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Part D : Miscellaneous
5 The Employees’ Provident Fund
Organisation has launched a facility for online verification of status of the
claim under the EPF. The facility can be availed at http://epfindia.nic.in/indiaepf%5Cloginnew.aspx
the user needs to select his State, the EPF office, Establishment Code,
Extension code, if any and then enter the employee number to ascertain the claim
status.
3 Income earned in foreign countries to be
included in the total income of the Resident in India — Notification No. 90/2008
and 91/2008, dated 28-8-2008.
The CBDT has notified that when the income earned by a
Resident Indian outside India, is taxed outside India as per the provisions of
Double Taxation Avoidance Agreements, such foreign income needs to be included
in the total income of the Resident in their return of income in India. Also,
relief would be granted as per the elimination of double taxation avoidance
provisions provided in the respective Agreements applicable to the assessee.
This provision equally applies to Indian associations as specified in S. 90A of
the Act also.
Part A : Direct Taxes
36 Form Saral II notified for assessees having income from
salary, income from house property (except those having brought forward loss or
more than one property) and income from other sources (except those having
income from lottery winnings or race horses) — Notification No. 34/2010, dated
19-5-2010.
Part D : COMPANY LAW
Changes relating to Company
Law for the period 15th July, 2010 to 15th August, 2010
106 Notification No. 531.
Legal : 710/(m) dated 23rd July, 2010
The Company Secretaries (Amendment)
Regulations, 2010 has substituted Regulations 6, 11, 13, 14, 98, 99, 114,115,
118, 150, 152, 154, 155 & 161; amendments have been made from Regulations 15-19,
101 & 117; Regulations 15A, 101A, 154A, 168A and 168B have been added;
Regulations 56 to 87W, 106 and 116 have been omitted.
Part D : COMPANY LAW
Changes relating to Company
Law for the period 15th July, 2010 to 15th August, 2010
105 New versions
New versions of Form 1, Form
1AA, Form 4, Form 4C, Form 15, Form 20A, Form 20B, Form 22, Form 22B, Form 23,
Form 23AA, Form 25C, Form 44, Form 49, Form 52, Form 61, Form DD-B, Form I- Cost
Audit Report and Form 67 are available on the portal — www.mca.gov.in —
effective 1st August, 2010.
Part D : COMPANY LAW
Changes relating to Company
Law for the period 15th July, 2010 to 15th August, 2010
104 Government amends public
shareholding requirement rules.
Government has issued a
Notification amending the Securities Contracts (Regulation) (Amendment) Rules,
2010 notified on 4th June 2010. This Notification allows public shareholding of
10% (as against 25% earlier) to public sector enterprises. It also provides more
flexibility to all companies in attaining the public shareholding levels.
Part B : INDIRECT TAXES
MVAT UPDATE
MVAT Notification
103 Notification No.
1510/CR-90/Taxation-1
Every registered dealer, liable to file
quarterly return, shall make payment electronically under the MVAT Act, 2002
w.e.f. 1st October, 2010.
Part B : INDIRECT TAXES
SERVICE TAX UPDATE
Notifications :
102 Clarification regarding
certain issues arising out of budgetary changes — D.O. Letter D.O.F. No.
334/03/2010-TRU, dated 1-7-2010.
By this letter the Research
Unit, Department of Revenue under the Ministry of Finance has issued the
following clarifications to resolve certain issues arising out of budgetary
changes :
(1) The Finance Act, 2010
has added eight new services to the list of taxable services and modified
scope of nine existing services. These changes become effective from 1-7-2010
being the appointed date notified by Notification No. 24/2010-Service Tax,
dated 22nd June 2010. It has been decided to specifically exempt service tax
on the partial or full amount of consideration received by the service
provider before the appointed date which pertains to services provided after
the appointed date.(2) In case of domestic
air journey, service tax will be leviable @ 10% of the gross value of the
ticket or Rs.100 per journey, whichever is less. In case of international air
journey undertaken in economy class, service tax will be leviable @ 10% of the
gross value of the ticket or Rs.500 per journey, whichever is less. The
aforesaid rates are subject to non-availment of CENVAT credit. And for the
purpose of gross value of the ticket, all the charges except statutory levies
shall be considered.(3) It is clarified that
when ticket covers more than one domestic journey/flight/sector (say,
Mumbai-Delhi-Mumbai) or in case of
round-trip journey ticket, tax would be separately chargeable for each
journey/flight/sector since the taxability is on embarkation in India for
domestic journey.(4) Tickets involving
multiple journies/flights with one of the sectors involving embarkation or
disembarkation at North-Eastern States/Bagdogra, the journey/flight that
involves embarkation or disembarkation at North-Eastern States/Bagdogra would
alone be covered under exemption from service tax under Notification No.
27/2010-ST, dated 22nd June, 2010.(5) The scheme of tax on
passengers embarking in India for an international journey in higher class
remains unchanged.(6) In respect
of aircraft operations services, the airlines or the agent may not issue a
separate invoice to the passenger, but the ticket in any form showing
specified particulars would be deemed to be the invoice/bill/challan for the
purpose of Rule 4A of the Service Tax Rules, 1994.(7) With intent to ease
the classification disputes, the definitions of port, other port and airport
services were amended to comprehensively cover under their ambit, all services
provided within an airport, or a port or other port whether or not they are
otherwise classifiable as distinct taxable services. But some apprehensions
have been raised that these changes may have certain unintended effects with
reference to exemptions, abatements, etc. To address these issues, various
measures as enlisted at (a) to (g) in this letter have been taken by way of
promulgating post-budget Notifications.(8) The definition of
existing taxable service, namely, ‘Sponsorship Service’ is amended to remove
exclusion available for sponsorship pertaining to sports events organised by
private organisations or business entities. However, exemption is provided for
sponsorship service with reference to certain sports championships or
tournaments, such as national tournament.(9) The Finance Act, 2010
has, in respect of commercial & residential complex construction services,
inter alia introduced concept ‘completion certificate’ to be issued by
‘competent authority’. As the practice regarding issuance of completion
certificates varies from State to State, the scope of the phrase ‘competent
authority’ to issue completion certificate has been widened by including
therein architect, chartered engineer and local licensed surveyor.(10) Abatement of 75% of
the gross value of construction of industrial or commercial complex or
residential complex is available where the gross value includes cost of land
and 67% of the gross value where the gross value does not include cost of the
land.(11) Two flagship schemes
of the Government of India, namely, Jawaharlal Nehru National Urban Renewal
Mission (JNNURM) and Rajiv Awaas Yojana are kept outside the ambit of the
service tax under construction of residential complex service.(12) Service tax on
transport of goods by railways though leviable is not yet operational and this
levy will now take effect from 1st January, 2011.(13) Taxable services
provided by distribution licensee or a distribution franchisee authorised to
distribute power under the Electricity Act, 2003 for distribution of
electricity is exempt from levy of service tax.
Part B : INDIRECT TAXES
SERVICE TAX UPDATE
15 Classification of New
Services notified through Finance Act, 2010 under Export of Services Rules, 2005
— Circular No. 129/11/2010-ST, dated 21-9-2010.
To resolve the doubts raised
by the service tax payers regarding classification of new services introduced by
the Finance Act, 2010, the CBEC has clarified that all the new services shall
fall in category 3(iii) of the Export of Services Rules, 2005 and Taxation of
Services (Provided from Outside India and Received in India) Rules, 2006
popularly known as Import Rules, 2006. Consequently for services to be
classified as an eligible export, the same must be provided to a service
recipient located outside India and for services to be classified as import of
service the same must be provided from outside India to a service recipient
located in India.
Part E : Miscellaneous
67 S. 4 of Payment of Gratuity Act, 1972 is
amended.
S. 4 of the Payment of Gratuity Act, 1972 is amended for increasing
the maximum amount of gratuity payable to employees from 3.5 lakh to 10 lakh.
The amendment is notified on 24th May, 2010.
Part D : COMPANY
LAW
Part E : Miscellaneous
66 The Double Tax Avoidance Treaty and Protocol
signed between Finland and India on 15-1-2010.
The Double Tax Avoidance Treaty and Protocol signed
between Finland and India on 15th January, 2010 has been notified to be entered
into force on 19th April, 2010. The treaty shall apply from 1st January, 2011
for Finland and from 1st April, 2011 for India.
Part D : COMPANY
LAW
65 Conditions of listing for issuers seeking listing on SME
Exchange
In recognition of the need for making finance available to
small and medium enterprises, SEBI has decided to encourage promotion of
dedicated exchanges and/or dedicated platforms of the exchanges for listing and
trading of securities issued by SMEs. Consequently, SEBI amended SEBI (ICDR)
Regulations, 2009 and specified the new ‘Model Equity Listing Agreement’ to be
executed between the SME issuer and the stock exchange.
The key highlights of the amendments to listing requirements
are :
(a) Companies listed on the SME exchange may send to their
shareholders a statement containing the salient features of all the documents,
as prescribed in sub-clause (iv) of clause(b) of proviso to S. 219 of the Companies Act, 1956,
instead of sending a full annual report.(b) Periodical financial results may be submitted on a
‘half-yearly basis’, instead of a ‘quarterly basis’.(c) SMEs need not publish their financial results, as
required in the main board and can make it available on their website.
Part D : COMPANY
LAW
64 Enhancement of Disclosure Requirements in Offer Document
At the SEBI Board meeting held on 19th May 2010, it was
decided that the offer documents of companies raising capital will contain
disclosures from directors if they were directors of any company when the shares
of the said company were suspended from trading by stock exchange(s) for more
than 3 months during the last 5 years or delisted.
Visit SEBI website for a complete text of the press release
containing various decisions taken at the Board meeting.
Part D : COMPANY
LAW
63 Easy Exit Scheme, 2010
The Ministry of Corporate Affairs vide General Circular No. 2
/2010 F. No. 2/7/2010-CL V, has on 26 May, 2010 given an opportunity to the
defunct companies, for getting their names strike off from the Register of
Companies, through an ‘Easy Exit Scheme, 2010’ u/s.560 of the Companies Act,
1956. The Scheme shall come into force on the 30th May, 2010 and shall remain in
force up to 31st August, 2010. Defunct company has been defined as a company
registered under the Companies Act, 1956, which is not carrying over any
business activity or operation on or after the 1st April, 2008 and includes a
company which has not raised its paid-up capital as provided in Ss.(3) and
Ss.(4) of S. 3 of the Companies Act, 1956.
The Scheme does not cover the following companies, namely :
(a) listed companies;
(b) companies registered u/s.25 of the Companies Act, 1956;
(c) vanishing companies;
(d) companies where inspection or investigation is ordered
and being carried out or yet to be taken up or where completed prosecutions
arising out of such inspection or investigation are pending in the Court;(e) companies where order u/s.234 of the
Companies Act, 1956 has been issued by the Registrar and reply thereto is
pending or where prosecution if any, is(f) pending in the Court;
(g) companies against which prosecution for a
non-compoundable offence is pending in the Court;(h) companies which have accepted public deposits which are
either outstanding or the company is in default in repayment of the same;(i) company having secured loan;
(j) company having management dispute;
(k) company in respect of which filing of documents have
been stayed by the Court or Company Law Board (CLB) or Central Government or
any other competent authority;(l) company having dues towards income-tax or sales tax or
central excise or banks and financial institutions or any other Central
Government or State Government departments or authorities or any local
authorities.
Applications need to be made in the Form EES 2010, along with
affidavit and indemnity bond among other things.
62 Company Law Settlement Scheme, 2010
The Ministry of Corporate Affairs, vide the General Circular
No. 1 /2010 F. No. 2/7/2010-CL V, dated 26 May, 2010, has given an opportunity
to the defaulting companies to enable them to make their default good by filing
belated documents and to become a regular compliant in future. The Ministry, in
exercise of the powers u/s.611(2) and 637B (b) of the Companies Act, 1956 has
decided to introduce a Scheme, namely, ‘Company Law Settlement Scheme, 2010,’
condoning the delay in filing documents with the Registrar, granting immunity
from prosecution and charging additional fee of 25% of actual additional fee
payable for filing belated documents under the Companies Act, 1956 and the rules
made thereunder. The Scheme shall come into force on the 30th May, 2010 and
shall remain in force up to 31st August, 2010. The application for seeking
immunity in respect of belated documents filed under the Scheme may be made
electronically in the required Form, after closure of the Scheme and after the
document(s) are taken on file, or on record or approved by the Registrar of
Companies as the case may be, but not after the expiry of six months from the
date of closure of the Scheme.
Part C : RBI/FEMA
61 A.P. (DIR Series) Circular No. 54, dated 26-5-2010 —
Deferred Payment Protocols dated April 30, 1981 and December 23, 1985 between
Government of India and erstwhile USSR.
The Rupee value of the special currency basket has been fixed at Rs.63.0402
with effect from May 31, 2010 as against the earlier value of Rs. 60.897378.
Part A : Direct Taxes
35 Clarification regarding eligibility of deduction u/s.80C
of the Act for investment under Jeevan Akshay-VI — Notification No. 34/2010,
dated 19-5-2010.
Jeevan Akshay-VI of the Life Insurance Corporation of India
has been approved as an annuity plan eligible for deduction under clause (xii)
of Ss.(2) of S. 80C of the Act. This clarification would be applicable for
investment made under this scheme for A.Y. 2008-09 and onwards.
Refund is granted to tax collected by any registered dealer on his sales
made to the diplomatic authorities and international bodies or organisations
listed in column (2) of the Schedule appended to the Notification No.
VAT-1507/CR-41/Taxation-1, dated 25-6-2007. By this Notification, ‘Republic
of South Africa’ has been deleted from this Schedule.
42 Clarification by CBDT that filing of an application to the
Dispute Resolution Panel is optional (reproduced hereunder for ease of
reference)
F. No. 142/22/2009-TPL (Pt. II)
20th January 2010
The Director General of Income-tax (International Taxation),
Room No. 406, Drum Shape Building,
I. P. Estate, Delhi.
Subject:
Clarification regarding
filing of Objections before Dispute Resolution Panel (DRP) – reg
A new section 144C was inserted in the Income-tax Act, 1961
vide Finance (No. 2) Act of 2009. Section 144C provides for constitution of a
Dispute Resolution Panel (DRP) to decide cases of an eligible assessee as
defined in sub-section (15) of section 144C of the Income-tax Act. The Dispute
Resolution Panel Rules were notified vide SO No. 2958 (E) dated 20th November
2009.
2. A query has been raised as to whether it is compulsory for
an assessee to file an objection before the DRP or whether he can choose to file
an appeal through the normal appellate channel of CIT (Appeals).
3. The provisions from sub-section (2) to sub-section (5) of
section 144C are quite clear that a choice has been given to the assessee either
to go before the DRP or to prefer the normal appellate channel. It is again
clarified that it is the choice of the assessee whether to file an objection
before the Dispute Resolution panel against the draft assessment order or not to
exercise this option and file an appeal later before CIT (Appeals) against the
assessment order passed by the Assessing Officer.
4. This position may also be brought to the notice of
taxpayers at large.
C. S. Kahlon,
Member (L&C).
Part C:
FEMA
Given below are the highlights of certain RBI
circulars, press notes and notifications
33 A. P. (DIR Series) Circular No. 23, dated December
30, 2009
Establishment of Branch Office (BO) / Liaison
Office (LO) in India by Foreign Entities – Eligibility Criteria and Procedural
Guidelines
This circular places in public domain the
eligibility criteria and procedural guidelines for the establishment of Branch
Offices and Liaison Offices by foreign entities in India.
The broad criteria regarding eligibility for
opening of BO and LO, documents required, etc., are given in Annex A. The scope
of activities permitted and other procedural guidelines (additional offices /
activities, renewal, closure) are given in Annex B.
Application for establishing a BO/LO has to be made
to designated AD Category – I Bank in Form FNC given in Annex C. The same, along
with the relevant documents, will be submitted by the Bank to the RBI. However,
applications from foreign banks and insurance companies will continue to be
received directly by the RBI. Comfort letter to be given by applicants who do
not satisfy the eligibility criteria and are subsidiaries of other companies is
given in Annex D.
All BO and LO (new as well as existing) will be
allotted a Unique Identification Number which needs to be quoted in all
references to RBI.
Part C : RBI/FEMA
Given below are the highlights of certain RBI Circulars
A. P. (DIR Series) Circular No. 65, dated April 28, 2009
Buyback/Prepayment of Foreign Currency Convertible Bonds
(FCCBs)
Presently, buyback of FCCB up to US $ 50 million is
permitted, subject to certain terms and conditions, under the approval route.This Circular has raised this limit for buyback out of
internal accruals from US $ 50 million to US $ 100 million, subject to the
following :
i) Minimum discount of 25 per cent of book value for
redemption value up to USD 50 million;ii) Minimum discount of 35 per cent of book value for the
redemption value over USD 50 million and up to USD 75 million; andiii) Minimum discount of 50 per cent of book value for
the redemption value of USD 75 million and up to USD 100 million.
Part C : RBI/FEMA
Given below are the highlights of certain RBI Circulars
A. P. (DIR Series) Circular No. 64, dated April 28, 2009
External Commercial Borrowings (ECB)
Policy — Liberalisation
Presently, ECB could be obtained, up to June 30, 2009, at
rates higher than the all-in-cost ceilings by obtaining approval of RBI under
the approval route.This Circular has extended this date for borrowing at rates
higher than the all-in-cost ceilings by obtaining approval of RBI under the
approval route from June 30, 2009 to December 31, 2009.
Gram Nyayalayas Act, 2008 to become operative from 2nd
October 2009 — Press Release dated 29-9-2009.
The Gram Nyayalayas Act, 2008 has been enacted to provide
for the establishment of the Gram Nyayalayas at the grass roots level for the
purpose of providing access to justice to the citizens at their door steps.
This Act shall come into force from Gandhi Jayanti this year i.e. 2nd
October 2009.
Given below are the highlights of certain RBI Circulars.
9. A.P. (DIR Series) Circular No. 11, dated 5-10-2009 : Issue
of Bank Guarantee on behalf of service importers.
Presently, an importer of services is permitted to issue a
Bank Guarantee up to US $ 100,000 or its equivalent in favour of the foreign
supplier of services, subject to certain terms and conditions.This circular has increased the limit for issuing Bank
Guarantee in favour of the foreign supplier of services from US $ 100,000 to
US $ 500,000 for all importers (other than Public Sector
Companies/Undertakings and Central/State Government Departments), provided the
transaction is a bonafide transaction and the Bank Guarantee is issued to
secure a direct contractual liability arising out of a contract between a
resident and a non-resident. The importer is required to submit in the normal
course, to the Bank issuing the Bank Guarantee, documentary evidence for
import of services.In the case of Public Sector Companies/Undertakings and
Central/State Government Departments the limit will continue to be US $
100,000. For issue of Bank Guarantee in excess of US $ 100,000 or its
equivalent prior permission is required to be obtained from the Ministry of
Finance, Government of India.
Given below are the highlights of certain RBI Circulars.
A.P. (DIR Series) Circular No. 10, dated 5-10-2009 :
Foreign Exchange Management Act, 1999 — Advance remittance for import of
services.
Presently, the limit for advance remittance for all
permissible current account transactions for import of services without
obtaining a Bank Guarantee from the foreign supplier is US $ 500,000 or its
equivalent.This circular clarifies that the said limit of US $ 500,000
or its equivalent is not applicable to Public Sector Companies/Undertakings
and Central/State Government Departments. And the limit for them continues to
be US $ 100,000 or its equivalent. For advance remittance in excess of US $
100,000 or its equivalent prior permission is required to be obtained from the
Ministry of Finance, Government of India.
Part C : RBI/FEMA
Given below are the highlights of certain RBI Circulars
A. P. (DIR Series) Circular No. 66, dated April 28, 2009
Foreign Exchange Management (Deposit) Regulations,
2000 — Loans to Non-Residents/Third Party against security of Non-Resident
(External) Rupee Accounts [NR(E)RA]/Foreign Currency Non-Resident (Bank)
Accounts [FCNR(B)] — Deposits
Presently, loans up to Rs. 20 lakh can be availed by the
account holder/third party against security of deposits in NR(E)RA and FCNR(B)
accounts.This Circular has increased this limit from Rs. 20 lakh to Rs. 100 lakh.
Hence, account holder/third party can avail loans up to Rs. 100 against
security of deposits in NR(E)RA and FCNR(B) accounts.
Part C : RBI/FEMA
Given below are the highlights of certain RBI Circulars
A. P. (DIR Series) Circular No. 63, dated April 22, 2009
Foreign Direct Investment (FDI) in India — Transfer of
Shares/Preference Shares/Convertible Debentures by way of sale — Modified
Reporting Mechanism
This Circular has made the following changes, with
immediate effect, in respect to reporting requirements in case of transfer of
shares/preference shares/convertible debentures by way of sale from resident
to non-resident and vice versa :
1. Form FC-TRS has been revised as per format attached to
this Circular.2. Proforma for reporting of inflows/outflows by banks
has also been revised as per format attached to this Circular.3. Bank receiving the remittance/handling the transaction
will have to carry out KYC non-resident purchaser as per format (Annex II)
attached to this Circular.4. The resident transferor/transferee will have to submit
Form FC-TRS to the bank within 60 days from the date of receipt of the
amount of consideration.5. In case of deferment of consideration (which continues
to require prior approval of RBI) the bank carrying out the transaction will
have to submit Form FC-TRS to RBI within 60 days from the date of receipt of
the full and final amount of consideration.
Part C : RBI/FEMA
Given below are the highlights of certain RBI Circulars
A. P. (DIR Series) Circular No. 62, dated April 20, 2009
External Commercial Borrowings (ECB)
Policy —Liberalisation — Issue of guarantee for operating lease
Presently, AD Category – I banks are permitted to convey
‘no objection’ under FEMA for creation of charge on immoveable assets,
financial securities and issue of corporate pr personal guarantees in favour
of overseas lender/security trustee, to secure ECB to be raised by the
borrower, subject to compliance with prescribed conditions.This Circular, in addition to the above, allows AD
Category – I banks to convey ‘no objection’ under FEMA for issue of corporate
guarantee in favour of the overseas lessor, for operating lease in respect of
import of aircraft/aircraft engine/helicopter, subject to compliance with
prescribed conditions.
Part C : RBI/FEMA
Given below are the highlights of certain RBI Circulars.
A.P. (DIR Series) Circular No. 70, dated 30-6-2009 : Export
of goods and software : Realisation and repatriation of export proceeds :
Liberalisation.
Presently, exporters are permitted to realise and
repatriate the full export value of the goods or soft-ware exported within
twelve months from the date of export, as against the norm of realising and
repatriation of the full export value of the goods or software exported within
six months from the date of export.This Circular has extended this relaxation for a further
period of one year i.e., up to June 30, 2010. As a result exporters can
repatriate the full export value of the goods or software exported up to June
30, 2010 within twelve months from the date of export.
Part C : RBI/FEMA
Given below are the highlights of certain RBI Circulars and Press Notes
issued by DIPP
On-line downloading of GR Forms
Presently, exporters are required to purchase GR Forms from
Regional Offices of RBI. Now, in addition to the above facility of purchasing
the GR Forms, exporters have been given an option of downloading the said GR
Forms from RBI website www.rbi.org.in and use the same.
Part C : RBI/FEMA
Given below are the highlights of certain RBI Circulars and Press Notes
issued by DIPP
Buyback/Prepayment of Foreign Curren-cy Convertible
Bonds (FCCBs)
As per A. P. (Dir Series) Circular No. 39, dated December
8, 2008 the entire procedure of buyback was to be completed by Indian
companies by March 31, 2009.
This Circular has extended the said date from March 31,
2009 to December 31, 2009.
Part C : RBI/FEMA
Given below are the highlights of certain RBI Circulars and Press Notes
issued by DIPP
Ministry of Commerce & Industry, DIPP (FC Section) —
Press Note No. 4 (2009), dated February 25, 2009
Clarificatory guidelines on downstream investment by
Indian companiesThis Press Note aims to bring clarity into the Policy for
downstream investment by investing Indian companies.
The Policy on downstream investment comprises policy for :
(a) Only operating companies — Foreign investment in
such companies would have to comply with the relevant sectoral conditions on
entry route, other conditions and caps with regard to the sectors in which
such companies are operating.(b) Operating-cum-investing companies — Foreign
investment into such companies would have to comply with the relevant
sectoral conditions on entry route, other conditions and caps with regard to
the sectors in which such companies are operating. Further, the subject
Indian companies into which downstream investments are made by such
companies would have to comply with the relevant sectoral conditions on
entry route, other conditions and caps in regard of the sector in which the
subject Indian companies are operating.(c) Only investing companies — Foreign investment in
investing companies will require prior Government/FIPB approval, regardless
of the amount or extent of foreign investment. The Indian companies into
which downstream investments are made by such investing companies would have
to comply with the relevant sectoral conditions on entry route, other
conditions and caps in regard of the sector in which the subject Indian
companies are operating.(d) Others companies — Government/FIPB approval is
required for infusion of funds into companies that do not have any
downstream investments. Further, as and when such company commences
business(s) or makes downstream investment, it will have to comply with the
relevant sectoral conditions on entry route, other conditions and caps.
Downstream investments can be made by
operating-cum-investing companies, only investing companies and other
companies, subject to the following conditions :
(a) Such company must notify SIA, DIPP and FIPB of its
downstream investment within 30 days of such investment even if equity
shares/CCPS/CCD have not been allotted along with the modality of investment
in new/existing ventures (with/without expansion programme).(b) Downstream investment by way of induction of foreign
equity in an existing Indian company to be duly supported by a resolution of
the Board of Directors supporting the said induction as also a shareholders’
agreement if any.(c) Issue/transfer/pricing/valuation of shares shall be
in accordance with applicable SEBI/RBI guidelines.(d) Investing companies would have to bring in requisite
funds from abroad and not leverage funds from domestic market for such
investments. This would, however, not preclude downstream operating
companies to raise debt in the domestic market.
This Press Note has amplified Annexure to Press Note 7
(2008), dated June 16, 2008 to the extent stated therein.
Part C : RBI/FEMA
Given below are the highlights of certain RBI Circulars and Press Notes
issued by DIPP
Ministry of Commerce & Industry, DIPP (FC Section) —
Press Note No. 3 (2009), dated February 13, 2009
Guidelines for transfer of ownership or control of
Indian companies in sectors with caps from resident Indian citizens to
non-resident entities
Presently, transfer of shares from residents to
non-residents, including acquisition of shares in an existing company, is on
the automatic route, subject to the sectoral policy on FDI. This Press Note
lays down guidelines for transfer of ownership or control of Indian companies
in sectors with caps from resident Indian citizens to non-resident entities.Foreign investment shall include all types of foreign
investments i.e., FDI, investment by FIIs, NRIs, ADRs, GDRs, Foreign
Currency Convertible Bonds (FCCB) and convertible preference shares,
regardless of whether the said investments have been made under Schedule 1, 2,
3 and 6 of FEMA (Transfer or Issue of Security by Persons Resident Outside
India) Regulations.In sectors with caps, including inter alia defence
production, air transport services, ground handling services, asset
reconstruction companies, private sector banking, broadcasting, commodity
exchanges, credit information companies, insurance, print media,
telecommunications and satellites, Government approval/FIPB approval would be
required in all cases, where :
1. An Indian company is being established with foreign
investment and is owned by a non-resident entity or2. An Indian company is being established with foreign
investment and is controlled by a non-resident entity or3. The control of an existing Indian company, currently
owned or controlled by resident Indian citizens and Indian companies, which
are owned or controlled by resident Indian citizens, will be/is being
transferred/passed on to a non-resident entity as a consequence of transfer
of shares to non-resident entities through amalgamation, merger,
acquisition, etc. or4. The ownership of an existing Indian company, currently
owned or controlled by resident Indian citizens and Indian companies, which
are owned or controlled by resident Indian citizens, will be/is being
transferred/passed on to a non-resident entity as a consequence of transfer
of shares to non-resident entities through amalgamation, merger,
acquisition, etc.
These guidelines will not apply for sectors / activities
where there are no foreign investment caps, that is, 100% foreign investment
is permitted under the automatic route.This Press Note has amplified Annexure to Press Note 7
(2008), dated June 16, 2008 to the extent stated therein.
Part C : RBI/FEMA
Given below are the highlights of certain RBI Circulars and Press Notes
issued by DIPP
Ministry of Commerce & Industry, DIPP (FC Section) —
Press Note No. 2 (2009) dated, February 13, 2009
Guidelines for calculation of total foreign investment
i.e., direct and indirect foreign investment in Indian companies
This Press Note lays down the guidelines for calculation of
total foreign investment i.e., direct and indirect foreign investment
in Indian companies, accordingly :
1. Direct Foreign Investment
All investments made directly by a non-resident entity
into the Indian company would be counted towards foreign investment.
2. Indirect Foreign Investment
(a) Foreign investment through an investing Indian
company would not be considered for calculation of the indirect foreign
investment if the Indian company which is making the investment is ‘owned and controlled’ by resident Indian citizens and/or Indian companies
which are owned and controlled by resident Indian citizens.
(b) Foreign investment through an investing Indian
company which does not satisfy the condition mentioned above or where the
said investing company is owned or controlled by ‘non-resident
entities’, the entire investment by the investing company into the subject
Indian Company would be considered as indirect foreign investment.
3. Total foreign investment would be the sum total of
direct and indirect foreign investment.4. This methodology of calculation would apply at every
stage of investment in Indian companies and thus to each and every Indian
company.
Full details about the foreign investment including
ownership details, etc. in Indian company(s) and information about the control
of the company(s) would be furnished by the company(s) to the Government of
India at the time of seeking approval.In all sectors attracting sectoral caps, the balance equity
i.e., beyond the sectoral foreign investment cap, would specifically be
beneficially owned by/held with/in the hands of resident Indian citizens and
Indian companies, owned and controlled by resident Indian citizens. In the I &
B and Defence sectors where the sectoral cap is less than 49%, the company
would need to be ‘owned and controlled’ by resident Indian citizens and
Indian companies, which are owned and controlled by resident Indian citizens.
Part C : RBI/FEMA
Given below are the highlights of certain RBI Circulars and Press Notes
issued by DIPP
Ministry of Commerce & Industry, DIPP (FC Section) —
Press Note No. 1 (2009), dated January 14, 2009
Foreign investment in Print Media dealing with news and
current affairs
This Press Note lays done FDI policy in respect of foreign
investment in publication of facsimile edition of foreign newspapers and
Indian edition of foreign magazines dealing with news and current affairs.This Press Note has amplified Entry No. 27 Annexed to Press
Note 7 (2008), dated June 16, 2008 as follows :
Foreign direct investment (FDI) in publication of facsimile
edition of foreign newspapers
1. FDI up to 100% is permitted with prior approval of the
Government in publication of facsimile edition of foreign newspapers,
provided the FDI is by the owner of the original foreign newspaper(s) whose
facsimile edition is proposed to be brought out in India.
2. Publication of facsimile edition of foreign newspapers
can be undertaken only by an entity incorporated or registered in India
under the provisions of the Companies Act, 1956.
3. Publication of facsimile edition of foreign newspaper
would also be subject to the guidelines for publication of newspapers and
periodicals dealing with news and current affairs and publication of
facsimile edition of foreign newspapers issued by the Ministry of
Information & Broadcasting on 31.3.2006, as amended from time to time.
Foreign investment in publication of Indian editions of
foreign magazines dealing with news and current affairs
1. Foreign investment, including FDI and investment by
NRIs/PIOs/FII, up to 26%, is permitted with prior approval of the
Government.2. ‘Magazine’, for the purpose of these guidelines, will
be defined as a periodical publication, brought out on non-daily basis,
containing public news or comments on public news.
Foreign investment would also be subject to the guidelines
for publication of Indian editions of foreign magazines dealing with news and
current affairs issued by the Ministry of Information & Broadcasting on
4.12.2008.
Part C : RBI/FEMA
Given below are the highlights of certain RBI Circulars and Press Notes
issued by DIPP
Opening of Diamond Dollar Accounts —Liberalisation
Presently, RBI permits opening of Diamond Dollar Accounts (DDA)
on a case-to-case basis, provided the firms/companies interested in opening
the same have :
(i) a track record of at least 3 years in import/ export
of diamonds/coloured gemstones/ diamond and coloured gemstone-studded
jewellery/plain gold jewellery, and(ii) an average annual turnover of Rs. 5 crore or above
during preceding three licensing years.
This Circular permits banks to open such DDA, subject to
the firms/companies opening the same complying with certain terms and
conditions. Application form for opening DDA is also annexed to this Circular.
Part C : RBI/FEMA
Given below are the highlights of certain RBI Circulars and Press Notes
issued by DIPP
Hedging of freight risk by domestic oil-refining,
shipping companies and other companies
This Circular provides that banks that have been granted
permission by RBI to approve commodity hedging transactions, are permitted to
allow hedging of freight risk by domestic oil-refining companies and shipping
companies on the following terms and conditions :
i) The hedging can be undertaken as plain vanilla
Over-the-Counter (OTC) or exchange traded products in the international
market/exchange.ii) The exchanges on which the products are purchased
must be a regulated entity.iii) The maximum tenor permissible will be one year
forward.
In case of hedging of freight risk by other companies,
banks will have to obtain prior permission of RBI on behalf of their
customers.
Part C : RBI/FEMA
Given below are the highlights of certain RBI Circulars and Press Notes
issued by DIPP
Settlement system under ACU Mechanism
Presently, transactions through the Asian Clearing Union (ACU)
can be settled in ACU Dollars only.This Circular provides that on and from 1.1.2009,
transactions through ACU can be settled in ACU Dollars or ACU Euros at the
option of the participants.
Part B : Indirect taxes
Rate of tax on timber is 12.5% from 1st April 2009 :
Trade Circular No. 13 T of 2009, dated 15.04.2009 :
With effect from 1.4.2009 the rate of tax on Timber shall be 12.5%.
Part B : Indirect taxes
Extension of time for applying for declarations prior to
31/03/08 :
Trade Circular No. 12 T of 2009, dated 31.03.2009 :
The Commissioner has extended time for applying for
declaration prior to 31.3.2008 till 30.6.2009. Declarations for the periods
prior to 1.4.2008 will not be issued after 1.7.2009.
Part B : Indirect taxes
Luxury Tax on luxuries provided in hotels from 1.5.2004 to
30.4.2005 :
Trade Circular No. 11 T of 2009, dated 25.03.2009 :
This Circular provides procedural clarifications in respect
of Notification No.LTA-1090/CR-47/ Taxation-2, dated 18.11.2008 granting
exemption of Luxury Tax in excess of 6% on the luxuries provided during the
period from 1.5.2004 to 30.4.2005.
Part B : Indirect taxes
Pending ‘Ps’ under B.S.T & C.S.T. Acts up to P year 2004-05
and instruction for disposal thereof :
Trade Circular No. 10 T of 2009, dated 23.03.2009 :
By this Circular, the Commissioner has issued fresh
assessment guidelines. It has been directed that no assessments will be done
from ‘C’ & ‘D’ category of the dealers except priority ‘Ps’ falling in 7
categories enumerated in the Circular. Even compulsory assessment criteria for
all the pending Ps, pertaining to financial year in which gross tax liability
(before adjusting set-off) is Rs. 6 lakh or less under the BST and CST Acts,
shall not be assessed except those falling under the criteria enumerated in
the Circular.
Part B : Indirect taxes
Filing of revised return as advised by auditor in Audit
Report :
Trade Circular No. 9 T of 2009, dated 21.03.2009 :
As per para 15 of Trade Circular 26T of 2006, dated
18.09.2006, a dealer can file the single revised return for the period ending
on 31st March of the respective year to give effect to the observations of the
auditor.By this Circular, the Commissioner has clarified that if it
is not possible to give effect to all the observations of the auditor by
filing revised return for the period ending on 31st March of the respective
year, then the dealer can revise the returns for the respective periods for
which discrepancies have been pointed out by the auditor. All such revised
returns will have to be filed electronically only.
Part B : Indirect taxes
Updates in VAT and Service Tax :
Service Tax update
Circulars
Refund of service tax paid on taxable services provided in
relation to the authorised operations in a Special Economic Zone
This Circular explains the new Notification No.15/2009, dated 20.05.2007 in
relation to Refund of service tax paid on taxable services provided in
relation to the authorised operations in a Special Economic Zone.
Part C : RBI/FEMA
Given below are the highlights of certain RBI Circulars.
A.P. (DIR Series) Circular No. 5, dated 22-7-2009 : Issue
of Indian Depository Receipts (IDRs).
This Circular makes operational the rules/guidelines for
issue of Indian Depository Receipts by companies resident outside India
through a Domestic Depository.This Circular also lays down criteria for issue, purchase,
transfer and redemption of IDR. Some of the important points are as under :
IDR must be
denominated in Indian Rupees.Financial/Banking companies having presence in India, either through a
branch or subsidiary, will have to obtain approval of the sectoral
regulator(s) before they can issue IDR.The company
issuing IDR will have to immediately repatriate the proceeds of the issue.IDR can be
purchased, held and transferred by persons resident in India, FII & NRI.
Provisions of FEMA will not be applicable to investment and transfer of IDR
by persons resident in India. FII and NRI will have to comply with the
provisions of Notification No. FEMA 20/2000-RB, dated May 3, 2000, as
amended from time to time. Further, NRI can only invest out of funds held in
their NRE/FCNR(B) accounts.Automatic
fungibility of IDR is not permitted.IDR can be
converted into underlying equity shares after one year from the date of
their issue.Listed
Indian companies and Indian mutual funds, registered with SEBI can sell or
continue to hold the underlying shares, subject to the terms and conditions
as per Regulations 6B & 7 and 6C, respectively, of Notification No. FEMA
120/RB-2004, dated July 7, 2004, as amended from time to time.Other
persons resident in India, including resident individuals, have to sell the
underlying shares within a period of 30 days from the date of conversion of
the IDR into underlying shares.Provisions
of FEMA will not apply to the holding of the underlying shares, on
redemption of IDR by FII, including SEBI approved sub-accounts of the FII,
and NRI.
Part C : RBI/FEMA
Given below are the highlights of certain RBI Circulars.
A.P. (DIR Series) Circular No. 3, dated 17-7-2009 :
Deferred payment protocols dated April 30, 1981 and December 23, 1985 between
Govt. of India and erstwhile USSR.
This Circular provides that, with effect from June 25,
2009, the rupee value of the special currency basket has been fixed at
Rs.66.5719 as against the earlier value of Rs.64.6153.
Part C : RBI/FEMA
Given below are the highlights of certain RBI Circulars.
A.P. (DIR Series) Circular No. 71, dated 30-6-2009 :
External Commercial Borrowings (ECB) Policy.
This Circular modifies certain aspects of the ECB Policy
with immediate effect as under :1. ECB for integrated township :
Presently, corporates engaged in the development of
integrated townships are permitted to avail ECB under the Approval Route up to
June 30, 2009.This Circular has extended this permission up to December
31, 2009 under the Approval Route.2. ECB for NBFC Sector :
Presently, NBFCs which are exclusively involved in
financing of the infrastructure sector, are permitted to avail ECB from
multilateral/regional financial institutions and Government-owned development
financial institutions for on-lending to borrowers in the infrastructure
sector under the Approval Route if, among other conditions, their direct
lending portfolio vis-à-vis their total ECB lending to NBFC at any point of
time is not less than 3 : 1.This Circular has dispensed with this condition that the
direct lending portfolio vis-à-vis their total ECB lending to NBFC at any
point of time is not less than 3 : 1. All other conditions, including availing
ECB under Approval Route, apply as before.3. ECB for Development of Special Economic Zone :
SEZ developers can avail of ECB under the Approval Route
for providing infrastructure facilities, as defined in the ECB Policy, within
the SEZ.4. Corporates under investigation :
Corporates who have violated ECB Policy and are under
investigation by RBI and/or Directorate of Enforcement will not be allowed to
access the Automatic Route. All requests from such corporates will be examined
under the Approval Route.
Part D : Miscellaneous
Business/Employment visa
The Ministry of Home Affairs has issued Frequently Asked Questions on
work-related visas issued by India, clarifying the purpose, duration and
various scenarios under which Business Visa/Employment Visa may be granted to
foreign nationals. These FAQ’s are available on www.mha.nic.in
Part D : Miscellaneous
The Union cabinet has approved a proposal of the Department
of Industrial Policy & Promotion, Ministry of Commerce & Industry to permit
all payment for royalty, lump sum fee for transfer of technology, payment for
use of trademark/brand name on the automatic route without any restrictions,
and subject to FEMA(Current Account Transaction) Rules, 2000. To get the
information about the nature/details of technology and the amount paid for it,
a suitable post reporting requirement would be devised within three months in
consultation with the Department of Economic Affairs and Reserve Bank of
India.
Part D : Miscellaneous
The Government of India has signed a Social Security
Agreement with the Government of Netherlands on 22-10-2009.
Dispute Resolution Panel Rules, 2009 — Notification No.
84/2009 [F. No. 142/22/2009-TPL], dated 20-11-2009.
Alternate Dispute Resolution Mechanism was introduced by
Finance (No. 2 )Act, 2009 and consequently Section 144C is introduced w.e.f.
1st April, 2009.Dispute Resolution Panel Rules, 2009 are introduced and the
rules shall come into force on the date of their publication in the Official
Gazette. The said Rules provide for the procedure for filing objection,
procedure for the hearing by the panel, passing of the assessment order by the
panel and rectification thereof and appeal before the ITAT, etc. The Rules
also prescribe formats of Form Nos. 35A and 36B.
Income-tax Department’s website has offered a facility to
enable the assessees to ascertain whether the Income-tax Department has
received ITR V at Bangalore. The procedure is as follows :
(i) Log-in at the Department’s website using the e-filing
log-in ID and Password.
(ii) After the log-in is successful, click on the ‘My
Account’ tab at the top of the window.
(iii) Select the last option ‘E-filing processing status’.
(iv) Provide the assessment year.
(v) The next screen will provide information whether ITR V
is received and the date of receipt.
(vi) There is a hyperlink to obtain the confirmation
receipt.
Income-tax — Instruction No. 7/2009, dated 22nd/23rd
December, 2009 — F. No. 275/23/2007-IT(B) — Government of India, Ministry of
Finance, Department of Revenue, Central Board of Direct Taxes, New Delhi.
To,
All Chief Commissioners & Directors Generals of Income Tax,
All Commissioners of Income Tax (TDS),
Director of Income Tax (TDS).
Certificate of lower deduction or non-deduction of tax at
source under Section 197 of Income-tax Act — matter reg.
I am directed to bring to your notice on the subject of
issue of certificates under Section 197. Instruction No. 8/2006, dated
13-10-2006, was issued stating that certificates for lower deduction or nil
deduction of TDS u/s.197 are not to be issued indiscriminately and for issue
of each certificate, approval of the JCI/Addl. CIT concerned need to be taken
by the Assessing Officer (AO). Further, a letter of even number dated
16-10-2008 was issued stating that power of issue of certificates under
Section 197 would ordinarily be exercised by the officers manning TDS
Administration. However, instances are being brought to the notice of Board
that the AOs are issuing certificates for lower or non-deduction of tax at
source u/s.197 indiscriminately, in contravention of relevant Income-tax Rules
and Instructions.I am, therefore, directed to communicate to you that
further to the contents of Instruction No. 8/2006, prior administrative
approval of the Commissioner of Income-tax (TDS) shall be taken (where the
cumulative amount of tax foregone by non-deduction/lesser rate of deduction of
tax arising out of certificate under Section 197 during a financial year for a
particular assessee exceeds Rs.50 lakh in Delhi, Mumbai, Chennai, Kolkata,
Bangalore, Hyderabad, Ahmedabad and Pune stations and Rs.10 lakh for other
stations. Once the CIT (TDS) gives administrative approval of the above, a
copy of it has to be endorsed invariably to the jurisdictional CIT also.The content of the above instruction may be brought to the
notice of all officers working in your charge for strict compliance.Sd/-
(Ansuman Pattnaik)
Director (Budget)
Income-tax — Instruction No. 6/2009, dated 18-12-2009 F.
No. 225/11/2006/ITA. II, Government of India, Ministry of Finance, Dept. of
Revenue, CBDT, New Delhi.
To,
All Cadre Control Chief Commissioners of
Income-tax/Directors General of Income-tax
Scheme for improving quality of assessments — regarding :
For past sometime the Board has been concerned about the
need for improving general quality of scrutiny assessments on a sustainable
basis. In this connection, reference is invited to Board’s Instruction No.
2/2006, dated 27-4-2006 which required monitoring of scrutiny assessments by
Range Heads under the powers available to them under Section 144A of the
Income-tax Act. Instructions have also been issued from time to time for
strengthening the machinery for review of assessments and inspection of
assessment charges. However, it is felt that there is significant scope for
improving the quality of scrutiny system. The matter came up for discussion
during 25th Annual Conference of Chief Commissioner of Income-tax held in
August 2009. A presentation was made by the CCIT Chandigarh outlining a scheme
for improving quality assessments implemented in NWR Region. After taking into
account various suggestions, it was decided to devise a similar scheme with
appropriate flexibility for country-wide implementation.2. Accordingly, it has now been decided that the following
scheme for improving quality of assessments shall be implemented from calendar
year 2010 onwards :
(i) At the beginning of each calendar year i.e.,
in the month of January, the Range Head in consultation with the concerned
Assessing Officer would identify at least 5 pending time-barring assessment
cases in respect of each Assessing Officer of his Range for monitoring.
These should normally include cases taken up for scrutiny with the
permission of the CCIT. The selection should be done jointly by the Range
Head and the concerned Assessing Officer. Cases of PSUs and loss-making
concerns should normally not be identified for this purpose. This exercise
should also include those Ranges which are held as additional charge by a
Range Head in January.(ii) The Range Head would issue directions u/s. 144A in
the identified cases for the guidance of the Assessing Officer regarding the
course of investigation to enable him to complete these assessments in a
proper manner. This should be done at the earliest available opportunity so
as to allow the Assessing Officer to have sufficient time to complete the
assessment proceedings. A copy of the directions issued by the Range Head
would also be endorsed to the CIT. The Range Head should also monitor the
subsequent developments in the assessment proceedings in these cases.(iii) On completion of the assessment the Assessing
Officer shall send a copy of the assessment order to the Range Head and the
CIT.(iv) In the event of a Range Head holding more than one
Range, the concerned CCIT may appropriately relax the requirement for issue
of directions u/s.144A in respect of the cases of the Range(s) held as
additional charge.(v) For the purpose of this instruction, a quality
assessment would be one in which issues arising for consideration are
clearly identified, investigation of basic facts in respect of these issues
is carried out, adequate opportunity to rebut adverse evidence is given to
the assessee, the rival evidence are suitably analysed and evaluate in the
light of correct interpretation of law, and these efforts result in
substantial addition to the returned income. The benchmark for the quantum
of addition to the returned income, which may quality for being a quality
assessment, may be decided by the concerned CCIT depending upon the
potential of the given Range/Charge. Normally, this should not be less than
Rs.5 lakh, excluding additions on account of recurring issues. It is
expected that the selected cases will meet the parameters for quality
assessment.(vi) As regards the remaining scrutiny assessments, it is
expected that 30% of assessments completed by the Range Head, 20% of the
remaining scrutiny assessments completed by DC/ACIT and 10% of ITOs will
result in quality assessments. These benchmarks can be reviewed once the
scheme has been in operation for some time.(vii) The parameters for determining whether an
assessment is a quality assessment should be decided by the concerned Chief
Commissioner in the light of the above and should be widely circulated at
the beginning of the calendar year i.e., in the month of January of
every year.(viii) At the end of the financial year, the data
regarding assessments, completed by Assessing Officers of the CCIT Region
shall be got evaluated by the concerned CCIT in the month of next April
according to the parameters decided earlier. The overall results will be
tabulated in the enclosed proforma and circulated in the CCIT (CCA) Region
for information. Separate performance ranking should be done for Range Heads
in respect of cases completed by them u/s.143(3) out of the cases selected
under Instruction 4 of 2007, dated 16-5-2007, and those monitored by them
under this instruction.(ix) CCsIT may also devise methods for commending good
performance of AO in the area of quality assessments and reflecting the same
in the annual appraisals. Important cases involving large successful
additions may be reported to the Board in monthly D.O. letters. These can
also be sent to DTI (RSP&PR) for inclusion in the Annual Report of good
assessment cases.
3. These instructions may please be brought to the notice
of all officers working in your Cadre Control region immediately for proper
compliance.Sd/-
(S.
S. Khan)
Member (Income Tax)sessing Officers
New rules for valuation of perquisites and ESOPs notified —
Notification No. 94/2009, dated 18-12-2009.
Post FBT, Budget 2009 had restored taxation of perquisites
given to employees. The perquisite valuation rules (Rule 3) has been notified
with retrospective effect from 1st April 2009. Even the rule for ESOP
valuation and taxation thereof has been notified with effect from 1st April
2009.
Clarification regarding applicability of
Section 194J to Third Party Administrators — Circular No. 8/2009, dated
24-11-2009.
It has been clarified in this Circular that payments made
by TPAs to the hospitals on behalf of the insurance companies are liable to
deduct tax at source under Section 194J of the Act. However, in case, in the
past defaults have occurred in this matter, the Board has clarified the
following :
- No
proceedings u/s.201 be initiated after expiry of six years from end of
financial year of default
- No demand
u/s.201(1) be enforced if TPAs are able to satisfy the jurisdictional TDS
officer that the hospitals have duly paid the taxes along with a certificate
to this effect from the auditors of hospitals.
However, the liability of interest u/s.201(1A) of the Act
till payment of taxes by hospitals as well as penalty implications would apply
to the TPAs.
Clarification on remittances of consular receipts —
Circular No. 9/2009, dated 30-11-2009.
It has been clarified by the Board that for the purpose of
remittance of consular receipts abroad, diplomatic missions in India need to
submit only a self-certified undertaking in Form No. 15CA to the remitter
bank. They are not required to obtain a certificate from an
accountant/certificate of Assessing Officer in Form 15CB, since their receipts
are tax exempt.
Part A : Direct taxes
Clarification for the new procedure prescribed for
furnishing the CA certificate/undertaking while making remittance to
non-residents — Circular No. 4/2009, dated 29-6-2009.
The CBDT vide insertion of Rule 37BB prescribed procedures
for e-filing of the new undertaking in Form 15CA and modified the format of CA
certificate in Form 15CB. A clarificatory Circular has been issued to explain
the modus operandi of the system.
Part A : Direct taxes
New Scheme of TDS/TCS procedures deferred till further
notice : Press Release dated 30-6-2009.
The CBDT has kept the new procedures prescribed under
Notification No. 31/2009 in abeyance till further notice. Accordingly
taxpayers can continue to follow the existing procedures till further
information is received from the Board. Returns can also be filed without
Unique Transaction Number (UTN).
Part A : Direct taxes
CBDT clarification regarding deduction u/s.80IB(10) in
respect of undertakings developing housing projects : Instruction No. 4/2009,
dated 30-6-2009 (reproduced)
U/ss.(10) of S. 80-IB an undertaking developing and
building housing projects is allowed a deduction of 100% of its profits
derived from such projects if it commenced the project on or after 1-10-1998
and completes the construction within four years from the financial year in
which the housing project is approved by the local authority.2. Clarifications have been sought by various CCsIT on the
issue whether the deduction u/s.80-IB(10) would be available on a year-to-year
basis where an assessee is showing profit on partial completion or if it would
be available only in the year of completion of the project u/s.80-IB(10).3. The above issue has been considered by the Board and it
is clarified as under :
(a) The deduction can be claimed on a year-to-year basis
where the assessee is showing profit from partial completion of the project
in every year.(b) In case it is late, and it is found that the
condition of completing the project within the specified time limit of 4
years as started in S. 80-IB(10) has not been satisfied, the deduction
granted to the assessee in the earlier years should be withdrawn.
4. The above Instruction will override earlier
clarification on this issue contained in Member (R)’s D.O. letter No.
58/Misc./2008/CIT(IT&CT), dated 29-4-2008 and Member (IT)’s D.O. letter No.
279/Misc./46/08-ITJ, dated 2-5-2008.5. This may kindly be brought to the notice of the all
Assessing Officers in your charge.F.No.178/32/2009-ITA.I (Raman Chopra)
Director (ITA-I)
Part B : Indirect taxes
Updates in VAT and Service Tax :
Service Tax update
Notifications
Notification No.15/2009 — Service Tax dated 20.05.2009.
Amendment to Notification No. 9/2009-Service Tax, dated the 3rd March, 2009
Exemption to levy service tax on services provided in
relation to the authorised operations in a Special Economic Zone. So the
refund procedure has been dispensed with by this notification when services
have been utilised wholly in the SEZ. Refund procedure will continue where
taxable services provided to SEZ are consumed partially or wholly outside SEZ.
Exemption is subject to conditions and requirements specified in this
notification.
Part B : Indirect taxes
Updates in VAT and Service Tax :
MVAT UPDATE
Mvat Notifications
Notification No. 23/2009-Service Tax, dated 7-7-2009.
By this Notification the Works Contract (Composition Scheme
for Payment of Service Tax) Rules, 2007 have been amended by laying down
procedure for computing the gross amount under the Composition Scheme. The
amendment would not apply where the execution has commenced or any payment
been made on or before 7-7-2009.
Part B : Indirect taxes
Updates in VAT and Service Tax :
MVAT UPDATE
Mvat Notifications
Change in rate and conditions for composition scheme of
restaurants, eating house, refreshment room, boarding establishment, factory
canteen, clubs, hotels and caterers : Notification No.
VAT-1509/CR-81-D/Taxation-1, dated 29-6-2009.
By this Notification the Commissioner has amended
Notification No.VAT-1505/CR-105/Taxation-1, dated 1-6-2005 whereby rate of
composition tax has been reduced from 8% to 5% w.e.f. 1-7-2009 and has made
some changes in conditions laid down in the said Notification No. 1505.
Part B : Indirect taxes
Updates in VAT and Service Tax :
MVAT UPDATE
Mvat Notifications
Notification No. 22/2009-Service Tax, dated 7-7-2009.
By this Notification clause (e) of Rule (2) of the Taxation
of Services (provided from outside India and received in India) Rules, 2006
has been substituted and extended to services provided at the installations,
structures and vessels in the entire Continental Shelf of India and Exclusive
Economic Zone of India.
Part B : Indirect taxes
Updates in VAT and Service Tax :
MVAT UPDATE
Mvat Notifications
Adding entries to Medical Device Notification :
Notification No. VAT-1509/CR-81-C/Taxation-1, dated 29-6-2009.
By this Notification the Commissioner has amended
Notification No. VAT-1505/CR-233/Taxation-1, dated 23-11-2005 by adding
certain entries to medical device list w.e.f. 1-7-2009.
Part B : Indirect taxes
Updates in VAT and Service Tax :
MVAT UPDATE
Mvat Notifications
Entry for solar energy devices deleted : Notification No.
VAT-1509/CR-81-B(2)/Taxation-1, dated 29-6-2009.
By this Notification the Commissioner has deleted list of
solar energy devices from Entry C-82 w.e.f. 1-7-2009.
Part B : Indirect taxes
Updates in VAT and Service Tax :
MVAT UPDATE
Mvat Circulars
Grant of administrative relief to unregistered dealers :
Trade Circular No. 20T of 2009, dated 23-6-2009.
The powers delegated to all the Additional Commissioners of
Sales Tax in Maharashtra State with respect to granting administrative relief
to unregistered dealers as per Trade Circular No. 14T of 2009 have been
modified by this Circular.
Part B : Indirect taxes
Updates in VAT and Service Tax :
MVAT UPDATE
Mvat Circulars
Form ‘I’ under Central Sales Tax Act.
Trade Circular No. 19T of 2009, dtd. 20-6-2009.
By this Circular the Commissioner has instructed to allow
declarations in Form ‘I’ issued by Sales Tax authorities of other States. This
will be applicable for a period of one year and the issue will be re-examined
thereafter. Form ‘I’ issued by the Commissioner, SEZ and form issued by Sales
Tax Department was valid only up to 9-9-2004 under Circular No. 8T of 2005,
dated 9-3-2005.
Old circulars on S. 9 of the Act withdrawn — Circular No. 7
/2009, dated 22-10-2009.
Erstwhile Circular No. 23, dated 23rd July 1969 on income
accruing or arising through or from business connection in India —
Non-residents — Liability to tax under clause (i) of sub-section (1), Circular
No. 163, dated 29th May 1975 on Agency engaged in activity of purchase of
goods for export and Circular No. 786, dated 7th February 2000 on Non-resident
agent operating outside the country have been withdrawn by the Board vide
aforementioned Circular.
18. Income tax (Eleventh Amendment) Rules, 2009 —
Notification no. 37/2009 dated 21 April 2009
The CBDT had amended the depreciation rate and provided for
enhanced depreciation on new commercial vehicles acquired after 1st January,
2009 and before 1 April 2009. By a recent amendment, the benefit is extended.
The benefit of enhanced depreciation on commercial vehicles shall now be
available for vehicles acquired up to 30th September 2009.
17. There are certain corrections made in ITR 2 and ITR 5
vide Notification no. 35/2009 dated 13 April 2009.
Income tax (10th Amendment) Rules, 2009 —Notification
36/2009 dated 13 April 2009
A new clause is inserted in Form 3CD for reporting interest
inadmissible under Section 23 of the Micro, Small and Medium Enterprises
Development Act, 2006.
15. Amendments in Income-tax Rules relating to TDS/TCS
provisions — Notification No. 31/2009, dtd. 25th March, 2009
The CBDT has notified Income-tax (8th Amendment Rules),
2009 in respect of TDS/TCS payments and compliance requirements with effect
from 1 April 2009. The highlights of these amendments are as under :Rules in relation to TDS on salary payments :
Rule No.
Amendments effective 01 April 2009
30(1)
If the credit is on the date up to
which accounts of the employer/deductor are made, then TDS to be deposited
within two months from the end of the month in which amount is credited to
the account of the employee/deductee.
In any other case, within one week from the end of
the month in which tax deducted/Income-tax due.
30(2)/(3)
Quarterly deposit of TDS on 15 June, 15 September,
15 December, 15 March, if the tax officer permits in special cases with
the prior approval of the Joint Commissioner.
30(4)/(5)
E-payment of tax in Form No.17 by way of internet
banking facility or use of credit/ debit card.
31(2)
a) In case of TDS on Salary
payments : TDS Certificate (Form 16) to be issued within one month
from the end of the financial year i.e., 30th April following the
relevant financial year.
b) In other cases :
§
If the credit is up to the date up to which the accounts of the deductor
are made, TDS Certificate (Form 16A) to be issued within one week from
the date on which tax deposited.
§
In case of a consolidated certificate/TDS under Section 194D, within one
month from the end of the financial year (i.e., 30th April).
§
In all other cases, within one month from the end of the month in which
tax deducted.
c) In case of quarterly payments of TDS in special
cases, within 14 days from the date of payment of Income-tax.
31(4)
The tax officer to grant credit of TDS on duplicate
Form 16 /16A after obtaining an indemnity bond from the employee and get
the payment certified from the prescribed person.
31A(3)
Compliance statement to be filed (Form 24C) by 15th
July, 15th October, 15th January for first three quarters of the relevant
financial year, respectively, and 15th June following the last quarter.
31A(4)
Quarterly statement of TDS to be filed in Form
24Q/26Q/27Q by 15th June following the financial year.
The new Rules in relation to tax collected at source :
New Rule 37BB along with new forms for furnishing of
information under Section 195(6) of the Act have been prescribed —Notification
no. 30/2009, dated 25 March 2009.
The CBDT has issued Income-tax (Seventh Amendment) Rules,
2009 effective 1 July 2009, wherein the method of issuing a CA certificate for
the purpose of non-resident remittances has been changed. As per the modified
procedure, new forms have been introduced viz.,
G Form 15CB to be issued by a Chartered Accountant in
which detailed explanations are required for arriving at the rate of
withholding taxG Form 15CA is required to be filled in by the payer and
submit electronically on the Income- tax websiteG Thereafter a printout of such electronically submitted
Form 15CA needs to be signed and submitted by the payer prior to remitting
the payment.
Miscellaneous — National Pension Scheme notified with
effect from 1 May 2009.
National Pension Scheme which was erstwhile applicable only
to Government employees is now made applicable to all the eligible citizens of
India (both resident and non-resident) of the age of 18 to 55 years of age,
with effect from 1 May 2009. An individual can contribute savings into this
non-withdrawable account which matures and can be annutised post 60 years of
age or as prescribed by the scheme. There is another voluntary contribution
scheme, wherein money can be withdrawn, however the same is yet to be
notified. To enrol in the scheme, an individual needs to submit a registration
Form UOS-s1 to selected agencies. NRIs should have a bank account in India to
register in this scheme. After the account is opened, the Central Record
Keeping Agency shall allot a unique Permanent Retirement Account Number (PRAN)
card. As per the scheme the minimum contribution is Rs. 500 (Rs. 6000 per
year) and a person needs to contribute at least 4 times a year. Investment
options are also available as prescribed in the scheme.
Clarifications on the amendments/introduction of the new
TDS/TCS provisions vide Notification No. 31/2009, dated 25 March
2009 — Circular No. 2/2009, dated 21 May 2009.
The CBDT vide a press release (as mentioned above) had
stalled the implementation of the new provisions relating to TDS/TCS
provisions till 1 July 1009. The CBDT has now reinstated the implementation of
these provisions with effect from 1 April 2009, by issuing this Circular and
clarifying certain ambiguities which arose due to the introduction/amendments
relating to the captioned subject. Important clarifications are under :
- Claim for TDS would be allowed only if amount has been
deposited and information relating to the deductee has been provided by the
deductor/collector and the claim matches with that of the deductee/collector.
- Central and State Government deductors have also been
made responsible for payment of TDS in the bank unlike earlier when book
adjustments/consolidated payments were allowed.
- Every deduction record will generate a Unique
Transaction Number (UTN) on loading the information on NSDL and payment of
the TDS/TCS to the Government Treasury. UTN would be emailed by the NSDL to
the deductor, and needs to be quoted in the TDS certificate. This UTN can
also be independently viewed by the deductee on the website of NSDL.
- It is mandatory for all TAN holders to furnish Form 24C
quarterly irrespective of whether any payment liable to TDS has been made or
not. The first quarter in respect of which Form 24C is required to be
furnished is the quarter ending on 30th June, 2009 by 15th July.
- The above new system will be effective for all TDS/TCS
on or after the 1st April, 2009. However, any TDS or TCS effected on or
after the 1st April, 2009 but not later than 31st May, 2009 can be continued
to be paid to the credit of the Central Government by using the old challan
form. Post 1st June, 2009 such TDS/TCS shall be required to be paid by
electronically by furnishing income tax challan in Form No. 17. By 15 July,
for those TDS/TCS which have been paid in the old challan, Form No 17 needs
to be filled up so that UTNs for these can be generated.
- For splitting the payment of TDS/TCS , a separate Form
17 needs to be filled for each payment.
- In the said Circular, it has been clarified for the AY
2008-09 and onwards, UTNs are going to be generated by NSDL and detailed
procedure has been prescribed for claiming TDS on the basis of this UTNs.
Since the returns for AY 2008-09 have already been filed, it remains to be
seen how this would be practically implemented.
- Similarly new procedures have been prescribed for issue
of TDS/TCS certificates in Form 16/16A and 27D.
Instructions for new Income Tax Return forms for Assessment
Year 2009-2010 — Circular No. 3/2009, dated 21 May 2009.
Certain clarifications have been given by the CBDT for
the E-returns for AY
2009-10, the important ones being :
It has been reiterated that no enclosures need to be
submitted along with the paper return. The only exception being transfer
pricing report which needs to be filed separately as per the provisions of the
Act.
With respect to E-filing(without digital signatures) and
subsequent filing of verification form in ITR-V — hard copy of verification
form ITR-V now can be filed within 30 days (instead of the earlier time limit
of 15 days) from date of electronic filing. Further, the CBDT has decided to
process all the paper returns i.e., ITR V Centrally at Bangalore.
Hence, all the ITR V needs to be sent by the assessee at the following
address :
“Income Tax Department — CPC, Post Box No.1, Electronic
City Post Office, Bangalore- 560100, Karnataka”
Please note that it has been specifically mentioned that
the document should be posted in A-4 size envelope without folding it since
the ITR V is bar-coded. On receipt of the ITRV, the Department will email an
acknowledgement to the taxpayer at the email id mentioned in the ITR V. There
is only one exception being ITR 7 which is Trust returns.
It has been reiterated in this Circular that the credit
for TDS/TCS and the advance tax/self assessment tax would be available mainly
on the basis of the UTN information and CIN information feeded in the return.
Press Release dated May, 15th 2009.
The Reserve Bank has designated 926 branches of private and
public sector banks for receiving advance Income tax in Mumbai and Navi
Mumbai. Out of these 926 branches, 862 are public sector banks and 35 are HDFC
bank branches, 10 are ICICI bank branches and 19 are AXIS bank branches.
Press Release No. 402/92/2009 — MC (11 of 2009), dated
11.5.2009
The Central Board of Direct Taxes have decided to defer the
implementation of Notification No.31/2009, dated 25-3-2009 amending or
substituting Rules 30, 31, 31A and 31AA of the Income Tax Rules, 1962. The
amended/substituted Rules will now come into effect on 1st July 2009 instead
of 1st April 2009. Tax deductors/collectors may continue to deposit TDS/TCS
tax and file TDS/TCS returns as per the pre-amended provisions in the interim
period. This however is only for records due to the Circular issued later
which is outlined below.
TDS on commission paid by MTNL/BSNL to owners of PCO under
Section 194-H of Income-tax Act, 1961 —Instruction No. 03/2009, dated 8.5.2009
(reproduced) — [F.
No. 275/15/2002-IT(B)]
A number of representations have been received from BSNL/MTNL
and field formations regarding raising of/pending demands for non-deduction of
tax at source on commission payments to the franchisees/PCO owners by MTNL and
BSNL prior to 1/6/2007. The matter was discussed by the Board recently and it
has been decided that the demands raised against MTNL/BSNL on account of
non-deduction of TDS u/s. 194H on all such commission payments to franchisee/PCO
owners, etc. may not be enforced till the matter is sorted out by the Board.
However, in case MTNL/BSNL have already deducted TDS on commission payments to
the PCO owners, etc., but have not deposited it to the Govt. accounts because
of incorrect interpretations of instruction dated 15th July, 2002, they have
to be directed to deposit such sums immediately to the Govt. Account.
Part B : Indirect taxes
Updates in VAT and Service Tax :
MVAT UPDATE
Mvat Notifications
Notification No. 20/2009-Service Tax, dated 7-7-2009 :
w.r.t. sub-clause (n) of clause (105) of S. 65.
By this Notification the services provided to any person by
a tour operator having a contract carriage permit for inter-state or
intrastate transportation of passengers, excluding tourism, conducted tours,
charter or hire service, have been made exempt from levy of service tax.
Part B : Indirect taxes
Updates in VAT and Service Tax :
MVAT UPDATE
Mvat Notifications
Notification No. 21/2009-Service Tax, dated 7-7-2009 :
Amendments in Notification No. 1/2002-Service Tax, dated 1-3-2002.
By this Notification, the levy of service tax has been
extended to services provided at the installations, structures and vessels in
the entire Continental Shelf of India and Exclusive Economic Zone of India.
Part B : Indirect taxes
Updates in VAT and Service Tax :
MVAT UPDATE
Mvat Notifications
Notification No. 19/2009-Service Tax, dated 7-7-2009 :
w.r.t. sub-clause (zzb) and (zzp) of clause (105) of S. 65.
By this Notification services in relation to transaction of
purchase and sale of foreign currency between scheduled banks have been made
exempt. This exemption is applicable only for banks included in Second
Schedule of the Reserve Bank of India Act, 1934.
Part B : Indirect taxes
Updates in VAT and Service Tax :
MVAT UPDATE
Mvat Notifications
Notification No. 18/2009-Service Tax, dated 7-7-2009 :
w.r.t. sub-clause (zzb) and (zzp) of clause (105) of S. 65.
By this Notification the taxable service provided to an
exporter for transport of the goods by road and service provided by a
commission agent located outside India for procuring orders (Exemption is
limited to 1% of the FOB value) has been exempted from service tax subject to
conditions.
Part B : Indirect taxes
Updates in VAT and Service Tax :
MVAT UPDATE
Mvat Notifications
Notification No. 17/2009-Service Tax, dated 7-7-2009 :
Services received by exporters exempted.
This Notification supersedes Notification No. 41/2007-
Service Tax, dated the 6th October, 2007. By this Notification taxable
services specified in column (3) of the Table appended to this Notification
received by an exporter of goods and used for export of goods pertaining to
sub-clauses of clause (105) of S. 65 have been exempted from service tax.
Part B : Indirect taxes
Updates in VAT and Service Tax :
MVAT UPDATE
Mvat Notifications
Exemption to some clubs and associations : Notification No.
16/2009-Service Tax, dated 7-7-2009 w.r.t. sub-clause (zzze) of clause (105)
of S. 65.
By this Notification, services provided by certain clubs
and associations have been made exempt from the levy of service tax.
Part B : Indirect taxes
Updates in VAT and Service Tax :
MVAT UPDATE
Mvat Notifications
Amendment to the Notification No. VAT-1505/CR-237, dated
17-10-2005 regarding mobile phones : Notification No.
VAT-1509/CR-81-E/Taxation-1, dated 29-6-2009.
By this Notification the Commissioner has deleted some
items from Entry C-56 so that some products like mobile phones, digital
camera, etc. are liable at 12.50% w.e.f. 1-7-2009.
Service Tax Update
Notifications :
Part B : Indirect taxes
Updates in VAT and Service Tax :
MVAT UPDATE
Mvat Notifications
Nil rate of tax for solar energy devices : Notification No.
VAT-1509/CR-81-B(1)/Taxation-1, dated 29-6-2009.
By this Notification the Commissioner has notified list of
solar energy devices under Entry A-56 at NIL rate of tax w.e.f. 1-7-2009.
Part B : Indirect taxes
Updates in VAT and Service Tax :
MVAT UPDATE
Mvat Notifications
Concessional rate for sales by a registered dealer to the
Department of Space, Government of India of goods used in Satellite Launch
System : Notification No. VAT-1509/CR-81-A/Taxation-1, dated 29-6-2009.
By this Notification the Commissioner has added an entry to
the Schedule appended to Notification No.VAT-1505/C.R.-192/Taxation-1, dated
19-4-2007 so that specified sales by a registered dealer to the Department of
Space, Government of India of goods used in Satellite Launch System can be
made at concessional rate of tax.
Part B : Indirect taxes
Updates in VAT and Service Tax :
MVAT UPDATE
Mvat Notifications
Maharashtra Tax Laws (Levy, Amendment and Validation) Act,
2009 : Notification No. VAT-1509/CR-78/Taxation-1, dated 29-6-2009.
By this Notification the Commissioner has notified
Maharashtra Tax Laws (Levy, Amendment and Validation) Act, 2009 to be
effective from 1st July 2009 wherever applicable.By Maharashtra Tax Laws (Levy, Amendment and Validation)
Act, 2009 following Acts are amended :
(a) Amendment to Schedule I appended to the Bombay Stamp
Act, 1958;(b) Amendment to Third Schedule appended to the Bombay
Motor Vehicles Tax Act, 1958;(c) Amendment to Schedule I of the Maharashtra State Tax
on Professions, Trades, Callings And Employments Act, 1975;(d) Amendment to S. 20, S. 29, S. 30, S. 63, S. 85 and
amendment to Schedules A, B, C & D of the Maharashtra Value Added Tax Act,
2002.
Part B : Indirect taxes
Updates in VAT and Service Tax :
MVAT UPDATE
Mvat Notifications
Maharashtra Value Added Tax (2nd Amendment) Rules, 2009 :
Notification No. VAT-1509/CR-16/Taxaion, dated 18-6-2009.
By this Notification the Commissioner has amended Rules 17,
17A, 20, 40, 41, 45, & 53.
Part B : Indirect taxes
Updates in VAT and Service Tax :
MVAT UPDATE
Mvat Circulars
Waiver of penalty in certain cases for non-filing of
returns within prescribed time : Trade Circular No. 21T of 2009, dtd.
4-7-2009.
In pursuance of the announcement made by the Finance
Minister in his Budget Speech, the Commissioner has announced a scheme for
waiver of penalty as follows :
(a) if the dealers, who have not filed one or more
returns for the periods starting on or after 1st April 2005 and ending on
30th June 2009, file all such pending returns electronically along with the
due payment with interest on or before 31st July 2009, then penalty for late
filing of returns will not be levied.(b) In a case where for the period starting on or after
1st April 2005 and ending on 30th June 2009, if penalty is imposed and
recovered, then the dealer will not be entitled for the refund of such
amount.(c) In a case where the penalty has been already levied
for non-filing of returns but the same has not been paid by the dealer, it
will not be recovered if the dealer files all his pending returns
electronically with payment of tax and interest up to 31st July 2009.(d) Where the penalty is already levied and the dealer
has filed an appeal against the said penalty order, then the said penalty or
part of the penalty outstanding shall not be recovered if the dealer files
all his returns up to 31st July 2009 along with payment of tax with
interest. The dealer must however, withdraw the appeal against such order
unconditionally before availing this benefit. The part payment made in
appeal shall not be refunded.
Part B : Indirect taxes
Updates in VAT and Service Tax :
MVAT UPDATE
Mvat Notifications
Amendment to Rule 58 by inserting Sub-Rule (1A) :
Notification No. VAT-1507/CR-53/Taxation-1, dated 1-6-2009.
By this Notification, the Commissioner has amen-ded Rule 58
by inserting Sub-Rule (1A) after Sub-Rule (1) with retrospective effect from
20-6-2006.New Sub-Rule (1A) lays down the method of valuation of
goods transferred in the execution of construction contracts wherein, along
with the immovable property, the land or interest in the land, underlying the
immovable property is to be conveyed. The value of the said goods at the time
of the transfer shall be calculated after making deductions under Sub-Rule (1)
and for the cost of the land from the total agreement value. The cost of the
land shall be determined in accordance with the guidelines appended to the
Annual Statement of Rates prepared under the provisions of the Bombay Stamp
(Determination of True Market Value of Property) Rules, 1995, as applicable on
the 1st January of the year in which the agreement to sell the property is
registered. Deduction towards cost of land under this sub-rule shall not
exceed 70% of the agreement value.
Part A : Direct taxes
Procedure for representation before BIFR and AAIFR :
Circular No. 5/2009, dated 2-7-2009.
For granting income-tax reliefs/concessions to be given to
sick companies for their rehabilitation under the Sick Industrial Companies (SICA)
Act, 1985 the CBDT has issued a Circular superseding all earlier ones issued on
this account — prescribing method to be followed before the Board for Industrial
and Financial Reconstruction (BIFR) and the Appellate Authority for Industrial
and Financial Reconstruction (AAIFR).
The Director General Income Tax
(Administration), [DGIT (Admn.)] has been nominated as a nodal agency for co-ordinating
between BIFR, AAIFR and CBDT.
Every scheme where financial
assistance is sought u/s.19(2) of SICA, the consent would be granted by the
DGIT (Admn.) by considering each case on merits. Where the tax relief has been
quantified, the DGIT (Admn.) would communicate the consent/denial after
getting it approved from the CBDT. In case of incomplete information, after
calling for requisite information, the file would be put up to the CBDT and
the decision be conveyed to BIFR.
Since all the above relief
decisions are vetted by the CBDT, they would be binding on all Assessing
Officers and relief would be granted to the assessees accordingly.
In case BIFR/AAIFR takes a
different view from CBDT, the DGIT (Admn.) would be responsible for filing an
appeal before AAIFR/Delhi High Court as the case may be. Where the case is
filed by sick companies, the CCIT (Admn.) would be responsible to represent
the Department before the Appellate Authority.
11. India Luxembourg Social Security Agreement signed : Press
Release dated 30-9-2009.
• Rule 31A provides for an option of electronic filing of quarterly returns of TDS – with digital signature.
• Refund claim can be lodged by the deductor by filing Form 26B electronically with digital signature as prescribed.
• Details of TDS not deducted as per the provisions of Section 197A(1F) need to be furnished in the form.
Similar provisions are provided for rules pertaining to Tax Collection at Source u/s. 206C. Form 26A being certificate – of Accountant u/s. 201(1), Form 27BA being certificate of Accountant u/s. 206C(6A), Form 15G being declaration for no deduction of TDS by certain persons u/s. 197A(1) & 197A(1A), Form 15H being declaration for non deduction by individuals above the age of sixty years u/s. 197A(1C), Form No. 16 being TDS on Salary, Form 16A being TDS on other income, Form 24Q, Form 26Q,27Q, 27C, 27D and Form 27EQ being quarterly statement of TDS/TCS to be filed by deductors have been substituted. Further, a new Form 26B is notified for claim of refund.
DTAA between India and Malaysia signed on 9th May, 2012 shall enter into force on 26th December, 2012
2: Income tax (First amendment) Rules, 2013 Notification No- 8 dated 31st January, 2013–
New Rule 17CA has been inserted to enumerate the functions of an electoral trust. Form 10BC has been prescribed as an Audit Report for such electoral trusts.
3: Electoral Trusts Scheme 2013 notified under Section 10(22AAA) – Notification No- 9 dated 31st January, 2013
(b) Annual Report for AY 2011-12, 2012-13 and 2013-14 (if not finalised, submit unaudited results)
(c) Tax Audit Report for AY 2011-12, 2012-13 and 2013- 14 (if finalised)
(d) Wherever there is delay in payment of TDS as per Tax Audit Report, attach proof of payment of interest.
(e) List of parties included in the projected receipts with their TAN and expected amount.
(f) If there is fall in net profit for Financial Year 13-14 as compared to earlier three years then reasons for fall in net profit.
(g) Copies of Provisional TDS statement of FY 2010-11, 2011-12 and 2012-13.
(a) Foreign principal performs most of the economically significant functions involved in research or product development cycle whereas Indian development centre would largely by involved in economically insignificant functions;
(b) The principal provides funds. capital and other economically significant assets including intangibles for research or product development and Indian development centre would not use any other economically significant assets including intangibles in research or product development;
(c) Indian development centre works under direct supervision of foreign principal who not only has capability to control or supervise, but also actually controls or supervises research or product development through its strategic decisions to perform core functions as well as monitor activities on regular basis;
(d) Indian development centre does not assume or has no economically significant realised risks. If a contract shows the principal to be controlling the risk but conduct shows that Indian development centre is doing so, then the contractual terms are not the final determinant of actual activities. In the case of foreign principal being located in a country/territory widely perceived as a low or no tax jurisdiction, it will be presumed that the foreign principal is not controlling the risk. However, the Indian development centre may rebut this presumption to the satisfaction of the revenue authorities; and
(e) Indian development centre has no ownership right (legal or economic) on outcome of research which vests with foreign principal, and that it shall be evident from conduct of the parties.
Further, it has been clarified that all the above conditions should be actually proved by conduct of parties and not mere contractual terms.
