IT: Where assessee had consistently held shares as investments and valued them at cost, gain from sale of shares could not be held as business income
Wednesday 18 September 2013
Riots causing failure to pay self-assessment tax is an unfortunate event; HC deleted penalty for suc
IT : Where due to riot, assessee suffered extensive damage and, hence, was unable to pay self assessment tax, no penalty for period after date of riot would be levied
Application seeking amendment to written statement rejected as it was irrelevant to decide oppressio
CL: CLB justified in rejecting application seeking amendment of written statement, which were irrelevant for determining main controversy as regards transfer of shares
Service-Tax Rules don’t require advance payment of Service-Tax
ST/ECJ : Service tax is a tax on provision of services and is, in principle, payable only after happening of taxable event; hence, rules cannot require payment of service tax in advance for a period which has not yet expired
Uttarakhand hospitality sector exempted from service tax for 6 months
The Centre has exempted the hospitality industry in the flood-ravaged Uttarakhand from service tax till March 2014.
The floods and landslides on June 16 had caused extensive damage in Uttarakhand and adversely affected the life of the people in the state.
"There is a need to provide support to ensure sustenance for the local population by reviving the hospitality industry," Central Board of Excise and Customs (CBEC) said in its 'ad-hoc exemption order'.
In the wake of circumstances of exceptional nature, the CBEC said it has been decided to exempt taxable "services by way of renting of a room in a hotel, inn, guest house, club, campsite or other commercial place meant for residential or lodging purposes."
The levy has also been exempted on "services provided in relation to serving of food or beverages by a restaurant, eating joint or mess."
"This exemption order is applicable for the above- mentioned taxable services provided during the period September 17, 2013, to March 31, 2014," the CBEC said.
Thousands of people, including pilgrims, were killed in the state in the aftermath of the mid-June flash-floods and landslides. About 4,120 people are reported missing.
Govt issues guidelines to bring greater clarity in cross-border transactions
The finance ministry on Wednesday sweetened the deal for multinationals and Indian companies with overseas arms, involving cross-border tax disputes, in a bid to avoid litigation and boost investor confidence.
The government has issued "safe harbour" rules to bring greater clarity in cross-border transactions. The rules usually come with fixed prescribed margins and involve simpler compliance commitments than the general transfer pricing rules. Safe harbour rules are globally accepted norms although countries have tailored them to suit their specific requirements.
Transfer pricing applies to cross-border transactions of companies and their affiliates in other countries. The rules enable tax authorities to "value" goods and services exchanged between these companies as they are not done at "market prices".
In recent months several global giants such as Vodafone and Shell have complained of being adversely hit by the tax department's transfer pricing moves.
As a result, the government had issued draft rules, which have now been finalized after incorporating several suggestions made by investors. "The government has responded very quickly (to the suggestions) and that shows its commitment to improve the business sentiment," said Rahul Garg, head of direct tax practice at consulting firm PricewaterhouseCoopers.
"The litigation on transfer pricing, which has grown significantly over the years, should abate as a result of this," added KPMG India deputy CEO Dinesh Kanabar.
The government has tweaked the rules from what it had originally proposed to address the concerns. The biggest comfort comes in the form of an assurance that starting assessment year 2013-14, the rules will be in place for five years, which industry views as a big positive.
The draft norms had proposed that only IT and ITeS companies with transaction size of up to Rs 100 crore would be covered by the rules. On Wednesday, revenue secretary Sumit Bose said the ceiling has been removed.
Through the rules the government has essentially provided that companies with operating profit margin beyond a prescribed level can opt for the rules. For instance, in case of IT and IT-enabled services, transactions up to Rs 500 crore have been provided a safe harbour of 20%, which will rise to 22% beyond the Rs 500 crore threshold. So, if both criteria are met, a company in the IT sector, for instance, can make use of the safe harbour rules and lower its compliance burden. In the final set of rules, a special dispensation has been provided for knowledge process outsourcing firms, which were earlier clubbed with IT-enabled services. For KPOs, the safe harbour operating margin has been cut from 30% to 25%.
"It (the revision) increases coverage of safe harbours to larger companies and moderates safe harbour margin for KPOs... The CBDT should have done away with the bifurcation of IT and IT enabled services, to avoid unnecessary classification disputes. The revision would also increase the number of multinational companies opting for safe harbours. However, for the Indian companies having foreign businesses, both on outbound loans and guarantees a lot more could have been done," said Vijay Iyer, partner at consulting firm EY.
FinMin asks CBDT to clarify taxes on offshore fund managers
In what could result in a huge relief for the Indian fund industry, the finance ministry has nudged the CBDT (Central Board of Direct Taxes) to issue a clarification on the taxation of fund managers of an offshore fund. The ministry believes that fund managers managing offshore funds are being driven out of India to Singapore due to adverse tax provisions, reports CNBC-TV18’s Payaswini Upadhyay. In a letter dated September 9, the finance ministry had directed the CBDT to clarify that simply because a fund manager of an offshore fund is located in India; it would not constitute a business connection. Also read: Tide has turned, EM ETFs seeing good inflows: Morningstar The concept becomes important because once a business connection is constituted; the Indian fund becomes a permanent establishment liable to be taxed at 40 percent. The board of the fund ultimately takes a decision on whether to invest or divest from India. The issue which comes up as on the ground presence is required, especially in case of private equity funds. A lot of ground work is needed and the core team usually sits in India.” Several countries including the United Kingdom, Singapore, Hong Kong, United States, and New Zealand provide for a safe harbour to prevent offshore funds from having a taxable presence in their respective jurisdictions. |
Capital gains arise from dealing in shares if portfolio manager is appointed by assessee for wealth
IT : Where assessee-trust invested its corpus fund in purchase of shares/securities through Portfolio Management Services, gain on sale of such shares/securities would be assessed as capital gains
Re-assessment initiated on Assessing Officer's conviction but concluded on other matters is bad in l
IT/ILT: Reassessment order passed is invalid if income other than income which formed basis for reopening was considered for assessment
Exercise Utmost Caution In Arrests: Cbec To Excise Officials
September 18, 2013
The CBEC has asked its officers to exercise utmost caution while arresting persons for cognisable and non-bailable offences for alleged violation of excise duty laws.
"Powers to arrest a person needs to be exercised with utmost caution. Chief Commissioners/Commissioners of Central Excise are required to ensure that approval for arrest for non-bailable offence is granted only where the intent to evade duty is evident and element of mens rea/ guilty mind is palpable," CBEC said in a communication to field formations.
The Finance Act 2013 has made certain offences where the excise duty evasion exceeds Rs 50 lakh as congnisable and non-bailable and gave powers to the officers of the Central Board of Excise and Customs (CBEC) to arrest the alleged offenders.
The list of offences for which a CBEC Commissioner is empowered to order arrest, include clandestine removal of manufactured goods, removal of without declaring correct value, taking Cenvat credit on fake invoices and issuing cenvatable invoices without delivery of goods.
In certain cases, Commissioners have to take permission of their jurisdictional Chief Commissioners.
The communication further said that decision to arrest needs to be taken on case-to-case basis considering various factors, such as, nature and gravity of offence, quantum of duty evaded or credit wrongfully availed.
"...Power to arrest has to be exercised after careful consideration of the facts of the case," it said, adding, arrested person should be produced with the appropriate magistrate within 24 hours.
There are only 1.2 lakh excise duty assesses in the country.
Source:-www.business-standard.com
Gold Imports May Fall 11 Pct To 750 Tonnes In 2013/14
India's gold imports could be 750 tonnes in the current fiscal year ending March 31, 2014, a government official said, down 11 percent from last year as official measures curb purchases in what has been the world's biggest bullion buyer.
Gold is the most expensive non-essential item in the country's import bill and the government has tried to bring it down, reducing the trade gap and helping bring some stability to the battered rupee currency, which hit a record low last month.
"We have already seen the import of gold coming down drastically," said Arvind Mayaram, economic affairs secretary at the ministry of finance.
"Because of the measures we have taken we expect imports of only 750 tonnes," he said, adding it could be lower.
Gold imports were 845 tonnes in the last fiscal year, Finance Minister P. Chidambaram said in July, helping to spur the current account deficit to an all-time high and prompting the government to raise import duty to a record 10 percent.
Chidambaram said then he hoped they would be "well below" that level this year.
"My sense is it would be much sharper than 100 tonnes" fall from "business as usual" levels of 850 tonnes, Mayaram said on Wednesday.
With gold-loving Indians already shipping in 380.5 tonnes between April and July, the latest forecast for annual shipments on Wednesday by Mayaram would mean they will average just over 50 tonnes a month from September until March 31, 2014.
India's gold bonanza came in April and May along with massive buying in the rest of the world as prices slumped. Indians also buy gold as a hedge against inflation and as a traditional gift at festivals and weddings.
The wedding season will kick off in about a month and in addition, this year a hefty monsoon has boosted farm output which could raise incomes in rural areas where 60 percent of India's gold buying comes from.
Domestic prices have climbed to hit a record 35,074 rupees per 10 grams on August 28, partly fuelled by the falling rupee, and international prices have shed 22 percent since the start of the year, helping to keep hopes sustained that gold will still have space to give buyers good returns.
While demand from Indians may rise sharply, supplies remain constrained by the central bank's rules, including its stipulation that 20 percent of all imports must be turned around as jewellery for export.
Source:-in.reuters.com
Ranbaxy Import Ban: Us Regulator Found What Could Be Hair, Oil In Tablets
NEW DELHI: Tablets embedded with "black fibre" that was suspected to be hair from an employee's arm, "black spots" of oil from machines in tablets and absence of running water in toilets were some observations made by US Food and Drug Administration that has banned import of drugs made at Ranbaxy's Mohali unit.
According to USFDA documents sent to Ranbaxy's Mohali plant head after a series of inspections in 2011 and 2012, the US health regulator made 11 observations citing various violations of current good manufacturing practices (cGMP).
"There is a failure to thoroughly review any unexplained discrepancy in the failure of a batch or any of its components to meet any of its specifications whether or not the batch has been already distributed," the USFDA said.
Citing an example, the USFDA observed that in August 2012 it was concluded that a "black fibre embedded in a tablet" was likely either "tape remnants on the nozzle head of the machine or a hair from an employee's arm that could be exposed on loading the machine".
"The firm did not conduct any analysis of the fibre to support these root causes. Further, a plan to evaluate whether the corrective actions of trimming the tape and implementing longer gloves for employees were effective was not established," it added.
Comments from Ranbaxy Laboratories could not be obtained as a query remained unanswered. Earlier, it had however said it "will review the details and will continue to fully cooperate with the US FDA and take all necessary steps to resolve the concerns at the earliest".
Pointing out further cGMP violations, the USFDA said in response to the presence of black spots observed during tablet compression, "the investigation did not include chemical analysis of the tablet or contaminated tablets to support the absence of contamination and the root cause, which was determined to have originated from oil in the compression machine."
The USFDA also pointed out the lack of hygiene in the toilet complexes of the plant.
"During the course of the inspection, the toilet facility adjoining change room of the raw material storage area did not have running water for hand washing and toilet flushing," it said.
Stating that washing and toilet facilities lacked hot and cold water, USFDA further said: "Additionally, there are no procedures to direct employees to wash hands with soap and water after toilet use and prior to gowning."
The Mohali plant (in Punjab) is the company's third plant to come under the USFDA import alert after the Dewas (Madhya Pradesh) and Paonta Sahib (Himachal Pradesh) plants.
In May, Ranbaxy pleaded guilty to "felony charges" related to the manufacture and distribution of certain 'adulterated' drugs made at two units in India and agreed to pay $500 million to US authorities as a penalty.
This followed a series of actions by the US authorities and the FDA, which in 2008 banned the import of 30 generic drugs produced by Ranbaxy at its Dewas and Paonta Sahib plants for violation of manufacturing norms.
Source:-timesofindia.indiatimes.com
India Cements Mulls Export Option
India Cements is contemplating exports to reap the benefits of a falling rupee as also improve capacity utilisation at its plants, according to N. Srinivasan, Vice-Chairman and Managing Director of the company.
Addressing shareholders at the annual general meeting here on Wednesday, Mr. Srinivasan said the company was taking all necessary measures at the operational level to improve the working results in the remaining part of the current fiscal. The company expected a revival in demand in the coming quarters, driven by rural markets and government spending on infrastructure.
Against the backdrop of difficult economic situation, the company could achieve a satisfactory performance in 2012-13 with cement production growing by 5 per cent to 99.40 lakh tonne. The performance would have been better but for the worsening power situation in Andhra Pradesh, Mr. Srinivasan said.
During the first quarter ended September 30, 2013, the company increased its clinker production by 15 per cent to 20.78 lakh tonne, and the volume of cement and clinker rose by 11 per cent to 26.49 lakh tonne.
During the year, the 48 MW-power plant at Sankarnagar went fully operational.
The company’s plans to move coal from its own mines in Indonesia took final shape, and the first shipment arrived in May. The company was also on the look out for other alternative fuels available at cheaper prices within the vicinity of the plant, Mr. Srinivasan said.
Source:-www.thehindu.com
Yog trust is tax exempt; its main object is to impart yoga training, for education and curing diseas
IT : Imparting of yoga training through well structured yoga shivir/camps falls under category of imparting education which is one of charitable objects defined under section 2(15)
SEBI incorporates Angel funds in Alternate Investment Funds; inserts new chapter on Angel Funds
SEBI : SEBI (Alternative Investment Funds) (Amendment) Regulations, 2013 - Amendment in Regulations 2, 3, 6, 10, 15, 16, 17 & 18 and Second Schedule and Insertion of Chapter III-A
RBI's helping hand to beneficiaries of Govt. schemes; their bank accounts won't be dormant, it clari
BANKING : Unclaimed Deposits/Inoperative Accounts in Banks - Treatment of Certain Savings Bank Accounts Opened for Credit of Scholarship Amounts and Credit of Direct Benefit Transfer under Government Schemes
Exemption to boarding/lodging and restaurant/mess services provided in Uttarakhand up to 31-3-2014
ST : Section 66E(a), Read with Section 66E(i), of The Finance Act, 1994 - Declared Services - Renting of Hotel, Inn, Guest House and Restaurant/Mess Services Provided in The State of Uttarakhand Exempted from Service Tax upto 31-3-2014 - Adhoc Exemption Granted Under Section 93(2)
SEBI announces revised format for filing of reports under buy-back regulations
SEBI : Formats for Filing Reports in Terms of Regulations 15(i) and 20(j) of SEBI (Buy Back of Securities) Regulations, 1998
RBI puts breaks on online FOREX trading in violation of FEMA; asks banks to shut customer's a/c on s
FEMA/ILT : Overseas Forex Trading Through Electronic/Internet Trading Portals
Sec. 226 notice to escrow agent is invalid if no amount is held by him in relation to assessee
IT: Where Assessing Officer raised tax demand upon assessee and for recovery of said demand issued notice under section 226(3) on an escrow agent, who furnished an affidavit to effect that no amount was held by it on account of assessee, impugned notice was without jurisdiction
I-T dept extends date for applications
The Income Tax Department today extended the date to November 30 for filing of applications by Electoral Trusts for getting tax benefits on donations given to political parties.
"The Central Board of Direct Taxes (CBDT) has permitted Electoral Trusts to file their applications up to November 30, 2013 in respect of Assessment Year 2014-15 for approval under clause (22AAA) of Section 2 of the Income-tax Act, 1961...," the Finance Ministry said in a statement.
Earlier, the last date for filing applications by such non-profit companies for the next Assessment Year was July 31.
The government notified the Electoral Trusts Scheme earlier this year to streamline the process and bringing in more transparency in the funds provided by corporate entities to the political parties for election-related expenses.
The move was aimed at bringing greater transparency in corporate funding of political parties' poll expenses.
The scheme permitted the entities to register non-profit companies having 'Electoral Trust' as part of their names, thus differentiating them from the companies having other business interests.
As per the scheme, such companies can get tax benefits only if they distribute 95 per cent of total contributions received by them in any financial year to the registered political parties within that year itself.
Besides, they can not receive any contribution in cash and they are required to take the Permanent Account Number of all contributors who are resident Indians, and passport number of non-resident Indian citizens at the time of receiving the contribution.
These Electoral Trust companies are not allowed to accept contributions from foreign citizens or companies.
As per the rules, all donations to political parties should be made only through cheques to get tax benefits.
Many business conglomerates, including Tatas, Aditya Birla group and Bharti Groups, have in the past disclosed having made contributions to different political parties through their trusts.
COMMISSIONER OF INCOME TAX-XIV Vs. MR. GHORAYED EMILE
|
Option to pay service tax on receipt basis under Rule 6 of ST Rules is valid
ST/ECJ : Third proviso to rule 6(1) of Service Tax Rules, 1994 providing that, in cases falling thereunder, receipt of price is event which renders tax chargeable/payable, is valid
Payment of subscription fee to Irish co. to access research products was 'royalty'; Wipro's case fol
IT/ILT : Subscription fee to subscribe to a research product sold by assessee, a foreign company, amounted to royalty
Project can't be completed without incurrence of underlying cost; assessee-builder can't follow both
IT: Where costs forming part of construction project were yet to be incurred, project could not be held to have been completed, and profit thereon could be booked only to proportionate extent, even if occupancy certificate stood received and possession had been transferred in most cases
HC extended time for filing appeal before CCE (Appeals) as single appeal was filed against two order
ST: Where assessee filed a common appeal before Commissioner (Appeals) against two adjudication orders, High Court allowed assessee to prefer separate appeals within two weeks from date of present judgment
HC dismissed appeal against direction of CLB referring dispute of oppression to arbitration
CL: An appeal filed under section 10F against order passed by CLB allowing application made by a party under section 8 of 1996 Act and referring dispute between parties under sections 397 and 398 to arbitration, is not maintainable
Stiffer norms on gold lending; no ads ensuring loans in few minutes, PAN of borrower for loan above
NBFCs: Lending Against Security of Single Product - Gold Jewellery
RBI expands scope of infrastructure sector for purposes of borrowing in foreign exchange
FEMA/ILT : FEM (Borrowing or Lending in Foreign Exchange) (Third Amendment) Regulations, 2013 – Amendment in Schedule I & Schedule II
RBI notifies new definition of 'Qualified Foreign Investors' for FEMA Deposit Regulations
FEMA/ILT : FEM (Deposit) (Third Amendment) Regulations, 2012 - Amendment in Regulations 2 & 5 – Corrigendum to Notification [No.FEMA.243/2012-RB]/GSR 798(E), Dated 19-10-2012
RBI allows MSEs to issue securities to non-residents for list of items mentioned in Annex A
FEMA/ILT : FEM (Transfer or Issue of Security by A Person Resident Outside India) (Fourth Amendment) Regulations, 2012 – Amendment in Schedule 1 – Corrigendum to Notification [No. FEMA 230/2012-RB]/GSR 797(E), Dated 29-5-2012
Foreign Exchange Counters to be opened for NRIs in international airports for money changing facilit
FEMA/ILT : Memorandum of Instructions Governing Money Changing Activities - Location of Forex Counters in International Airports in India
If manner of working out book profits was not challenged before ITAT, it couldn't be raised before H
IT : Where assessee did not challenge manner of computation of book profit by Assessing Officer before Tribunal, it now in fourth appeal could not be allowed and permitted to raise contention that adjustments required for computing book profit under section 115JA had been wrongly made by Assessing Officer
Transfer of property by supplier after its testing is contract of sale and not a works contract
IT : Where property in machineries was transferred to assessee only after they were inspected and tested by supplier and then dispatched, it was a contract of sale and not a works contract
Extend the date for filing of the Form Stock-1 online to 5th October, 2013 for all dealers.
In supersession of all previous Notifications, regarding date for filing of Stock Statement in Form Stock-1 online for the stock available on 315t March, 2013, I, Prashant Goyal, Commissioner, Value Added Tax, in exercise of the powers conferred on me under sub-section( 1) read with sub-section (3) of section 70 of Delhi Value Added Tax Act, 2004, do hereby extend the date for filing of the said form to 5th October, 2013 for all dealers. |
AD-HOC EXEMPTION ORDER NO.1/1/2013 dated 17-09-2013
Government of India
Ministry of Finance
Department of Revenue
Tax Research Unit
AD-HOC EXEMPTION ORDER NO.1/1/2013
New Delhi, 17th September, 2013
Whereas the recent floods and landslides has caused extensive damage in the State of Uttarakhand and has adversely affected the life of the common man in the state. There is a need to provide support to ensure sustenance for the local population by revival of the hospitality industry;
And whereas taxable services provided in the State of Uttarakhand are chargeable to service tax;
Now therefore, in exercise of the powers conferred by sub-section (2) of section 93 of the Finance Act, 1994 (32 of 1994), the Central Government, on being satisfied that it is necessary in the public interest so to do and that there are circumstances of exceptional nature as mentioned above, hereby exempts the following taxable service provided to any person in the State of Uttarakhand, from the whole of service tax leviable thereon under section 66B of the Finance Act, 1994 (32 of 1994), namely:-
- Services by way of renting of a room in a hotel, inn, guest house, club, campsite or other commercial place meant for residential or lodging purposes;
- Services provided in relation to serving of food or beverages by a restaurant, eating joint or mess
This exemption order is applicable for the above mentioned taxable services provided during the period 17th September, 2013 to 31st March, 2014.
(Raj Kumar Digvijay)
Under Secretary to the Government of India
F.No.354/182/2013-TRU
AO to do his home work before disallowance for TDS default; scot free passage if nature of payment i
IT/ILT : Where nature of payments to non-resident was not correctly ascertained, disallowance for non-deduction of tax could not be made
INCOME TAX APPELLATE TRIBUNAL : NEW DELHI TRIBUNAL NEW DELHI CONSTITUTION OF BENCHES FROM 16/09/2013 TO 19/09/2013
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Customs Notification No. 44/ 2013 dated 17-09-2013
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
(DEPARTMENT OF REVENUE)
NOTIFICATION No. 44/2013-Customs
New Delhi, the 17th September, 2013
G.S.R. (E).- WHEREAS the Central Government is satisfied that the import duty leviable on articles of jewellery and parts thereof, of precious metal or of metal clad with precious metal and articles of goldsmiths’ or silversmiths’ wares and parts thereof, of precious metal or of metal clad with precious metal, falling under headings 7113 and 7114 respectively of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), should be increased and that circumstances exist which render it necessary to take immediate action;
NOW, therefore, in exercise of the powers conferred by sub-section (1) of section 8A of the said Customs Tariff Act, the Central Government, hereby directs that the First Schedule to the said Customs Tariff Act shall be amended in the following manner, namely:-
In the First Schedule to the said Customs Tariff Act, in Section XIV, in Chapter 71, against tariff items 7113 11 10, 7113 11 20, 7113 11 30, 7113 11 90, 7113 19 10, 7113 19 20, 7113 19 30, 7113 19 40, 7113 19 50, 7113 19 60, 7113 19 90, 7113 20 00, 7114 11 10, 7114 11 20, 7114 19 10, 7114 19 20, 7114 19 30, 7114 20 10, 7114 20 20 and 7114 20 30, for the entry in column (4), the entry "15%" shall be substituted.
2. This notification shall come into force on the 17th day of September, 2013.
F.No.354/165/2013-TRU
(Raj Kumar Digvijay)
Under Secretary to the Government of India
Note:- The First Schedule to the Customs Tariff Act, 1975 (51 of 1975) was enacted on 18th August, 1975 and was last amended on 10th May, 2013 by the Finance Act, 2013 (17 of 2013).
RBI/2013-14/265 A.P. (DIR Series) Circular No. 46 dated 17-09-2013
RBI/2013-14/265
A.P. (DIR Series) Circular No. 46
September 17, 2013
To
All Category - I Authorised Dealer Banks
Madam/ Sir,
Overseas forex trading through electronic / internet trading portals
Attention of the Authorised Dealer Category - I (AD Category - I) banks is invited to A.P. (DIR Series) Circular No. 53 dated April 07, 2011 and A.P. (DIR Series) Circular No. 46 dated November 17, 2011 wherein AD Category I banks were advised to exercise due caution and be extra vigilant in respect of the margin payments being made by the public for online forex trading transactions through credit cards / deposits in various accounts maintained with banks in India. Further, AD Category-I banks were also advised to exercise due caution in respect of the accounts being opened in the name of individuals or proprietary concerns at different bank branches for collecting the margin money, investment money, etc. in connection with such transactions.
- However, it has been observed that some banking customers continue to undertake online trading in foreign exchange on portals / websites offering such schemes wherein they initially remit funds from Indian bank accounts using credit cards or other electronic channels to overseas websites / entities and subsequently receive cash refunds from the same overseas entities into their credit card or bank accounts.
- With a view to further strengthening the restrictions on such online activities which are in violation of FEMA, 1999, AD Category I banks are hereby directed as follows:
- All AD Category I banks who offer credit cards or online banking facilities to their customers should advise their customers that any person resident in India collecting and effecting / remitting payments directly /indirectly outside India in any form towards overseas foreign exchange trading through electronic/internet trading portals would make himself/ herself / themselves liable to be proceeded against with for contravention of the Foreign Exchange Management Act (FEMA), 1999 besides being liable for violation of regulations relating to Know Your Customer (KYC) norms / Anti Money Laundering (AML) standards.
- As and when any AD category I bank comes across any prohibited transaction undertaken by its credit card or online banking customer the bank will immediately close the card or account of the defaulting customer and report the same to Chief General Manager-in-Charge, Forex Markets Division, Foreign Exchange Department, Reserve Bank of India, Central Office, 5th Floor, Amar Building, P.M. Road, Mumbai – 400001 in the format provided in the Annex to this circular.
- If it is observed that the concerned AD category I bank has failed to carry out the measures as outlined above, Reserve Bank of India may proceed against the defaulting bank under section 11(3) of FEMA, 1999 and take any action as may be deemed necessary.
- AD Category - I banks may bring the contents of this circular to the notice of their constituents and customers concerned. The instructions contained in this circular may also be brought to the attention of the card issuing companies who may also be advised to remain alert against permitting payments for such unauthorized transactions.
- The directions contained in this circular have been issued under sections 10(4) and 11 (1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and are without prejudice to permissions / approvals, if any, required under any other law.
Yours faithfully,
(Rudra Narayan Kar)
Chief General Manager-In-Charge
RBI/2013-14/266 A.P. (DIR Series) Circular No. 47 dated 17-09-2013
RBI/2013-14/266
A.P. (DIR Series) Circular No. 47
September 17, 2013
To
All Category - I Authorised Dealer Banks
Madam / Sir,
Deferred Payment Protocols dated April 30, 1981 and December 23, 1985 between Government of India and erstwhile USSR
Attention of Authorised Dealer Category-I (AD Category-I) banks is invited to A.P. (DIR Series) Circular No.33 dated September 04, 2013 , wherein the Rupee value of the Special Currency Basket was indicated as Rs.86.857663 effective from August 23, 2013.
- AD Category-I banks are advised that a further revision has taken place on August 28, 2013 and accordingly, the Rupee value of the Special Currency Basket has been fixed at Rs.92.985396 with effect from September 02, 2013.
- AD Category-I banks may bring the contents of this circular to the notice of their constituents concerned.
- The Directions contained in this circular have been issued under sections 10(4) and 11(1) of the Foreign Exchange Management Act (FEMA), 1999 (42 of 1999) and are without prejudice to permissions / approvals, if any, required under any other law.
Yours faithfully,
(C.D. Srinivasan)
Chief General Manager
Incentive bonus received by an LIC employees is part of salary
IT : Where assessee, a Development Officer of LIC, received incentive bonus prior to 1-4-1989 and claimed deduction of 40 per cent of same stating that he had incurred expenditure to extent of 40 per cent of incentive bonus for canvassing business, assessee was entitled only for permissible deductions under section 16
Government warns service tax evaders
The Central Government has advised service tax evaders to take benefit of its amnesty scheme to avoid harsh action against them.
The tax defaulters will be "hit hard" if they failed to pay their dues, Revenue Secretary Sumit Bose today said.
The Finance Minister, P Chidambaram, in the Budget introduced the Voluntary Compliance Encouragement Scheme (VCES) to motivate service tax assesses who had not filed returns or stopped filing returns, and not paid service tax dues from October 2007 to March 31, 2012.
"There is no target for VCES but the department has so far received more than 1,000 applications. The assessees have been given the option of paying the dues in instalments by December 2013," he said here.
Last year, the Government collected Rs 1,24,000 crore in service tax and this fiscal the target has been set at Rs 1,81,000 crore, Bose told reporters.
The Revenue Secretary said the Centre has undertaken an exercise to enlighten the tax assessees on VCES.
As part of this exercise, Bose interacted with a group of members of the business community and trade organisations, chartered accountants and manufacturing houses here.
Bose heard their grievances and asked them to send representations, and if needed, meet him personally.
Under the scheme, the defaulters will be required to make a declaration of all pending service tax dues from October 1 2007 to December 31, 2012 and pay at least 50 per cent of that before December 31, 2013. The remaining 50 per cent is to be paid by June 30, 2014 without interest.
Payment after that will attract interest, Bose said.
The Secretary had earlier said failure to pay service tax will attract penal action which could include arrest, prosecution and property attachment.
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