Ministry of Finance 

22.09.2022

Goods and Services Tax

Classification of goods that undertake lifting and handling functions and have mobility as a function

MANU/CUCR/0020/2022

1. Various references have been received in the Board regarding the classification of the goods referred as Truck Cranes or All Terrain Cranes. These are essentially goods that are used in handling and lifting heavy loads and have mobility as a function.

2. These goods come in various types and sizes, depending on the requirement of the users and factors such as load to be handled, the terrain where it is put to use etc. A simple generic description such as All Terrain Cranes would thus represent a large category of similar goods. However, some of the basic features common to goods of this type include:

a) The primary purpose of these goods is not transport of persons or goods.

b) These are equipments designed to lift extremely heavy loads.

c) The goods have wheels indicating that they have mobility as a feature.

d) There is a superstructure which is the revolving frame of equipment on which operating machinery are mounted along with operator's cab.

e) The carrier or chassis is the under carriage of the crane and includes the carrier cab, wheels, and outriggers. This chassis is designed to support the rotating crane superstructure.

f) When in operation, the outriggers fix the equipment to the ground to provide support to life heavy loads. The wheels do not touch the ground in such instances.

3. Since the goods have features that are similar to motor vehicles, as well as to that of load handling heavy machines, there are differing opinions on the classification of such goods. One opinion states that the goods are essentially cranes that are used in lifting and handling and are therefore to be classified under heading 8426. On the other hand, there is a different opinion relying on the ability of these goods to be propelled and moved from one place to other which makes them similar to the motor vehicles classified under 8705.

4. The classification of similar goods has also been interpreted in various judgments of the Courts and Tribunals as well as in the discussions between parties at the World Customs Organisation (WCO). Some of these include-

a) The Hon'ble Supreme Court, in the case of Commissioner vs. Sanghvi Movers Ltd-2016(337) ELT A.208(SC) ruled on the classification of 'hydraulic truck mounted mobile cranes' and upheld the ruling of the Tribunal which stated that the special purpose vehicles listed in the inclusive clause of explanatory notes to 8705 continue to have mobility as a very significant function. While stating that the crane portion and the chassis portion of the product stand fairly integrated, the Tribunal ruled that the product is a crane which is mobile rather than a vehicle fitted with a crane. It was held that the product in question is covered by the exclusion clause of explanatory notes to heading 8705 and therefore the classification of the product under 8426 appeared to be correct.

b) In the case of Collector of Central Excise Baroda vs. LMP Precision Eng. Co. Ltd the Hon'ble Supreme Court ruled on the classification of 'water well drilling rigs mounted on motor vehicles chassis. By relying on the specific inclusion of 'mobile drilling derricks' under heading 8705, the Court gave precedence to the 8705 over the inclusions mentioned in the Section notes to heading 8430 and thus classified the goods under heading 8705.

c) It is also pertinent to note the classification opinion of the WCO (HSC/51/March 2013) for a self propelled mobile crane consisting of a six wheeled chassis with a diesel engine, four outriggers and a driving cum operator's cab which houses both crane and driving controls. During driving on the road, the cab is positioned and mechanically locked at the front of the chassis. During crane operation, the cab can be lifted upto a height of 7.8m. This self propelled mobile crane has been classified under 8426.41 by the WCO.

5. However, it is pertinent to note that the judgments and the classification opinions are specific to a particular good or product. The legal notes and the explanatory notes have been interpreted in the context of those specific goods with particular features. As already pointed out above, the goods referred as 'all terrain trucks' come in various types and it would not be advisable to apply any of the judgments above or other similar judgments and opinions squarely to all goods of a similar nature. Therefore, it is imperative to outline a set of parameters that can serve as a guide to arrive at the classification of all such goods.

Tags : Classification Goods Mobility

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Reserve Bank of India

22.09.2022

Banking

RBI cancels the licence of The Laxmi Co-operative Bank Limited, Solapur, Maharashtra

MANU/RPRL/0427/2022

Today, the Reserve Bank of India (RBI), vide order dated September 14, 2022, has cancelled the licence of "The Laxmi Co-operative Bank Limited, Solapur, Maharashtra". Consequently, the bank ceases to carry on banking business, with effect from the close of business on September 22, 2022. The Commissioner for Cooperation and Registrar of Cooperative Societies, Maharashtra has also been requested to issue an order for winding up the bank and appoint a liquidator for the bank.

The Reserve Bank cancelled the licence of the bank as:

i. The bank does not have adequate capital and earning prospects. As such, it does not comply with the provisions of Section 11(1) and Section 22 (3) (d) read with Section 56 of the Banking Regulation Act, 1949.

ii. The bank has failed to comply with the requirements of Sections 22(3) (a), 22 (3) (b), 22(3)(c), 22(3) (d) and 22(3)(e) read with Section 56 of the Banking Regulation Act, 1949;

iii. The continuance of the bank is prejudicial to the interests of its depositors;

iv. The bank with its present financial position would be unable to pay its present depositors in full; and

v. Public interest would be adversely affected if the bank is allowed to carry on its banking business any further.

2. Consequent to the cancellation of its licence, "The Laxmi Co-operative Bank Limited, Solapur, Maharashtra" is prohibited from conducting the business of 'banking' which includes, among other things, acceptance of deposits and repayment of deposits as defined in Section 5(b) read with Section 56 of the Banking Regulation Act, 1949 with immediate effect.

3. On liquidation, every depositor would be entitled to receive deposit insurance claim amount of his/her deposits up to a monetary ceiling of ₹5,00,000/- (Rupees five lakh only) from Deposit Insurance and Credit Guarantee Corporation (DICGC) subject to the provisions of DICGC Act, 1961. As per the data submitted by the bank, about 99% of the depositors are entitled to receive full amount of their deposits from DICGC. As on September 13, 2022, DICGC has already paid ₹193.68 crore of the total insured deposits under the provisions of Section 18A of the DICGC Act, 1961 based on the willingness received from the concerned depositors of the bank.

Tags : Licence Cancellation Non-compliance

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Securities and Exchange Board of India

22.09.2022

Capital Market

Issue and listing of Commercial Paper by listed REITs

MANU/SIPM/0017/2022

1. In terms of Reserve Bank Commercial Paper Directions, 2017 dated August 10,2022 Real Estate Investment Trust (REIT) having net worth of INR 100 Crore or higher are eligible to issue commercial paper.

2. It has been decided that, REITs may issue listed commercial papers subject to the following:

2.1. REITs shall abide by the guidelines prescribed by Reserve Bank of India for issuances of commercial papers.

2.2. REITs shall abide by the conditions of listing norms prescribed by SEBI under SEBI (Issue and Listing of Non-Convertible Securities) Regulations, 2021 and circulars issued thereunder.

2.3. The issuance of listed CPs shall be within the overall debt limit permitted under SEBI (Real Estate Investment Trusts) Regulations, 2014

3. This circular is being issued in exercise of powers conferred under Section 11(1) of the Securities and Exchange Board of India Act, 1992 and Regulation 33 of the SEBI (Real Estate Investment Trusts) Regulations, 2014. This circular is issued with the approval of the competent authority.

Tags : Issue Commercial Paper REITs

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Press Information Bureau

22.09.2022

Electricity

CEA brings out Draft Resource Adequacy framework for reliable and secured power supply

MANU/PIBU/3956/2022

Shri Krishan Pal Gujar, Minister of State for Power & Heavy Industries inaugurated a workshop on "Resource Adequacy- Need and way forward" organized by Central Electricity Authority, Ministry of Power in New Delhi today. Shri Alok Kumar, Secretary, Ministry of Power and Shri Ghanshyam Prasad, Chairperson, Central Electricity Authority also attended the event.

The objective of the workshop was to introduce the concept of Resource Adequacy in the power sector to various stakeholders. The workshop was attended by representatives from Ministry of Power, State Electricity Regulatory Commissions, State Governments, Distribution utilities, CPSUs under Ministry of Power and various Government officials.

Shri Krishan Pal Gujar stressed on the importance of 24X7 reliable and secured supply of power to consumers at affordable rate. He congratulated CEA for brining out Draft guidelines for carrying out Resource Adequacy plan for various Distribution utilities.

Issues including Need of Resource Adequacy plans and proposed guidelines for carrying out the Resource Adequacy plans were deliberated. The plan would be beneficial to the State Distribution utilities for optimal utilization of generation capacity, harnessing the diversity associated with demand of electricity and sharing of generating assets among various States. The plan will also help states in optimal capacity planning and procurement of power thereby reducing the cost of supply to consumers.

The Pilot studies are being carried out for five states namely Madhya Pradesh, Assam, Odissa, Tamilnadu and Punjab. Further, Central Electricity Authority also plans to organize Regional Workshops for the benefit of States Electricity Regulatory Commissions and Distribution utilities.

Tags : Resource Adequacy Framework Power supply

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Reserve Bank of India

21.09.2022

Banking

RBI announces rate of interest on Government of India Floating Rate Bond 2033

MANU/RPRL/0423/2022

The rate of interest on Government of India Floating Rate Bond 2033 (GOI FRB 2033) applicable for the half year September 22, 2022 to March 21, 2023 shall be 7.42 percent per annum.

It may be recalled that FRB 2033 will carry a coupon, which will have a base rate equivalent to the average of the Weighted Average Yield (WAY) of last 3 auctions (from the rate fixing day, i.e., September 22, 2022) of 182 Day T-Bills, plus a fixed spread (1.22 percent).

Tags : Rate Interest Floating Rate Bond 2033

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Securities and Exchange Board of India

21.09.2022

Capital Market

Firewall between Credit Rating Agencies and their Affiliates

MANU/SCRR/0003/2022

I. SEBI (Credit Rating Agencies) Regulations, 1999 ("CRA Regulations") provide for a principle-based regulation of Credit Rating Agencies (CRAs) focusing inter alia on prevention of conflict of interests. Regulation 13 of the CRA Regulations require CRAs to abide by the Code of Conduct contained in the Third Schedule.

II. Further, CRA Regulations inter alia required CRAs to segregate certain activities to a separate entity under Regulation 9(f) of CRA Regulations (hereinafter referred to as "non-rating associate or subsidiary or group entity" or collectively as "non-rating entities").

III. In view of the above, the following measures are mandated to strengthen the firewall between SEBI-registered CRAs and their non-rating entities:

A. CRAs shall formulate a policy on separation or firewall practices with the non-rating entities and document the same in their internal operational manuals or governing document. Such policy, and revisions thereto, shall be ratified by the Board of Directors of the CRAs and the policy may cover inter alia the following:

i. Nature and extent of sharing of infrastructure, officials/employees or resources, if any, between the CRA and the non-rating entity, including specification on whether such arrangement is temporary.

ii. Measures taken by CRA to ensure the independence of its credit rating process in view of the above arrangement with the non-rating entity.

iii. Guidance to employees on sharing of information or resources, if any, between the CRA and the non-rating entity in order to mitigate any potential or actual conflict of interest.

B. A CRA shall disclose on its website, details of any common director or Chief Executive Officer or Managing Director between the CRA and the non-rating entity. Such disclosure shall be updated by the CRA on the first working day of each month. The disclosure should include a reference to the date it was last updated by the CRA, along with a reference or hyperlink to archives of previous such disclosures.

C. Credit rating scales (i.e., symbols and definitions) prescribed by SEBI vide its circulars dated June 15, 2011 (CIR/MIRSD/4/2011 dated June 15, 2011) or July 16, 2011 (SEBI/HO/MIRSD/MIRSD_CRADT/P/CIR/ 2021/594 dated July 16, 2021) or any other circular issued under the CRA Regulations, shall not be used by any non-rating entities of the CRA

D. The websites of SEBI-registered CRAs and their non-rating entities shall be separate. A CRA's website may contain hyperlinks to the separate websites of the non-rating entities.

IV. Applicability: The circular shall be applicable with effect from January 1, 2023, and CRAs shall report on their compliance with this circular (as ratified by their respective board of directors) to SEBI within one quarter from the date of applicability of this circular.

V. Monitoring: Monitoring of this circular shall be done in terms of the half-yearly internal audit for CRAs, mandated under Regulation 22 of the SEBI (Credit Rating Agencies) Regulations, 1999 and Circular SEBI/ MIRSD/CRA/Cir-01/ 2010 dated January 06, 2010 issued thereunder.

VI. This circular is issued with the approval of competent authority, in exercise of the powers conferred by Section 11(1) of Securities and Exchange Board of India Act, 1992 read with the provisions of Regulation 20 of SEBI (Credit Rating Agencies) Regulations, 1999, to protect the interest of investors in securities and to promote the development of, and to regulate, the securities market.

Tags : Firewall Credit Rating Agencies Regulations

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