Notifications & Circulars
Press Information Bureau
25.05.2017
Indirect Taxation
Proposed GST Tax rates would be lesser than the prevailing taxes in case of Sugar, Tea and Coffee (other than instant coffee) and Milk Powder
MANU/PIBU/0565/2017
1. Sugar: Sugar attracts specific central excise duty of Rs.71 per quintal plus Sugar Cess of Rs.124 per quintal, which translates to ad valorem rate of more than 6%. Including incidence on account of account of CST, octroi, and entry tax etc., the present total tax incidence would work out to more than 8%. As against this, the proposed GST rate on sugar is only 5% i.e. 3% less than present incidence of taxes.
2. Tea and coffee (other than instant coffee): Tea and coffee attract Nil central excise duty and VAT rate of 5%. Considering embedded taxes in production of tea and coffee and the incidence on account of CST, octroi and entry tax etc., the present total tax incidence works out to more than 7%. As against this, the proposed GST rate for tea and coffee (other than instant coffee) is only 5%.
3. Milk powder: Milk powder attracts Nil central excise duty and 5% VAT. Considering embedded taxes in production of milk powder and the incidence on account of CST, octroi, and entry tax etc., the present total tax incidence works out to more than 7%. As against this, the proposed GST rate on milk powder is only 5%.
Tags : GST Rates Products
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Press Information Bureau
25.05.2017
Banking
Continuation of Interest Subvention Scheme for short-term crop loans on interim basis during the year 2017-18
MANU/RMIC/0065/2017
Please refer to Circular FIDD. CO. FSD. BC. No 9/05.02.001/2016-17 dated August 4, 2016 on Interest Subvention Scheme for Short-term Crop Loans 2016-17 wherein we had advised the continuation and implementation of the Interest Subvention Scheme for the year 2016-17. As regards the Scheme for the year 2017-18, Ministry of Agriculture & Farmers Welfare, Government of India (GoI) has informed that they have initiated the process for continuation of the Interest Subvention Scheme. In view of the above, it has been decided by GoI, as an interim measure, to implement the Interest Subvention Scheme for the year 2017-18 till further instructions are received, on the terms and conditions approved for the Scheme for 2016-17, as contained in the above cited circular. All banks are, therefore, advised to take note and implement the Interest Subvention Scheme for 2017-18 accordingly.
Tags : Scheme Continuation Interim
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Press Information Bureau
24.05.2017
Civil
Cabinet approves MoU between Spain and India on cooperation in the field of Organ Transplant Services
MANU/PIBU/0557/2017
The Union Cabinet chaired by the Prime Minister Shri Narendra Modi has approved the signing of a Memorandum of Understanding (MoU) between the National Transplant Organization, Ministry of Health, Social Services and Equality, Spain and the Directorate General of Health Services, Ministry of Health and Family Welfare, India on cooperation in the field of Organ Transplant Services. The MoU would facilitate bilateral cooperation in the field of organ and tissue procurement and transplantation and better understanding between the two countries. The knowledge gained will help in improving the services rendered to the patients suffering from end stage organ failure. The Memorandum of Understanding is proposed to be signed during the forthcoming bilateral meeting with the Spanish side.
Tags : MOU Organ Transplant Services
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Press Information Bureau
24.05.2017
Civil
Cabinet apprised of MoU between India and Bangladesh on cooperation in the peaceful uses of outer space
MANU/PIBU/0558/2017
The Union Cabinet chaired by the Prime Minister Shri Narendra Modi has been apprised of the Memorandum of Understanding (MoU) between India and Bangladesh on cooperation in the peaceful uses of outer space. The MoU was signed at New Delhi in April, 2017. This MoU shall enable the areas of cooperation such as, space science, technology and applications including remote sensing of the earth; satellite communication and satellite based navigation; Space science and planetary exploration; use of spacecraft and space systems and ground system; and application of space technology.
The MoU would lead to set up a Joint Working Group, drawing members from Department of Space/ Indian Space Research Organisation (DOS/ISRO), and the Bangladesh Telecom Regulatory Commission (BTRC), which will further work out the plan of action including the time-frame and the means of implementing this MoU. It will provide impetus to explore newer research activities and application possibilities in the field of remote sensing of the earth; satellite communication; satellite navigation; space science and exploration of outer space. Financing of works carried out under this MoU shall be provided by the respective executive organisation with due consideration of national norms and rules concerning budgetary regulations in force in their respective States and within the limits of available resources. Joint projects and works carried out under this MoU depending on the type and field of activity shall be on non-commercial or commercial basis and shall be executed either without mutual payments or on the basis of compensatory arrangements or contracts. The MoU would lead to develop a joint activity in the field of application of space technologies for the benefit of humanity. Thus all sections and regions of the country will get benefited.
Background:
India and Bangladesh have expressed interest to cooperate with each other in the area of space. Accordingly, a template of framework MoU for space cooperation was provided to Indian High Commission to Bangladesh & MEA in August 2016 for further processing at Government level, for which Bangladesh side has given its concurrence in December 2016. Accordingly, an MoU between India and Bangladesh on cooperation in the peaceful uses of outer space, signed at New Delhi on April 08, 2017.
Tags : MOU Outer space Peaceful uses
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Press Information Bureau
24.05.2017
Direct Taxation
Income Tax Department Steps-up actions under Benami Transactions (Prohibition) Amendment Act, 2016
MANU/PIBU/0559/2017
The Income-tax Department (ITD) has initiated actions under the new Benami Transactions (Prohibition) Amendment Act, 2016 (the Act) w.e.f. 1st November, 2016. The Prohibition of Benami Property Transactions Rules, 2016 have been framed in this regard. As per the Act, Benami property includes movable or immovable property, tangible or intangible property, corporeal or incorporeal property. It empowers provisional attachment and subsequent confiscation of benami properties. It also allows for prosecution of the beneficial owner, the benamidar, the abettor and the inducer to benami transactions, which may result in rigorous imprisonment up to 7 years and fine up to 25% of fair market value of the property.
The Income-tax Directorates of Investigation have identified more than 400 benami transactions up to 23 May, 2017. Theseinclude deposits in bank accounts, plots of land, flat and jewellery. Provisional attachment of properties under the Act has been done in more than 240 cases. The market value of properties under attachment is more than Rs. 600 crore. Immovable properties have been attached in 40 cases with total value of more than Rs. 530 crore in Kolkata, Mumbai, Delhi, Gujarat, Rajasthan and Madhya Pradesh.
In one case in Jabalpur, the benamidar, a driver, was found to be owner of land worth Rs. 7.7 crore. The beneficial owner is a Madhya Pradesh based listed company, his employer. In Mumbai a professional was found to be holding several immovable properties in the name of shell companies which exist only on paper. In another case in Sanganer, Rajasthan a jeweller was found to be beneficial owner of nine immovable properties in the name of his former employee, a man of no means. Certain properties purchased through shell companies have also been attached by the Department in Kolkata.
The Government is keen to implement the new Benami Act in an effective manner with visible outcomes on the ground. For this purpose, 24 dedicated Benami Prohibition Units (BPUs) have been set up all over India in the last week. These units are under the overall supervision of the Principal Directors of Investigation in the Income-tax Department to enable swift action and follow up, especially in cases where criminality has been detected.
In addition, the Income-tax Department, has undertaken searches on 10 senior government officials during the past one month, keeping in view its policy to unearth black money earned through corrupt practices and introduce accountability and probity in public life. The crackdown on all forms of illicit wealth is being spearheaded by the ITD to ensure that any economic misdeed is immediately identified and actions as per law follows.
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Ministry of Commerce and Industry
23.05.2017
Commercial
Supersession of notification no G.S.R. 180 (E) of Government of India dated 17th February, 2016
MANU/INDP/0010/2017
This notification is being issued in supersession of Gazette Notification No G.S.R. 180 (E) of Government of India dated 17th February, 2016.
Definition
An entity shall be considered as a Startup:
a) if it is incorporated as a private limited company (as defined in the Companies Act, 2013) or registered as a partnership firm (registered under section 59 of the Partnership Act, 1932) or a limited liability partnership (under the Limited Liability Partnership Act, 2008) in India; and
b) up to seven years from the date of its incorporation/ registration; however, in the case of Startups in the biotechnology sector, the period shall be up to ten years from the date of its incorporation/ registration; and
c) if its turnover for any of the financial years since incorporation/ registration has not exceeded Rupees 25 crores; and
d) if it is working towards innovation, development or improvement of products or processes or services, or if it is a scalable business model with a high potential of employment generation or wealth creation.
Provided that any such entity formed by splitting up or reconstruction of a business already in existence shall not be considered a 'Startup'.
Explanation
i. An entity shall cease to be a Startup on completion of seven years from the date of its incorporation/ registration or if its turnover for any previous year exceeds Rupees 25 crores. However, in respect of Startups in the biotechnology sector, an entity shall cease to be a Startup on completion of ten years from the date of its incorporation/ registration or if its turnover for any previous year exceeds Rupees 25 crores.
ii. Turnover is as defined under the Companies Act, 2013.
Process of recognition
The process of recognition as a 'Startup' shall be through an online application made over the mobile app/ portal set up by the Department of Industrial Policy and Promotion. Entities will be required to submit the online application along with the Certificate of Incorporation/ Registration and other relevant details as may be sought. Startups also have to submit a write-up about the nature of business highlighting how is it working towards innovation, development or improvement of products or processes or services, or its scalability in terms of employment generation or wealth creation.
Tax Benefits
In order to obtain tax benefits, a Startup should -
i. be a private limited company (as defined in the Companies Act, 2013) or a limited liability partnership (as defined under the Limited Liability Partnership Act, 2008) which is incorporated on or after the 1st day of April, 2016 but before the 1st day of April, 2019, and
ii. be working towards innovation, development or improvement of products or processes or services, or should be a scalable business model with a high potential of employment generation or wealth creation, and
iii. obtain a certificate of an eligible business from the Inter-Ministerial Board of Certification as constituted by Department of Industrial Policy and Promotion from time to time.
Recognising the need to encourage innovation in India, innovativeness shall be considered from a domestic standpoint.
Provided that the mere act of developing:
I. products or services or processes which do not have potential for commercialization, or
II. un-differentiated products or services or processes, or
III. products or services or processes with no or limited incremental value for customers or workflow would not make a Startup eligible for tax benefits.
Revocation
Subsequently, if such recognition is found to have been obtained without uploading the relevant documents or on the basis of false information, DIPP reserves the right to revoke the recognition certificate and certificate of an eligible business for tax benefits immediately without any prior notice or reason.
Effect
This notification shall come into effect on the date of its publication in the Official Gazette.
Tags : Notification Suppression Start-up Scope
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Press Information Bureau
22.05.2017
Direct Taxation
Central Board of Direct Taxes signs 2 Unilateral Advance Pricing Agreements with Indian taxpayers taking the number of APAs signed in the current Financial Year to four
MANU/PIBU/0553/2017
The progress of the APA Scheme strengthens the Government's commitment to foster a non-adversarial tax regime. The Central Board of Direct Taxes (CBDT) has entered into two Unilateral Advance Pricing Agreements (APA) on 04th May, 2017 and 11th May, 2017 respectively, with Indian taxpayers. One of the Agreements also has "Rollback" provision. The two APAs signed pertain to chip design/development of embedded software and Information technology (software development) sectors of the economy. The number of APAs signed in the current financial year now is four. The CBDT expects more APAs to be signed in the near future. The progress of the APA Scheme strengthens the Government's commitment to foster a non-adversarial tax regime.
The APA Scheme endeavours to provide certainty to taxpayers in the domain of transfer pricing by specifying the methods of pricing and determining the arm's length price of international transactions in advance for the maximum of five future years. Further, the taxpayer has the option to roll-back the APA for four preceding years, as a result of which, total nine years of tax certainty is provided. Since its inception, the APA scheme has attracted tremendous interest among Multi National Enterprises (MNEs).
Tags : Unilateral APA Sighing of
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Reserve Bank of India
22.05.2017
Banking
Reserve Bank of India Outlines action plan to implement the Banking Regulation (Amendment) Ordinance, 2017
MANU/RPRL/0083/2017
In a Release today, the Reserve Bank of India outlined the steps taken and those on the anvil post the promulgation of the Banking Regulation (Amendment) Ordinance, 2017.
2. The amendments to the BR Act 1949, introduced through the Ordinance, and the notification issued thereafter by the Central Government empower RBI to issue directions to any banking company or banking companies to initiate insolvency resolution process in respect of a default, under the provisions of the Insolvency and Bankruptcy Code, 2016 (IBC). It also enables the Reserve Bank to issue directions with respect to stressed assets and specify one or more authorities or committees with such members as the Bank may appoint or approve for appointment to advise banking companies on resolution of stressed assets.
3. Immediately upon the promulgation of the Ordinance, the Reserve Bank issued a directive bringing the following changes to the existing regulations on dealing with stressed assets.
i. It was clarified that a corrective action plan could include flexible restructuring, SDR and S4A.
ii. With a view to facilitating decision making in the JLF, consent required for approval of a proposal was changed to 60 percent by value instead of 75 percent earlier, while keeping that by number at 50 percent.
iii. Banks who were in the minority on the proposal approved by the JLF are required to either exit by complying with the substitution rules within the stipulated time or adhere to the decision of the JLF.
iv. Participating banks have been mandated to implement the decision of JLF without any additional conditionality.
v. The Boards of banks were advised to empower their executives to implement JLF decisions without further reference to them
It was made clear to the banks that non-adherence would invite enforcement actions.
4. Currently, the Oversight Committee (OC) comprises of two Members. It has been constituted by the IBA in consultation with RBI. It has been decided to reconstitute the OC under the aegis of the Reserve Bank and also enlarge it to include more Members so that the OC can constitute requisite benches to deal with the volume of cases referred to it. While the current Members will continue in the reconstituted OC, names of a few more will be announced soon. The Reserve Bank is planning to expand the scope of cases to be referred to the OC beyond those under S4A as required currently.
5. The Reserve Bank is working on a framework to facilitate an objective and consistent decision making process with regard to cases that may be determined for reference for resolution under the IBC. Reserve Bank has already sought information on the current status of the large stressed assets from the banks. The RBI would also be constituting a Committee comprised majorly of its independent Board Members to advise it in this matter.
6. The current guidelines on restructuring are under examination for such modifications as may be necessary to resolve the large stressed assets in the banking system in a value optimising manner. The Reserve Bank envisages an important role for the credit rating agencies in the scheme of things and, with a view to preventing rating-shopping or any conflict of interest, is exploring the feasibility of rating assignments being determined by the Reserve Bank itself and paid for from a fund to be created out of contribution from the banks and the Reserve Bank.
7. The Reserve Bank notes that the proper exercise of the enhanced empowerment would require coordination with and cooperation from several stakeholders including banks, ARCs, rating agencies, IBBI and PE firms, to which end the Reserve Bank would be holding meetings in the near future with these stakeholders.
8. The Reserve Bank will issue further updates as may be deemed necessary at an appropriate time.
Tags : Amendment Action plan Implementation
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