Weekly Insight1st August, 2016

Regulatory UpdatesAssembled & Edited by:Vimal Saini (FCA, LCS, PGDBM – Finance & IB)

Neetu Saini (FCS, LLM, M.Com, MBA - Finance)

Sonia Mittal (ACS, MBA - Finance)

Karuna Bajaj (ACA, B.Com)

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In this issue,WHAT’s been NEW in:Income Tax,Service Tax,Customs & Excise Tax,RBI & Corporates,Latest News

Corporate Analyst & Consultant Private Limited | Weekly Insight | 1st August’ 16 1

To be considered a Senior citizen, CBDT, in exercise of powers under section 119 of the Act, hereby clarifies that a person born on 1st April would be considered to have attained a particular age on 31st March (the day preceding the anniversary of his birthday)! (vide CBDT Circular dated 27.07.2016)Clarification regarding attaining prescribed age of 60 years/80 years on 31st March itself, in case of Senior/Very Senior Citizens whose date of birth falls on 1st April, for purpose of Income-tax Act, 1961.

Draft Rules for prescribing the manner of determination of amount received by the company in respect of share - section 115QA of the Income-tax Act, 1961-reg. (vide CBDT Press Release dated 25.07.2016) Under section 115QA of the Income-tax Act, 1961 (the Act), additional Income-tax at the rate of 20 percent is levied on the distributed income arising out of buy back of unlisted share by the company. The Finance Act, 2016 has amended the definition of “distributed income”, with effect from 01.06.2016. In this regard, draft rules providing for determination of amount received by company for use of its shares under different circumstances have been formulated.

Circular No. 196/06/2016-ST dated 27-17-2016!Instructions regarding provisional attachment of property under Section 73C of the Finance Act, 1994. The Court also directed that a certified copy of the order be sent to the CBEC, Dptt.of Revenue, Ministry of Finance with specific instructions to issue a circular to all officers ensuring that the powers under Rule 3 should be exercised with utmost care and caution and should not be exercised frivolously.

Service tax dept to re-auction Vijay Mallya's jet on Aug 18!Having failed to get a good valuation in the first attempt to auction the luxury jet of embattled businessman Vijay Mallya last month, the service tax department will re-auction it on August 18, possibly at a lower reserve price. (Click here to read the news)

Corporate Analyst & Consultant Private Limited | Weekly Insight | 1st August’ 16 2

Seeks to further amend notification No. 27/2011-Customs, dated 01.03.2011! (vide Customs Notification dated 26.07.2016)So as to provide exemption from export duty to Organic sugar up to 10,000 MT in a year beginning with October and ending with September subject to specified conditions. The exemption for the period ending with 30th September, 2016 shall be restricted to 2500 MT.

Notification of goods under Section 123 (2) of the Customs Act, 1962! (vide Customs Notification dated 25.07.2016)This notification has added Silver Bullions and Cigarettes under subsection 2 of section 123. Now, Silver Bullions and Cigarettes can be seized under this Act in the reasonable belief that they are smuggled goods.

Seeks to amend notification No.67/2011-Customs dated the 26th July, 2011! (vide Customs Notification dated 26.07.2016)So as to extend the levy of anti-dumping duty on imports of certain Rubber Chemicals, namely PX13 and TDQ originating in, or exported from, European Union and MOR originating in, or exported from, People's Republic of China, (imposed vide notification No. 67/2011-Customs, dated 28th July, 2011) for a period of one year i.e. upto and inclusive of the 27th July, 2017.

Regarding assessment of Bulk liquid Cargo! (vide Customs Circular dated 26.07.2016)In case of Bulk Liquid Cargo imports, whether for home consumption or for warehousing, the shore tank receipt quantity i.e., dip measurement in tanks on shore into which such cargo is pumped from the tanker, should be taken as the basis for levy of Customs Duty irespective of whether Customs Duty is leviable at a specific rate or ad-valorem basis.

Seeks to amend notification No. 17/2011-Central Excise, dated the 1st March, 2011! (vide Excise Notification dated 26.07.2016)So as to exclude handicrafts falling under heading 7113 of the Central Excise Tariff Act, 1985 (5 of 1986), from the purview of excise duty exemption for "handicrafts".

Seeks to amend notification No. 8/2003-Central Excise dated 1st March, 2003! (vide Excise Notification dated 26.07.2016)So as to increase the SSI Exemption limit and the SSI Eligibility limit for articles of jewellery or parts of articles of jewellery or both, falling under heading 7113 of the Central Excise Tariff Act, 1985 (5 of 1986).

Seeks to partially exempt Central Excise duty! (vide Excise Notification dated 26.07.2016)On articles of jewellery falling under heading 7113 of the Central Excise Tariff Act, 1985 (5 of 1986) manufactured by:

1. Re-conversion of jewellery given by the retail customer, or

2. Mounting of precious stone given by the retail customer.

Seeks to amend notification No. 12/2012-Central Excise! (vide Excise Notification dated 26.07.2016)So as to prescribe 1% excise duty (without input and capital goods credit) on parts of articles of jewellery falling under heading 7113 of the Central Excise Tariff Act, 1985 (5 of 1986), and to prescribe a criteria for classification of an articles of jewellery or part of articles of jewellery or both as that of a particular precious metal.

Seeks to amend notification No. 36/2001-Central Excise (N.T.) dated 26th June, 2001! (vide Excise Notification dated 26.07.2016) So as to exempt a manufacturer or principal manufacturer of articles of jewellery or parts of articles of jewellery or both, falling under heading 7113 of the Central Excise Tariff Act, 1985 (5 of 1986) from taking central excise registration upto the full exemption limit.

Seeks to amend notification No. 17/2006-Central Excise (N.T) dated the 1st August, 2006! (vide Excise Notification dated 26.07.2016)So as to exempt a manufacturer or principal manufacturer of articles of jewellery or parts of articles of jewellery or both, falling under heading 7113 of the Central Excise Tariff Act, 1985 (5 of 1986) from filing of annual return.

Corporate Analyst & Consultant Private Limited | Weekly Insight | 1st August’ 16 3

Seeks to amend notification No. 35/2001-Central Excise (N.T.)! (vide Excise Notification dated 26.07.2016)So as to:

i. provide that a person engaged in the manufacture of articles of jewellery or parts of articles of jewellery or both, falling under chapter heading 7113 of the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) may get himself registered by 31st day of July, 2016;

ii. exempt a person engaged in the manufacture of articles of jewellery or parts of articles of jewellery or both, falling under chapter heading 7113 of the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) from the requirement to submit plan of the factory premises under simplified registration procedure.

Seeks to provide a modified format for quarterly return, ER-8! (vide Excise Notification dated 26.07.2016)For return of excisable goods cleared at the Central Excise duty rate of 1% [including articles of jewellery or parts of articles of jewellery or both, falling under heading 7113] or 2%.

Seeks to amend the CENVAT Credit Rules, 2004! (vide Excise Notification dated 26.07.2016)In relation to articles of jewellery or parts of articles of jewellery or both, falling under heading 7113 of the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986).

Seeks to amend the Central Excise Rules, 2002! (vide Excise Notification dated 26.07.2016) In relation to articles of jewellery or parts of articles of jewellery or both, falling under heading 7113 of the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986).

Seeks to notify the Articles of Jewellery (Collection of Duty) Rules, 2016! (vide Excise Notification dated 26.07.2016)Applicable to articles of jewellery or parts of articles of jewellery or both falling under heading 7113 of the Central Excise Tariff Act, 1985 (5 of 1986).

Guidelines for Excise Audit of Manufacturers / Principal Manufacturers! (vide Excise Circular dated 26.07.2016)Of articles of jewellery or parts of articles of jewellery.

Seeks to notify the tariff values for articles of jewellery or parts of articles of jewellery or both! (vide Excise Notification dated 26.07.2016)Falling under heading 7113 of the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986).

Taxability of stock on February 29, 2016 - Excise duty imposition on articles of jewellery in the Budget 2016-17! (vide Excise Circular dated 26.07.2016)All Jewellery manufactured and removed, on or before February 29, 2016, from the premises of the job workers or any other premises where such articles of jewellery were manufactured, and

i. Lying at different premises (including branches) of the principal manufacturer, or

ii. Sent on approval to potential customers,Will not be liable to excise duty. Furthermore, no stock declaration is required to be filed by the Jeweller for this purpose with the jurisdictional central excise authorities.

Guidelines for issue of summons, visits, search, seizure, arrest and prosecution! (vide Excise Circular dated 26.07.2016)Regarding manufacturers or principal manufacturers of articles of jewellery or parts of articles of jewellery or both.

General procedures regarding excise duty on articles of jewellery or parts of articles of jewellery or both! (vide Excise Circular dated 26.07.2016)Falling under heading 7113.

Export related procedural simplifications! (vide Excise Circular dated 26.07.2016)Excise duty on articles of jewellery falling under heading 7113!

Clarification on computation of exemption and eligibility and exemption limits and other related issues for small scale industries [SSI] exemption under Notification No. 8/2003-CE dated 1st March 2003! (vide Excise Circular date 26.07.2016)In respect manufacturer or principal manufacturer of articles of jewellery or parts of articles of jewellery or both.

Corporate Analyst & Consultant Private Limited | Weekly Insight | 1st August’ 16 4

Priority Sector Lending –Targets and Classification- Bank loans to MFIs for on-lending - Qualifying asset - Revised loan limit! (vide RBI Notification dated 28.07.2016)

The limit of the loans extended by Non-Banking Financial Company- Micro Finance Institutions (NBFC-MFIs) for which the tenure of the loan shall not be less than 24 months, has been raised to ₹ 30,000/- from the earlier limit of ₹ 15,000/-.

Tenure of loan is not less than 24 months when loan amount exceeds ₹ 30,000/- with right to borrower of prepayment without penalty.

Guidelines for Relief Measures by NBFCs in areas affected by Natural Calamities! (vide RBI Notification dated 28.07.2016)It has been decided to extend the above mentioned guidelines, to NBFCs, in areas affected by natural calamities as identified for implementation of suitable relief measures by the institutional framework.

Half yearly/Quarterly Review of Accounts of Public Sector Banks! (vide RBI Notification dated 28.07.2016)The reporting format has been revised as per the annex.

Retail Participation by Demat Account Holders in the Government Securities Market: Access to NDS-OM Platform! (vide RBI Notification dated 28.07.2016)It has been decided to allow Demat Account Holders of NSDL and CDSL to put through trades in Government Securities on the NDS-OM platform through their respective Depository Participant (DP) bank which is an SGL Account Holder and a direct member of NDS-OM and CCIL. Details of the scheme for accessing NDS-OM for execution of trades by demat account holders are given in the Annex. (w.e.f. 16th August, 2016)

RBI slaps Rs 27-crore penalty on 13 banks for FEMA violations!The RBI has come down hard on 13 banks and fined them for Rs 27 crore for violation of FEMA and lapses in know your client (KYC) rules. The RBI undertook a scrutiny on advance import remittances in 21 banks in October/November 2015. (Click here to read the news)

Relaxation of additional Fees and extension of last date of in filing AOC-4, AOC-4(XBRL), AOC-4(CFS) and MGT-7 under the Companies Act, 2013! (vide MCA Circular dated 29.07.2016)It has been decided to allow Companies to file financial statements and Annual Returns on or before 29.10.2016 where due date for holding of the AGM is on or after 01.04.2016, without payment of additional filing fee.

Special Court under section 435 of the Companies Act, 2013! (vide MCA Notification dated 27.07.2016)Central Govt. has designated a Special Court for the purposes of providing speedy trial of offences punishable under the Companies Act, 2013 with imprisonment of two years or more under the Companies Act, 2013.

Companies (Accounts) Amendment Rules, 2016! (vide MCA Notification dated 27.07.2016)Rule 6, Rule 8, Rule 13, Annexure for form AOC-1 and form AOC-4 are amended viz. notification.

Companies (Incorporation) Third Amendment Rules, 2016! (vide MCA Notification dated 27.07.2016)Rule 3, Rule 8, Rule 13, Rule 16, Rule 26, Rule 28, Rule 29, Rule 30, Rule 36 are amended viz. notification. Form INC-10 has been omitted, and Form INC-11 has been substituted with new forms INC-11, INC-11A, INC-27, INC-27A.

SEBI likely to scrap crowd-funding norms!The Securities and Exchange Board of India (SEBI) has decided not to proceed with the final regulations on crowd-funding, according to people in the know. In a discussion paper floated two years ago, SEBI had proposed a framework to enable domestic start-ups and small and medium enterprises (SMEs) to raise capital from multiple investors through crowd-funding. (Click here to read the news)

Foreign companies can hold 15% in stock, commodity exchanges!In a move to attract more overseas capital, the government today allowed a foreign company to own up to 15 per cent in the domestic stock or commodity exchanges as against 5 per cent currently. (Click here to read the news)

Corporate Analyst & Consultant Private Limited | Weekly Insight | 1st August’ 16 5

Extension of the last date for filing returns for the first quarter of 2016-17! (vide DVAT Circular dated 28.07.2016)The last date of filing of return for the first quarter of FY 16-17 has been extended to 31st August, 2016.

Notification regarding appointing effective date of DVAT (Amendment) Act 2016 (Delhi Act 03 of 2016)! (vide DVAT Notification dated 25.07.2016)26th July, 2016 has been notified as the effective date of DVAT (Amendment) Act 2016.

India - Japan Social Security Agreement to come into force from 01st October 2016 – dated 22-07-2016! (vide EPFO Press Release dated 22.07.2016)A Social Security Agreement between India and Japan was signed in Tokyo on November 16, 2012. The Ministry of External Affairs, along with Employees’ Provident Fund Organisation (EPFO) - the competent authority for negotiating and concluding SSAs have completed the formalities for the Agreement to enter into force. The Agreement on Social Security between India and Japan shall enter into force with effect from 1st October 2016. With this addition number of SSA that would become operational would be 16.

Start- ups seek easier access to tax benefits!At a meeting with Commerce Minister Nirmala Sitharaman on Thursday, a number of start- up enterprises asked for easier access to tax benefits and more incubation facilities, among others. The minister later told journalists that issues such as government funding and online selling of prescription drugs were also discussed. (Click here to read more)

Logistics stocks up on GST clearance hope!Shares of companies in the logistics sector gained ground on Thursday on hope that the government will be able to secure clearance for a revised goods and services tax (GST) Bill in the Rajya Sabha next week. Snowman Logistics, GATI, All cargo Logistics, VRL Logistics, Patel Integrated and Transport Corporation of India are some stocks in this segment that rallied, by 3.8-7.2 per cent. In comparison, the benchmark S&P BSE Sensex and Nifty50 indices ended the day at 28,209 and 8,666, up around 0.6 per cent each. (Click here to read more)

Why you must file I- T returns on time!The last date for filing incomes tax returns for salaried individuals and those whose earnings don’t need to be audited is July 31. Should you file returns if your earnings are below the taxable amount? Yes, as there are several benefits of filing returns within the due date. (Click here to read more)

GST Missing Pieces!The Centre must bring some more clarity to the bill before the 'revolutionary' tax reform is implemented. Just a day before the start of the monsoon session of Parliament, Prime Minister Narendra Modi raised the decibel levels and vociferously pushed for a constitutional amendment to pave the way for the Goods and Services Tax, or GST, in the Upper House. Perceived as a panacea for India's convoluted tax structure, GST is designed to subsume taxes on production, sales and services - ranging from services tax, entertainment, luxury and purchase tax to excise duty, value-added tax, central sales tax and entry, or octroi, taxes. The Central government believes that GST will not only make tax evasion difficult, but may also curtail inflation (as deformities in taxes only add to the cost of products). (Click here to read more)

How GST deal was clinched!The empowered committee of the finance ministers of states on Tuesday reached an agreement that the revenue- neutral rate ( RNR) would not be specified in the Goods and Services Tax (GST) Constitution amendment Bill, raising hopes that it would be passed by the Rajya Sabha next week. (Click here to read more)

Excise duty payment structure on jewellery!The government has notified a simplified structure of excise duty payment on jewellery, following recommendations of the Ashok Lahiri sub- committee. In this year’s Budget, central excise duty of one per cent without input and capital goods tax credit or 12.5 per cent with credit was imposed on articles of jewellery. Following protests, the government had set up the committee.

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