Corporate Updates – 20-05-2015

CBEC – SERVICE TAX:

The Hon’ble President has given assent to the Finance Bill, 2015 on Thursday, May 14, 2015. Accordingly, the Finance Bill, 2015 has now become Finance Act (No.20), 2015. Few of the changes in Service tax are effective from the date of notification i.e May 14, 2015 and few of the changes will become effective only from the date to be notified. In the regard Service Tax rate as increased from 12.36% to 14% (Subsuming EC and SHEC) shall be applicable from 1st June, 2015.

RBI:

RBI reviewed the instructions regarding opening and maintenance of FCNR (B) deposit and noticed that Authorised Dealer banks are insisting on different requirements at the time of closure of FCNR (B) deposits and subsequent remittance of funds. RBI 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.

Corporate Updates – 13-01-2015

MCA:

To get hold of the persons having multiple DIN’s, MCA has authorised, the following officers namely 1. Dr. Raj Singh, Joint Director, 2. Shri A.M,Singh, Joint Director, 3. Ms. P. Sheela, Joint Director, 4. Shri R.K.Tiwari, Joint Director & 5. Shri Ch. Jaganadh Reddy, Assistant Director in the office of Regional Director (Northern Region) at Noida for the purposes of filing complaint under Section 159 of the Companies Act, 2013 in respect of offences under Section 155 of the said Act. The provisions of Section 155 deals with prohibition to obtain or possess more than one DIN by any person and punishment for contravention are provided under Section 159 of the Act.

CBEC:

CBEC has notified the rules for Mandatory pre-deposit of duty or penalty for filing appeals effective 06-08-2014, further in order to maintain uniformity in the database being maintained, has suggested some additional columns in a separate register (e-register preferably) in the Review Cell of each Commissionerate. It has been further clarified that the amended provisions regarding filing of appeal along with stipulated percentage of pre-deposit shall apply to all appeals filed on or after 6th August, 2014 and mandatory pre-deposit would also be payable in cases of demand of drawback as the new section 129E would apply to such cases.

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Corporate Updates – 14-10-2014

RBI:

RBI has issued clarifications on usage of ATMs and number of free transactions provided by the banks. All banks were mandated not to charge any fees to their savings bank account customers for five ATM transactions (inclusive of both financial and non-financial) in a month carried out at other bank ATMs located in the 6 metro centres with a sub-limit of 3 transactions, if carried out at other bank ATMs located in six metro centres. However, Banks are free to offer more number of free transactions per month at other bank ATMs as well as own ATMs in any geographical location. Banks are also free to decide on the combination (for metro & non-metro locations) of free transactions while adhering to the minimum requirements.

CBEC:

CBEC has issued clarifications regarding powers of a Central Excise officer to conduct audit, in the background of a recent judgment of Hon’ble High Court of Delhi dated 04.08.2014 in case of M/s Travelite (India) wherein the Hon’ble court has held that the powers to conduct audit as envisaged in rule 5A (2) of the Service Tax Rules, 1994, does not have appropriate statutory backing and therefore quashed the rule. It has been clarified by the Department that Clause (x) of section 37(2) empowers the Central Government to make rules for verification of records and returns to check the correctness of levy and collection of duty and officers of Central Excise shall continue to conduct audit, as provided in the statute.

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Corporate Updates – 26-09-2014

RBI

RBI has notified the accreditation given to the SME Rating Agency of India Ltd (SMERA) as one of the approved credit rating agency for the purpose of rating Fixed Deposits of NBFCs. Accordingly, NBFCs may also use the ratings of SMERA for the purpose of rating their Fixed Deposits. The Minimum Investment Grade Rating for Fixed Deposits shall be “SMERA A”.

CBEC

CBEC has issued clarifications to the Amendments made by Finance Act, 2014 with respect to the Appeal provisions in Customs, Central Excise and Service Tax. New provisions prescribe mandatory pre-deposit as a percentage of the duty demanded where duty demanded is in dispute or where duty demanded and penalty levied are in dispute. Where penalty alone is in dispute, the pre-deposit shall be calculated on the penalty imposed. Through these clarification, circumstance relating to pre deposit of the amount and ground of rejection of appeal are now settled.

Corporate Updates – 28-08-2014

Department of Industrial Policy & Promotion:

The Government of India has reviewed the FDI policy with regard toFDI in Defence Sector and amended certain paragraphs of the consolidated FDI Policy Circular 2014. In the I & B sector where the sectoral cap is less then 49%, the company would need to owned and controlled by the resident Indian citizens and Indian Companies, which are owned and controlled by resident Indian citizens. Further the limits for FDI in Defence Industry subject to Industrial Licence under IDRA have been raised from 26% to 49% under Government Route and for above 49% approval of cabinet committee will be required.

CBEC:

The Central Government has issued Guidelines for considering request for exemption from payment of Customs Duty under Section 25(2) of Customs Act, 1962. The Central Government has provided exemptions from payment of duty of customs for import of specified goods for charitable purposes and for specified organizations engaged in relief & rehabilitation In view of the various requests received seeking grant of exemption from time to time and after due consideration to the existing general exemptions, the revised guidelines are issued for considering the pending and future requests for exemption under Section 25(2) of the Customs Act, 1962, in suppression of the previous guidelines.

Corporate Updates – 27-08-2014

SEBI:

The Central Government has amended the Securities (Regulation) Rules, 1957 which shall come into force on the date of their publication in the official gazette. In a move to maintain the uniformity among all the listed public sector companies, it is now mandated that every listed public sector company which has public shareholding below 25% on the date of commencement of, Securities (Regulation) (Second Amendment) Rules 2014, shall increase its public shareholding to atleast 25% within a period of 3 years in the manner as may be specified by SEBI.

CBEC

The Central Government has amended the CENVAT Credit Rules,2004, which shall be called as the Cenvat Credit (Seventh Amendment) Rules, 2014 and shall come into force on the date of their publication in the Official Gazette. In the CENVAT Credit Rules, 2004, in rule 12AAA, after the words “first stage and second stage dealer”, the words “provider of taxable service” shall be inserted.

Corporate Updates 15 July 2014

CBEC: 

CBEC has made amendments in Rule 7(d) of the Cenvat Credit Rules, 2004 with regard to the manner and extent of distribution of common input Service Credit. Rule 7 provides for the mechanism of distribution of common input service credit by the Input Service Distributor to its manufacturing units or to units providing output services. Rule 7 was amended to simplify the method of distribution. The amended rule 7(d) seeks to allow distribution of input service credit to all units in the ratio of their turnover of the previous year.

RBI: 

RBI has removed levy of foreclosure charges / pre – payment penalty on Floating Rate Loans on individual borrowers. As a measure of customer protection and also in order to bring in uniformity with regard to prepayment of various loans by borrowers of banks and NBFCs, it is advised that NBFCs shall not charge foreclosure charges/ pre-payment penalties on all floating rate term loans sanctioned to individual borrowers, with immediate effect.

Corporate Updates 22 March 2014

MCA:

The Ministry of Corporate Affairs has received Election Commission’s approval for notifying rules related to various sections of the new Companies Act, paving the way for its implementation from April 1, 2014. EC today conveyed that it has no objections to the ministry coming out with notifications related to the new Companies Act. With the Election Commission of India announcing the schedule for the Lok Sabha polls, the Model Code of Conduct came into force from March 5, consequently, the ministry sought the Commission’s nod for notifying the rules. Sources said that while rules for most parts of the legislation would be notified before April 1, those for National Company Law Tribunal (NCLT) and new institutions such as National Financial Reporting Authority (NFRA) and Investor Education and Protection Fund (IEPF) would be notified later.

CBEC:

CBEC under the provisions of the Section 67A of the Finance Act, 1994 read with explanation to Section 14 of the Customs Act, 1962, has notified the rate of exchange for calculation of gross value of taxable service tax would be the rate, for the conversion of foreign currency into Indian currency or vice versa, applicable on the date on which taxable service has been provided or agreed to be provided. The Notification has come containing the Rates of Exchange are applicable from March 21, 2014.

Corporate Updates 12 March 2014

Competition Act: 

CCI has recently decided that Intel had not restricted and limited market by foreclosing distribution network to its competitors or denied access to market of microprocessor to its competitors or imposed supplementary conditions or leveraged its dominant position in market of high demand products in market for low demand products, there was no abuse of dominance by Intel.

CBEC: 

The Central Board of Excise and Customs (CBEC) has denied the report that the Customs, Excise Duty and Service Tax refunds/drawbacks are being held-up by the Department. This was mentioned in a certain section of media attributing to a statement by President, Federation of India Export Organisations (FIEO) to the effect that Customs, Excise Duty and Service Tax refunds /drawbacks are being held-up by the Department. This is not correct as CBEC have refunded more amounts in 2013-14 as compared to the corresponding period in the previous year.

Corporate Updates 10 March 2014

CBEC: 

Partial reverse charge mechanism has been introduced w.e.f. July 1, 2012 wherein both service provider and service receiver are required to pay a specified portion of service tax liability in terms of Notification No.30/2012-ST dated June 20, 2012. The Central Board of Excise & Customs vide Notification has now provided the procedure for filling refund application by service provider, of unutilized Cenvat credit availed on inputs and input services received on and after July 1, 2012 for providing the specified services. For the full procedure, safeguards, conditions and limitations, please Click Here.

RBI:

RBI permits e-transfer of inward foreign remittances directly into beneficiaries accounts under Money Transfer Service Scheme – ‘Direct To Account’ Facility. To facilitate receipt of foreign inward remittances directly into bank account of the beneficiary, it has been decided to allow foreign inward remittances received under MTSS to be transferred to the KYC compliant beneficiary bank account through electronic mode, such as NEFT, IMPS etc. A detailed prescribed procedure is required to be followed for the said purpose. To download & view the notification , please Click Here.