Corporate Updates – 05-01-2016


DVAT Authoritiers have clarified the position relating to the registration of dealers who are using eCommerce platform. One of the notification prescribed that the return to be filed by the persons engaged in providing facility of electronic shopping (commonly known as e-cornmerce) through their web portals. These entities were required to provide details of dealers using these platforms for making sales. The department has been receiving a number of queries from the dealers engaged in eCommerce as to whether they are required to get themselves registered and file prescribed returns. A confusion also arose about dealers effecting sales of their own products through their own eportals/websites. It is hereby clarified that only the persons who are providing these e-portals/websites to other dealers for passing on the orders from customers to the dealers /other vendors are required to enrol and file the returns.


RBI has reviewed the existing guidelines, which permits banks in India to extend funded and/or non-funded credit facilities to step-down subsidiaries of the overseas subsidiaries of Indian companies that may not be wholly owned, subject to certain conditions. According to the new guidelines, Banks may extend funded and/or non-funded credit facilities to the step-down subsidiaries of Indian companies including to those beyond the first level, to finance the projects undertaken abroad. The immediate overseas subsidiary of the Indian company must be directly controlled by the Indian parent company through any of the modes of control recognised under the Indian Accounting Standards.1 In addition, the Indian parent company must directly hold a minimum 51% of its shareholding. Further, Banks shall make additional provision of 2% (in addition to country risk provision that is applicable to all overseas exposures) against standard assets representing all exposures to the step-down subsidiaries, to cover the additional risk arising from complexity in the structure, location of different intermediary entities in different jurisdictions exposing the Indian company, and hence the bank, to greater political and regulatory risk. The above modifications shall apply to the credit facilities sanctioned after the date of this circular and to existing facilities as and when they are renewed hereafter.

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