section 17B of the Wealth-tax Act (hereinafter the Act) is charged in case of default in furnishing of return of net wealth by an assessee. The interest is charged at the specified rate on the amount of tax payable on the net wealth. Since the provisions of section 17B do not provide for reduction of the amount of self-assessment tax from the amount on which interest under section 17Bis chargeable, interest is being charged on the amount of self-assessment tax paid by the assessee even before the due date of filing of return of net wealth.

2. It has been held by the Hon’ble Supreme Court in the case of CIT v. Prannoy Roy 309 ITR 231 (2009) that the interest under section 234A of the Income Tax Act, 1961 on default in furnishing return of income shall be payable only on the amount of tax that has not been deposited before the due date of filing of the income-tax return for the relevant assessment year. The Central Board of Direct Taxes (the Board) has already issued Circular No.2/2015 dated 10.02.2015 giving effect to the decision of the Hon’ble Supreme Court with regard to the provisions under the Income-tax Act.Maintaining an analogous position with regard to the provisions under the Wealth-tax Act, the Board has decided that no interest under section 17B of the Wealth-tax Act is chargeable on the amount of self-assessment tax paid by the assessee before the due date of filing return of net wealth.

3. This Circular may be brought to the notice of all officers for compliance.

[F.NO.328/7/2015-WT]

No. 06/2015 Dated: 9-4-2015


Clarification under sub-section (7) of section 186 of the Companies Act, 2013 – Dated 9-4-2015 – Companies Law

General Circular No. 06/2015

File No. 5/3/13-CL.V

Government of India

Ministry of Corporate Affairs

5th floor, ‘A’ wing, Shastri Bhavan

Dr. R P Road, New Delhi.

Dated 9th April, 2015

All Regional Directors,

All Registrar of Companies,

All Stakeholders.

Subject : Clarification under sub-section (7) of section 186 of the Companies Act, 2013

Sir,

Attention of this Ministry has been drawn to General Circular No 06/2013 dated 14.03.2013 vide which it was clarified that in cases where the effective yield (effective rate of return) on tax free bonds is greater than the yield on prevailing bank rate, there was no violation of Section 372A(3) ofCompanies Act, 1956.  Stakeholders have requested for similar clarification w.r.t. correspondingsection 186(7) of the Companies Act, 2013.

2.   The matter has been examined in the Ministry and it is hereby clarified that in cases where the effective yield (effective rate of return) on tax free bonds is greater than the prevailing yield of one year, three year, five year or ten year Government Security closest to the tenor of the loan, there is no violation of sub-section (7) of section 186 of the Companies Act, 2013.

3.  This issues with the approval of competent authority.

Yours faithfully,

(K M S Narayanan)

Assistant Director

Phone 23387263

Copy to:

1. All concerned

2. PS to CAM

3. PS to Secretary

4. PS to A.S.

5. PS to Joint Secretaries

6. E-Governance Cell for uploading this Circular in MCA 21.

No. F.NO.500/137/2011-FT&TR-III Dated: 7-4-2015


Constituted an Information Security Committee (ISC) in the Central Board of Direct Taxes (CBDT) – Order-Instruction – Dated 7-4-2015 – Income Tax

ORDER

DATED 7-4-2015

An Information Security Committee (ISC) in the Central Board of Direct Taxes (CBDT) is hereby constituted comprising of the following officers:-

(a)   Member (IT), CBDT

(b)   Joint Secretary (FT&TR-I)

(c)   Joint Secretary (TPL-II)

(d)   CIT(Inv.)

(e)   CIT(M&TP)

(f)    DIT (I&CI), New Delhi

(g)   DIT (Systems-II)

Member (IT), CBDT will be the Chairman of the ISC. CIT (M&TP) shall also perform the role of Chief Information Security Officer (CISO).

2. Broad Responsibilities of ISC would be as under:

(a)   Ratification of the Information Security Policies and Procedures (ISPP) suggested by the CISO.

(b)   Ensure that ISPP is implemented by ensuring the involvement of the business heads.

(c)   Conduct the management review of the ISPP to ensure continuing suitability, adequacy and effectiveness of ISPP.

(d)   Initiate internal and external security reviews and ensuring that action is taken to rectify any identified shortfalls.

(e)   Responsible for disciplinary action in cases of breach of ISPP.

3. Broad Responsibilities of CISO would be as under:

(a)   Responsible for preparing, maintaining and communicating ISPP.

(b)   Oversee all information security processes and serve as the focal point for all information security issues and concerns.

(c)   Ensure that responsibilities are defined for and that procedures are in effect to promptly detect, investigate, report and resolve security incidents.

(d)   Ensure that ongoing information security awareness education and training is provided to all employees.

(e)   Provide reports to the ISC on the status of information security, policy violations and information security incidents.

[F.NO.500/137/2011-FT&TR-III]

No. P.6/3/2006-SEZ – 6-4-2015


Guidelines for Power Generation in Special Economic Zones – regarding. – Dated 6-4-2015 – SEZ

No. P.6/3/2006-SEZ

Government of India

Ministry of Commerce & Industry

Department of Commerce

(SEZ Division)

Udyog Bhawan, New Delhi

Dated : 6th April, 2015

Subject : Guidelines for Power Generation in Special Economic Zones -  regarding.

The undersigned is directed to say that guidelines for power generation, transmission and distribution in Special Economic Zones issued vide this Ministry’s letter of even number dated 21thMarch, 2012 stand withdrawn with immediate effect i.e. 1st April, 2015.

2.    The guidelines for power Generation, Transmission and Distribution in Special Economic Zone issued vide this Department’s letter of even number dated 27th February, 2009 are hereby restored and will, henceforth, be the basis for relevant policy and operational decisions.

(Kabiraj Sabar)

Under Secretary to the Govt. of India

Tel. 011-2306 2496

e-mail: kabiraj.sabar@nic.in

  1. Chief Secretaries of all States/UTs
  2. All development Commissioners of SEZs
  3. Ministry of Power, Govt. of India, Shram Shakti Bhawan, Rafi Marg, New Delhi
  4. Department of Revenue (CBDT/CBEC), Govt. of India
  5. DG, EPCES

No. PRESS RELEASE Dated: 1-4-2015


Applicability of CARO 2003 – Dated 1-4-2015 – Companies Law

We are receiving queries from the members regarding applicability of CARO, 2003 along with Auditors’ Report on financial statements of companies for the financial year 2014-15. The Ministry of Corporate Affairs (MCA) is working on it and has constituted a Committee for this purpose to analyse the contents of the Order to be made under section 143(11) of the Companies Act, 2013 for the Financial Year 2014-15. ICAI is also a member of the said committee. We are given to understand by MCA that an Order being a smaller version of CARO 2003, applicable for the financial year 2014-15, may be notified soon under section 143(11) of the Companies Act, 2013. However, at this juncture, to bring more clarity, this Announcement is released in consultation with the Ministry.

The Companies Act, 1956 has ceased to have effect from 01st April, 2014. As a corollary, theCompanies (Auditor’s Report) Order, 2003 issued under section 227(4A) of the said Act also ceases to have effect from the said date.

Section 143(11) of the Companies Act, 2013 which came into force from 01st April, 2014 provides that “the Central Government may, in consultation with the National Financial Reporting Authority, by general or special order, direct, in respect of such class or description of companies, as may be specified in the order, that the auditor’s report shall also include a statement on such matters as may be specified therein.”

Accordingly, it may be noted that as when an Order is notified by the Central Government undersection 143(11) of the Companies Act, 2013, the members would be required to report thereon as a part of their statutory audit reports.

Until the aforesaid Order is issued, no additional reporting under section 143(11) of the Companies Act, 2013 is required by the Auditors for the financial year 2014-15.

Members are advised to keep a watch on the MCA site (www.mca.gov.in ) as well as the ICAI site (www.icai.org) for further announcements in this regard.

Notification No.33/2015 dated 31-03-2015


Income Computation and Disclosure Standards under section 145(2) of the Income-tax Act, 1961 notified – 33/2015 – Dated 31-3-2015 – 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. 33/2015

New Delhi, the 31st March, 2015

S.O. 892 (E) - In exercise of the powers conferred by sub-section (2) of section 145 of the Income-tax Act, 1961 (43 of 1961) and in supersession of the notification of the Government of India in the Ministry of Finance, Department of Revenue, published in the Gazette of India, Part II, Section 3, Sub-section (ii), vide number S.O 69(E) dated the 25th January, 1996, except as respects things done or omitted to be done before such supersession, the Central Government hereby notifies the income computation and disclosure standards as specified in the Annexure to be followed by all assessees, following the mercantile system of accounting, for the purposes of computation of income chargeable to income-tax under the head “Profit and gains of business or profession” or “ Income from other sources”. This notification shall come into force with effect from 1st day of April, 2015, and shall accordingly apply to the assessment year 2016-17 and subsequent assessment years.

Annexure

[See notification No.33/2015, F. No. 134/48/2010-TPL, dated 31st March, 2015]

A. Income Computation and Disclosure Standard I relating to accounting policies

 

Preamble

This Income Computation and Disclosure Standard is applicable for computation of income chargeable under the head “Profits and gains of business or profession” or “Income from other sources” and not for the purpose of maintenance of books of accounts.

In the case of conflict between the provisions of the Income-tax Act, 1961 (‘the Act’) and this Income Computation and Disclosure Standard, the provisions of the Act shall prevail to that extent.

Scope

1. This Income Computation and Disclosure Standard deals with significant accounting policies.

Fundamental Accounting Assumptions

2. The following are fundamental accounting assumptions, namely:-

(a) Going Concern

“Going concern” refers to the assumption that the person has neither the intention nor the necessity of liquidation or of curtailing materially the scale of the business,

profession or vocation and intends to continue his business, profession or vocation for the foreseeable future.

(b) Consistency

“Consistency” refers to the assumption that accounting policies are consistent from one period to another;

(c) Accrual

“Accrual” refers to the assumption that revenues and costs are accrued, that is, recognised as they are earned or incurred (and not as money is received or paid) and recorded in the previous year to which they relate.

Accounting Policies

3. The accounting policies refer to the specific accounting principles and the methods of applying those principles adopted by a person.

Considerations in the Selection and Change of Accounting Policies

4. Accounting policies adopted by a person shall be such so as to represent a true and fair view of the state of affairs and income of the business, profession or vocation. For this purpose,

(i) the treatment and presentation of transactions and events shall be governed by their substance and not merely by the legal form; and

(ii) marked to market loss or an expected loss shall not be recognised unless the recognition of such loss is in accordance with the provisions of any other Income Computation and Disclosure Standard.

5. An accounting policy shall not be changed without reasonable cause.

Disclosure of Accounting Policies

6. All significant accounting policies adopted by a person shall be disclosed.

7. Any change in an accounting policy which has a material effect shall be disclosed. The amount by which any item is affected by such change shall also be disclosed to the extent ascertainable. Where such amount is not ascertainable, wholly or in part, the fact shall be indicated. If a change is made in the accounting policies which has no material effect for the current previous year but which is reasonably expected to have a material effect in later previous years, the fact of such change shall be appropriately disclosed in the previous year in which the change is adopted and also in the previous year in which such change has material effect for the first time.

8. Disclosure of accounting policies or of changes therein cannot remedy a wrong or inappropriate treatment of the item.

9. If the fundamental accounting assumptions of Going Concern, Consistency and Accrual are followed, specific disclosure is not required. If a fundamental accounting assumption is not followed, the fact shall be disclosed.

Transitional Provisions

10. All contract or transaction existing on the 1st day of April, 2015 or entered into on or after the 1st day of April, 2015 shall be dealt with in accordance with the provisions of this standard after taking into account the income, expense or loss, if any, recognised in respect of the said contract or transaction for the previous year ending on or before the 31st March, 2015.

B. Income Computation and Disclosure Standard II relating to valuation of inventories

Preamble

This Income Computation and Disclosure Standard is applicable for computation of income chargeable under the head “Profits and gains of Business or profession” or “Income from other sources” and not for the purpose of maintenance of books of accounts.

In the case of conflict between the provisions of Income Tax Act, 1961 (‘the Act’) and this Income Computation and Disclosure Standard, the provisions of the Act shall prevail to that extent.

Scope

1. This Income Computation and Disclosure Standard shall be applied for valuation of inventories, except :

(a) Work-in-progress arising under ‘construction contract’ including directly related service contract which is dealt with by the Income Computation and Disclosure Standard on construction contracts;

(b) Work-in-progress which is dealt with by other Income Computation and Disclosure Standard;

(c) Shares, debentures and other financial instruments held as stock-in-trade which are dealt with by the Income Computation and Disclosure Standard on securities;

(d) Producers’ inventories of livestock, agriculture and forest products, mineral oils, ores and gases to the extent that they are measured at net realisable value;

(e) Machinery spares, which can be used only in connection with a tangible fixed asset and their use is expected to be irregular, shall be dealt with in accordance with the Income Computation and Disclosure Standard on tangible fixed assets.

Definitions

2(1) The following terms are used in this Income Computation and Disclosure Standard with the meanings specified:

(a) “Inventories” are assets:

(i) held for sale in the ordinary course of business;

(ii) in the process of production for such sale;

(iii) in the form of materials or supplies to be consumed in the production process or in the rendering of services.

(b) “Net realisable value” is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale.

2(2) Words and expressions used and not defined in this Income Computation and Disclosure Standard but defined in the Act shall have the meanings assigned to them in that Act.

Measurement

3. Inventories shall be valued at cost, or net realisable value, whichever is lower.

Cost of Inventories

4. Cost of inventories shall comprise of all costs of purchase, costs of services, costs of conversion and other costs incurred in bringing the inventories to their present location and condition.

Costs of Purchase

5. The costs of purchase shall consist of purchase price including duties and taxes, freight inwards and other expenditure directly attributable to the acquisition. Trade discounts, rebates and other similar items shall be deducted in determining the costs of purchase.

Costs of Services 

6. The costs of services in the case of a service provider shall consist of labour and other costs of personnel directly engaged in providing the service including supervisory personnel and attributable overheads.

Costs of Conversion

7. The costs of conversion of inventories shall include costs directly related to the units of production and a systematic allocation of fixed and variable production overheads that are incurred in converting materials into finished goods. Fixed production overheads shall be those indirect costs of production that remain relatively constant regardless of the volume of production. Variable production overheads shall be those indirect costs of production that vary directly or nearly directly, with the volume of production.

8. The allocation of fixed production overheads for the purpose of their inclusion in the costs of conversion shall be based on the normal capacity of the production facilities. Normal capacity shall be the production expected to be achieved on an average over a number of periods or seasons under normal circumstances, taking into account the loss of capacity resulting from planned maintenance. The actual level of production shall be used when it approximates to normal capacity. The amount of fixed production overheads allocated to each unit of production shall not be increased as a consequence of low production or idle plant. Unallocated overheads shall be recognised as an expense in the period in which they are incurred. In periods of abnormally high production, the amount of fixed production overheads allocated to each unit of production is decreased so that inventories are not measured above the cost. Variable production overheads shall be assigned to each unit of production on the basis of the actual use of the production facilities.

9. Where a production process results in more than one product being produced simultaneously and the costs of conversion of each product are not separately identifiable, the costs shall be allocated between the products on a rational and consistent basis. Where by-products, scrap or waste material are immaterial, they shall be measured at net realisable value and this value shall be deducted from the cost of the main product.

Other Costs

10. Other costs shall be included in the cost of inventories only to the extent that they are incurred in bringing the inventories to their present location and condition.

11. Interest and other borrowing costs shall not be included in the costs of inventories, unless they meet the criteria for recognition of interest as a component of the cost as specified in the Income Computation and Disclosure Standard on borrowing costs.

Exclusions from the Cost of Inventories

12. In determining the cost of inventories in accordance with paragraphs 4 to paragraphs

11, the following costs shall be excluded and recognised as expenses of the period in which they are incurred, namely:-

(a) Abnormal amounts of wasted materials, labour, or other production costs;

(b)Storage costs, unless those costs are necessary in the production process prior to a further production stage;

(c) Administrative overheads that do not contribute to bringing the inventories to their present location and condition ;

(d)Selling costs.

Cost Formulae

13. The Cost of inventories of items

(i) that are not ordinarily interchangeable; and

(ii) goods or services produced and segregated for specific projects shall be assigned by specific identification of their individual costs.

14. ‘Specific identification of cost’ means specific costs are attributed to identified items of inventory.

15. Where there are a large numbers of items of inventory which are ordinarily interchangeable, specific identification of costs shall not be made.

First-in First-out and Weighted Average Cost Formula

16. Cost of inventories, other than the inventory dealt with in paragraph 13, shall be assigned by using the First-in First-out (FIFO), or weighted average cost formula. The formula used shall reflect the fairest possible approximation to the cost incurred in bringing the items of inventory to their present location and condition.

17. The FIFO formula assumes that the items of inventory which were purchased or produced first are consumed or sold first, and consequently the items remaining in inventory at the end of the period are those most recently purchased or produced. Under the weighted average cost formula, the cost of each item is determined from the weighted average of the cost of similar items at the beginning of a period and the cost of similar items purchased or produced during the period. The average shall be calculated on a periodic basis, or as each additional shipment is received, depending upon the circumstances.

Retail Method

18. Where it is impracticable to use the costing methods referred to in paragraph 16, the retail method can be used in the retail trade for measuring inventories of large number of rapidly changing items that have similar margins. The cost of the inventory is determined by reducing from the sales value of the inventory, the appropriate percentage gross margin. The percentage used takes into consideration inventory, which has been marked down to below its original selling price.

Net Realisable Value

19. Inventories shall be written down to net realisable value on an item-by-item basis. Where ‘items of inventory’ relating to the same product line having similar purposes or end uses and are produced and marketed in the same geographical area and cannot be practicably evaluated separately from other items in that product line, such inventories shall be grouped together and written down to net realisable value on an aggregate basis.

20. Net realisable value shall be based on the most reliable evidence available at the time of valuation. The estimates of net realisable value shall also take into consideration the purpose for which the inventory is held. The estimates shall take into consideration fluctuations of price or cost directly relating to events occurring after the end of previous year to the extent that such events confirm the conditions existing on the last day of the previous year.

21. Materials and other supplies held for use in the production of inventories shall not be written down below the cost, where the finished products in which they shall be incorporated are expected to be sold at or above the cost. Where there has been a decline in the price of materials and it is estimated that the cost of finished products will exceed the net realisable value, the value of materials shall be written down to net realisable value which shall be the replacement cost of such materials.

Value of Opening Inventory

22. The value of the inventory as on the beginning of the previous year shall be

(i) the cost of inventory available, if any, on the day of the commencement of the business when the business has commenced during the previous year; and

(ii) the value of the inventory as on the close of the immediately preceding previous year, in any other case.

Change of Method of Valuation of Inventory

23. The method of valuation of inventories once adopted by a person in any previous year shall not be changed without reasonable cause.

Valuation of Inventory in Case of Certain Dissolutions

24. In case of dissolution of a partnership firm or association of person or body of individuals, notwithstanding whether business is discontinued or not, the inventory on the date of dissolution shall be valued at the net realisable value.

Transitional Provisions

25. Interest and other borrowing costs, which do not meet the criteria for recognition of interest as a component of the cost as per para 11, but included in the cost of the opening inventory as on the 1st day of April, 2015, shall be taken into account for determining cost of such inventory for valuation as on the close of the previous year beginning on or after 1st day of April, 2015 if such inventory continue to remain part of inventory as on the close of the previous year beginning on or after 1st day of April, 2015.

Disclosure

26. The following aspects shall be disclosed, namely:-

(a) the accounting policies adopted in measuring inventories including the cost formulae used; and

(b) the total carrying amount of inventories and its classification appropriate to a person.

C. Income Computation and Disclosure Standard III relating to construction contracts

Preamble

This Income Computation and Disclosure Standard is applicable for computation of income chargeable under the head “Profits and gains of business or profession” or “Income from other sources” and not for the purpose of maintenance of books of accounts.

In the case of conflict between the provisions of the Income-tax Act, 1961(‘the Act’) and this Income Computation and Disclosure Standard, the provisions of the Act shall prevail to that extent.

Scope

1. This Income Computation and Disclosure Standard should be applied in determination of income for a construction contract of a contractor.

Definitions

2 (1) The following terms are used in this Income Computation and Disclosure Standard with the meanings specified:

(a) “Construction contract” is a contract specifically negotiated for the construction of an asset or a combination of assets that are closely interrelated or interdependent in terms of their design, technology and function or their ultimate purpose or use and includes :

(i) contract for the rendering of services which are directly related to the construction of the asset, for example, those for the services of project managers and architects;

(ii) contract for destruction or restoration of assets, and the restoration of the environment following the demolition of assets.

(b) “Fixed price contract” is a construction contract in which the contractor agrees to a fixed contract price, or a fixed rate per unit of output, which may be subject to cost escalation clauses.

(c) “Cost plus contract” is a construction contract in which the contractor is reimbursed for allowable or otherwise defined costs, plus a mark up on these costs or a fixed fee.

(d) “Retentions” are amounts of progress billings which are not paid until the satisfaction of conditions specified in the contract for the payment of such amounts or until defects have been rectified.

(e) “Progress billings” are amounts billed for work performed on a contract whether or not they have been paid by the customer.

(f) “Advances” are amounts received by the contractor before the related work is performed.

2(2) Words and expressions used and not defined in this Income Computation and Disclosure Standard but defined in the Act shall have the meaning respectively assigned to them in the Act.

3. A construction contract may be negotiated for the construction of a single asset. A construction contract may also deal with the construction of a number of assets which are closely interrelated or interdependent in terms of their design, technology and function or their ultimate purpose or use.

4. Construction contracts are formulated in a number of ways which, for the purposes of this Income Computation and Disclosure Standard, are classified as fixed price contracts and cost plus contracts. Some construction contracts may contain characteristics of both a fixed price contract and a cost plus contract, for example, in the case of a cost plus contract with an agreed maximum price.

Combining and Segmenting Construction Contracts

5. The requirements of this Income Computation and Disclosure Standard shall be applied separately to each construction contract except as provided for in paragraphs 6, 7 and 8 herein. For reflecting the substance of a contract or a group of contracts, where it is necessary, the Income Computation and Disclosure

Standard should be applied to the separately identifiable components of a single contract or to a group of contracts together.

6. Where a contract covers a number of assets, the construction of each asset should be treated as a separate construction contract when:

(a) separate proposals have been submitted for each asset;

(b) each asset has been subject to separate negotiation and the contractor and customer have been able to accept or reject that part of the contract relating to each asset; and

(c) the costs and revenues of each asset can be identified.

7. A group of contracts, whether with a single customer or with several customers, should be treated as a single construction contract when:

(a) the group of contracts is negotiated as a single package;

(b) the contracts are so closely interrelated that they are, in effect, part of a single project with an overall profit margin; and

(c) the contracts are performed concurrently or in a continuous sequence.

8. Where a contract provides for the construction of an additional asset at the option of the customer or is amended to include the construction of an additional asset, the construction of the additional asset should be treated as a separate construction contract when:

(a) the asset differs significantly in design, technology or function from the asset or assets covered by the original contract; or

(b) the price of the asset is negotiated without having regard to the original contract price.

Contract Revenue

9. Contract revenue shall be recognised when there is reasonable certainty of its ultimate collection.

10. Contract revenue shall comprise of:

(a) the initial amount of revenue agreed in the contract, including retentions; and

(b) variations in contract work, claims and incentive payments:

(i) to the extent that it is probable that they will result in revenue; and

(ii) they are capable of being reliably measured.

11. Where contract revenue already recognised as income is subsequently written off in the books of accounts as uncollectible, the same shall be recognised as an expense and not as an adjustment of the amount of contract revenue.

Contract Costs

12. Contract costs shall comprise of :

(a) costs that relate directly to the specific contract;

(b) costs that are attributable to contract activity in general and can be allocated to the contract;

(c) such other costs as are specifically chargeable to the customer under the terms of the contract; and

(d) allocated borrowing costs in accordance with the Income Computation and Disclosure Standard on Borrowing Costs.

These costs shall be reduced by any incidental income, not being in the nature of interest, dividends or capital gains, that is not included in contract revenue.

13. Costs that cannot be attributed to any contract activity or cannot be allocated to a contract shall be excluded from the costs of a construction contract.

14. Contract costs include the costs attributable to a contract for the period from the date of securing the contract to the final completion of the contract. Costs that are incurred in securing the contract are also included as part of the contract costs, provided

(a) they can be separately identified; and

(b) it is probable that the contract shall be obtained.

When costs incurred in securing a contract are recognised as an expense in the period in which they are incurred, they are not included in contract costs when the contract is obtained in a subsequent period.

15. Contract costs that relate to future activity on the contract are recognised as an asset. Such costs represent an amount due from the customer and are classified as contract work in progress.

Recognition of Contract Revenue and Expenses

16. Contract revenue and contract costs associated with the construction contract should be recognised as revenue and expenses respectively by reference to the stage of completion of the contract activity at the reporting date.

17. The recognition of revenue and expenses by reference to the stage of completion of a contract is referred to as the percentage of completion method. Under this method, contract revenue is matched with the contract costs incurred in reaching the stage of completion, resulting in the reporting of revenue, expenses and profit which can be attributed to the proportion of work completed.

18. The stage of completion of a contract shall be determined with reference to:

(a) the proportion that contract costs incurred for work performed upto the reporting date bear to the estimated total contract costs; or

(b) surveys of work performed; or

(c) completion of a physical proportion of the contract work.

Progress payments and advances received from customers are not determinative of the stage of completion of a contract.

19. When the stage of completion is determined by reference to the contract costs incurred upto the reporting date, only those contract costs that reflect work performed are included in costs incurred upto the reporting date. Contract costs which are excluded are:

(a) contract costs that relate to future activity on the contract; and

(b) payments made to subcontractors in advance of work performed under the subcontract.

20. During the early stages of a contract, where the outcome of the contract cannot be estimated reliably contract revenue is recognised only to the extent of costs incurred. The early stage of a contract shall not extend beyond 25 % of the stage of completion.

Changes in Estimates

21. The percentage of completion method is applied on a cumulative basis in each previous year to the current estimates of contract revenue and contract costs. Where there is change in estimates, the changed estimates shall be used in determination of the amount of revenue and expenses in the period in which the change is made and in subsequent periods.

Transitional Provisions

22. Contract revenue and contract costs associated with the construction contract, which commenced on or before the 31st day of March, 2015 but not completed by the said date, shall be recognised as revenue and costs respectively in accordance with the provisions of this standard. The amount of contract revenue, contract costs or expected loss, if any, recognised for the said contract for any previous year commencing on or before the 1st day of April, 2014 shall be taken into account for recognising revenue and costs of the said contract for the previous year commencing on the 1st day of April, 2015 and subsequent previous years.

Disclosure

23. A person shall disclose:

(a) the amount of contract revenue recognised as revenue in the period; and

(b) the methods used to determine the stage of completion of contracts in progress.

24. A person shall disclose the following for contracts in progress at the reporting date, namely:-

(a) amount of costs incurred and recognised profits (less recognised losses) upto the reporting date;

(b) the amount of advances received; and

(c) the amount of retentions.

D. Income Computation and Disclosure Standard IV relating to revenue recognition

Preamble

This Income Computation and Disclosure Standard is applicable for computation of income chargeable under the head “Profits and gains of business or profession” or “Income from other sources” and not for the purpose of maintenance of books of accounts.

In the case of conflict between the provisions of the Income-tax Act, 1961 (‘the Act’) and this Income Computation and Disclosure Standard, the provisions of the Act shall prevail to that extent.

Scope

1(1) This Income Computation and Disclosure Standard deals with the bases for recognition of revenue arising in the course of the ordinary activities of a person from

(i) the sale of goods;

(ii) the rendering of services;

(iii) the use by others of the person’s resources yielding interest, royalties or dividends.

1(2) This Income Computation and Disclosure Standard does not deal with the aspects of revenue recognition which are dealt with by other Income Computation and Disclosure Standards.

Definitions

2(1) The following term is used in this Income Computation and Disclosure Standard with the meanings specified:

(a) “Revenue” is the gross inflow of cash, receivables or other consideration arising in the course of the ordinary activities of a person from the sale of goods, from the rendering of services, or from the use by others of the person’s resources yielding interest, royalties or dividends. In an agency relationship, the revenue is the amount of commission and not the gross inflow of cash, receivables or other consideration.

2(2) Words and expressions used and not defined in this Income Computation and Disclosure Standard but defined in the Act shall have the meanings assigned to them in that Act.

Sale of Goods

3. In a transaction involving the sale of goods, the revenue shall be recognised when the seller of goods has transferred to the buyer the property in the goods for a price or all significant risks and rewards of ownership have been transferred to the buyer and the seller retains no effective control of the goods transferred to a degree usually associated with ownership. In a situation, where transfer of property in goods does not coincide with the transfer of significant risks and rewards of ownership, revenue in such a situation shall be recognised at the time of transfer of significant risks and rewards of ownership to the buyer.

4. Revenue shall be recognised when there is reasonable certainty of its ultimate collection.

5. Where the ability to assess the ultimate collection with reasonable certainty is lacking at the time of raising any claim for escalation of price and export incentives, revenue recognition in respect of such claim shall be postponed to the extent of uncertainty involved.

Rendering of Services

6. Revenue from service transactions shall be recognised by the percentage completion method. Under this method, revenue from service transactions is matched with the service transactions costs incurred in reaching the stage of completion, resulting in the determination of revenue, expenses and profit which can be attributed to the proportion of work completed. Income Computation and Disclosure Standard on construction contract also requires the recognition of revenue on this basis. The requirements of that Standard shall mutatis mutandis apply to the recognition of revenue and the associated expenses for a service transaction.

The Use of Resources by Others Yielding Interest, Royalties or Dividends

7. Interest shall accrue on the time basis determined by the amount outstanding and the rate applicable. Discount or premium on debt securities held is treated as though it were accruing over the period to maturity.

8. Royalties shall accrue in accordance with the terms of the relevant agreement and shall be recognised on that basis unless, having regard to the substance of the transaction, it is more appropriate to recognise revenue on some other systematic and rational basis.

9. Dividends are recognised in accordance with the provisions of the Act.

Transitional Provisions

10. The transitional provisions of Income Computation and Disclosure Standard on construction contract shall mutatis mutandis apply to the recognition of revenue and the associated costs for a service transaction undertaken on or before the 31st day of March, 2015 but not completed by the said date.

11. Revenue for a transaction, other than a service transaction referred to in Para 10, undertaken on or before the 31st day of March, 2015 but not completed by the said date shall be recognised in accordance with the provisions of this standard for the previous year commencing on the 1st day of April, 2015 and subsequent previous year. The amount of revenue, if any, recognised for the said transaction for any previous year commencing on or before the 1st day of April, 2014 shall be taken into account for recognising revenue for the said transaction for the previous year commencing on the 1st day of April, 2015 and subsequent previous years.

Disclosure

12. Following disclosures shall be made in respect of revenue recognition, namely:-

(a) in a transaction involving sale of good, total amount not recognised as revenue during the previous year due to lack of reasonably certainty of its ultimate collection along with nature of uncertainty;

(b) the amount of revenue from service transactions recognised as revenue during the previous year;

(c) the method used to determine the stage of completion of service transactions in progress; and

(d) for service transactions in progress at the end of previous year:

(i) amount of costs incurred and recognised profits (less recognised losses) upto end of previous year;

(ii) the amount of advances received; and

(iii) the amount of retentions.

E. Income Computation and Disclosure Standard V relating to tangible fixed assets

Preamble

This Income Computation and Disclosure Standard is applicable for computation of income chargeable under the head “Profits and gains of business or profession” or “Income from other sources” and not for the purpose of maintenance of books of accounts.

In the case of conflict between the provisions of the Income-tax Act, 1961 (‘the Act’) and this Income Computation and Disclosure Standard, the provisions of the Act shall prevail to that extent.

Scope

1. This Income Computation and Disclosure Standard deals with the treatment of tangible fixed assets.

Definitions

2(1) The following terms are used in this Income Computation and Disclosure Standard with the meanings specified:

(a) “Tangible fixed asset” is an asset being land, building, machinery, plant or furniture held with the intention of being used for the purpose of producing or providing goods or services and is not held for sale in the normal course of business.

(b) “Fair value” of an asset is the amount for which that asset could be exchanged between knowledgeable, willing parties in an arm’s length transaction.

2(2) Words and expressions used and not defined in this Income Computation and Disclosure Standard but defined in the Act shall have the meanings assigned to them in that Act.

Identification of Tangible Fixed Assets

3. The definition in clause (a) of sub-paragraph (1) of paragraph 2 provides criteria for determining whether an item is to be classified as a tangible fixed asset.

4. Stand-by equipment and servicing equipment are to be capitalised. Machinery spares shall be charged to the revenue as and when consumed. When such spares can be used only in connection with an item of tangible fixed asset and their use is expected to be irregular, they shall be capitalised.

Components of Actual Cost

5. The actual cost of an acquired tangible fixed asset shall comprise its purchase price, import duties and other taxes, excluding those subsequently recoverable, and any directly attributable expenditure on making the asset ready for its intended use. Any trade discounts and rebates shall be deducted in arriving at the actual cost.

6. The cost of a tangible fixed asset may undergo changes subsequent to its acquisition or construction on account of

(i) price adjustment, changes in duties or similar factors; or

(ii) exchange fluctuation as specified in Income Computation and Disclosure Standard on the effects of changes in foreign exchange rates.

7. Administration and other general overhead expenses are to be excluded from the cost of tangible fixed assets if they do not relate to a specific tangible fixed asset. Expenses which are specifically attributable to construction of a project or to the acquisition of a tangible fixed asset or bringing it to its working condition, shall be included as a part of the cost of the project or as a part of the cost of the tangible fixed asset.

8. The expenditure incurred on start-up and commissioning of the project, including the expenditure incurred on test runs and experimental production, shall be capitalised. The expenditure incurred after the plant has begun commercial production, that is, production intended for sale or captive consumption, shall be treated as revenue expenditure.

Self- constructed Tangible Fixed Assets

9. In arriving at the actual cost of self-constructed tangible fixed assets, the same principles shall apply as those described in paragraphs 5 to 8. Cost of construction that relate directly to the specific tangible fixed asset and costs that are attributable to the construction activity in general and can be allocated to the specific tangible fixed asset shall be included in actual cost. Any internal profits shall be eliminated in arriving at such costs.

Non- monetary Consideration

10. When a tangible fixed asset is acquired in exchange for another asset, the fair value of the tangible fixed asset so acquired shall be its actual cost.

11. When a tangible fixed asset is acquired in exchange for shares or other securities, the fair value of the tangible fixed asset so acquired shall be its actual cost.

Improvements and Repairs

12. An Expenditure that increases the future benefits from the existing asset beyond its previously assessed standard of performance is added to the actual cost.

13. The cost of an addition or extension to an existing tangible fixed asset which is of a capital nature and which becomes an integral part of the existing tangible fixed asset is to be added to its actual cost. Any addition or extension, which has a separate identity and is capable of being used after the existing tangible fixed asset is disposed of, shall be treated as separate asset.

Valuation of Tangible Fixed Assets in Special Cases

14. Where a person owns tangible fixed assets jointly with others, the proportion in the actual cost, accumulated depreciation and written down value is grouped together with similar fully owned tangible fixed assets. Details of such jointly owned tangible fixed assets shall be indicated separately in the tangible fixed assets register.

15. Where several assets are purchased for a consolidated price, the consideration shall be apportioned to the various assets on a fair basis.

Transitional Provisions

16. The actual cost of tangible fixed assets, acquisition or construction of which commenced on or before the 31st day of March, 2015 but not completed by the said date, shall be recognised in accordance with the provisions of this standard. The amount of

actual cost, if any, recognised for the said assets for any previous year commencing on or before the 1st day of April, 2014 shall be taken into account for recognising actual cost of the said assets for the previous year commencing on the 1st day of April, 2015 and subsequent previous years.

Depreciation

17. Depreciation on a tangible fixed asset shall be computed in accordance with the provisions of the Act.

Transfers

18. Income arising on transfer of a tangible fixed asset shall be computed in accordance with the provisions of the Act.

Disclosures

19. Following disclosure shall be made in respect of tangible fixed assets, namely:-

(a) description of asset or block of assets;

(b) rate of depreciation;

(c) actual cost or written down value, as the case may be;

(d) additions or deductions during the year with dates; in the case of any addition of an asset, date put to use; including adjustments on account of-

(i) Central Value Added Tax credit claimed and allowed under the CENVAT Credit Rules, 2004;

(ii) change in rate of exchange of currency;

(iii) subsidy or grant or reimbursement, by whatever name called;

(e) depreciation Allowable; and

(f) written down value at the end of year.

F. Income Computation and Disclosure Standard VI relating to the effects of changes in foreign exchange rates

Preamble

This Income Computation and Disclosure Standard is applicable for computation of income chargeable under the head “Profits and gains of business or profession” or “Income from other sources” and not for the purpose of maintenance of books of accounts.

In the case of conflict between the provisions of the Income-tax Act, 1961 (‘the Act’) and this Income Computation and Disclosure Standard, the provisions of the Act shall prevail to that extent.

Scope

1. This Income Computation and Disclosure Standard deals with:

(a) treatment of transactions in foreign currencies;

(b) translating the financial statements of foreign operations;

(c) treatment of foreign currency transactions in the nature of forward exchange contracts.

Definitions

2. (1) The following terms are used in this Income Computation and Disclosure Standard with the meanings specified:

(a) “Average rate” is the mean of the exchange rates in force during a period.

(b) “Closing rate” is the exchange rate at the last day of the previous year.

(c) “Exchange difference” is the difference resulting from reporting the same number of units of a foreign currency in the reporting currency of a person at different exchange rates.

(d) “Exchange rate” is the ratio for exchange of two currencies.

(e) “Foreign currency” is a currency other than the reporting currency of a person.

(f) “Foreign operations of a person” is a branch, by whatever name called, of that person, the activities of which are based or conducted in a country other than India.

(g) “Foreign currency transaction” is a transaction which is denominated in or requires settlement in a foreign currency, including transactions arising when a person:-

(i) buys or sells goods or services whose price is denominated in a foreign currency; or

(ii) borrows or lends funds when the amounts payable or receivable are denominated in a foreign currency; or

(iii) becomes a party to an unperformed forward exchange contract; or

(iv) otherwise acquires or disposes of assets, or incurs or settles liabilities, denominated in a foreign currency.

(h) “Forward exchange contract” means an agreement to exchange different currencies at a forward rate, and includes a foreign currency option contract or another financial instrument of a similar nature;

(i) “Forward rate” is the specified exchange rate for exchange of two Currencies at a specified future date;

(j) “Indian currency” shall have the meaning as assigned to it in section 2 of the Foreign Exchange Management Act, 1999 (42 of 1999);

(k) “Integral foreign operation” is a foreign operation, the activities of which are an integral part of the operation of the person;

(l) “Monetary items” are money held and assets to be received or liabilities to be paid in fixed or determinable amounts of money. Cash, receivables, and payables are examples of monetary items;

(m) “Non-integral foreign operation” is a foreign operation that is not an integral foreign operation;

(n) “Non-monetary items” are assets and liabilities other than monetary items. Fixed assets, inventories, and investments in equity shares are examples of non-monetary items;

(o) “Reporting currency” means Indian currency except for foreign operations where it shall mean currency of the country where the operations are carried out.

(2) Words and expressions used and not defined in this Income Computation and Disclosure Standard but defined in the Act shall have the meaning assigned to them in the Act.

Foreign Currency Transactions

Initial Recognition

3(1) A foreign currency transaction shall be recorded, on initial recognition in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.

(2) An average rate for a week or a month that approximates the actual rate at the date of the transaction may be used for all transaction in each foreign currency occurring during that period. If the exchange rate fluctuates significantly, the actual rate at the date of the transaction shall be used.

Conversion at Last Date of Previous Year

4. At last day of each previous year:-

(a) foreign currency monetary items shall be converted into reporting currency by applying the closing rate;

(b) where the closing rate does not reflect with reasonable accuracy, the amount in reporting currency that is likely to be realised from or required to disburse, a foreign currency monetary item owing to restriction on remittances or the closing rate being unrealistic and it is not possible to effect an exchange of currencies at that rate, then the relevant monetary item shall be reported in the reporting currency at the amount which is likely to be realised from or required to disburse such item at the last date of the previous year; and

(c) non-monetary items in a foreign currency shall be converted into reporting currency by using the exchange rate at the date of the transaction.

Recognition of Exchange Differences

5. (i) In respect of monetary items, exchange differences arising on the settlement thereof or on conversion thereof at last day of the previous year shall be recognised as income or as expense in that previous year.

(ii) In respect of non-monetary items, exchange differences arising on conversion thereof at the last day of the previous year shall not be recognised as income or as expense in that previous year.

Exceptions to Paragraphs 3, 4 and 5

6. Notwithstanding anything contained in paragraph 3, 4 and 5; initial recognition, conversion and recognition of exchange difference shall be subject to provisions of section 43A of the Act or Rule 115 of Income-tax Rules, 1962, as the case may be.

Financial Statements of Foreign Operations

Classification of Foreign Operations

7. (1) The method used to translate the financial statements of a foreign operation depends on the way in which it is financed and operates in relation to a person. For this purpose, foreign operations are classified as either “integral foreign operations” or “non-integral foreign operations”.

(2) The following are indications that a foreign operation is a non-integral foreign operation rather than an integral foreign operation:-

(a) while the person may control the foreign operation, the activities of the foreign operation are carried out with a significant degree of autonomy from the activities of the person;

(b) transactions with the person are not a high proportion of the foreign operation’s activities;

(c) the activities of the foreign operation are financed mainly from its own operations or local borrowings;

(d) costs of labour, material and other components of the foreign operation’s products or services are primarily paid or settled in the local currency;

(e) the foreign operation’s sales are mainly in currencies other than Indian currency;

(f) cash flows of the person are insulated from the day-to-day activities of the foreign operation;

(g) sales prices for the foreign operation’s products or services are not primarily responsive on a short-term basis to changes in exchange rates but are determined more by local competition or local government regulation;

(h) there is an active local sales market for the foreign operation’s products or services, although there also might be significant amounts of exports.

Integral Foreign Operations

8. The financial statements of an integral foreign operation shall be translated using the principles and procedures in paragraphs 3 to 6 as if the transactions of the foreign operation had been those of the person himself.

Non-integral Foreign Operations

9. (1) In translating the financial statements of a non-integral foreign operation for a previous year, the person shall apply the following, namely:-

(a) the assets and liabilities, both monetary and non-monetary, of the non-integral foreign operation shall be translated at the closing rate;

(b) income and expense items of the non-integral foreign operation shall be translated at exchange rates at the dates of the transactions; and

(c) all resulting exchange differences shall be recognised as income or as expenses in that previous year.

(2) Notwithstanding anything stated in sub-paragraph 1, translation and recognition of exchange difference in cases referred to in section 43A of the Act or Rule 115 of Income-tax Rules, 1962 shall be carried out in accordance with the provisions contained in that section or that Rule, as the case may be.

Change in the Classification of a Foreign Operation

10(1) When there is a change in the classification of a foreign operation, the translation procedures applicable to the revised classification should be applied from the date of the change in the classification.

(2) The consistency principle requires that foreign operation once classified as integral or non-integral is continued to be so classified. However, a change in the way in which a foreign operation is financed and operates in relation to the person may lead to a change in the classification of that foreign operation.

Forward Exchange Contracts

11. (1) Any premium or discount arising at the inception of a forward exchange contract shall be amortised as expense or income over the life of the contract. Exchange differences on such a contract shall be recognised as income or as expense in the previous year in which the exchange rates change. Any profit or loss arising on cancellation or renewal shall be recognised as income or as expense for the previous year.

(2) The provisions of sub-para (1) shall apply provided that the contract:

(a) is not intended for trading or speculation purposes; and

(b) is entered into to establish the amount of the reporting currency required or available at the settlement date of the transaction.

(3) The provisions of sub-para (1) shall not apply to the contract that is entered into to hedge the foreign currency risk of a firm commitment or a highly probable forecast transaction. For this purpose, firm commitment, shall not include assets and liabilities existing at the end of the previous year.

(4) The premium or discount that arises on the contract is measured by the difference between the exchange rate at the date of the inception of the contract and the forward rate specified in the contract. Exchange difference on the contract is the difference between:

(a) the foreign currency amount of the contract translated at the exchange rate at the last day of the previous year, or the settlement date where the transaction is settled during the previous year; and

(b) the same foreign currency amount translated at the date of inception of the contract or the last day of the immediately preceding previous year, whichever is later.

(5) Premium, discount or exchange difference on contracts that are intended for trading or speculation purposes, or that are entered into to hedge the foreign currency risk of a firm commitment or a highly probable forecast transaction shall be recognised at the time of settlement.

Transitional Provisions

12. (1) All foreign currency transactions undertaken on or after 1st day of April, 2015 shall be recognised in accordance with the provisions of this standard.

(2) Exchange differences arising in respect of monetary items or non-monetary items, on the settlement thereof during the previous year commencing on the 1st day of April, 2015 or on conversion thereof at the last day of the previous year commencing on the 1st day of April, 2015, shall be recognised in accordance with the provisions of this standard after taking into account the amount recognised on the last day of the previous year ending on the 31st March,2015 for an item, if any, which is carried forward from said previous year.

(3) The financial statements of foreign operations for the previous year commencing on the 1st day of April, 2015 shall be translated using the principles and procedures specified in this standard after taking into account the amount recognised on the last day of the previous year ending on the 31st March, 2015 for an item, if any, which is carried forward from said previous year.

(4) All forward exchange contracts existing on the 1st day of April, 2015 or entered on or after 1st day of April, 2015 shall be dealt with in accordance with the provisions of this standard after taking into account the income or expenses, if any, recognised in respect of said contracts for the previous year ending on or before the 31st March, 2015.

G. Income Computation and Disclosure Standard VII relating to government grants

Preamble

This Income Computation and Disclosure Standard is applicable for computation of income chargeable under the head “Profits and gains of business or profession” or “Income from other sources” and not for the purpose of maintenance of books of account.

In case of conflict between the provisions of the Income Tax Act, 1961 (‘the Act’) and this Income Computation and Disclosure Standard, the provisions of the Act shall prevail to that extent.

Scope

1. This Income Computation and Disclosure Standard deals with the treatment of Government grants. The Government grants are sometimes called by other names such as subsidies, cash incentives, duty drawbacks, waiver, concessions, reimbursements, etc.

2. This Income Computation and Disclosure Standard does not deal with:-

(a) Government assistance other than in the form of Government grants; and

(b) Government participation in the ownership of the enterprise.

Definitions

3(1) The following terms are used in the Income Computation and Disclosure Standard with the meanings specified:

(a) “Government” refers to the Central Government, State Governments, agencies and similar bodies, whether local, national or international.

(b) “Government grants” are assistance by Government in cash or kind to a person for past or future compliance with certain conditions. They exclude those forms of Government assistance which cannot have a value placed upon them and the transactions with Government which cannot be distinguished from the normal trading transactions of the person.

3(2) Words and expressions used and not defined in this Income Computation and Disclosure Standard but defined in the Act shall have the meaning assigned to them in the Act.

Recognition of Government Grants

4(1) Government grants should not be recognised until there is reasonable assurance that (i) the person shall comply with the conditions attached to them, and (ii) the grants shall be received.

4(2) Recognition of Government grant shall not be postponed beyond the date of actual receipt.

Treatment of Government Grants

5. Where the Government grant relates to a depreciable fixed asset or assets of a person, the grant shall be deducted from the actual cost of the asset or assets concerned or from the written down value of block of assets to which concerned asset or assets belonged to.

6. Where the Government grant relates to a non-depreciable asset or assets of a person requiring fulfillment of certain obligations, the grant shall be recognised as income over the same period over which the cost of meeting such obligations is charged to income.

7. Where the Government grant is of such a nature that it cannot be directly relatable to the asset acquired, so much of the amount which bears to the total Government grant, the same proportion as such asset bears to all the assets in respect of or with reference to which the Government grant is so received, shall be deducted from the actual cost of the asset or shall be reduced from the written down value of block of assets to which the asset or assets belonged to.

8. The Government grant that is receivable as compensation for expenses or losses incurred in a previous financial year or for the purpose of giving immediate financial support to the person with no further related costs, shall be recognised as income of the period in which it is receivable.

9. The Government grants other than covered by paragraph 5, 6, 7, and 8 shall be recognised as income over the periods necessary to match them with the related costs which they are intended to compensate.

10. The Government grants in the form of non-monetary assets, given at a concessional rate, shall be accounted for on the basis of their acquisition cost.

Refund of Government Grants

11. The amount refundable in respect of a Government grant referred to in paragraphs 6, 8 and 9 shall be applied first against any unamortised deferred credit remaining in respect of the Government grant. To the extent that the amount refundable exceeds any such deferred credit, or where no deferred credit exists, the amount shall be charged to profit and loss statement.

12. The amount refundable in respect of a Government grant related to a depreciable fixed asset or assets shall be recorded by increasing the actual cost or written down value of block of assets by the amount refundable. Where the actual cost of the asset is increased, depreciation on the revised actual cost or written down value shall be provided prospectively at the prescribed rate.

Transitional Provisions

13. All the Government grants which meet the recognition criteria of para 4 on or after 1st day of April, 2015 shall be recognised for the previous year commencing on or after 1st day of April, 2015 in accordance with the provisions of this standard after taking into account the amount, if any, of the said Government grant recognised for any previous year ending on or before 31st day of March, 2015.

Disclosures

14. Following disclosure shall be made in respect of Government grants, namely:-

(a) nature and extent of Government grants recognised during the previous year by way of deduction from the actual cost of the asset or assets or from the written down value of block of assets during the previous year;

(b) nature and extent of Government grants recognised during the previous year as income;

(c) nature and extent of Government grants not recognised during the previous year by way of deduction from the actual cost of the asset or assets or from the written down value of block of assets and reasons thereof; and

(d) nature and extent of Government grants not recognised during the previous year as income and reasons thereof.

H. Income Computation and Disclosure Standard VIII relating to securities

Preamble

This Income Computation and Disclosure Standard is applicable for computation of income chargeable under the head “Profits and gains of business or profession” or “Income from other sources” and not for the purpose of maintenance of books of account.

In the case of conflict between the provisions of the Income-tax Act, 1961 (‘the Act’) and this Income Computation and Disclosure Standard, the provisions of the Act shall prevail to that extent.

Scope

1. This Income Computation and Disclosure Standard deals with securities held as stock-in-trade.

2. This Income Computation and Disclosure Standard does not deal with:

(a) the bases for recognition of interest and dividends on securities which are covered by the Income Computation and Disclosure Standard on revenue recognition;

(b) securities held by a person engaged in the business of insurance;

(c) securities held by mutual funds, venture capital funds, banks and public financial institutions formed under a Central or a State Act or so declared under the Companies Act, 1956 (1 of 1956) or the Companies Act, 2013 (18 of 2013).

Definitions

3(1) The following terms are used in this Income Computation and Disclosure Standard with the meanings specified:

(a) “Fair value” is the amount for which an asset could be exchanged between a knowledgeable, willing buyer and a knowledgeable, willing seller in an arm’s length transaction.

(b) “Securities” shall have the meaning assigned to it in clause (h) of Section 2 of the Securities Contract (Regulation) Act, 1956 (42 of 1956), other than Derivatives referred to in sub-clause (1a) of that clause.

3(2) Words and expressions used and not defined in this Income Computation and Disclosure Standard but defined in the Act shall have the meaning respectively assigned to them in the Act.

Recognition and Initial Measurement of Securities

4. A security on acquisition shall be recognised at actual cost.

5. The actual cost of a security shall comprise of its purchase price and include acquisition charges such as brokerage, fees, tax, duty or cess.

6. Where a security is acquired in exchange for other securities, the fair value of the security so acquired shall be its actual cost.

7. Where a security is acquired in exchange for another asset, the fair value of the security so acquired shall be its actual cost.

8. Where unpaid interest has accrued before the acquisition of an interest-bearing security and is included in the price paid for the security, the subsequent receipt of interest is allocated between pre-acquisition and post-acquisition periods; the pre-acquisition portion of the interest is deducted from the actual cost.

Subsequent Measurement of Securities

9. At the end of any previous year, securities held as stock-in-trade shall be valued at actual cost initially recognised or net realisable value at the end of that previous year, whichever is lower.

10. For the purpose of para 9, the comparison of actual cost initially recognised and net realisable value shall be done categorywise and not for each individual security. For this purpose, securities shall be classified into the following categories, namely:-

(a) shares;

(b) debt securities;

(c) convertible securities; and

(d) any other securities not covered above.

11. The value of securities held as stock-in-trade of a business as on the beginning of the previous year shall be:

(a) the cost of securities available, if any, on the day of the commencement of the business when the business has commenced during the previous year; and

(b) the value of the securities of the business as on the close of the immediately preceding previous year, in any other case.

12. Notwithstanding anything contained in para 9, 10 and 11, at the end of any previous year, securities not listed on a recognised stock exchange; or listed but not quoted on a recognised stock exchange with regularity from time to time, shall be valued at actual cost initially recognised.

13. For the purposes of para 9, 10 and 11 where the actual cost initially recognised cannot be ascertained by reference to specific identification, the cost of such security shall be determined on the basis of first-in-first-out method.

I. Income Computation and Disclosure Standard IX relating to borrowing costs

Preamble

This Income Computation and Disclosure Standard is applicable for computation of income chargeable under the head “Profits and gains of business or profession” or “Income from other sources” and not for the purpose of maintenance of books of account.

In the case of conflict between the provisions of the Income-tax Act, 1961 (‘the Act’) and this Income Computation and Disclosure Standard, the provisions of the Act shall prevail to that extent.

Scope

1. (1) This Income Computation and Disclosure Standard deals with treatment of borrowing costs.

(2) This Income Computation and Disclosure Standard does not deal with the actual or imputed cost of owners’ equity and preference share capital.

Definitions

2. (1) The following terms are used in this Income Computation and Disclosure Standard with the meanings specified:

(a) “Borrowing costs” are interest and other costs incurred by a person in connection with the borrowing of funds and include:

(i) commitment charges on borrowings;

(ii) amortised amount of discounts or premiums relating to borrowings;

(iii) amortised amount of ancillary costs incurred in connection with the arrangement of borrowings;

(iv) finance charges in respect of assets acquired under finance leases or under other similar arrangements.

(b) “Qualifying asset” means:

(i) land, building, machinery, plant or furniture, being tangible assets;

(ii) know-how, patents, copyrights, trade marks, licences, franchises or any other business or commercial rights of similar nature, being intangible assets;

(iii) inventories that require a period of twelve months or more to bring them to a saleable condition.

(2) Words and expressions used and not defined in this Income Computation and Disclosure Standard but defined in the Act shall have the meaning assigned to them in the Act.

Recognition

3. Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset shall be capitalised as part of the cost of that asset. The amount of borrowing costs eligible for capitalisation shall be determined in accordance with this Income Computation and Disclosure Standard. Other borrowing costs shall be recognised in accordance with the provisions of the Act.

4. For the purposes of this Income Computation and Disclosure Standard, “capitalisation” in the context of inventory referred to in item (iii) of clause (b) of sub-paragraph (1) of paragraph 2means addition of borrowing cost to the cost of inventory.

Borrowing Costs Eligible for Capitalisation

5. To the extent the funds are borrowed specifically for the purposes of acquisition, construction or production of a qualifying asset, the amount of borrowing costs to be capitalised on that asset shall be the actual borrowing costs incurred during the period on the funds so borrowed.

6. To the extent the funds are borrowed generally and utilised for the purposes of acquisition, construction or production of a qualifying asset, the amount of borrowing costs to be capitalised shall be computed in accordance with the following formula namely :-

A x = B / C

Where

A = borrowing costs incurred during the previous year except on borrowings directly relatable to specific purposes;
B = (i) the average of costs of qualifying asset as appearing in the balance sheet of a person on the first day and the last day of the previous year;(ii) in case the qualifying asset does not appear in the balance sheet of a person on the first day or both on the first day and the last day of previous year, half of the cost of qualifying asset;(iii) in case the qualifying asset does not appear in the balance sheet of a person on the last day of previous year, the average of the costs of qualifying asset as appearing in the balance sheet of a person on the first day of the previous year and on the date of put to use or completion, as the case may be ,other than those qualifying assets which are directly funded out of specific borrowings; or
C = the average of the amount of total assets as appearing in the balance sheet of a person on the first day and the last day of the previous year, other than those assets which are directly funded out of specific borrowings;

Commencement of Capitalisation

7. The capitalisation of borrowing costs shall commence:

(a) in a case referred to in paragraph 5, from the date on which funds were borrowed;

(b) in a case referred to in paragraph 6, from the date on which funds were utilised.

Cessation of Capitalisation

8. Capitalisation of borrowing costs shall cease:

(a) in case of a qualifying asset referred to in item (i) and (ii) of clause (b) of sub-paragraph (1) of paragraph 2, when such asset is first put to use;

(b) in case of inventory referred to in item (iii) of clause (b) of sub-paragraph (1) of paragraph 2, when substantially all the activities necessary to prepare such inventory for its intended sale are complete.

9. When the construction of a qualifying asset is completed in parts and a completed part is capable of being used while construction continues for the other parts, capitalisation of borrowing costs in relation to a part shall cease:-

(a) in case of part of a qualifying asset referred to in item (i) and (ii) of clause (b) of sub-paragraph (1) of paragraph 2, when such part of a qualifying asset is first put to use;

(b) in case of part of inventory referred to in item (iii) of clause (b) of sub-paragraph (1) of paragraph 2, when substantially all the activities necessary to prepare such part of inventory for its intended sale are complete.

Transitional Provisions

10. All the borrowing costs incurred on or after 1st day of April, 2015 shall be capitalised for the previous year commencing on or after 1st day of April, 2015 in accordance with the provisions of this standard after taking into account the amount of borrowing costs capitalised, if any, for the same borrowing for any previous year ending on or before 31st day of March, 2015.

Disclosure

11. The following disclosure shall be made in respect of borrowing costs, namely:-

(a) the accounting policy adopted for borrowing costs; and

(b) the amount of borrowing costs capitalised during the previous year.

J. Income Computation and Disclosure Standard X relating to provisions, contingent liabilities and contingent assets

Preamble

This Income Computation and Disclosure Standard is applicable for computation of income chargeable under the head “Profits and gains of business or profession” or “Income from other sources” and not for the purpose of maintenance of books of accounts.

In the case of conflict between the provisions of the Income-tax Act, 1961 (‘the Act’) and this Income Computation and Disclosure Standard, the provisions of the Act shall prevail to that extent.

Scope

1. This Income Computation and Disclosure Standard deals with provisions, contingent liabilities and contingent assets, except those:

(a) resulting from financial instruments;

(b) resulting from executory contracts;

(c) arising in insurance business from contracts with policyholders; and

(d) covered by another Income Computation and Disclosure Standard.

2. This Income Computation and Disclosure Standard does not deal with the recognition of revenue which is dealt with by Income Computation and Disclosure Standard – Revenue Recognition.

3. The term ‘provision’ is also used in the context of items such as depreciation, impairment of assets and doubtful debts which are adjustments to the carrying amounts of assets and are not addressed in this Income Computation and Disclosure Standard.

Definitions

4(1) The following terms are used in this Income Computation and Disclosure Standard with the meanings specified:

(a) “Provision” is a liability which can be measured only by using a substantial degree of estimation.

(b) “Liability” is a present obligation of the person arising from past events, the settlement of which is expected to result in an outflow from the person of resources embodying economic benefits.

(c) “Obligating event” is an event that creates an obligation that results in a person having no realistic alternative to settling that obligation.

(d) “Contingent liability” is:

(i) a possible obligation that arises from past events and the existence of which will be confirmed only by the occurrence or nonoccurrence of one or more uncertain future events not wholly within the control of the person; or

(ii) a present obligation that arises from past events but is not recognised because:

(A) it is not reasonably certain that an outflow of resources embodying economic benefits will be required to settle the obligation; or

(B) a reliable estimate of the amount of the obligation cannot be made.

(e) “Contingent asset” is a possible asset that arises from past events the existence of which will be confirmed only by the occurrence or nonoccurrence of one or more uncertain future events not wholly within the control of the person.

(f) “Executory contracts” are contracts under which neither party has performed any of its obligations or both parties have partially performed their obligations to an equal extent.

(g) “Present obligation” is an obligation if, based on the evidence available, its existence at the end of the previous year is considered reasonably certain.

4(2) Words and expressions used and not defined in this Income Computation and Disclosure Standard but defined in the Act shall have the meaning respectively assigned to them in the Act.

Recognition

Provisions

5. A provision shall be recognised when:

(a) a person has a present obligation as a result of a past event;

(b) it is reasonably certain that an outflow of resources embodying economic benefits will be required to settle the obligation; and

(c) a reliable estimate can be made of the amount of the obligation.

If these conditions are not met, no provision shall be recognised.

6. No provision shall be recognised for costs that need to be incurred to operate in the future.

7. It is only those obligations arising from past events existing independently of a person’s future actions, that is the future conduct of its business, that are recognised as provisions

8. Where details of a proposed new law have yet to be finalised, an obligation arises only when the legislation is enacted.

Contingent Liabilities

9. A person shall not recognise a contingent liability.

Contingent Assets

10. A person shall not recognise a contingent asset.

11. Contingent assets are assessed continually and when it becomes reasonably certain that inflow of economic benefit will arise, the asset and related income are recognised in the previous year in which the change occurs.

Measurement

Best Estimate

12. The amount recognised as a provision shall be the best estimate of the expenditure required to settle the present obligation at the end of the previous year. The amount of a provision shall not be discounted to its present value.

13. The amount recognised as asset and related income shall be the best estimate of the value of economic benefit arising at the end of the previous year. The amount and related income shall not be discounted to its present value.

Reimbursements

14. Where some or all of the expenditure required to settle a provision is expected to be reimbursed by another party, the reimbursement shall be recognised when it is reasonably certain that reimbursement will be received if the person settles the obligation. The amount recognised for the reimbursement shall not exceed the amount of the provision.

15. Where a person is not liable for payment of costs in case the third party fails to pay, no provision shall be made for those costs.

16. An obligation, for which a person is jointly and severally liable, is a contingent liability to the extent that it is expected that the obligation will be settled by the other parties.

Review

17. Provisions shall be reviewed at the end of each previous year and adjusted to reflect the current best estimate. If it is no longer reasonably certain that an outflow of resources embodying economic benefits will be required to settle the obligation, the provision should be reversed.

18. An asset and related income recognised as provided in para 11 shall be reviewed at the end of each previous year and adjusted to reflect the current best estimate. If it is no longer reasonably certain that an inflow of economic benefits will arise, the asset and related income shall be reversed.

Use of Provisions

19. A provision shall be used only for expenditures for which the provision was originally recognised.

Transitional Provisions

20. All the provisions or assets and related income shall be recognised for the previous year commencing on or after 1st day of April, 2015 in accordance with the provisions of this standard

after taking into account the amount recognised, if any, for the same for any previous year ending on or before 31st day of March, 2015.

Disclosure

21(1) Following disclosure shall be made in respect of each class of provision, namely:-

(a) a brief description of the nature of the obligation;

(b) the carrying amount at the beginning and end of the previous year;

(c) additional provisions made during the previous year, including increases to existing provisions;

(d) amounts used, that is incurred and charged against the provision, during the previous year;

(e) unused amounts reversed during the previous year; and

(f) the amount of any expected reimbursement, stating the amount of any asset that has been recognised for that expected reimbursement.

21(2) Following disclosure shall be made in respect of each class of asset and related income recognised as provided in para 11, namely:-

(a) a brief description of the nature of the asset and related income;

(b) the carrying amount of asset at the beginning and end of the previous year;

(c) additional amount of asset and related income recognised during the year, including increases to assets and related income already recognised; and

(d) amount of asset and related income reversed during the previous year.

[F. No. 134/48/2010-TPL]

 (RAJESH KUMAR BHOOT)

DIRECTOR (TAX POLICY AND LEGISLATION)

Notification No.32/2015 dated 31-03-2015


Income Computation and Disclosure Standards under section 145(2) of the Income-tax Act, 1961 notified – 32/2015 – Dated 31-3-2015 – 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. 32/2015

New Delhi, the 31st March, 2015

S.O. 892 (E) - In exercise of the powers conferred by sub-section (2) of section 145 of the Income-tax Act, 1961 (43 of 1961) and in supersession of the notification of the Government of India in the Ministry of Finance, Department of Revenue, published in the Gazette of India, Part II, Section 3, Sub-section (ii), vide number S.O 69(E) dated the 25th January, 1996, except as respects things done or omitted to be done before such supersession, the Central Government hereby notifies the income computation and disclosure standards as specified in the Annexure to be followed by all assessees, following the mercantile system of accounting, for the purposes of computation of income chargeable to income-tax under the head “Profit and gains of business or profession” or “ Income from other sources”. This notification shall come into force with effect from 1st day of April, 2015, and shall accordingly apply to the assessment year 2016-17 and subsequent assessment years.

Annexure

[See notification No.32/2015, F. No. 134/48/2010-TPL, dated 31st March, 2015]

A. Income Computation and Disclosure Standard I relating to accounting policies

Preamble

This Income Computation and Disclosure Standard is applicable for computation of income chargeable under the head “Profits and gains of business or profession” or “Income from other sources” and not for the purpose of maintenance of books of accounts.

In the case of conflict between the provisions of the Income-tax Act, 1961 (‘the Act’) and this Income Computation and Disclosure Standard, the provisions of the Act shall prevail to that extent.

Scope

1. This Income Computation and Disclosure Standard deals with significant accounting policies.

Fundamental Accounting Assumptions

2. The following are fundamental accounting assumptions, namely:-

(a) Going Concern

“Going concern” refers to the assumption that the person has neither the intention nor the necessity of liquidation or of curtailing materially the scale of the business,

profession or vocation and intends to continue his business, profession or vocation for the foreseeable future.

(b) Consistency

“Consistency” refers to the assumption that accounting policies are consistent from one period to another;

(c) Accrual

“Accrual” refers to the assumption that revenues and costs are accrued, that is, recognised as they are earned or incurred (and not as money is received or paid) and recorded in the previous year to which they relate.

Accounting Policies

3. The accounting policies refer to the specific accounting principles and the methods of applying those principles adopted by a person.

Considerations in the Selection and Change of Accounting Policies

4. Accounting policies adopted by a person shall be such so as to represent a true and fair view of the state of affairs and income of the business, profession or vocation. For this purpose,

(i) the treatment and presentation of transactions and events shall be governed by their substance and not merely by the legal form; and

(ii) marked to market loss or an expected loss shall not be recognised unless the recognition of such loss is in accordance with the provisions of any other Income Computation and Disclosure Standard.

5. An accounting policy shall not be changed without reasonable cause.

Disclosure of Accounting Policies

6. All significant accounting policies adopted by a person shall be disclosed.

7. Any change in an accounting policy which has a material effect shall be disclosed. The amount by which any item is affected by such change shall also be disclosed to the extent ascertainable. Where such amount is not ascertainable, wholly or in part, the fact shall be indicated. If a change is made in the accounting policies which has no material effect for the current previous year but which is reasonably expected to have a material effect in later previous years, the fact of such change shall be appropriately disclosed in the previous year in which the change is adopted and also in the previous year in which such change has material effect for the first time.

8. Disclosure of accounting policies or of changes therein cannot remedy a wrong or inappropriate treatment of the item.

9. If the fundamental accounting assumptions of Going Concern, Consistency and Accrual are followed, specific disclosure is not required. If a fundamental accounting assumption is not followed, the fact shall be disclosed.

Transitional Provisions

10. All contract or transaction existing on the 1st day of April, 2015 or entered into on or after the 1st day of April, 2015 shall be dealt with in accordance with the provisions of this standard after taking into account the income, expense or loss, if any, recognised in respect of the said contract or transaction for the previous year ending on or before the 31st March, 2015.


B. Income Computation and Disclosure Standard II relating to valuation of inventories

Preamble

This Income Computation and Disclosure Standard is applicable for computation of income chargeable under the head “Profits and gains of Business or profession” or “Income from other sources” and not for the purpose of maintenance of books of accounts.

In the case of conflict between the provisions of Income Tax Act, 1961 (‘the Act’) and this Income Computation and Disclosure Standard, the provisions of the Act shall prevail to that extent.

Scope

1. This Income Computation and Disclosure Standard shall be applied for valuation of inventories, except :

(a) Work-in-progress arising under ‘construction contract’ including directly related service contract which is dealt with by the Income Computation and Disclosure Standard on construction contracts;

(b) Work-in-progress which is dealt with by other Income Computation and Disclosure Standard;

(c) Shares, debentures and other financial instruments held as stock-in-trade which are dealt with by the Income Computation and Disclosure Standard on securities;

(d) Producers’ inventories of livestock, agriculture and forest products, mineral oils, ores and gases to the extent that they are measured at net realisable value;

(e) Machinery spares, which can be used only in connection with a tangible fixed asset and their use is expected to be irregular, shall be dealt with in accordance with the Income Computation and Disclosure Standard on tangible fixed assets.

Definitions

2(1) The following terms are used in this Income Computation and Disclosure Standard with the meanings specified:

(a) “Inventories” are assets:

(i) held for sale in the ordinary course of business;

(ii) in the process of production for such sale;

(iii) in the form of materials or supplies to be consumed in the production process or in the rendering of services.

(b) “Net realisable value” is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale.

2(2) Words and expressions used and not defined in this Income Computation and Disclosure Standard but defined in the Act shall have the meanings assigned to them in that Act.

Measurement

3. Inventories shall be valued at cost, or net realisable value, whichever is lower.

Cost of Inventories

4. Cost of inventories shall comprise of all costs of purchase, costs of services, costs of conversion and other costs incurred in bringing the inventories to their present location and condition.

Costs of Purchase

5. The costs of purchase shall consist of purchase price including duties and taxes, freight inwards and other expenditure directly attributable to the acquisition. Trade discounts, rebates and other similar items shall be deducted in determining the costs of purchase.

Costs of Services 

6. The costs of services in the case of a service provider shall consist of labour and other costs of personnel directly engaged in providing the service including supervisory personnel and attributable overheads.

Costs of Conversion

7. The costs of conversion of inventories shall include costs directly related to the units of production and a systematic allocation of fixed and variable production overheads that are incurred in converting materials into finished goods. Fixed production overheads shall be those indirect costs of production that remain relatively constant regardless of the volume of production. Variable production overheads shall be those indirect costs of production that vary directly or nearly directly, with the volume of production.

8. The allocation of fixed production overheads for the purpose of their inclusion in the costs of conversion shall be based on the normal capacity of the production facilities. Normal capacity shall be the production expected to be achieved on an average over a number of periods or seasons under normal circumstances, taking into account the loss of capacity resulting from planned maintenance. The actual level of production shall be used when it approximates to normal capacity. The amount of fixed production overheads allocated to each unit of production shall not be increased as a consequence of low production or idle plant. Unallocated overheads shall be recognised as an expense in the period in which they are incurred. In periods of abnormally high production, the amount of fixed production overheads allocated to each unit of production is decreased so that inventories are not measured above the cost. Variable production overheads shall be assigned to each unit of production on the basis of the actual use of the production facilities.

9. Where a production process results in more than one product being produced simultaneously and the costs of conversion of each product are not separately identifiable, the costs shall be allocated between the products on a rational and consistent basis. Where by-products, scrap or waste material are immaterial, they shall be measured at net realisable value and this value shall be deducted from the cost of the main product.

Other Costs

10. Other costs shall be included in the cost of inventories only to the extent that they are incurred in bringing the inventories to their present location and condition.

11. Interest and other borrowing costs shall not be included in the costs of inventories, unless they meet the criteria for recognition of interest as a component of the cost as specified in the Income Computation and Disclosure Standard on borrowing costs.

Exclusions from the Cost of Inventories

12. In determining the cost of inventories in accordance with paragraphs 4 to paragraphs

11, the following costs shall be excluded and recognised as expenses of the period in which they are incurred, namely:-

(a) Abnormal amounts of wasted materials, labour, or other production costs;

(b)Storage costs, unless those costs are necessary in the production process prior to a further production stage;

(c) Administrative overheads that do not contribute to bringing the inventories to their present location and condition ;

(d)Selling costs.

Cost Formulae

13. The Cost of inventories of items

(i) that are not ordinarily interchangeable; and

(ii) goods or services produced and segregated for specific projects shall be assigned by specific identification of their individual costs.

14. ‘Specific identification of cost’ means specific costs are attributed to identified items of inventory.

15. Where there are a large numbers of items of inventory which are ordinarily interchangeable, specific identification of costs shall not be made.

First-in First-out and Weighted Average Cost Formula

16. Cost of inventories, other than the inventory dealt with in paragraph 13, shall be assigned by using the First-in First-out (FIFO), or weighted average cost formula. The formula used shall reflect the fairest possible approximation to the cost incurred in bringing the items of inventory to their present location and condition.

17. The FIFO formula assumes that the items of inventory which were purchased or produced first are consumed or sold first, and consequently the items remaining in inventory at the end of the period are those most recently purchased or produced. Under the weighted average cost formula, the cost of each item is determined from the weighted average of the cost of similar items at the beginning of a period and the cost of similar items purchased or produced during the period. The average shall be calculated on a periodic basis, or as each additional shipment is received, depending upon the circumstances.

Retail Method

18. Where it is impracticable to use the costing methods referred to in paragraph 16, the retail method can be used in the retail trade for measuring inventories of large number of rapidly changing items that have similar margins. The cost of the inventory is determined by reducing from the sales value of the inventory, the appropriate percentage gross margin. The percentage used takes into consideration inventory, which has been marked down to below its original selling price.

Net Realisable Value

19. Inventories shall be written down to net realisable value on an item-by-item basis. Where ‘items of inventory’ relating to the same product line having similar purposes or end uses and are produced and marketed in the same geographical area and cannot be practicably evaluated separately from other items in that product line, such inventories shall be grouped together and written down to net realisable value on an aggregate basis.

20. Net realisable value shall be based on the most reliable evidence available at the time of valuation. The estimates of net realisable value shall also take into consideration the purpose for which the inventory is held. The estimates shall take into consideration fluctuations of price or cost directly relating to events occurring after the end of previous year to the extent that such events confirm the conditions existing on the last day of the previous year.

21. Materials and other supplies held for use in the production of inventories shall not be written down below the cost, where the finished products in which they shall be incorporated are expected to be sold at or above the cost. Where there has been a decline in the price of materials and it is estimated that the cost of finished products will exceed the net realisable value, the value of materials shall be written down to net realisable value which shall be the replacement cost of such materials.

Value of Opening Inventory

22. The value of the inventory as on the beginning of the previous year shall be

(i) the cost of inventory available, if any, on the day of the commencement of the business when the business has commenced during the previous year; and

(ii) the value of the inventory as on the close of the immediately preceding previous year, in any other case.

Change of Method of Valuation of Inventory

23. The method of valuation of inventories once adopted by a person in any previous year shall not be changed without reasonable cause.

Valuation of Inventory in Case of Certain Dissolutions

24. In case of dissolution of a partnership firm or association of person or body of individuals, notwithstanding whether business is discontinued or not, the inventory on the date of dissolution shall be valued at the net realisable value.

Transitional Provisions

25. Interest and other borrowing costs, which do not meet the criteria for recognition of interest as a component of the cost as per para 11, but included in the cost of the opening inventory as on the 1st day of April, 2015, shall be taken into account for determining cost of such inventory for valuation as on the close of the previous year beginning on or after 1st day of April, 2015 if such inventory continue to remain part of inventory as on the close of the previous year beginning on or after 1st day of April, 2015.

Disclosure

26. The following aspects shall be disclosed, namely:-

(a) the accounting policies adopted in measuring inventories including the cost formulae used; and

(b) the total carrying amount of inventories and its classification appropriate to a person.


C. Income Computation and Disclosure Standard III relating to construction contracts

Preamble

This Income Computation and Disclosure Standard is applicable for computation of income chargeable under the head “Profits and gains of business or profession” or “Income from other sources” and not for the purpose of maintenance of books of accounts.

In the case of conflict between the provisions of the Income-tax Act, 1961(‘the Act’) and this Income Computation and Disclosure Standard, the provisions of the Act shall prevail to that extent.

Scope

1. This Income Computation and Disclosure Standard should be applied in determination of income for a construction contract of a contractor.

Definitions

2 (1) The following terms are used in this Income Computation and Disclosure Standard with the meanings specified:

(a) “Construction contract” is a contract specifically negotiated for the construction of an asset or a combination of assets that are closely interrelated or interdependent in terms of their design, technology and function or their ultimate purpose or use and includes :

(i) contract for the rendering of services which are directly related to the construction of the asset, for example, those for the services of project managers and architects;

(ii) contract for destruction or restoration of assets, and the restoration of the environment following the demolition of assets.

(b) “Fixed price contract” is a construction contract in which the contractor agrees to a fixed contract price, or a fixed rate per unit of output, which may be subject to cost escalation clauses.

(c) “Cost plus contract” is a construction contract in which the contractor is reimbursed for allowable or otherwise defined costs, plus a mark up on these costs or a fixed fee.

(d) “Retentions” are amounts of progress billings which are not paid until the satisfaction of conditions specified in the contract for the payment of such amounts or until defects have been rectified.

(e) “Progress billings” are amounts billed for work performed on a contract whether or not they have been paid by the customer.

(f) “Advances” are amounts received by the contractor before the related work is performed.

2(2) Words and expressions used and not defined in this Income Computation and Disclosure Standard but defined in the Act shall have the meaning respectively assigned to them in the Act.

3. A construction contract may be negotiated for the construction of a single asset. A construction contract may also deal with the construction of a number of assets which are closely interrelated or interdependent in terms of their design, technology and function or their ultimate purpose or use.

4. Construction contracts are formulated in a number of ways which, for the purposes of this Income Computation and Disclosure Standard, are classified as fixed price contracts and cost plus contracts. Some construction contracts may contain characteristics of both a fixed price contract and a cost plus contract, for example, in the case of a cost plus contract with an agreed maximum price.

Combining and Segmenting Construction Contracts

5. The requirements of this Income Computation and Disclosure Standard shall be applied separately to each construction contract except as provided for in paragraphs 6, 7 and 8 herein. For reflecting the substance of a contract or a group of contracts, where it is necessary, the Income Computation and Disclosure

Standard should be applied to the separately identifiable components of a single contract or to a group of contracts together.

6. Where a contract covers a number of assets, the construction of each asset should be treated as a separate construction contract when:

(a) separate proposals have been submitted for each asset;

(b) each asset has been subject to separate negotiation and the contractor and customer have been able to accept or reject that part of the contract relating to each asset; and

(c) the costs and revenues of each asset can be identified.

7. A group of contracts, whether with a single customer or with several customers, should be treated as a single construction contract when:

(a) the group of contracts is negotiated as a single package;

(b) the contracts are so closely interrelated that they are, in effect, part of a single project with an overall profit margin; and

(c) the contracts are performed concurrently or in a continuous sequence.

8. Where a contract provides for the construction of an additional asset at the option of the customer or is amended to include the construction of an additional asset, the construction of the additional asset should be treated as a separate construction contract when:

(a) the asset differs significantly in design, technology or function from the asset or assets covered by the original contract; or

(b) the price of the asset is negotiated without having regard to the original contract price.

Contract Revenue

9. Contract revenue shall be recognised when there is reasonable certainty of its ultimate collection.

10. Contract revenue shall comprise of:

(a) the initial amount of revenue agreed in the contract, including retentions; and

(b) variations in contract work, claims and incentive payments:

(i) to the extent that it is probable that they will result in revenue; and

(ii) they are capable of being reliably measured.

11. Where contract revenue already recognised as income is subsequently written off in the books of accounts as uncollectible, the same shall be recognised as an expense and not as an adjustment of the amount of contract revenue.

Contract Costs

12. Contract costs shall comprise of :

(a) costs that relate directly to the specific contract;

(b) costs that are attributable to contract activity in general and can be allocated to the contract;

(c) such other costs as are specifically chargeable to the customer under the terms of the contract; and

(d) allocated borrowing costs in accordance with the Income Computation and Disclosure Standard on Borrowing Costs.

These costs shall be reduced by any incidental income, not being in the nature of interest, dividends or capital gains, that is not included in contract revenue.

13. Costs that cannot be attributed to any contract activity or cannot be allocated to a contract shall be excluded from the costs of a construction contract.

14. Contract costs include the costs attributable to a contract for the period from the date of securing the contract to the final completion of the contract. Costs that are incurred in securing the contract are also included as part of the contract costs, provided

(a) they can be separately identified; and

(b) it is probable that the contract shall be obtained.

When costs incurred in securing a contract are recognised as an expense in the period in which they are incurred, they are not included in contract costs when the contract is obtained in a subsequent period.

15. Contract costs that relate to future activity on the contract are recognised as an asset. Such costs represent an amount due from the customer and are classified as contract work in progress.

Recognition of Contract Revenue and Expenses

16. Contract revenue and contract costs associated with the construction contract should be recognised as revenue and expenses respectively by reference to the stage of completion of the contract activity at the reporting date.

17. The recognition of revenue and expenses by reference to the stage of completion of a contract is referred to as the percentage of completion method. Under this method, contract revenue is matched with the contract costs incurred in reaching the stage of completion, resulting in the reporting of revenue, expenses and profit which can be attributed to the proportion of work completed.

18. The stage of completion of a contract shall be determined with reference to:

(a) the proportion that contract costs incurred for work performed upto the reporting date bear to the estimated total contract costs; or

(b) surveys of work performed; or

(c) completion of a physical proportion of the contract work.

Progress payments and advances received from customers are not determinative of the stage of completion of a contract.

19. When the stage of completion is determined by reference to the contract costs incurred upto the reporting date, only those contract costs that reflect work performed are included in costs incurred upto the reporting date. Contract costs which are excluded are:

(a) contract costs that relate to future activity on the contract; and

(b) payments made to subcontractors in advance of work performed under the subcontract.

20. During the early stages of a contract, where the outcome of the contract cannot be estimated reliably contract revenue is recognised only to the extent of costs incurred. The early stage of a contract shall not extend beyond 25 % of the stage of completion.

Changes in Estimates

21. The percentage of completion method is applied on a cumulative basis in each previous year to the current estimates of contract revenue and contract costs. Where there is change in estimates, the changed estimates shall be used in determination of the amount of revenue and expenses in the period in which the change is made and in subsequent periods.

Transitional Provisions

22. Contract revenue and contract costs associated with the construction contract, which commenced on or before the 31st day of March, 2015 but not completed by the said date, shall be recognised as revenue and costs respectively in accordance with the provisions of this standard. The amount of contract revenue, contract costs or expected loss, if any, recognised for the said contract for any previous year commencing on or before the 1st day of April, 2014 shall be taken into account for recognising revenue and costs of the said contract for the previous year commencing on the 1st day of April, 2015 and subsequent previous years.

Disclosure

23. A person shall disclose:

(a) the amount of contract revenue recognised as revenue in the period; and

(b) the methods used to determine the stage of completion of contracts in progress.

24. A person shall disclose the following for contracts in progress at the reporting date, namely:-

(a) amount of costs incurred and recognised profits (less recognised losses) upto the reporting date;

(b) the amount of advances received; and

(c) the amount of retentions.


D. Income Computation and Disclosure Standard IV relating to revenue recognition

Preamble

This Income Computation and Disclosure Standard is applicable for computation of income chargeable under the head “Profits and gains of business or profession” or “Income from other sources” and not for the purpose of maintenance of books of accounts.

In the case of conflict between the provisions of the Income-tax Act, 1961 (‘the Act’) and this Income Computation and Disclosure Standard, the provisions of the Act shall prevail to that extent.

Scope

1(1) This Income Computation and Disclosure Standard deals with the bases for recognition of revenue arising in the course of the ordinary activities of a person from

(i) the sale of goods;

(ii) the rendering of services;

(iii) the use by others of the person’s resources yielding interest, royalties or dividends.

1(2) This Income Computation and Disclosure Standard does not deal with the aspects of revenue recognition which are dealt with by other Income Computation and Disclosure Standards.

Definitions

2(1) The following term is used in this Income Computation and Disclosure Standard with the meanings specified:

(a) “Revenue” is the gross inflow of cash, receivables or other consideration arising in the course of the ordinary activities of a person from the sale of goods, from the rendering of services, or from the use by others of the person’s resources yielding interest, royalties or dividends. In an agency relationship, the revenue is the amount of commission and not the gross inflow of cash, receivables or other consideration.

2(2) Words and expressions used and not defined in this Income Computation and Disclosure Standard but defined in the Act shall have the meanings assigned to them in that Act.

Sale of Goods

3. In a transaction involving the sale of goods, the revenue shall be recognised when the seller of goods has transferred to the buyer the property in the goods for a price or all significant risks and rewards of ownership have been transferred to the buyer and the seller retains no effective control of the goods transferred to a degree usually associated with ownership. In a situation, where transfer of property in goods does not coincide with the transfer of significant risks and rewards of ownership, revenue in such a situation shall be recognised at the time of transfer of significant risks and rewards of ownership to the buyer.

4. Revenue shall be recognised when there is reasonable certainty of its ultimate collection.

5. Where the ability to assess the ultimate collection with reasonable certainty is lacking at the time of raising any claim for escalation of price and export incentives, revenue recognition in respect of such claim shall be postponed to the extent of uncertainty involved.

Rendering of Services

6. Revenue from service transactions shall be recognised by the percentage completion method. Under this method, revenue from service transactions is matched with the service transactions costs incurred in reaching the stage of completion, resulting in the determination of revenue, expenses and profit which can be attributed to the proportion of work completed. Income Computation and Disclosure Standard on construction contract also requires the recognition of revenue on this basis. The requirements of that Standard shall mutatis mutandis apply to the recognition of revenue and the associated expenses for a service transaction.

The Use of Resources by Others Yielding Interest, Royalties or Dividends

7. Interest shall accrue on the time basis determined by the amount outstanding and the rate applicable. Discount or premium on debt securities held is treated as though it were accruing over the period to maturity.

8. Royalties shall accrue in accordance with the terms of the relevant agreement and shall be recognised on that basis unless, having regard to the substance of the transaction, it is more appropriate to recognise revenue on some other systematic and rational basis.

9. Dividends are recognised in accordance with the provisions of the Act.

Transitional Provisions

10. The transitional provisions of Income Computation and Disclosure Standard on construction contract shall mutatis mutandis apply to the recognition of revenue and the associated costs for a service transaction undertaken on or before the 31st day of March, 2015 but not completed by the said date.

11. Revenue for a transaction, other than a service transaction referred to in Para 10, undertaken on or before the 31st day of March, 2015 but not completed by the said date shall be recognised in accordance with the provisions of this standard for the previous year commencing on the 1st day of April, 2015 and subsequent previous year. The amount of revenue, if any, recognised for the said transaction for any previous year commencing on or before the 1st day of April, 2014 shall be taken into account for recognising revenue for the said transaction for the previous year commencing on the 1st day of April, 2015 and subsequent previous years.

Disclosure

12. Following disclosures shall be made in respect of revenue recognition, namely:-

(a) in a transaction involving sale of good, total amount not recognised as revenue during the previous year due to lack of reasonably certainty of its ultimate collection along with nature of uncertainty;

(b) the amount of revenue from service transactions recognised as revenue during the previous year;

(c) the method used to determine the stage of completion of service transactions in progress; and

(d) for service transactions in progress at the end of previous year:

(i) amount of costs incurred and recognised profits (less recognised losses) upto end of previous year;

(ii) the amount of advances received; and

(iii) the amount of retentions.


E. Income Computation and Disclosure Standard V relating to tangible fixed assets

Preamble

This Income Computation and Disclosure Standard is applicable for computation of income chargeable under the head “Profits and gains of business or profession” or “Income from other sources” and not for the purpose of maintenance of books of accounts.

In the case of conflict between the provisions of the Income-tax Act, 1961 (‘the Act’) and this Income Computation and Disclosure Standard, the provisions of the Act shall prevail to that extent.

Scope

1. This Income Computation and Disclosure Standard deals with the treatment of tangible fixed assets.

Definitions

2(1) The following terms are used in this Income Computation and Disclosure Standard with the meanings specified:

(a) “Tangible fixed asset” is an asset being land, building, machinery, plant or furniture held with the intention of being used for the purpose of producing or providing goods or services and is not held for sale in the normal course of business.

(b) “Fair value” of an asset is the amount for which that asset could be exchanged between knowledgeable, willing parties in an arm’s length transaction.

2(2) Words and expressions used and not defined in this Income Computation and Disclosure Standard but defined in the Act shall have the meanings assigned to them in that Act.

Identification of Tangible Fixed Assets

3. The definition in clause (a) of sub-paragraph (1) of paragraph 2 provides criteria for determining whether an item is to be classified as a tangible fixed asset.

4. Stand-by equipment and servicing equipment are to be capitalised. Machinery spares shall be charged to the revenue as and when consumed. When such spares can be used only in connection with an item of tangible fixed asset and their use is expected to be irregular, they shall be capitalised.

Components of Actual Cost

5. The actual cost of an acquired tangible fixed asset shall comprise its purchase price, import duties and other taxes, excluding those subsequently recoverable, and any directly attributable expenditure on making the asset ready for its intended use. Any trade discounts and rebates shall be deducted in arriving at the actual cost.

6. The cost of a tangible fixed asset may undergo changes subsequent to its acquisition or construction on account of

(i) price adjustment, changes in duties or similar factors; or

(ii) exchange fluctuation as specified in Income Computation and Disclosure Standard on the effects of changes in foreign exchange rates.

7. Administration and other general overhead expenses are to be excluded from the cost of tangible fixed assets if they do not relate to a specific tangible fixed asset. Expenses which are specifically attributable to construction of a project or to the acquisition of a tangible fixed asset or bringing it to its working condition, shall be included as a part of the cost of the project or as a part of the cost of the tangible fixed asset.

8. The expenditure incurred on start-up and commissioning of the project, including the expenditure incurred on test runs and experimental production, shall be capitalised. The expenditure incurred after the plant has begun commercial production, that is, production intended for sale or captive consumption, shall be treated as revenue expenditure.

Self- constructed Tangible Fixed Assets

9. In arriving at the actual cost of self-constructed tangible fixed assets, the same principles shall apply as those described in paragraphs 5 to 8. Cost of construction that relate directly to the specific tangible fixed asset and costs that are attributable to the construction activity in general and can be allocated to the specific tangible fixed asset shall be included in actual cost. Any internal profits shall be eliminated in arriving at such costs.

Non- monetary Consideration

10. When a tangible fixed asset is acquired in exchange for another asset, the fair value of the tangible fixed asset so acquired shall be its actual cost.

11. When a tangible fixed asset is acquired in exchange for shares or other securities, the fair value of the tangible fixed asset so acquired shall be its actual cost.

Improvements and Repairs

12. An Expenditure that increases the future benefits from the existing asset beyond its previously assessed standard of performance is added to the actual cost.

13. The cost of an addition or extension to an existing tangible fixed asset which is of a capital nature and which becomes an integral part of the existing tangible fixed asset is to be added to its actual cost. Any addition or extension, which has a separate identity and is capable of being used after the existing tangible fixed asset is disposed of, shall be treated as separate asset.

Valuation of Tangible Fixed Assets in Special Cases

14. Where a person owns tangible fixed assets jointly with others, the proportion in the actual cost, accumulated depreciation and written down value is grouped together with similar fully owned tangible fixed assets. Details of such jointly owned tangible fixed assets shall be indicated separately in the tangible fixed assets register.

15. Where several assets are purchased for a consolidated price, the consideration shall be apportioned to the various assets on a fair basis.

Transitional Provisions

16. The actual cost of tangible fixed assets, acquisition or construction of which commenced on or before the 31st day of March, 2015 but not completed by the said date, shall be recognised in accordance with the provisions of this standard. The amount of

actual cost, if any, recognised for the said assets for any previous year commencing on or before the 1st day of April, 2014 shall be taken into account for recognising actual cost of the said assets for the previous year commencing on the 1st day of April, 2015 and subsequent previous years.

Depreciation

17. Depreciation on a tangible fixed asset shall be computed in accordance with the provisions of the Act.

Transfers

18. Income arising on transfer of a tangible fixed asset shall be computed in accordance with the provisions of the Act.

Disclosures

19. Following disclosure shall be made in respect of tangible fixed assets, namely:-

(a) description of asset or block of assets;

(b) rate of depreciation;

(c) actual cost or written down value, as the case may be;

(d) additions or deductions during the year with dates; in the case of any addition of an asset, date put to use; including adjustments on account of-

(i) Central Value Added Tax credit claimed and allowed under the CENVAT Credit Rules, 2004;

(ii) change in rate of exchange of currency;

(iii) subsidy or grant or reimbursement, by whatever name called;

(e) depreciation Allowable; and

(f) written down value at the end of year.


F. Income Computation and Disclosure Standard VI relating to the effects of changes in foreign exchange rates

Preamble

This Income Computation and Disclosure Standard is applicable for computation of income chargeable under the head “Profits and gains of business or profession” or “Income from other sources” and not for the purpose of maintenance of books of accounts.

In the case of conflict between the provisions of the Income-tax Act, 1961 (‘the Act’) and this Income Computation and Disclosure Standard, the provisions of the Act shall prevail to that extent.

Scope

1. This Income Computation and Disclosure Standard deals with:

(a) treatment of transactions in foreign currencies;

(b) translating the financial statements of foreign operations;

(c) treatment of foreign currency transactions in the nature of forward exchange contracts.

Definitions

2. (1) The following terms are used in this Income Computation and Disclosure Standard with the meanings specified:

(a) “Average rate” is the mean of the exchange rates in force during a period.

(b) “Closing rate” is the exchange rate at the last day of the previous year.

(c) “Exchange difference” is the difference resulting from reporting the same number of units of a foreign currency in the reporting currency of a person at different exchange rates.

(d) “Exchange rate” is the ratio for exchange of two currencies.

(e) “Foreign currency” is a currency other than the reporting currency of a person.

(f) “Foreign operations of a person” is a branch, by whatever name called, of that person, the activities of which are based or conducted in a country other than India.

(g) “Foreign currency transaction” is a transaction which is denominated in or requires settlement in a foreign currency, including transactions arising when a person:-

(i) buys or sells goods or services whose price is denominated in a foreign currency; or

(ii) borrows or lends funds when the amounts payable or receivable are denominated in a foreign currency; or

(iii) becomes a party to an unperformed forward exchange contract; or

(iv) otherwise acquires or disposes of assets, or incurs or settles liabilities, denominated in a foreign currency.

(h) “Forward exchange contract” means an agreement to exchange different currencies at a forward rate, and includes a foreign currency option contract or another financial instrument of a similar nature;

(i) “Forward rate” is the specified exchange rate for exchange of two Currencies at a specified future date;

(j) “Indian currency” shall have the meaning as assigned to it in section 2 of the Foreign Exchange Management Act, 1999 (42 of 1999);

(k) “Integral foreign operation” is a foreign operation, the activities of which are an integral part of the operation of the person;

(l) “Monetary items” are money held and assets to be received or liabilities to be paid in fixed or determinable amounts of money. Cash, receivables, and payables are examples of monetary items;

(m) “Non-integral foreign operation” is a foreign operation that is not an integral foreign operation;

(n) “Non-monetary items” are assets and liabilities other than monetary items. Fixed assets, inventories, and investments in equity shares are examples of non-monetary items;

(o) “Reporting currency” means Indian currency except for foreign operations where it shall mean currency of the country where the operations are carried out.

(2) Words and expressions used and not defined in this Income Computation and Disclosure Standard but defined in the Act shall have the meaning assigned to them in the Act.

Foreign Currency Transactions

Initial Recognition

3(1) A foreign currency transaction shall be recorded, on initial recognition in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.

(2) An average rate for a week or a month that approximates the actual rate at the date of the transaction may be used for all transaction in each foreign currency occurring during that period. If the exchange rate fluctuates significantly, the actual rate at the date of the transaction shall be used.

Conversion at Last Date of Previous Year

4. At last day of each previous year:-

(a) foreign currency monetary items shall be converted into reporting currency by applying the closing rate;

(b) where the closing rate does not reflect with reasonable accuracy, the amount in reporting currency that is likely to be realised from or required to disburse, a foreign currency monetary item owing to restriction on remittances or the closing rate being unrealistic and it is not possible to effect an exchange of currencies at that rate, then the relevant monetary item shall be reported in the reporting currency at the amount which is likely to be realised from or required to disburse such item at the last date of the previous year; and

(c) non-monetary items in a foreign currency shall be converted into reporting currency by using the exchange rate at the date of the transaction.

Recognition of Exchange Differences

5. (i) In respect of monetary items, exchange differences arising on the settlement thereof or on conversion thereof at last day of the previous year shall be recognised as income or as expense in that previous year.

(ii) In respect of non-monetary items, exchange differences arising on conversion thereof at the last day of the previous year shall not be recognised as income or as expense in that previous year.

Exceptions to Paragraphs 3, 4 and 5

6. Notwithstanding anything contained in paragraph 3, 4 and 5; initial recognition, conversion and recognition of exchange difference shall be subject to provisions of section 43A of the Act or Rule 115 of Income-tax Rules, 1962, as the case may be.

Financial Statements of Foreign Operations

Classification of Foreign Operations

7. (1) The method used to translate the financial statements of a foreign operation depends on the way in which it is financed and operates in relation to a person. For this purpose, foreign operations are classified as either “integral foreign operations” or “non-integral foreign operations”.

(2) The following are indications that a foreign operation is a non-integral foreign operation rather than an integral foreign operation:-

(a) while the person may control the foreign operation, the activities of the foreign operation are carried out with a significant degree of autonomy from the activities of the person;

(b) transactions with the person are not a high proportion of the foreign operation’s activities;

(c) the activities of the foreign operation are financed mainly from its own operations or local borrowings;

(d) costs of labour, material and other components of the foreign operation’s products or services are primarily paid or settled in the local currency;

(e) the foreign operation’s sales are mainly in currencies other than Indian currency;

(f) cash flows of the person are insulated from the day-to-day activities of the foreign operation;

(g) sales prices for the foreign operation’s products or services are not primarily responsive on a short-term basis to changes in exchange rates but are determined more by local competition or local government regulation;

(h) there is an active local sales market for the foreign operation’s products or services, although there also might be significant amounts of exports.

Integral Foreign Operations

8. The financial statements of an integral foreign operation shall be translated using the principles and procedures in paragraphs 3 to 6 as if the transactions of the foreign operation had been those of the person himself.

Non-integral Foreign Operations

9. (1) In translating the financial statements of a non-integral foreign operation for a previous year, the person shall apply the following, namely:-

(a) the assets and liabilities, both monetary and non-monetary, of the non-integral foreign operation shall be translated at the closing rate;

(b) income and expense items of the non-integral foreign operation shall be translated at exchange rates at the dates of the transactions; and

(c) all resulting exchange differences shall be recognised as income or as expenses in that previous year.

(2) Notwithstanding anything stated in sub-paragraph 1, translation and recognition of exchange difference in cases referred to in section 43A of the Act or Rule 115 of Income-tax Rules, 1962 shall be carried out in accordance with the provisions contained in that section or that Rule, as the case may be.

Change in the Classification of a Foreign Operation

10(1) When there is a change in the classification of a foreign operation, the translation procedures applicable to the revised classification should be applied from the date of the change in the classification.

(2) The consistency principle requires that foreign operation once classified as integral or non-integral is continued to be so classified. However, a change in the way in which a foreign operation is financed and operates in relation to the person may lead to a change in the classification of that foreign operation.

Forward Exchange Contracts

11. (1) Any premium or discount arising at the inception of a forward exchange contract shall be amortised as expense or income over the life of the contract. Exchange differences on such a contract shall be recognised as income or as expense in the previous year in which the exchange rates change. Any profit or loss arising on cancellation or renewal shall be recognised as income or as expense for the previous year.

(2) The provisions of sub-para (1) shall apply provided that the contract:

(a) is not intended for trading or speculation purposes; and

(b) is entered into to establish the amount of the reporting currency required or available at the settlement date of the transaction.

(3) The provisions of sub-para (1) shall not apply to the contract that is entered into to hedge the foreign currency risk of a firm commitment or a highly probable forecast transaction. For this purpose, firm commitment, shall not include assets and liabilities existing at the end of the previous year.

(4) The premium or discount that arises on the contract is measured by the difference between the exchange rate at the date of the inception of the contract and the forward rate specified in the contract. Exchange difference on the contract is the difference between:

(a) the foreign currency amount of the contract translated at the exchange rate at the last day of the previous year, or the settlement date where the transaction is settled during the previous year; and

(b) the same foreign currency amount translated at the date of inception of the contract or the last day of the immediately preceding previous year, whichever is later.

(5) Premium, discount or exchange difference on contracts that are intended for trading or speculation purposes, or that are entered into to hedge the foreign currency risk of a firm commitment or a highly probable forecast transaction shall be recognised at the time of settlement.

Transitional Provisions

12. (1) All foreign currency transactions undertaken on or after 1st day of April, 2015 shall be recognised in accordance with the provisions of this standard.

(2) Exchange differences arising in respect of monetary items or non-monetary items, on the settlement thereof during the previous year commencing on the 1st day of April, 2015 or on conversion thereof at the last day of the previous year commencing on the 1st day of April, 2015, shall be recognised in accordance with the provisions of this standard after taking into account the amount recognised on the last day of the previous year ending on the 31st March,2015 for an item, if any, which is carried forward from said previous year.

(3) The financial statements of foreign operations for the previous year commencing on the 1st day of April, 2015 shall be translated using the principles and procedures specified in this standard after taking into account the amount recognised on the last day of the previous year ending on the 31st March, 2015 for an item, if any, which is carried forward from said previous year.

(4) All forward exchange contracts existing on the 1st day of April, 2015 or entered on or after 1st day of April, 2015 shall be dealt with in accordance with the provisions of this standard after taking into account the income or expenses, if any, recognised in respect of said contracts for the previous year ending on or before the 31st March, 2015.


G. Income Computation and Disclosure Standard VII relating to government grants

Preamble

This Income Computation and Disclosure Standard is applicable for computation of income chargeable under the head “Profits and gains of business or profession” or “Income from other sources” and not for the purpose of maintenance of books of account.

In case of conflict between the provisions of the Income Tax Act, 1961 (‘the Act’) and this Income Computation and Disclosure Standard, the provisions of the Act shall prevail to that extent.

Scope

1. This Income Computation and Disclosure Standard deals with the treatment of Government grants. The Government grants are sometimes called by other names such as subsidies, cash incentives, duty drawbacks, waiver, concessions, reimbursements, etc.

2. This Income Computation and Disclosure Standard does not deal with:-

(a) Government assistance other than in the form of Government grants; and

(b) Government participation in the ownership of the enterprise.

Definitions

3(1) The following terms are used in the Income Computation and Disclosure Standard with the meanings specified:

(a) “Government” refers to the Central Government, State Governments, agencies and similar bodies, whether local, national or international.

(b) “Government grants” are assistance by Government in cash or kind to a person for past or future compliance with certain conditions. They exclude those forms of Government assistance which cannot have a value placed upon them and the transactions with Government which cannot be distinguished from the normal trading transactions of the person.

3(2) Words and expressions used and not defined in this Income Computation and Disclosure Standard but defined in the Act shall have the meaning assigned to them in the Act.

Recognition of Government Grants

4(1) Government grants should not be recognised until there is reasonable assurance that (i) the person shall comply with the conditions attached to them, and (ii) the grants shall be received.

4(2) Recognition of Government grant shall not be postponed beyond the date of actual receipt.

Treatment of Government Grants

5. Where the Government grant relates to a depreciable fixed asset or assets of a person, the grant shall be deducted from the actual cost of the asset or assets concerned or from the written down value of block of assets to which concerned asset or assets belonged to.

6. Where the Government grant relates to a non-depreciable asset or assets of a person requiring fulfillment of certain obligations, the grant shall be recognised as income over the same period over which the cost of meeting such obligations is charged to income.

7. Where the Government grant is of such a nature that it cannot be directly relatable to the asset acquired, so much of the amount which bears to the total Government grant, the same proportion as such asset bears to all the assets in respect of or with reference to which the Government grant is so received, shall be deducted from the actual cost of the asset or shall be reduced from the written down value of block of assets to which the asset or assets belonged to.

8. The Government grant that is receivable as compensation for expenses or losses incurred in a previous financial year or for the purpose of giving immediate financial support to the person with no further related costs, shall be recognised as income of the period in which it is receivable.

9. The Government grants other than covered by paragraph 5, 6, 7, and 8 shall be recognised as income over the periods necessary to match them with the related costs which they are intended to compensate.

10. The Government grants in the form of non-monetary assets, given at a concessional rate, shall be accounted for on the basis of their acquisition cost.

Refund of Government Grants

11. The amount refundable in respect of a Government grant referred to in paragraphs 6, 8 and 9 shall be applied first against any unamortised deferred credit remaining in respect of the Government grant. To the extent that the amount refundable exceeds any such deferred credit, or where no deferred credit exists, the amount shall be charged to profit and loss statement.

12. The amount refundable in respect of a Government grant related to a depreciable fixed asset or assets shall be recorded by increasing the actual cost or written down value of block of assets by the amount refundable. Where the actual cost of the asset is increased, depreciation on the revised actual cost or written down value shall be provided prospectively at the prescribed rate.

Transitional Provisions

13. All the Government grants which meet the recognition criteria of para 4 on or after 1st day of April, 2015 shall be recognised for the previous year commencing on or after 1st day of April, 2015 in accordance with the provisions of this standard after taking into account the amount, if any, of the said Government grant recognised for any previous year ending on or before 31st day of March, 2015.

Disclosures

14. Following disclosure shall be made in respect of Government grants, namely:-

(a) nature and extent of Government grants recognised during the previous year by way of deduction from the actual cost of the asset or assets or from the written down value of block of assets during the previous year;

(b) nature and extent of Government grants recognised during the previous year as income;

(c) nature and extent of Government grants not recognised during the previous year by way of deduction from the actual cost of the asset or assets or from the written down value of block of assets and reasons thereof; and

(d) nature and extent of Government grants not recognised during the previous year as income and reasons thereof.


H. Income Computation and Disclosure Standard VIII relating to securities

Preamble

This Income Computation and Disclosure Standard is applicable for computation of income chargeable under the head “Profits and gains of business or profession” or “Income from other sources” and not for the purpose of maintenance of books of account.

In the case of conflict between the provisions of the Income-tax Act, 1961 (‘the Act’) and this Income Computation and Disclosure Standard, the provisions of the Act shall prevail to that extent.

Scope

1. This Income Computation and Disclosure Standard deals with securities held as stock-in-trade.

2. This Income Computation and Disclosure Standard does not deal with:

(a) the bases for recognition of interest and dividends on securities which are covered by the Income Computation and Disclosure Standard on revenue recognition;

(b) securities held by a person engaged in the business of insurance;

(c) securities held by mutual funds, venture capital funds, banks and public financial institutions formed under a Central or a State Act or so declared under the Companies Act, 1956 (1 of 1956) or the Companies Act, 2013 (18 of 2013).

Definitions

3(1) The following terms are used in this Income Computation and Disclosure Standard with the meanings specified:

(a) “Fair value” is the amount for which an asset could be exchanged between a knowledgeable, willing buyer and a knowledgeable, willing seller in an arm’s length transaction.

(b) “Securities” shall have the meaning assigned to it in clause (h) of Section 2 of the Securities Contract (Regulation) Act, 1956 (42 of 1956), other than Derivatives referred to in sub-clause (1a) of that clause.

3(2) Words and expressions used and not defined in this Income Computation and Disclosure Standard but defined in the Act shall have the meaning respectively assigned to them in the Act.

Recognition and Initial Measurement of Securities

4. A security on acquisition shall be recognised at actual cost.

5. The actual cost of a security shall comprise of its purchase price and include acquisition charges such as brokerage, fees, tax, duty or cess.

6. Where a security is acquired in exchange for other securities, the fair value of the security so acquired shall be its actual cost.

7. Where a security is acquired in exchange for another asset, the fair value of the security so acquired shall be its actual cost.

8. Where unpaid interest has accrued before the acquisition of an interest-bearing security and is included in the price paid for the security, the subsequent receipt of interest is allocated between pre-acquisition and post-acquisition periods; the pre-acquisition portion of the interest is deducted from the actual cost.

Subsequent Measurement of Securities

9. At the end of any previous year, securities held as stock-in-trade shall be valued at actual cost initially recognised or net realisable value at the end of that previous year, whichever is lower.

10. For the purpose of para 9, the comparison of actual cost initially recognised and net realisable value shall be done categorywise and not for each individual security. For this purpose, securities shall be classified into the following categories, namely:-

(a) shares;

(b) debt securities;

(c) convertible securities; and

(d) any other securities not covered above.

11. The value of securities held as stock-in-trade of a business as on the beginning of the previous year shall be:

(a) the cost of securities available, if any, on the day of the commencement of the business when the business has commenced during the previous year; and

(b) the value of the securities of the business as on the close of the immediately preceding previous year, in any other case.

12. Notwithstanding anything contained in para 9, 10 and 11, at the end of any previous year, securities not listed on a recognised stock exchange; or listed but not quoted on a recognised stock exchange with regularity from time to time, shall be valued at actual cost initially recognised.

13. For the purposes of para 9, 10 and 11 where the actual cost initially recognised cannot be ascertained by reference to specific identification, the cost of such security shall be determined on the basis of first-in-first-out method.


I. Income Computation and Disclosure Standard IX relating to borrowing costs

Preamble

This Income Computation and Disclosure Standard is applicable for computation of income chargeable under the head “Profits and gains of business or profession” or “Income from other sources” and not for the purpose of maintenance of books of account.

In the case of conflict between the provisions of the Income-tax Act, 1961 (‘the Act’) and this Income Computation and Disclosure Standard, the provisions of the Act shall prevail to that extent.

Scope

1. (1) This Income Computation and Disclosure Standard deals with treatment of borrowing costs.

(2) This Income Computation and Disclosure Standard does not deal with the actual or imputed cost of owners’ equity and preference share capital.

Definitions

2. (1) The following terms are used in this Income Computation and Disclosure Standard with the meanings specified:

(a) “Borrowing costs” are interest and other costs incurred by a person in connection with the borrowing of funds and include:

(i) commitment charges on borrowings;

(ii) amortised amount of discounts or premiums relating to borrowings;

(iii) amortised amount of ancillary costs incurred in connection with the arrangement of borrowings;

(iv) finance charges in respect of assets acquired under finance leases or under other similar arrangements.

(b) “Qualifying asset” means:

(i) land, building, machinery, plant or furniture, being tangible assets;

(ii) know-how, patents, copyrights, trade marks, licences, franchises or any other business or commercial rights of similar nature, being intangible assets;

(iii) inventories that require a period of twelve months or more to bring them to a saleable condition.

(2) Words and expressions used and not defined in this Income Computation and Disclosure Standard but defined in the Act shall have the meaning assigned to them in the Act.

Recognition

3. Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset shall be capitalised as part of the cost of that asset. The amount of borrowing costs eligible for capitalisation shall be determined in accordance with this Income Computation and Disclosure Standard. Other borrowing costs shall be recognised in accordance with the provisions of the Act.

4. For the purposes of this Income Computation and Disclosure Standard, “capitalisation” in the context of inventory referred to in item (iii) of clause (b) of sub-paragraph (1) of paragraph 2means addition of borrowing cost to the cost of inventory.

Borrowing Costs Eligible for Capitalisation

5. To the extent the funds are borrowed specifically for the purposes of acquisition, construction or production of a qualifying asset, the amount of borrowing costs to be capitalised on that asset shall be the actual borrowing costs incurred during the period on the funds so borrowed.

6. To the extent the funds are borrowed generally and utilised for the purposes of acquisition, construction or production of a qualifying asset, the amount of borrowing costs to be capitalised shall be computed in accordance with the following formula namely :-

A x = B / C

Where

A = borrowing costs incurred during the previous year except on borrowings directly relatable to specific purposes;
B = (i) the average of costs of qualifying asset as appearing in the balance sheet of a person on the first day and the last day of the previous year;(ii) in case the qualifying asset does not appear in the balance sheet of a person on the first day or both on the first day and the last day of previous year, half of the cost of qualifying asset;

(iii) in case the qualifying asset does not appear in the balance sheet of a person on the last day of previous year, the average of the costs of qualifying asset as appearing in the balance sheet of a person on the first day of the previous year and on the date of put to use or completion, as the case may be ,

other than those qualifying assets which are directly funded out of specific borrowings; or

C = the average of the amount of total assets as appearing in the balance sheet of a person on the first day and the last day of the previous year, other than those assets which are directly funded out of specific borrowings;

Commencement of Capitalisation

7. The capitalisation of borrowing costs shall commence:

(a) in a case referred to in paragraph 5, from the date on which funds were borrowed;

(b) in a case referred to in paragraph 6, from the date on which funds were utilised.

Cessation of Capitalisation

8. Capitalisation of borrowing costs shall cease:

(a) in case of a qualifying asset referred to in item (i) and (ii) of clause (b) of sub-paragraph (1) of paragraph 2, when such asset is first put to use;

(b) in case of inventory referred to in item (iii) of clause (b) of sub-paragraph (1) of paragraph 2, when substantially all the activities necessary to prepare such inventory for its intended sale are complete.

9. When the construction of a qualifying asset is completed in parts and a completed part is capable of being used while construction continues for the other parts, capitalisation of borrowing costs in relation to a part shall cease:-

(a) in case of part of a qualifying asset referred to in item (i) and (ii) of clause (b) of sub-paragraph (1) of paragraph 2, when such part of a qualifying asset is first put to use;

(b) in case of part of inventory referred to in item (iii) of clause (b) of sub-paragraph (1) of paragraph 2, when substantially all the activities necessary to prepare such part of inventory for its intended sale are complete.

Transitional Provisions

10. All the borrowing costs incurred on or after 1st day of April, 2015 shall be capitalised for the previous year commencing on or after 1st day of April, 2015 in accordance with the provisions of this standard after taking into account the amount of borrowing costs capitalised, if any, for the same borrowing for any previous year ending on or before 31st day of March, 2015.

Disclosure

11. The following disclosure shall be made in respect of borrowing costs, namely:-

(a) the accounting policy adopted for borrowing costs; and

(b) the amount of borrowing costs capitalised during the previous year.


J. Income Computation and Disclosure Standard X relating to provisions, contingent liabilities and contingent assets

Preamble

This Income Computation and Disclosure Standard is applicable for computation of income chargeable under the head “Profits and gains of business or profession” or “Income from other sources” and not for the purpose of maintenance of books of accounts.

In the case of conflict between the provisions of the Income-tax Act, 1961 (‘the Act’) and this Income Computation and Disclosure Standard, the provisions of the Act shall prevail to that extent.

Scope

1. This Income Computation and Disclosure Standard deals with provisions, contingent liabilities and contingent assets, except those:

(a) resulting from financial instruments;

(b) resulting from executory contracts;

(c) arising in insurance business from contracts with policyholders; and

(d) covered by another Income Computation and Disclosure Standard.

2. This Income Computation and Disclosure Standard does not deal with the recognition of revenue which is dealt with by Income Computation and Disclosure Standard – Revenue Recognition.

3. The term ‘provision’ is also used in the context of items such as depreciation, impairment of assets and doubtful debts which are adjustments to the carrying amounts of assets and are not addressed in this Income Computation and Disclosure Standard.

Definitions

4(1) The following terms are used in this Income Computation and Disclosure Standard with the meanings specified:

(a) “Provision” is a liability which can be measured only by using a substantial degree of estimation.

(b) “Liability” is a present obligation of the person arising from past events, the settlement of which is expected to result in an outflow from the person of resources embodying economic benefits.

(c) “Obligating event” is an event that creates an obligation that results in a person having no realistic alternative to settling that obligation.

(d) “Contingent liability” is:

(i) a possible obligation that arises from past events and the existence of which will be confirmed only by the occurrence or nonoccurrence of one or more uncertain future events not wholly within the control of the person; or

(ii) a present obligation that arises from past events but is not recognised because:

(A) it is not reasonably certain that an outflow of resources embodying economic benefits will be required to settle the obligation; or

(B) a reliable estimate of the amount of the obligation cannot be made.

(e) “Contingent asset” is a possible asset that arises from past events the existence of which will be confirmed only by the occurrence or nonoccurrence of one or more uncertain future events not wholly within the control of the person.

(f) “Executory contracts” are contracts under which neither party has performed any of its obligations or both parties have partially performed their obligations to an equal extent.

(g) “Present obligation” is an obligation if, based on the evidence available, its existence at the end of the previous year is considered reasonably certain.

4(2) Words and expressions used and not defined in this Income Computation and Disclosure Standard but defined in the Act shall have the meaning respectively assigned to them in the Act.

Recognition

Provisions

5. A provision shall be recognised when:

(a) a person has a present obligation as a result of a past event;

(b) it is reasonably certain that an outflow of resources embodying economic benefits will be required to settle the obligation; and

(c) a reliable estimate can be made of the amount of the obligation.

If these conditions are not met, no provision shall be recognised.

6. No provision shall be recognised for costs that need to be incurred to operate in the future.

7. It is only those obligations arising from past events existing independently of a person’s future actions, that is the future conduct of its business, that are recognised as provisions

8. Where details of a proposed new law have yet to be finalised, an obligation arises only when the legislation is enacted.

Contingent Liabilities

9. A person shall not recognise a contingent liability.

Contingent Assets

10. A person shall not recognise a contingent asset.

11. Contingent assets are assessed continually and when it becomes reasonably certain that inflow of economic benefit will arise, the asset and related income are recognised in the previous year in which the change occurs.

Measurement

Best Estimate

12. The amount recognised as a provision shall be the best estimate of the expenditure required to settle the present obligation at the end of the previous year. The amount of a provision shall not be discounted to its present value.

13. The amount recognised as asset and related income shall be the best estimate of the value of economic benefit arising at the end of the previous year. The amount and related income shall not be discounted to its present value.

Reimbursements

14. Where some or all of the expenditure required to settle a provision is expected to be reimbursed by another party, the reimbursement shall be recognised when it is reasonably certain that reimbursement will be received if the person settles the obligation. The amount recognised for the reimbursement shall not exceed the amount of the provision.

15. Where a person is not liable for payment of costs in case the third party fails to pay, no provision shall be made for those costs.

16. An obligation, for which a person is jointly and severally liable, is a contingent liability to the extent that it is expected that the obligation will be settled by the other parties.

Review

17. Provisions shall be reviewed at the end of each previous year and adjusted to reflect the current best estimate. If it is no longer reasonably certain that an outflow of resources embodying economic benefits will be required to settle the obligation, the provision should be reversed.

18. An asset and related income recognised as provided in para 11 shall be reviewed at the end of each previous year and adjusted to reflect the current best estimate. If it is no longer reasonably certain that an inflow of economic benefits will arise, the asset and related income shall be reversed.

Use of Provisions

19. A provision shall be used only for expenditures for which the provision was originally recognised.

Transitional Provisions

20. All the provisions or assets and related income shall be recognised for the previous year commencing on or after 1st day of April, 2015 in accordance with the provisions of this standard after taking into account the amount recognised, if any, for the same for any previous year ending on or before 31st day of March, 2015.

Disclosure

21(1) Following disclosure shall be made in respect of each class of provision, namely:-

(a) a brief description of the nature of the obligation;

(b) the carrying amount at the beginning and end of the previous year;

(c) additional provisions made during the previous year, including increases to existing provisions;

(d) amounts used, that is incurred and charged against the provision, during the previous year;

(e) unused amounts reversed during the previous year; and

(f) the amount of any expected reimbursement, stating the amount of any asset that has been recognised for that expected reimbursement.

21(2) Following disclosure shall be made in respect of each class of asset and related income recognised as provided in para 11, namely:-

(a) a brief description of the nature of the asset and related income;

(b) the carrying amount of asset at the beginning and end of the previous year;

(c) additional amount of asset and related income recognised during the year, including increases to assets and related income already recognised; and

(d) amount of asset and related income reversed during the previous year.

[F. No. 134/48/2010-TPL]

 (RAJESH KUMAR BHOOT)

DIRECTOR (TAX POLICY AND LEGISLATION)

D.O. No. 48/3/2015/ASK/P-VI/DOMS /I844 dated 31-03-2015


Setting up of Aayakar Sewa Kendras during the Financial Year 2015-16- Regarding providing taxpayer services – Order-Instruction – Dated 31-3-2015 – Income Tax

DIRECTOR GENERAL OF INCOME TAX (LOGISTICS)

Central Board of Direct Taxes

Department of Revenue, Ministry of Finance

Government of India

A.R.A. Centre, Ground Floor, E-2,

Jhandewalan Extension, New Delhi-110055

Tel.: 011-23537002 Fax : 011-23593267

E-mail : dgit.log@gmail.com

D.O. No.  48/3/2015/ASK/P-VI/DOMS /I844

Dated: 31-03-2015

To

All Pr. CCIT(CCA) Dear

Subject : Providing taxpayer services i.e. setting up of Aayakar Sewa Kendras during the Financial Year 2015-16- regarding.

Your reference is invited to the fact that the Directorate of Income Tax (O & MS) is the nodal agency for setting up of Aayakar Sewa Kendras (ASKs) all over the country. Last year, we had a target of setting up 60 ASKs. It was felt by us that before identifying a particular location for setting up of a new ASK, the concerned CCIT should be consulted to avoid any communication gap at a later stage.

2.  The locations for setting up all the ASKs in the last year were identified and recommended by the concerned CCIT (CCA) / CCIT, as a result of which the process of setting up of the ASKs could be carried out smoothly. On the same lines as last year, you are requested to kindly use your good offices to participate in the exercise to identify locations for setting up Aayakar Sewa Kendra in this year also.

3.  A number of yardsticks have been identified by the CBDT for setting up a new Aayakar Sewa Kendra. A copy of these yardsticks is enclosed as Annexure-A.  Another important factor which needs to be taken into account while setting up an Aayakar Sewa Kendra is that the building should preferably be owned by the Government. In case no such buildings are available, a building which has been taken on rent by the Income Tax Department and which is not likely to be vacated soon, may also be considered.

4.  You are kindly requested to kindly coordinate amongst the CCsIT in your region and recommend 5 buildings in your region for setting up of the new Aayakar Sewa Kendra during the Financial Year 2015-16. Priority may kindly be given to buildings where CIT is the senior most officer and it may kindly be seen that no such building is left out unless there is any compelling reason.

5.  The primary requirements for setting up an ASK is the Sevottam node and the appropriate budget. The number of nodes required to setup an ASK is based on the workload in that location. The procedure to determine the same is explained in the annexure appended to this letter.  Therefore, once the buildings are identified at your end, you are requested to kindly determine the requirement of nodes for each of the buildings identified. It may however be kindly noted that for single ITO stations, only 1 node shall be applicable.

6.  Once you have identified the requirement of nodes, you are also requested to submit your required budget for each of the ASKs recommended by you. As far as the budget is concerned, depending upon the number of nodes and going by the pattern of expenditure in the previous years, the budget for setting up an ASK is also mentioned in the annexure. It is seen that ASKs have already been setup in most of the big locations and the ASKs being setup now are mostly with 3 nodes.  The  budget estimates enclosed are therefore based on ASKs with a maximum of 5 nodes since it is unlikely to be exceeded.

7.   Kindly appreciate that setting up of ASK is a time bound exercise and funds are to be disbursed at the earliest for its timely completion. I shall be grateful if you kindly send your list of 5 Aayakar Sewa Kendras proposed to be set up during the Financial Year 2015 -16 latest by 15-04-2015 alongwith the requirement of nodes and budget in respect of each recommended building.

With Yours

(K. C Jain)

Encl: As above

Annexure-A

YARDSTICKS & BUDGET FOR SELECTION OF ASK LOCATIONS

1. Ask Locations should preferably be in Govt. Owned buildings. However, in charges, where no govt. owned building is available for setting up of ASK, rented building which is for a longer period of time may be identified.

2. ASK should preferably be set-up on Ground Floor and in the front side of the office building. However, this yardstick is flexible depending on the requirement.

3. The requirement of space for ASK is determined on the basis of requirement of nodes for ASK based on workload of receipt of DAK and receipt of paper returns in that building. Broad basis for working out requirement of nodes/space is enclosed.

4. In single ITO stations, there is no need to set-up ASK Prototype. However, ASK may be made functional at these locations with a single node for monitoring of services given in the Citizen’s Charter.

5. For technical feasibility, the location for ASK should preferably be within 100 meters distance from the server/communication room

6. A Local Implementation Committee (with concerned CIT/Addl.CIT as Nodal Officer) may be set-up to identify space, to initiate all work relating to setting up of ASK and also monitoring the functioning of ASK.

7. The budget for setting up ASK with upto 5 nodes is also enclosed.

Basis of determining number of nodes/Requirement of space/Budget at ASK Centres

1. The requirement of number of nodes at ASK centers is equal to the number of Front Desks plus the number of Back Desks. In addition one node is also required for the person manning Enquiry counter. Hence, it is important to work out the requirement of Front Desks and Back Desks at ASK Centres which would ultimately be the requirement of nodes. The basis of working out requirements for Front Desk and Back Desk are given below:-

Requirement of Front Desk for Receipt of Dak/ Return of Income

a) There are approximately 200 working days in a year.

b) One person manning Front Desk can receive 200 Dak OR Returns of income

in a day which works out to 40,000/- Dak OR return per Front Desk per year.

c) The work for Front Desk is not scattered evenly. Sometimes during the day there is a great rush and some times there are only few persons availing services at ASK. In view of this, for initial block of 20,000/- returns or dak, one Front Desk is absolutely necessary. For next three block of 30,000, 40,000 and 50,000 one Front Desk for each of the block is required. These three blocks average full utilization of time for Front Desks.

Requirement of Back Desks for Receipt of Returns:

As for requirement of Back Desk is concerned, the basis for working out this requirement is different for Returns of Income and Dak As per Process Document, for receipt of returns, back desk has not much work except to generate RDR to distribute Returns of Income to the respective assessing officers. Hence for functional necessity only one Back Desk is sufficient irrespective of the workload of receipt of returns at ASK Centre.

Requirement of Back Desks for Receipt of Dak:

As per Process Document, Back Desk has to make some entries for the dak which is passed on to him by the Front Desk before the same is distributed to the respective AOs/Sections. As and when the workload of receipt of dak with Front dak increase, it has a bearing on Back Desk. Hence for initial block of upto 50,000 Dak, requirement of one Back Desk is a functional necessity. For next two block of 40,000 and 50,000, one Back Desk for each of the block is required. After that for every block of 30,000, 40,000 and 50,000, one additional Back Desk is required. It is pertinent to mention here that the Back Desk is also responsible to handle dak received through post/courier/drop box for which he has to carry out both the functions i.e. functions of FD as well as functions of BD, as this dak is not routed through the Front Desk, required to make all entries in the system.

2. The workload for ASK for Receipt of Returns of Income/Dak is determined on the following basis:

Workload for Receipt of Returns:

It has been the experience of the Department that 60 per cent of the Paper Returns of Income are received in the months of March/July. The balance 40% returns of income are received in rest of the year. In any case to cater to the rush period of March/July, the department is already making alternative arrangements which would still continue. Hence the effective workload for receipt of paper returns for ASK centres remains only 40 per cent of the total returns received by all the assessing officers housed in the building where ASK is made functional.

Workload for Receipt of Dak

Unlike returns of income, there is no rush period identified for dak. Hence the total dak received by all the assessing officers/other officers housed in the building where ASK is functional is the effective workload.

3. On the above basis, following ready reckoner is prepared for working out requirement of nodes:

Requirement of Nodes for Receipt of Returns of Income

Effective Workload

Requirement of Nodes

FD

BD

Up to 20,000 returns

1

1

Next 30,000 returns i.e. 50,000

2

1

Next 40,000 returns i.e. 90,000

3

1

Next 50,000 returns i.e. 1,40,000

4

1

Next 30,000 returns i.e. 1,70,000

5

1

Next 40,000 returns i.e. 2,10,000

6

1

Next 50,000 returns I.e. 2,60,000

7

1

And so on

Requirement of Nodes for Receipt of Daks

Effective Workload

Requirement of Nodes

FD BD
Up to 20,000 Dak 1 1
Next 30,000 dak i.e. 50,000 2 1
Next 40,000 dak i.e. 90,000 3 2
Next 50,000 dak i.e. 1,40,000 4 3
Next 30,000 dak i.e. 1,70,000 5 4
Next 40,000 dak i.e. 2,10,000 6 5
Next 50,000 dak I.e. 2,60,000 7 6
And so on    

Apart from the above, one additional node is required at each ASK Centre for “May I Help You” Counter.

Requirement of approximate area required for ASK

Sl. No.

Number of Nodes worked out for ASK (including ‘May I Help You’ counter) Requirement of approximate space (in sq. ft)

1

Locations having 3 nodes 600

2

Locations having 4 nodes 700

3

Locations having 5 nodes 1000

4

Locations having 6 to 10 nodes 1400

5

Locations having 11 to 15 nodes 2000

6

Locations having 16 to 25 nodes 2800

Requirement of budget for ASK

Sl. No Number of nodes Required Cost of Setting up of ASK (in Rs. Lacs) Cost of nodes (in lacs) Total Budget (in lacs)
1 Locations having 3 nodes 22.84 0.69 23.53
2 Locations having 4 Nodes 27.32 0.92 28.24
3 Locations having 5 nodes 42.68 1.15 43.83
4 Single ITO Station 7 0.23 7.23

Notification No.File No 1/8/2013-CL-V dated 31-03-2015


Companies (Acceptance of Deposits) Amendment Rules, 2015 – File No 1/8/2013-CL-V – Dated 31-3-2015 – 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 31st March, 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) Amendment Rules, 2015.

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

2. In the Companies (Acceptance of Deposits) Rules, 2014,

(1) in rule 2, in sub-rule (1), in clause (c),

(a) in sub-clause (vii), in Explanation (a), the following proviso shall be inserted, namely:-

“Provided that unless otherwise required under the Companies Act, 1956 (1 of 1956) or the Securities and Exchange Board of India Act, 1992 (15 of 1992) or rules or regulations made thereunder to allot any share, stock, bond, or debenture within a specified period, if a company receives any amount by way of subscriptions to any shares, stock, bonds or debentures before the 1st  April, 2014 and disclosed in the balance sheet for the financial year ending on or before the 31stMarch, 2014 against which the allotment is pending on the 31st March, 2015, the company shall, by the 1st June 2015, either return such amounts to the persons from whom these were received or allot shares, stock, bonds or debentures or comply with these rules.”

(b) in sub-clause (xii), in item (b),

(A) for the words “consideration for property”, the words “consideration for an immovable property” shall be substituted;

(B) for the words “against the property”, the words “against such property” shall be substituted;

(c)  in sub-clause (xii), in the Explanation, for the words “referred to in the first proviso”, the words “referred to in the proviso” shall be substituted;

(2) in rule 3, after sub-rule (7), the following sub-rule shall be inserted, namely:-

“(8) Every eligible company shall obtain, at least once in a year, credit rating for deposits accepted by it in the manner specified herein below and a copy of the rating shall be sent to the Registrar of Companies alongwith the return of deposits in Form DPT-3;

Name of the agency Minimum investment Grade Rating
(a) The Credit Rating Information Services of India Ltd FA- (FA Minus)
(b) ICRA Ltd. MA- (MA Minus)
(c) Credit Analysis and Research Ltd. CARE BBB(FD)
(d) Fitch Ratings India Private Ltd. tA-(ind) (FD)
(e) Brickwork Ratings India Pvt Ltd. BWRFA
(f) SME Rating Agency of India Ltd. SMERA A”

(3) in rule 5, in sub-rule (1), for the proviso, the following proviso shall be substituted, namely:-

“Provided that the companies may accept deposits without deposit insurance contract till the 31st March, 2016 or till the availability of a deposit insurance product, whichever is earlier.”

(4) in Annexure, for Form “DPT-3″ the following form shall be substituted, namely:-

 

Form DPT-3

Return of deposits

[Pursuant to rule 16 of the Companies (Acceptance of Deposits) Rules, 2014]

1. (a) CIN:

(b) GLN:

2. (a) Name of the company:

(b) Registered office address:

(c) E-mail Id:

3. Whether the company is

Public company

Private company

4. Whether the company is a Government company:

YES

NO

5. Objects of the company:

6.  (a) Date of issue of advertisement or circular:

(b) Date of last closing of accounts:

(c) Date of expiry of validity of advertisement or circular:

7.  Net Worth as per the latest audited balance sheet preceding the date of the return-

(a)  (i) Paid up share capital

(ii) Free reserves

(b) (i) Accumulated loss

(ii) Balance of deferred revenue expenditure

(iii) Accumulated unprovided depreciation

(iv) Miscellaneous expense and preliminary expenses

(v) Other intangible assets

(c) Net worth (a-b)

(d) Maximum limit of deposits (i.e., 35% of the above in case of Government Company or 25% in case of others)

8. Particulars of deposits(to be furnished in respect of deposits from shareholders   and others separately)

(a) Amount of existing deposits as at 1st April

(b) Amount of deposits accepted or renewed during the year

(i) Secured deposits

(ii) Unsecured deposits

(c) Amount of deposits repaid during the year

(d) Balance of deposits outstanding at the end of the year (a+b-c)

9. Details of outstanding deposits:

Particulars Date of receipt of  deposit Rate of interest Repayable after…….
       

10.(a) Amount of deposits that have matured but not claimed:

(b) Amount of deposits that have matured and claimed but not paid:

11. Particulars of liquid assets

(a) Amount of deposits maturing before 31st  March next year and following next year:

(b) Amount required to be invested in liquid assets:

(c) Details of liquid assets-

 

Date of investment/ deposit

Amount

(a) Amount in current or other deposits account, free from charge or lien, with any scheduled bank

(b) Unencumbered securities of Central/State Government

Face value

Market value

(c) Unencumbered trust securities

Face value

Market value

12. Particulars of deposit insurance:

(a) Date of entering into deposit insurance contract

(b) Name of the insurer

(c) Premium payable

(d) Premium paid upto:

(e) Maximum ceiling limit for every depositor

13. Particulars of charge

(a) Date of entering into trust deed

(b) Name of the trustee

(c) Short particulars of the property on which charge is created for securing  depositors

(d) Value of the property

14.  Credit Rating obtained

From:___________

Rating:__________

Signature

Date:

Place:

Attachment:

1. Auditor’s certificate;

2. Deposit insurance contract;

3. Copy of trust deed;

4. Copy of instrument creating charge;

5. List of depositors indicating name, address,  amount deposited, repaid during the year and outstanding, interest due, paid and payable as at the close of the  Financial Year and separately indicating deposits not yet matured, matured, claimed and paid and matured, claimed but not paid and matured but not claimed for payment. List of deposits matured, cheques issued but not yet  cleared to be shown separately.

6. Copy of rating obtained.

7. Optional attachment, if any.

[File No 1/8/2013-CL-V]

Amardeep Singh Bhatia

Joint 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 number G.S.R. 256(E), dated the 31st March, 2014 and were subsequently amended vide number G.S.R. 386(E), dated the 6th June, 2014.

Notification No.F. No. 1/6/2014-CL-V dated 31-03-2015


Delegation of powers to RDs u/s 94(5) read with section 458 of CA, 2013 – F. No. 1/6/2014-CL-V – Dated 31-3-2015 – Companies Law

 [TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY,

PART II, SECTION 3, SUB SECTION (ii)]

MINISTRY OF CORPORATE AFFAIRS

NOTIFICATION

New Delhi, the 31st March, 2015

S.O.  (E).- In exercise of the powers conferred by section  458 of the Companies Act, 2013 (18 of 2013), the Central Government hereby delegates to the Regional Directors at Mumbai, Kolkata, Chennai, Noida, Ahmedabad, Hyderabad and Shillong, the powers and functions vested in it undersub-section (5) of section 94 of the Companies Act, 2013, subject to the condition that the Central Government may revoke such delegation of powers or may itself exercise the powers under the said sub-section, if in its opinion such a course of action is necessary in the public interest.

2. This notification shall come into force with effect from the date of its publication in the Official Gazette.

[F. No. 1/6/2014-CL-V]

AMARDEEP SINGH BHATIA

 Joint Secretary

89 dated 27-03-2015


RBI//2014-15/518

A.P. (DIR Series) Circular No.89

March 27, 2015

To

All Category – I Authorised Dealer Banks

Madam / Sir,

Exim Bank’s Line of Credit of USD 2.712 million to the Banco Exterior De Cuba

Export-Import Bank of India (Exim Bank) has entered into an Agreement dated September 2, 2014 with the Banco Exterior De Cuba, for making available to the latter, a Line of Credit (LOC) of USD 2.712 million (USD Two Million and Seven Hundred and Twelve Thousand) for financing the setting up of a bulk blending fertilizer plant in the Republic of Cuba. 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 per cent of the contract price shall be supplied by the seller from India and the remaining 25 percent goods and services may be procured by the seller for the purpose of eligible contract from outside India.

2. The Credit Agreement under the LOC is effective from February 27, 2015. Under the LOC, 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 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 towww.eximbankindia.in.

6. The Directions contained in this circular have been issued under sections 10(4) and 11(1) of theForeign 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. K. Pandey)

Chief General Manager

PM Narendra Modi asks CBDT not to harass taxpayers, address all grievances : 30-03-2015


The seemingly endless wait for getting your income tax refund could soon come to an end. Coming to the aid of taxpayers, Prime Minister Narendra Modi has expressed dissatisfaction with the Central Board of Direct Taxes for harassing taxpayers and has directed taxmen to addressall public grievances on a priority.

The issue is understood to have been taken up last week when the Prime Minister held a video-conferencing meeting with revenue secretary Shaktikanta Das and CBDT chairperson Anita Kapur.

“During the meeting, the PM expressed dissatisfaction about delays in responding to public grievances by our officers as well as the harassment meted out to the tax payers and officious behaviour of our officers,” Kapur said in a missive to principal chief commissioners and principal DGs of the CBDT.

“He (Prime Minister) was assured that redressal of all public grievances is one of our priority areas in the interim Central Action Plan for the first quarter of the financial year 2015-16,” she further said.

Accordingly, the income tax department has now worked out timelines for addressing all outstanding concerns of tax payers. It plans to resolve all public grievances pending for more than a year from March 31, 2015 by April 30 and those pending for more than 60 days by June 7.

With the PM expected to personally monitor the issue on a monthly basis, the CBDT may also conduct special drives to dispose of all pending grievances.

“Any breach of the timeline will be viewed seriously and accountability will be required to be fixed for such failure,” the CBDT chairperson has further warned.

The move comes at a time when the government is trying to create a tax friendly regime for investors while easing the compliance burden for individual taxpayers.

Source : PTI