11 November 2019


Notifications & Circulars

Securities and Exchange Board of India

07.11.2019

Capital Market

Creation of segregated portfolio in mutual fund schemes

MANU/SMFD/0016/2019

1. In partial modification to SEBI Circular No. SEBI/HO/IMD/DF2/CIR/P/2018/160 dated December 28, 2018 on 'Creation of segregated portfolio in mutual fund schemes', it has been decided to permit creation of segregated portfolio of unrated debt or money market instruments by mutual fund schemes of an issuer that does not have any outstanding rated debt or money market instruments, subject to the following:

a. Segregated portfolio of such unrated debt or money market instruments may be created only in case of actual default of either the interest or principal amount. As per SEBI circular dated December 28, 2018, credit event is considered for creation of segregated portfolio, however for the purpose of this circular 'actual default' by the issuer of such instruments shall be considered for creation of segregated portfolio.

b. AMCs shall inform AMFI immediately about the actual default by the issuer. Upon being informed about the default, AMFI shall immediately inform the same to all AMCs. Pursuant to dissemination of information by AMFI about actual default by the issuer, AMCs may segregate the portfolio of debt or money market instruments of the said issuer in terms of SEBI circular dated December 28, 2018.

c. All other terms and conditions as stated in SEBI circular dated December 28, 2018 shall remain the same.

2. Paragraph C-3 of the aforesaid circular stands modified as under:

"Creation of segregated portfolio shall be optional and at the discretion of the AMC. It should be created only if the Scheme Information Document (SID) of the scheme has provisions for segregated portfolio with adequate disclosures. All new schemes to be launched after the date of this circular shall have the enabling provisions included in the SID for creation of segregated portfolio"

Tags : Segregated portfolio Mutual fund schemes Creation

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Press Information Bureau

07.11.2019

Commercial

GeM Partners with Central Bank of India for Payment Related Services

MANU/PIBU/1569/2019

Government e-Marketplace (GeM) signed MoU with Central Bank of India. Through this partnership, Central Bank of India will be able to offer an array of services including transfer of funds through GeM Pool Accounts (GPA), advising of electronic Performance Bank Guarantees (e-PBG) and Earnest Money Deposit (EMD) to the registered users on the portal.

Integration for payments and various banking services is one of the priorities for GeM towards the goal of paperless, contactless and cashless system. GeM has already signed MoU with 18 Public Sector and Private Banks to enable this.

GeM is also working with Banks, TReDs, and SIDBI to provide bill discounting and financing of working capital where the cost of capital is linked to the performance & rating of a seller on GeM. This will help the sellers in general and the MSMEs in particular to access easy credit and do better business with the government. In addition, GeM is contemplating the creation of EMD pool account for making it easy for sellers to comply with the EMD requirements while responding to bids.

GeM is an initiative of the Government of India which offers a one stop platform for facilitating online procurement of goods and services by Central and State government organizations. GeM provides tools for Direct Purchase, bidding and reverse auction for ensuring transparent and efficient procurement.

Tags : MoU Signing of Services

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Press Information Bureau

07.11.2019

Direct Taxation

DIN System of CBIC to comes into force

MANU/PIBU/1568/2019

The Documentation Identification Number (DIN) system of Central Board of Indirect Taxes (CBIC) will come into existence from Friday, 8th November 2019. This path breaking DIN system in indirect tax administration has been created as per the direction of Union Minister for Finance and Corporate Affairs Smt. Nirmala Sitharaman and from now onwards any CBIC communication will have to have a Documentation Identification Number. Government has already executed the DIN system in the direct tax administration. This step is to further the Government's objectives of bringing transparency and accountability in the indirect tax administration also through widespread use of information technology.

Revenue Secretary Dr. Ajay Bhushan Pandey said, "To begin with, in the indirect tax administration, the DIN would be used for search authorisation, summons, arrest memo, inspection notices and letters issued in the course of any enquiry. From now onwards, any communication from GST or Custom or Central Excise department without a computer generated DIN, would be treated as invalid and shall be non est in law or deemed to be as if it has never been issued."

"The DIN system would ensure greater accountability and transparency in the indirect tax administration as well. It would also provide the taxpayer a digital facility to verify any communications. Further, the DIN system would be extended to other communications by the end of next month. No communication would be issued without DIN except only if it is in the specified exceptional circumstances," said Dr Pandey.

CBIC Chairman Shri Pranab K. Das said, "This measure would create a digital directory for maintaining a proper audit trail of such communications. Now all such specified communications with DIN would be verifiable on the online portal cbicddm.gov.in and any communication which is not in conformity with the prescribed guidelines as per the DIN related Circulars dated 05.11.2019 shall be treated as invalid."

It would be pertinent to mention here that while specifying such exceptional circumstances, the CBIC Circulars related to DIN dated 05.11.2019 say that whenever any such manual communication would be issued, it would be necessarily required to specify reason of issuing such a communication without DIN and written approval of the competent authority shall be obtained within 15 days.

CBIC has specified that any communication issued manually under exceptional circumstances would have to be regularised on the system within 15 working days of its issuance.

The CBIC, in exercise of its power under section 168(1) of the CGST Act, 2017/Section 37 of the Central Excise Act, 1944/Section 151A of the Customs Act, 1962, is implementing the system for electronic generation of a Document Identification Number (DIN) for all such communications sent by its offices to taxpayers and other concerned persons.

Tags : DIN System CBIC Implementation

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Reserve Bank of India

06.11.2019

Banking

RBI releases the Report of the Working Group to Review the Regulatory and Supervisory Framework for Core Investment Companies

MANU/RPRL/0196/2019

The Reserve Bank of India had constituted a Working Group (WG) to Review Regulatory and Supervisory Framework for Core Investment Companies (CICs), on July 03, 2019, with Shri Tapan Ray, former Secretary, Ministry of Corporate Affairs, Government of India as the Chairperson.

The WG has submitted its report to the Governor. The key recommendations of the WG are as follows:

Capital contribution by a CIC in a step-down CIC, over and above 10% of its owned funds, should be deducted from its Adjusted Networth, as applicable to other NBFCs. Further, step-down CICs may not be permitted to invest in any other CIC, while allowing them to invest freely in other group companies;

The number of layers of CICs in a group should be restricted to two. As such, any CIC within a group shall not make investment through more than a total of two layers of CICs, including itself;

Every Group having a CIC should have a Group Risk Management Committee (GRMC);

Constitution of the Board level committees viz., Audit Committee and Nomination and Remuneration Committee should be mandated ;

Offsite returns may be designed by the Reserve Bank and may be prescribed for the CICs on the lines of other NBFCs. Annual submission of Statutory Auditors Certificates may also be mandated; and

Onsite inspection of CICs maybe conducted periodically.

The report is placed on the RBI website today for comments of stakeholders and members of the public. Comments on the report may be sent by November 30, 2019 through email.

Tags : Report Release Core Investment Companies

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Securities and Exchange Board of India

06.11.2019

Capital Market

Reporting of changes in terms of investment

MANU/SIPM/0005/2019

1.This is with reference to Para 9 of SEBI Circular No. SEBI/HO/IMD/DF4/CIR/P/2019/102 dated September 24, 2019 on conditions to be adhered to by Mutual Funds, while making any change to terms of an investment. In partial modification to the above circular, Para 9.1.1. shall read as follows:

Any changes to the terms of investment, including extension in the maturity of a money market or debt security, shall be reported to valuation agencies and SEBI registered Credit Rating Agencies (CRAs) immediately, along-with reasons for such changes.

2. The aforesaid provision is applicable from the date of issuance of this circular.

3. This circular is issued in exercise of powers conferred under Section 11 (1) of the Securities and Exchange Board of India Act, 1992 read with the provisions of Regulation 77 of SEBI (Mutual Funds) Regulations, 1996, to protect the interests of investors in securities and to promote the development of, and to regulate the securities market.

Tags : Report Changes Investment

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Press Information Bureau

06.11.2019

Civil

Khadi gets separate unique HS code, export to get a boost

MANU/PIBU/1554/2019

Khadi has once again come out of its customary veil, marking its presence in the exclusive HS code bracket, issued by the central government on 4th Nov'19 to categorize its products in export. In a long awaited move to make export of Khadi, exclusively categorized from the general league of textile products, the ministry of commerce and industries has allocated separate HS code for this signature fabric of India this week.

Khadi and Village Industries Commission (KVIC) Chairman Vinai Kumar Saxena said that this decision of government will open a new chapter in the field of Khadi export. Earlier, Khadi did not have its exclusive HS code. As a result, all the data regarding export of this signature fabric used to come as a normal fabric under the textile head. Now, we will be able to keep a constant eye not only on our export figures, but it will also help us in planning our export strategies.

HS Stands for Harmonized System and it is a six digit identification code. It was developed by the WCO (World Customs Organization) and custom officers use HS Code to clear every commodity that enters or crosses any international border.

Khadi and Village Industries products are eco-friendly and natural, and are in great demand in the International Markets. Recognizing its potential to generate exports and its eco-friendly importance, the Ministry of Commerce had accorded deemed Export Promotional Council Status (EPCS) to KVIC in 2006, to boost the export of Khadi products. However in the absence of separate HS code, the export of Khadi products was difficult to categorize and calculate.

The KVIC Chairman added that getting exclusive HS code would have remained a mirage for KVIC, had Union MSME Minister Shri Nitin Gadkari, Union Commerce Minister Shri Piyush Goyal and Union Finance Minister Smt. Nirmala Sitaraman not taken personal interest in it.

Tags : Khadi Export Boost

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Press Information Bureau

06.11.2019

Direct Taxation

Cabinet approves protocol amending the Convention between India and Brazil for the avoidance of double taxation and prevention of fiscal evasion with respect to taxes on income

MANU/PIBU/1558/2019

The Union Cabinet Chaired by the Prime Minister Shri Narendra Modi approved the signing of the Protocol amending the Convention between the Government of the Republic of India and the Government of the Federative Republic of Brazil for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income.

Implementation Strategy and Targets:

After Cabinet approval, necessary formalities for bringing the Protocol into force will be completed. Implementation would be watched and reported by the Ministry.

Major impact:

Through updation of the Double Taxation Avoidance Convention's (DTAC's) provisions to international standards, the Amending Protocol between India and the Federative Republic of Brazil will facilitate elimination of double taxation. Clear allocation of taxing rights between Contracting States through DTAC will provide tax certainty to investors & businesses of both countries. The Amending Protocol will augment the flow of investment through lowering of tax rates in source State on interest, royalties and fees for technical services. The Amending Protocol implements minimum standards and other recommendations of G-20 OECD Base Erosion Profit Shifting (BEPS) Project. Inclusion of Preamble Text, a Principal Purpose Test, a general anti abuse provision in the DTAC along with a Simplified Limitation of Benefits Clause as per BEPS Project will result in curbing of tax planning strategies which exploit gaps and mismatches in tax rules

Point-wise details:

a. The existing DTAC between India and Brazil was signed on 26th April, 1988 and was amended through a Protocol signed on 15th October 2013 in respect of exchange of information. Through the present Protocol, the DTAC has been amended on various other aspects.

b. The amended DTAC also implements the minimum standards as well as other recommendations of the G-20 OECD Base Erosion and Profit Shifting (BEPS) Project.

Background:

The existing Double Taxation Avoidance Convention (DTAC) between India and Brazil being very old was required to be amended to bring it in line with international developments and also to implement the recommendations contained in the G20 OECD Base Erosion and Profit Shifting Project (BEPS).

Tags : Protocol Approval Double taxation

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