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Cabinet approves Listing of Government owned General Insurance Companies(GIC) at the stock exchanges

The Cabinet Committee on Economic Affairs, chaired by the Prime Minister Shri Narendra Modi has given its ‘in principle’ approval  for listing the following five Government owned General Insurance Companies in the stock exchanges.

These are:

(i) The New India Assurance Company Ltd.
(ii) United India Insurance Company Ltd.,
(iii) Oriental Insurance Company Ltd.,
(iv) National Insurance Company Ltd. and
(v) General Insurance Corporation of India.

The shareholding of these Public Sector General Insurance Companies (PSGICs) will be divested from 100 percent to 75  percent in one or more tranches over a period of time.  During the process of disinvestment, existing rules and regulations of Securities and Exchange Board of India (SEBI) and Insurance Regulatory and Development Authority of India (IRDAI) will be followed.

Listing of (PSGICs) is likely to yield the following benefits:

RBI releases Outward Foreign Direct Investment - December 2016

The Reserve Bank of India has today released the data on Outward Foreign Direct Investment (OFDI), both under Automatic Route and the Approval Route,

i. for the month of December 2016;
ii. comparative position for the month of November and December 2016;
iii. for the month of December 2015 and December 2016; and
iv. country wise OFDI data for the quarter October-December 2016.

Procedure for registration and submission of statement of financial transactions (SFT) as per section 285BA of Income-tax Act, 1961 read with Rule 114E of Income-tax Rules, 1962

Central Board of Direct Taxes(CBDT), Directorate of Income Tax (Systems), Notification No. 1 of 2017 dated 17th January, 2017

1. Section 285BA of the Income Tax Act, 1961 (hereunder referred to as the “Act”) requires specified reporting persons to furnish statement of financial transaction. Rule 114E of the Income Tax Rules, 1962 (hereunder referred to as the “Rules”) specifies that the statement of financial transaction required to be furnished under sub-section (1) of section 285BA of the Act shall be furnished in Form No. 61A. The nature and value of transaction to be furnished by the reporting person under Rule 114 E is enclosed as Annexure A (link).

Clarifications on the Taxation and Investment Regime for Pradhan Mantri Garib Kalyan Yojana, 2016

The Taxation and Investment Regime for Pradhan Mantri Garib Kalyan Yojana, 2016 (PMGKY) has commenced on 17th December, 2016 and is open for declarations up to 31st March, 2017.

CBDT has received queries from stakeholders seeking clarifications about various provisions of the Scheme. The issues raised have been examined and a set of twelve FAQs has been issued on 18.01.2017 vide Circular No.2 of 2017. LINK

The Circular inter alia provides clarifications on issues such as the deposits eligible for being declared under the Scheme, eligibility for making a declaration under the Scheme, adjustment of seized cash against the payment of tax, surcharge and penalty under the Scheme etc.

Import of Point of Sale (PoS) Terminal Devices, its Cells & Batteries and Labelling Requirements Thereof

1. The government has vide notification No. 35/2016-Central Excise, dated 28.11.2016 exempted excise duty on Point of Sale (PoS) devices and also goods required for their manufacture. These devices are already exempted from customs duty. PoS devices are indispensable in a cashless digital payment ecosystem.

2. Ministry of Electronics and Information Technology (MeitY) have stated that Point of sale (PoS) Terminal devices and sealed secondary cell/batteries containing alkaline or other non-acid electrolytes for use in portable applications are covered under the scope of Electronics and Information Technology Goods (Requirement for Compulsory Registration) Order, 2012 with effect from 13.5.2015 & 1.6.2016 respectively for mandatory BIS registration.

3. MeitY have relaxed the import conditions of Point of Sale (PoS) terminal devices and cells/ batteries fitted in these devices to the following extent.

Clarification on Indirect Transfer Provision under Income Tax Act [Circular No. 41/2016 Dt. 21.12.2016]

Circular No. 41/2016 was issued on 21.12.2016 which dealt with clarification on Indirect Transfer provisions. - link

After the issue of the aforementioned circular, representations have been received from various FPIs, FIIs, VCFs and other stakeholders.

The stakeholders have presented their concerns stating that the circular does not address the issue of possible multiple taxation of the same income.

Amendment in Chapter 2 of the Handbook of Procedure (Foreign Trade Policy 2015-20)

Directorate General of Foreign Trade(DGFT) Public Notice No. 54/2015-2020 dated 11th January, 2017 

1. In exercise of powers conferred under paragraph 2.04 of the Foreign Trade Policy, 2015-2020, the Director General of Foreign Trade hereby amends para 2.14(A) of the Handbook of Procedure (2015-20) as well as the provision in the Public Notice No.58 dated 1.2.2016 and Appendix 2K of FTP(2015-20) as under:

Amendments effective from 15.01.2017 to the All Industry Rates of Duty Drawback

Central Board of Excise & Customs(CBEC) Circular No. 02/2017-Customs dated 13th January, 2017

1. The Government considered representations, feedback and data related to the All Industry Rates (AIR) of Duty Drawback that took effect on 15.11.2016 and has notified certain changes vide Notification No. 03/2017-Customs (N.T.) dated 12.01.2017 (link).

These changes take effect from 15.01.2017. The notification should be downloaded from www.cbec.gov.in and perused. The changes made, inter-alia, include –

(a) Tariff entry for ‘Surimi Fish Paste’ under tariff item 160401 has been shifted to 030402 and description of tariff item 160401 has been amended to read as ‘Surimi Analogue Product’ to address classification issue;
(b) Drawback cap is being increased for tariff item 500799 (other Silk fabric);
(c) Drawback rates/caps are being changed for Man-made fibre floor coverings covered under tariff items 570104, 570203, 570303, 570402 & 570503 and for babies garments covered under tariff items 611101 & 620901;
(d) Drawback rates are being decreased for Gold jewellery, Silver jewellery and silver articles covered under tariff items 711301, 711302 and 711401.

'SEZ India' App Launched by Commerce Ministry

A Mobile app named “SEZ India” has been launched by the Commerce Secretary on 06.1.2017.  SEZ Division, Department of Commerce under its broader e-Governance initiative i.e. SEZ Online System, has developed mobile app for Special Economic Zones (SEZs).

Commerce Secretary launched the app and mentioned that the App would help the SEZ Units and Developers to find information easily and track their transactions on SEZ Online System. Now the SEZ Developers & Units can file all their transactions digitally through SEZ Online system and track the status on the go through the SEZ India mobile app.

       The app is available on Android Platform for use by SEZ Developers, Units, officials and others. The app has four sections i.e. SEZ Information, SEZ Online Transaction, Trade Information, and Contact details. Salient Features of the four sections are as under:-

1. SEZ INFORMATION: This is a compendium of the SEZ Act, 2005, SEZ Rules, 2006, MOCI Circulars, details of SEZs and Units etc. It gives up to date comprehensive details on all the above aspects.

2. TRADE INFORMATION: This provision gives access to important information / tools such as Foreign Trade Policy, Hand Book of procedure , Duty Calculator , Customs & Excise Notification and MEIS Rates.

Enhancement of withdrawal limits from ATMs (4.5k to 10k) and Current Accounts (50k to 1lac)

RBI Circular DCM (Plg) No.2559/10.27.00/2016-17 dated January 16, 2017 to the Chairman / Managing Director / Chief Executive Officer of Public Sector Banks / Private Sector Banks / Foreign Banks / Regional Rural Banks / Urban Co-operative Banks / State Co-operative Banks/District Central Co-operative Banks

1. Please refer to our circulars DCM (Plg) No. 1274, 1317, 1437 and 2142/10.27.00/2016-17 dated November 14, 21 and 28 and December 30, 2016, respectively, on the above subject.

2. On a review of limits placed on withdrawals from ATMs and current accounts, it has been decided to enhance the same, with immediate effect as under:
(i) The limit on withdrawals from ATMs has been enhanced from the current limit of Rs. 4,500/- to Rs. 10,000/- per day per card (It will be operative within the existing overall weekly limit).
(ii) The limit on withdrawal from current accounts has been enhanced from the current limit of Rs. 50,000/- per week to Rs. 1,00,000/- per week and it extends to overdraft and cash credit accounts also.

[SEBI] Major Issues Discussed During 7th Meeting of the International Advisory Board of SEBI

The seventh meeting of the International Advisory Board (IAB) of the Securities and Exchange Board of India (SEBI) was held on January 13 & 14, 2017. The following major issues were inter alia discussed during the meeting:

i. Issues and Developments in Corporate Governance

The IAB took note of the recent developments on Corporate Governance related issues in India. The IAB made following observations in this context:
  • It has to be realized that good corporate governance is about helping the company achieve its objectives, implement its corporate strategy, while keeping the interest of various stakeholders in mind. 
  • A matrix of expertise may be introduced to make the board diverse, balanced and in tune with the requirements for the effective functioning of the company.
  • There has to be transparency in Board appointments and removal process and similar requirements need to be prescribed at both stages.
  • Audit committee should also focus on forward looking risk assessment in addition to retrospective evaluation.

[CBDT] Signing of Bilateral Advance Pricing Agreement with Indian subsidiaries of Japanese companies

The Central Board of Direct Taxes (CBDT) entered into a Bilateral Advance Pricing Agreement (BAPA) on the 13th of January, 2017 with Indian subsidiary of a Japanese trading company. Recently, the CBDT has also modified an existing Bilateral APA with another Indian subsidiary of a Japanese company to include rollback provisions.

Thus, total three Bilateral APAs are now signed with Indian subsidiaries of Japanese companies all including rollbacks. The total number of bilateral APAs entered into by the CBDT is now eight.

The APA Scheme was introduced in the Income-tax Act in 2012 and the “Rollback” provisions were introduced in 2014. Signing of bilateral APA is an important step towards ascertaining certainty in transfer pricing matters of multinational company cases and dispute resolution.

Under BAPA, certainty in tax treatment is provided for the next 5 years while rollback provides dispute redressal for a maximum of four past years preceding APA years.

[RBI] releases Data on India’s International Trade in Services: November 2016

The Reserve Bank releases monthly data on India’s international trade in services with a lag of around 45 days. The value of exports and imports of services during the month of November 2016 are given in the following Table.

Table: International Trade in Services

(US$ Million)

Month

Receipts (Exports)

Payments (Imports)

October 2016

13,113

7,680

November 2016

13,338

8,323

Note: Data are provisional.


[SEBI] Amendments in Regulation 17 of the Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) Regulations, 2012

Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) (Amendment) Regulations, 2017 - SEBI Notification No. SEBI/LAD/NRO/GN/2016-17/020 dated the 12th January, 2017

In exercise of the powers conferred by section 31 of the Securities Contracts (Regulation) Act, 1956 read with sections 11 and 30 of the Securities and Exchange Board of India Act, 1992, the Securities and Exchange Board of India hereby makes the following regulations to further amend the Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) Regulations, 2012, namely:—

1. These regulations may be called the Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) (Amendment) Regulations, 2017.

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

3. In the Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) Regulations, 2012,

[SEBI] Amendments in Regulation 21 of SEBI (Foreign Portfolio Investors) Regulations, 2014

Securities and Exchange Board of India (Foreign Portfolio Investors) (Amendment) Regulations, 2017 - SEBI Notification No. SEBI/LAD/NRO/GN/2016-17/018 dated the 12th January, 2017

In exercise of the powers conferred under section 30 of the Securities and Exchange Board of India Act, 1992 (15 of 1992), the Securities and Exchange Board of India hereby, makes the following regulations to further amend the Securities and Exchange Board of India (Foreign Portfolio Investors) Regulations, 2014, namely,—

1. These regulations may be called the Securities and Exchange Board of India (Foreign Portfolio Investors) (Amendment) Regulations, 2017.

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

3. In the Securities and Exchange Board of India (Foreign Portfolio Investors) Regulations, 2014,–

[FEMA] Amendments in Foreign Exchange Management (Transfer or issue of Security by a Person Resident outside India) Regulations, 2000

Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) (Fifteenth Amendment) Regulations, 2016 - RBI Notification No.FEMA.377/2016-RB dated January 10, 2017

In exercise of the powers conferred by clause (b) of sub-section (3) of Section 6 and Section 47 of the Foreign Exchange Management Act, 1999 (42 of 1999), the Reserve Bank of India hereby makes the following amendments in the Foreign Exchange Management (Transfer or issue of Security by a Person Resident outside India) Regulations, 2000 (Notification No. FEMA. 20/2000-RB dated 3rd May 2000) namely:-

1. Short Title & Commencement:-

(i) These Regulations may be called the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) (Fifteenth Amendment) Regulations, 2016.
(ii) They shall come into force from the date of their publication in the Official Gazette.

2. Amendment to Regulation 2:-

[ServiceTax] Amendment in Notification No. 26/2012-ST dated 20.06.2012 so as to rationalize the abatement for tour operator services

Ministry of Finance, Department of Revenue, Notification No. 04/2017-Service Tax dated the 12th January, 2017

In exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby makes the following further amendments in the notification of the Government of India in the Ministry of Finance (Department of Revenue) No.26/2012-Service Tax, dated the 20th June, 2012, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 468 (E), dated the 20th June, 2012, namely:-

1. In the said notification, in the first paragraph, in the TABLE, for Sl. No. 11 and the entries relating thereto, the following shall be substituted, namely:-

[ServiceTax] Amendment in Notification No. 30/2012-ST dated 20.06.2012 so as to specify the person complying with the sections 29, 30 or 38 read with section 148 of the Customs Act, 1962 (52 of 1962) as the person liable for paying service tax in case of services provided or agreed to be provided by a person located in non-taxable territory to a person located in non-taxable territory by way of transportation of goods by a vessel from a place outside India up to the customs station of clearance in India

Ministry of Finance, Department of Revenue, Notification No. 03/2017-Service Tax dated the 12th January, 2017

In exercise of the powers conferred by sub-section (2) of section 68 of the Finance Act, 1994 (32 of 1994), the Central Government, hereby makes the following further amendments in the notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 30/2012-Service Tax, dated the 20th June, 2012, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 472 (E), dated the 20th June, 2012, namely:-

1. In the said notification,-

(i) in paragraph I, in clause (A), after the sub-clause (vi), the following sub-clause shall be inserted, namely:-

“(vii) provided or agreed to be provided by a person located in non-taxable territory to a person located in non-taxable territory by way of transportation of goods by a vessel from a place outside India up to the customs station of clearance in India;”;

Service Tax (Amendment) Rules, 2017 w.e.f. 22nd-Jan-2017 [Modification in Rule 2]

Ministry of Finance, Department of Revenue, Notification No. 02/2017-Service Tax dated the 12th January, 2017

In exercise of the powers conferred by sub-section (1), read with sub-section (2) of section 94 of the Finance Act, 1994 (32 of 1994), the Central Government hereby makes the following rules further to amend the Service Tax Rules, 1994,namely:-

1. (1) These rules may be called the Service Tax (Amendment) Rules, 2017.
    (2) They shall come into force on the 22nd day of January, 2017.

2. In the Service Tax Rules, 1994, in rule 2, in sub-rule (1),-
(i) in clause (aa), the following proviso shall be inserted, namely:-
“Provided that aggregator shall not include such person who enables a potential customer to connect with persons providing services by way of renting of hotels, inns, guest houses, clubs, campsites or other commercial places meant for residential or lodging purposes subject to following conditions, namely:-

[ServiceTax] Amendment in Notification No. 25/2012-ST dated 20.06.2012 so as to (i) withdraw the exemption from service tax for services provided or agreed to be provided by a person located in non-taxable territory to a person located in non-taxable territory by way of transportation of goods by a vessel from a place outside India up to the customs station of clearance in India; (ii) exempt services provided by a business facilitator or a business correspondent to a banking company with respect to accounts in its rural area branch

Ministry of Finance, Department of Revenue, Notification No. 01/2017-Service Tax dated the 12th January, 2017

In exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994), the Central Government being satisfied that it is necessary in the public interest so to do, hereby makes the following further amendments in the notification of the Government of India in the Ministry of Finance (Department of Revenue) No.25/2012-Service Tax, dated the 20th June, 2012, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 467 (E), dated the 20th June, 2012, namely:-

In the said notification, in the opening paragraph,-
(i) in entry 29, for item (g), the following item shall be substituted, namely:-
“(g) business facilitator or a business correspondent to a banking company with respect to accounts in its rural area branch.”

[RBI] 27th Half Yearly Report on Management of Foreign Exchange Reserves April-September 2016


The latest position of foreign exchange reserve as on December 30, 2016 is as under:

US $ million

Foreign Exchange Reserves (i+ii+iii+iv)

360,296.8

i. Foreign Currency Assets (FCA)

336,582.5

ii. Gold

19,982.9

iii. Special Drawing Rights (SDR)

1,432.4

iv. Reserve Tranche Position (RTP)

2,299.0


[RBI] Evidence of Import under Import Data Processing and Monitoring System (IDPMS)

RBI Circular A.P. (DIR Series) Circular No. 27 dated January 12, 2017 to all Category - I Authorised Dealer Banks

1. Attention of Authorized Dealer Category-I (AD Category-I) banks is invited to A.P. (DIR Series) Circular No. 05 dated October 06, 2016 read with Section 5 and Section 10 of the Foreign Exchange Management Act 1999 (42 of 1999), Government of India Notification No. G.S.R. 381(E) dated May 3, 2000 viz., Foreign Exchange Management (Current Account Transaction) Rules, 2000 on import of goods, FED Master Direction No. 17 dated January 1, 2016 on Import of Goods and Services and A.P. (DIR Series) Circular No. 9 dated August 24, 2000 which outlines the procedure, mode/manner of payment for imports and submission of related returns. Within the contours of the extant instructions on import of goods, specific attention is invited to the directions on Obligation of Purchaser of Foreign Exchange and submission of document as Evidence of Import.

2. Bill of Entry (BoE) data is received in IDPMS from Customs Department for EDI ports and from NSDL for SEZ on daily basis. BoE data for non-EDI ports are entered by AD Category – I bank of the importer on receipt of BoE (importer’s copy) and then the bank uploads the data in IDPMS through “Manual BOE reporting” process. In order to enhance ease of doing business and reduce transaction costs, it has been decided to discontinue submission of hardcopy of Evidence of Import documents i.e. BoE, with effect from December 01, 2016, as it is available in IDPMS. The revised procedures are as set out below:

Plain (un-modified) Tamarind Kernel Powder (Notification under Section 11C of the Central Excise Act)


1. Whereas the Central Government is satisfied that according to a practice that was generally prevalent regarding levy of duty of excise (including non-levy thereof) under section 3 of the Central Excise Act, 1944 (l of 1944), (hereinafter referred to as the said Act), on Plain (Un-modified) Tamarind Kernel Powder falling under heading 1302 of the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) (hereinafter referred to as the said goods), was not being levied according to the said practice, during the period commencing on the 19th day of July, 2011 and ending with the 18th day of July, 2016;

2. Now, therefore, in exercise of the powers conferred by section l1C of the said Act, the Central Government hereby directs that the whole of the duty of excise payable under section 3 of the said Act on the said goods but for the said practice, shall not be required to be paid in respect of the said goods on which the said duty of excise was not levied during the period aforesaid in accordance with the said practice.

38th Meeting of Tripartite Committee on Convention (COC)

The 38th meeting of the Tripartite Committee on Convention (COC) was held, on 10th January, 2017, at New Delhi, under the chairpersonship of Smt.  M. Sathiyavathi, Secretary, Union Ministry of Labour and Employment.  Representatives of Central Trade Unions, Employers’ Organizations, State Governments, Central Ministries, ILO and officers from the Ministry of Labour & Employment participated in the meeting.

Secretary (Labour & Employment) informed the Committee that Tripartism has been integral to labour policy processes in India.  COC has a specific mandate of discussing the progress made so far in ratification of International Labour Standards and recommending the future road map.

COC took stock of the progress made in respect of ILO Convention No. 138 regarding Minimum Age for Entry to Employment and Work, Convention No. 182, concerning Worst Forms of Child Labour, Convention No. 87 regarding Freedom of Association and protection of Rights, Convention No. 98 regarding Right to Organize and Collective Bargaining, Maritime Labour Convention 2006, Convention No. 185 regarding Seafarers’ Identify Document, Convention No. 187 regarding promotional Framework for Occupational Safety and Health, Convention No. 153 regarding Hours of work and Rest Periods in Road Transport and Report on the Working Group on Standard Review Mechanism.

Law Commission Denies Hiring of Law Firms

The Law Commission of India has noted that certain newspapers and e-magazines are carrying news items which suggest the commission is hiring law firms to pursue the work assigned to it. The Commission would like to clarify that several advocates, research associates, academic institutions, faculty members of law schools, et al, approach the Commission from time to time with a request to get associated with the Commission and submit working papers on the subjects under its consideration.