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GOVERNMENT OF ANDHRA PRADESHGeneral Administration Department

HOLIDAYS – Declaration of General Holiday on 01.09.2010 (Wednesday)instead of 02.09.2010 (Thursday) on account of ‘Sri Krishnashtami’ –

Orders – Issued.

G.O.Rt.No. 4329 Dtd.: 30-08-2010

Read the following:-

1) G.O.Rt.No.5182, G.A.(Poll.A) Dept., dt.28.10.2009.

2) From the Secretary, All India Youth Yadav Mahasabha (A.P.),Hyderabad, Letter dt. 16.07.2010.

3) From the Commissioner, Endowments Department, Hyderabad, LetterRc.No.DPI/35814/10, dt.12.08.2010.

ORDER:

In the G.O. 1st read above, Government have issued orders declaring02.09.2010 (Thursday) as General Holiday on the occasion of ‘Sri Krishnashtami’.

2) In the letter 2nd read above, the Secretary, All India Youth Yadav Mahasabha,Hyderabad, has represented to change the Holiday from 2nd September to1st September, 2010 based on the birth time and Star of Sri Krishna. TheCommissioner, Endowments Department, in his letter 3rd read above, hasreported that according to Panchangakarthas, Sri Krishnashtami falls on01.09.2010 (Wednesday).

3) The Government, after careful examination of the matter, decided to declarethe General Holiday on 01.09.2010 (Wednesday) instead of 02-09-2010(Thursday) on the occasion of ‘Sri Krishnashtami’. Accordingly, the followingnotification is issued and shall be published in the extra-ordinary Gazette ofAndhra Pradesh:

NOTIFICATION

In partial modification of the orders issued notifying the General Holidaysand Optional Holidays in G.O.Rt.No.5182, General Administration (Poll.A)Department, dated 28.10,2009, Government hereby declare on 01.09.2010(Wednesday) as General Holiday on the occasion of ‘Sri Krishashtami’, insteadof 02.09.2010 (Thursday) notified earlier. Hence, 02.09.2010 shall now beobserved as working day.

S.V. PrasadCheif Secretary to Government

GOVERNMENT OF ANDHRA PRADESHIndustries & Commerce (IP) Department

Industrial Promotion – Constitution of Chief Minister’s Advisory Councilfor promoting the investments in the State – Orders – Issued.

G.O.Rt.No. 522 Dtd.10-08-2010

Read the following:

1. From the Spl. Secy. to C.M., CMO, Note dated 20.4.2010.

2. Govt.Memo.No.5997/IP/A1/2010, Ind. & Com. Dept. dated 27.4.2010.

3. Govt.Letter.No.5997/IP/A1/2010, Ind. & Com. Dept. dated 27.4.2010

ÕII 28–10–2009 QÆÅ l.X.P~ü.\˜.<≥O. 5182Ö’ Hõ$ëê‚+¨ìq∞H˜ „Ñ¨Hõ\Õz#™ê è•~°} ÃãÅ=Ù ÕII 2–09–2010H˜É Œ∞Å∞ ÕII 1–09–2010# áê\OKåÅxP^ÕtOK«@"≥∞ÿ#k.

~å¢+¨ìOÖ’ ÃÑ@∞ì|_»∞Å <åHõi¬OK«\ÏxH˜~å¢+¨ì =ÚYº=∞O„u J èŒºHõΔ «# ã¨ÅÇ¨=∞O_»ex U~åÊ@∞ KÕÜ«∞@"≥∞ÿ#k.

D Hõq∞\ „Ñu =¸_»∞ <≥ÅÅ‰õΩ XHõ™êiã¨=∂"Õâ◊=∞ø «∞Ok. Ñï„â◊=∞Å âßYHõg∞+¨#~ü D Hõq∞\© Hõhfi#~üQÍ=º=Ç¨Ïi™êÎ~°∞.


Ñi„â◊=∞Å∞ =∞iÜ«Ú "å}ç*º âßY - <À\˜Ñ¶ ≤ ˆH+¨<£û

O R D E R:

The State of Andhra Pradesh is emerging as a fast growing economic State. Economic growth of the State is

9.07% as against 8.49% at National level and 11% growth rate in industries sector as against 9% at National level

during the years 2004-09. In order to bring out and attracting investments to the State, the views of the Industrial

Associations i.e., CII, FICCI, FAPSIA, FAPCCI, ALEAP, COWE, AP Spinning Mills Association, ASSOCHAM, etc

are required.

2. In this regard, a meeting was conducted on 29.4.2010 with the Senior Government officials and the CEOs of the

Corporate Sector. During the length of discussions, it was resolved that there is a need to build an Andhra

Pradesh brand name for the promotion of investments in the State. A detailed study on the potential sectors and

strategy is to be developed for promotion of industries in the State. It was also expressed by the members that a

sector specific policies have to be prepared like policy for gas allocation, promotion of gas based industries,

policy for solar power, wine policy, merchant power policy, textile policy, infrastructure policy etc. More efforts

have to be made for creation of infrastructure than offering fiscal or non-fiscal incentives to investors. Single

window clearances have to be made more effective brining some more clearances. It was also suggested to have

an academic linkages to the industry there is need to produce the skilled persons according to the industrial need

from time to time. It was also resolved to constitute a Chief Minister’s Advisory Council for promotion of industrial

investments and a separate sub-committees for each sector headed one sector expert with his own team to come

with strategy paper for promotion of such sector.

3. Government, after careful examination of the matter and to have suggestions to attract more investments to the

State, hereby constitute a Chief Minister’s Advisory Council for promotion of industrial investment in the State

with the following Members:-

Sl.No. Member

1 Chief Minister Chairman

2 Minister for Major Industries Vice Chairman

3 Minister for Micro, Small & Medium Enterprises Member

4 Minister for Textiles, Mines Member

5. Sri. D. A. Somayajulu, Advisor to Government (Economic Affairs & Policy

Implementation) (Cabinet Minister Rank), Government of Andhra Pradesh Member

6 Sri. Peter T Hassan, Advisor to Government (Industries), (Cabinet Minister Rank),

Government of Andhra Pradesh Member

7 The Chief Secretary to Govt. Member

8 The Principal Finance Secretary to Govt. Member

9 The Principal Secretary to Govt. & CIP, Industries & Commerce Dept. Member

10 The Principal Secretary to Govt.(Text & Mines), Industries & Commerce Dept. Member

11 The Principal Secretary to Govt.(FP, MSME) Industries & Commerce Dept. Member

12 The Principal Secretary to Govt., Energy Dept. Member

13 The Vice Chairman & Managing Director, A.P. Industrial Infrastructure

Corporation Limited. Member

14 The Commissioner of Industries, A.P., Hyderabad. Member –

Convenor

15 Sri. J.A. Chowdary, Executive Chairman of Talent Sprint Pvt. Ltd. and

Co-Chairman, FICCI, Hyderabad Member


Ñi„â◊=∞Å∞ =∞iÜ«Ú "å}ç*º âßY - <À\˜Ñ¶≤ˆH+¨<£û

16 Sri. Harish Chandra Prasad, Chairman & Managing Director, Malaxmi Group Member

17 Sri B.V.R. Mohan Reddy, Chairman & Managing Director, Infotech Enterprises Member

18 Sri Narendra Surana , Chairman & Managing Director, Surana Group of

Industries, Chairman, FICCI – AP Chapter Member

19 Sri Shakti Sagar, Managing Director, ADP India & Chairman CII – AP Chapter Member

20 Sri Narayana Reddy, Chairman & Managing Director, Virco Labs,

Ex President, A.P. Bulk drug Manufacturers Association Member

21 Dr Ramesh Babu, Managing Director, Medwin Hospitals President, TiE- Hyderabad Member

22 Sri D Suresh Babu, Sector: Media & Entertainment Managing Director, Suresh Productions Member

23 Mrs. K. Rama Devi, Association of Lady Entrepreneurs of Andhra Pradesh (ALEAP) Member

24 Sri Shekar Reddy, Sector: Real Estate Chairman, A.P. Builders Forum Member

25 Sri B K Patodia, Chairman, GTN Textiles Member

26 Sri Shekar Agarwal, President, FAPCCI Member

27 Sri Raja V.Bommirala, Bommirala Group & Director, BBM Infra Ltd.

28 Sri A.Ayodhyarami Reddy, Chairman, Ramkey Group.

29 Sri N. Shiva Prasad, Electronics Industry Association,(ELIAP) Member

30 Sri L Suresh, President, IT’s AP (Formerly HYSEA) Member

31 Sri Ravindra Reddy, Chairman, MTAR Chairman, SAMUHA Group Member

32 Dr Ajit Rangenekar, Dean of Indian School of Business (ISB) Member

33 Mrs Karuna Gopal, Future Cities Member

34 Sri Ramesh Datla , SME Chairman for CII Member

35 Sri Hari Surapaneni, CEO, Solar Semiconductors Pvt. Limited Member

36 The President, FAPSIA Member

4. The Chief Minister’s Advisory Council shall meet once in 3 months under the chairmanship of Hon’ble Chief

Minister. The objective of the Council is to study the potential sectors of investment in the State, bring out the

strategies for promotion of investments in various sectors and development of industrial infrastructure in the

State, guide the State Government in preparation of policies from time to time and explore all the possibilities for

creation of investor friendly environment in the State to attract large scale investment with an vision to makeAndhra Pradesh the most preferred investment destination in the country. The Chief Minister’s Advisory Council

in turn will have sectoral group representing various sectors like Education, Infrastructure, Information Technology

(including Atomic Energy, Defence), Manufacturing, Pharmaceuticals and Biotechnology, Health Care, Media &

Entertainment, Real Estate, Textiles, Food Processing etc. Principal Secretary, Industries & Commissioner for

Industrial Promotion shall convene the meeting periodically and consult the sectoral group with regard to the

development and challenges from time to time.

5. The Commissioner of Industries, Andhra Pradesh, Hyderabad and Member Convenor of the Chief Minister’sAdvisory Council shall take necessary follow up action in the matter in close coordination with members of the

Council.

6. This order issues with the concurrence of Finance (Expr.I &C) Dept. vide their U.O.No.10062/311/Expr.I&C/10,

dated 7.8.2010.

B.P.Acharya,Principal Secretary to Government &

Commissioner for Industrial Promotion


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THE ANDHRA PRADESH GAZETTEPart-II Extraordinary Published by Authority

No. 50 I HYDERABAD, TUESDAY, APRIL 13, 2010.

Notifications by Heads of Departments, etc.

COMMISSIONER OF LABOUR

Declaration of staggered Weekly Holidays in lieu of Sundayfacilitating opening shops in Hyderabad (Twin cities) -

Exemption accorded.

Proc. No. Q1/12355/2009.-

In exercise of the powers conferred under the provisions of Section 12 (1)of A.P. Shops & Establishments Act, 1988, and in supercession of the earlierorders issued uuder the provisions of section 12 (I) of the Act for the areas asmentioned in the table by the Chief Inspector of Shops and Establishment andthe Commissioner of Labour, A.P. Hyderabad trom time to time, I, the ChiefInspector of Shops and Establishment and the Commissioner of Labour, A.P.Hyderabad do : hereby exempt all the shops located in the Hyderabad (TwinCities) being closed on all Sundays, subject to the condition that they shouldobserve other day as weekly holiday in lieu of Sunday, as shown against theareas mentioned in the table below.

Zone Name of the Area Weekly Holiday

I 1. Life Style junction towards Begumpet, 2. Prasanth Nagar, 3. Begumpet,4. Rasoolpura, 5, Ministers Road, 6. P.G. Road, 7. S.P. Road, 8. S.D. Road,9. M.G.Road, lO. Mahankali Temple, 11. Monda Market, 12. Secunderabad MONDAYStation Road, I3. Regimental Bazar, 14. East MaredpaIly, 15. West Maredpally,16. YMCA, 17. Bownpally, 18. Patny and Paradise.

II 1. Koti junction, 2. Bank Street, 3. Abids, 4. Nampally Station Road, 5. PublicGardens Road, 6. Lakdikapool, 7. Khairtabad, 8. Yerramanjil, 9. AnandnagarColony, 10. Punjagutta, 11. Banjarahills, 12. Srinagar Colony, 13. Krishnanagar,14. Jubillee Hills, 15. Filmnagar, 16. Ameerpet, 17. Satyam Theatre road, TUESDAY18. Balkampet, 19. Sanathnagar, 20. Vengalraonagar, 21. Greenlands,22. Somajiguda, 23. Raj Bhavan Road

III 1. Holyfanta Bridge, 2.Mettugutta, 3. Lalaguda, 4. Lalpet, 5.Tarnaka, 6. 0smaniaUniversity, 7. Bagh Amberpet, 8.Sri Ramana Theatre Road, 9.Che number,10. Shivam Road, ll. Tilaknagar, 12. Nallakunta, 13. Sankermutt Road,14. Seethafalmandi, 15. Namalagundu, 16. Warasiguda, I7. Parsigutta,18. Padmaraonagar, 19. Gandhi Hospital, 20. Kawadiguda, 21. Lower Tankbund, WEDNESDAY22. Gandhinagar, 23.Ashoknagar, 24. lndira Park Road, 25. RTC X-Roads,26.VST Road, 27. Musheerabad, 28. Ramnagar, 29. Ramanagargundu,30. Jamai Osmania, 31. Jamai Osmania Stn. Road, 32. Adikmet, 33. Vidyanagar

IV I. New Nallakunta, 2. Baghlingampally, 3. Chikkadpally, 4. Narayanaguda,5. Himayathnagar, 6. Adarshnagar, 7. Secretariat Road, 8. Himax Theatre,9. Necklice Road, 10. Mint Compount Road, 11. Saifabad Junction, THURSDAY12. Telephone Bhavan Road, 13. CCS Road, 14. Basheerbagh, 15. Hyderguda,16. King Koti, 117 .Barkatpura, 18. Narayanaguda-YMCA.

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V 1. Kachiguda, 2. Chaderghat, 3. Nalgonda X-Road, 4. Malakpet, 5. Dilsukhnagar-upto- Busstand, 6. Saidabad, 7. Santoshnagar, 8. Chandrayangutta, 9. Barkas,1O. Esamiabazar, 11. badichowdi, 12. Sultanbazar, 13. Afzalgunj, 14. Gowliguda,15. Puranpool, 16. Pathargatti, 17. Charminar, 18. Kalikabar, 19. Falaknama,20. Bagumbazar, 21. Adibs junctions (Towards M.M. Market), 22. Exhibition- FRIDAYgrounds-Roads, 23. Red-Hills, 24. Vijayanagar Colony, 25. Masab Tank,26. Mehdipatnam, 27. Tolichowki, 28. Shaikpet, 29. Taramati Baramati,30. Gudimalkapur, 31. Langer House, 32. Mallepally, 33. Ekminar,34. Maharajgunj, 35. karwan, 36. Chatrinaka, 37. Shalibanda

Hyderabad, D. Srinivasulu,08-04-2010. Commissioner of Labour.

GOVERNMENT OF ANDHRA PRADESHLabour Employment Training and Factories (LAB.IV) Department

Andhra Pradesh Building and Other Construction Workers (RECS) Act, 1996 and Rules,1999 and Cess Act – Collection of Cess – Procedure – Orders – Issued.

G.O.Ms.No. 75 Dt.: 24-08-2010

Read the following:

1. Minutes of the Second Expert Committee held on 26.8.2008.

2. G.O.Ms.No.82, LET&F (Lab.II) Dept. Dated 22.09.2008.

3. G.O .Ms. No. 3, LET&F (Lab.II) Dept. Dated 20.01.2009.

ORDER:

In the G.Os read above, Assessing Officers for the purpose of Cess collection under the Building and OtherConstruction Workers Cess Act, 1996 were appointed duly prescribing their jurisdiction of the local limits and thevalue of Assessment. Government have re-examined the issue in consultation with the Expert Committee and feltthat certain procedure needs to be prescribed for the assessment as to accomplish the task assigned to the officersof the Labour Department without causing much hardship to the establishments, assessees concerned.

Accordingly, the following procedure for assessment is hereby prescribed:

(i) Self Assessment should be permitted in respect of all the establishments/assessees.

(ii) Along with the Self Assessment Return, the Assessee should submit

(a) Project Report and Statements submitted to the Banks or other Financial Institutions for the constructionactivity, and

(b) Plans approved by the Local Authority and other competent authority,

(iii) The Assessment should be based on the cost of construction as per the norms prescribed by the RegistrationDepartment in case of buildings, and in case of other construction activities, the unit cost prescribed by theconcerned Government Departments/ Organizations. The unit cost prescribed shall be latest and directly relatedto other construction activities covered under the Act, 1996.

(iv) In respect of Assessments upto Rs.1.00 Crore no verification need to be made, except on receipt of complaints/petitions/representations with sufficient proof.

(v) In respect of remaining establishments/assessees, 5% of the self assessment shall be verified on the basis ofrandom sampling method by the Assessing Officers.

Bhanwar LalPrincipal Secretary to Government


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GOVERNMENTOF ANDHRA PRADESHInformation Technology and Communication Department

(e-Governance)

IT&C Department - Involvement of Small and Medium Enterprises(SMEs) in e-Governance Projects – to support SMEs to participate

and execute e-Governance projects - Orders issued - Reg.

G.O.Rt. No. 223 Dtd.: 31-08-2010

Read the following:-

D.O.Lr. 2(9)/2009 - EG – II, dt: 16.06.2010 from Joint Secretary, DIT, GoI

ORDERS:

In the D.O. Letter read above Government of India informed that, Small andMedium Enterprises (SMEs) are recognized as an important constituent of theNational Economies, Contributing significantly to employment expansion andinnovation. Recognizing the importance of Small and Medium Enterprises, theCentral and State Governments have been implementing several schemes andprogrammes for promotion and development of these enterprises.

2. The National e-Governance Plan (NeGP) of Government of India is aimingat making all Government services accessible to the common man in hislocality, through common service delivery outlets and ensuring efficiency,transparency and reliability of such services at affordable costs. e-Governance in India is presenting huge business opportunities for ITconsulting, hardware/software companies through these Mission ModeProject implementations across the country. Large IT companies areaggressively working towards capturing such opportunities. IT SMEs in Indiaalso have potential, capabilities, knowledge and innovative solutions;however they are not able to take part and contribute due to various constrains/ conditions in such initiatives such as high annual turnover requirements,experience in executing large projects etc.,

3. Department of Information Technology (DIT) under the Ministry ofCommunications and Information Technology, Govt. of India has constituteda group to explore the possibilities and the ways/ methodologies to involveSMEs in the e-Governance initiatives being implemented across the country.

4. SMEs play a crucial role in the design and implementation of e-Governanceinitiatives. 80% of the IT companies are SMEs and contribute 30% of ITexports. No Major MMP project under NeGP/ other large e-Governanceprojects have been awarded to IT SMEs. However, large IT companieswinning e-Gov projects do outsource some part of it to IT SMEs they havealready identified. Some of the key challenges being faced by IT SMEswhile bidding for e-Governance tenders include the following:

1. Process – Lack of relevant background to compete in the bidding process

2. Infrastructure and Finance – Lack of supporting infrastructure leading tohigher costs

3. Information and Capacity Building – Lack of central information sourceregarding tenders and market intelligence.

4. Vision and Credibility – lack of a platform to differentiate their good workfrom others

5. Linkages – Lack of platform to contact the large companies for the rightopportunities

5. Government, having examined the DIT suggestions and after carefulconsideration, hereby order the following to enable SMEs to bid for the e-Governance projects:

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a. As per ICT policy 2010-2015. SME means Small & Medium IT/ITES Companies/Units/Enterprises withturnover of more than Rs.50 lakhs and less than Rs.10 crores per annum.

The SMEs may be grouped into three categories

i. First group SME – (1) Turnover of more than Rs.50 lakhs and less than Rs. 200 Lakhs per annum

ii. Second group SME – (2) Turnovers more than Rs.200 lakhs and less than Rs.500 Lakhs per annumand

iii. Third group SME – (3) Turnover of more than Rs.500 lakhs and less than Rs.1000 lakhs per annum.

b. APTS will maintain a vendor registration with minimum pre-qualification criteria such that the SMEs arequalified. APTS may charge Rs.500/- from each SME for registration purpose. APTS will also provide foronline filing of applications.

c. Ensure that all e-Governance, IT related tender notices are published in IT Department website such aswww.apit.gov.in, www.apts.gov.in, www.ieg.gov.in to enable all IT/ITES organizations to have theinformation on opportunities.

d. Bids for the System Integration (SI) projects with cost of Rs. 25 lakhs and below should be called fromempanelled vendors of category SME-1.

e. Bids for the System Integration (SI) projects with cost of above Rs. 25 lakhs and below Rs. 100 Lakhsshould be called from empanelled vendors of category SME-2.

f. Bids for the System Integration (SI) projects with cost of above Rs. 100 lakhs and below Rs. 250 Lakhsshould be called from empanelled vendors of category SME-3.

g. Bids for the System Integration (SI) projects with cost of above Rs. 250 Lakhs should be invited by opencompetitive bidding.

h. System Integration (SI) projects with cost of above Rs. 250 Lakhs, the tender document should haveclause stating that minimum 10% of the contract value shall be outsourced to non related (not having anyequity in the SME) SMEs by the prime bidder.

i. Sub contracting is permitted for the following activities. Bidder shall ensure minimum one of the activitiesshall be outsourced to SME empanelled by Government of Andhra Pradesh. The areas can be outsourcedare but not limited to:

1. Application testing

2. Requirement Engineering, Business Modeling

3. Module Design & development

4. Digitization

5. Localization of application etc.

6. Networking

7. Annual Maintenance

8. Facility Management and Call center services

9. Special areas (Biometrics, GIS, GPS etc.)

j. Wherever specialized work is involved in the System Integration (SI) project, consortium consisting ofprincipal bidder and SME with Specialized skill shall be permitted.

k. The prime bidder has to indicate the SME partner details at the pre-Qualification, Technical stage andalso Commercial stage. Bidder not indicating SME details in any stage of the bid will be rejected at therespective stage. Supporting document like: JV, MoU etc., should be enclosed with detailed terms andconditions in the bid.

6. Government departments procuring software and hardware products/e-Governance initiatives directly arerequested to source from APTS empanelled vendors from the three (3) categories / groups to ensure fairopportunities to SMEs to ensure quality services on competitive basis.

7. These orders are also available in AP Government website www.ap.gov.in/goirK Ratna Prabha

Principal Secretary to Government


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From: Commissioner of Commercial Taxes <[email protected]>Subject: RE: Submission of On line VAT & CST Returns-Insisting for hard copies by CTOs

To: V.N. Prasad, President, Twin City’s Tax Practitioners Assn. <[email protected]>,

Date: Sunday, 5 September, 2010, 8:12 AM

There is no need to submit hard copy of eReturn.

CTOs will take out print from system to keep hard copy in dealer’s file.

Second issue - please indicate specific cases.

Suresh Chanda, I.A.S.,Commissioner Commercial Taxes

CT Complex, MJ Road, Nampally, Hyderabad. AP

GOVERNMENT OF ANDHRA PRADESHEnvironment, Forests, Science & Technology (FOR.III) Department

ACTS-RULES- The Andhra Pradesh Forest Offences(Compounding Prosecution) Rules, 1969 - Amendment - Orders - Issued

G.O.Ms.No. 138 Dtd. 18-08-2010

Read:

From the Principal Chief Conservator of Forests, Andhra Pradesh,Hyderabad, Letter No.11949/2009/EC, Dt.21.03.2009.

O R D E R:-

The following Notification will be published in an Extraordinary Issue of theAndhra Pradesh Gazette dt..

2. The Commissioner of Printing, Stationery and Stores Purchase (PrintingWing), Hyderabad is requested to publish the following “Notification” in thenext issue of the Andhra Pradesh Gazette and arrange to supply of 200copies to the Principal Chief Conservator of Forests, Andhra Pradesh,Hyderabad and 50 copies to the Government.

NOTIFICATION

In exercise of the powers conferred by section 68 of the Andhra PradeshForest Act,1967 (Act No.1 of 1967) and all other powers hereunto enabling theGovernor of Andhra Pradesh hereby makes the following amendment to theAndhra Pradesh Forest Offences (Compounding Prosecution) Rules, 1969issued in G.O.Ms.No.438, F& RD(Leg), dt.12.03.1969 and published in A.P.Gazette RS to Pt.II, dt.29.05.1969 as subsequently amended:

AMENDMENT

In rule 8 of the said rules for sub-rule (iii) the following shall be substitutednamely:-

“(iii)Forest Range officers may compound any offence involving non-teak timber and fuel wood carried in autos and two wheelers. They shouldnot compound any offence involving fast moving motorized vehiclescarrying Sandal Wood and Red Sandal Wood, teak wood, etc.”

Janaki R.KondapiSpecial Chief Secretary to Government

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GOVERNMENT OF INDIAMinistry of Finance - Department of Revenue

Notification No. 43/2010-ServiceTax Dt. 30-06-2010

In exercise of the powers conferred by sub-section (1) of section 93 of theFinance Act, 1994 (32 of 1994), the Central Government, on being satisfied thatit is necessary in the public interest so to do, hereby makes the followingamendment in the Notification of the Government of India in the Ministry ofFinance (Department of Revenue) No.13/2008-Service Tax dated 1st March,2008 which was published in the Gazette of India, Extraordinary, vide numberG.S.R. 157 (E), dated the 1st March, 2008, namely:-

In the said notification, the letters and brackets “(zzp)” shall be substitutedwith the letters and brackets “(zzp) or (zn) or (zzl) or (zzm)”.

F No 334/03/2010-TRU K S V V PrasadUnder Secretary to the Government of India

Note. - The principal notification No.13/2008-Service Tax, dated the 1st March2008, was published the Gazette of India, Extraordinary, vide numberG.S.R.157(E), dated the 1 st March, 2008.



In exercise of the powers conferred by sub-section (1) of Section 71 of theFinance Act, 1994 (32 of 1994), the Central Board of Excise and Customs,makes the following amendment in the Service Tax Return Preparer Scheme,2009, namely : –

In the Service Tax Return Preparer Scheme, 2009, in paragraph 4, –

(a) proviso to sub-paragraph (1) shall be omitted;

(b) sub-paragraph (2) shall be omitted.

[F. No. 137/318/2007 – CX.4] Madan MohanUnder Secretary to Government of India

Note.- The principal scheme was published in the Gazette of India, videnotification No. 7/200-Service Tax, dated the 3rd February, 2009, [G.S.R. 69(E), dated the 3rd February, 2009].



Whereas, the Central Government is satisfied that a practice was generallyprevalent regarding levy of service tax (including non-levy thereof), under section66 of the Finance Act, 1994 (32 of 1994) (hereinafter referred to as ‘the FinanceAct'), on all taxable services relating to transmission and distribution of electricityprovided by a person (hereinafter called ‘the service provider') to any otherperson (hereinafter called ‘the service receiver'), and that all such services wereliable to service tax under the said Finance Act, which were not being leviedaccording to the said practice during the period up to 26 th day of February,2010 for all taxable services relating to transmission of electricity, and the periodup to 21 st day of June, 2010 for all taxable services relating to distribution ofelectricity;

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Now, therefore, in exercise of the powers conferred by section 11C of the Central Excise Act, 1944 (1 of 1944),read with section 83 of the said Finance Act, the Central Government hereby directs that the service tax payable onsaid taxable services relating to transmission and distribution of electricity provided by the service provider to theservice receiver, which was not being levied in accordance with the said practice, shall not be required to be paid inrespect of the said taxable services relating to transmission and distribution of electricity during the aforesaid period.

[F. No. 356/13/2010 – TRU] Prashant KumarUnder Secretary to the Government of India


Tax Research Unit

Circular No.124/6 /2010-TRU Dtd. 29-06-2010

Accounting Codes for the taxable services introduced videthe Finance (No.14) Act, 2010 — regarding.

Heads of Account under the Major Head “0044-Service Tax” in respect ofthe new taxable services have been allotted by the Office of the Principal ChiefController of Accounts, CBEC.

2. Accounting Codes for the purpose of payment of service tax are as follows:

Taxable Services Accounting Code

Sl. Tax Other DeductNo. Collection Receipts Refunds

(1) (2) (3) (4) (5)

1. Service of promoting, marketing or organizing of games of chance, 00440595 00440596 00440597including lottery, Bingo or Lotto [Finance Act 1994,Section 65(105)(zzzzn)]

2. Health service: (a) health check-up undertaken by hospitals or 00440598 00440599 00440600medical establishments for employees of business entities and(b) health services provided under health insurance schemesoffered by insurance companies[Finance Act 1994,Section 65 (105) (zzzzo)]

3. Service of maintenance of medical records of employees of 00440601 00440602 00440603business entity[Finance Act 1994, Section 65(105)(zzzzp)]

4. Service of promoting a brand of goods, services, events, business 00440604 00440605 00440606entities, etc[Finance Act 1994, Section 65(105)(zzzzq)]

5. Service of permitting commercial use or exploitation of any event 00440607 00440608 00440609organized by a person or organization[Finance Act 1994,Section 65 (105) (zzzzr)]

6. Service provided by electricity exchange [Finance Act 1994, 00440610 00440611 00440612Section 65(105)(zzzzs)]

7. Service related to (a) transferring temporarily or (b) permitting the 00440613 00440614 00440615right to use or enjoyment of any copyright defined in the CopyrightAct, 1957 and services related two types of copyright not coveredunder Intellectual Property Right(IPR) Service, namely those on(a) cinematographic films and (b) sound recording [Finance Act 1994,Section 65(105)(zzzzt)]

8. Special service provided by a builder etc, to the prospective tax 00440616 00440617 00440618buyers such as providing preferential location or external or internaldevelopment of complexes on extra charges[Finance Act 1994,Section 65(105)(zzzzu)]

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Note:

A. The sub-head “other receipts” is meant for interest, penalty, leviable on delayed payment of service tax

B. The sub-head “deduct refunds” is not to be used by the assessees, as it is meant for the Revenue/Commissionerates while allowing refund of tax

C. Primary education cess on all taxable services will be booked under 00440298 and Secondary Higher EducationCess will be booked under 00440426

D. If NSDL have issued any dummy codes for revenue collection and interest/penalty for the above eight services,all these dummy codes should be treated as void and may be replaced by the correct account codes asstated above

5. Description of taxable services provided at column (2) of the given table for ease of reference, does not limit thescope of the taxable service.

6. Trade Notice/Public Notice may be issued to the field formations and taxpayers.

7. Please acknowledge receipt of this Circular. Hindi version follows.

F.No.335/5/2006-TRU J. M. KennedyTel: 011-23092634 Director, TRU


Tax Research Unit

Circular No.126/08/2010 - ST Dt. 10-08-2010

Service tax on commission received by Primary Dealers dealing in Government Securities – regarding.

A representation has been received seeking clarification whether service tax is leviable on the underwritingcommission received by the Primary Dealers for the auction of Government Securities.

2. The matter has been examined. Underwriting service is taxable by virtue of section 65 (105) (z) of the FinanceAct, 1994. In the definition of taxable service, two technical terms are mentioned, namely ‘underwriting’ and‘underwriter’. The term ‘underwriting’ [section 65 (117) of the Finance Act, 1994] has the meaning assigned to itin clause (g) of rule 2 of the Securities and Exchange Board of India (Underwriters) Rules, 1993, which reads asfollows:

“underwriting means an agreement with or without conditions to subscribe to the securities of a body corporatewhen the existing shareholders of such body corporate or the public do not subscribe to the securities offered tothem.”

3. The term “underwriter” as in section 65(116) of the Finance Act, 1994, has been borrowed from rule 2 (f) of theSecurities and Exchange Board of India (Underwriters) Rules, 1993, which reads as follows:

“underwriter means a person who engages in the business of underwriting of an issue of securities of a bodycorporate.”

It is thus clear that under the above definitions ‘underwriter’ or ‘underwriting’ is about dealing in securities of abody corporate.

4. The related issue requiring resolution is whether dealing in government securities amounts to dealing in securitiesof a body corporate, particularly since government securities are issued by the Reserve bank of India, which is a‘body corporate’ in terms of section 3 (2) of the RBI Act, 1934.

5. Government securities are sovereign securities having zero default risk. Reserve Bank of India only manages theissue and also auction of Government Securities on behalf of the Government of India. In effect, Primary Dealersregistered with the RBI (as opposed to registration with the Securities Exchange Board of India) deal in GovernmentSecurities, issued by the RBI on behalf of the Government of India, as a part of the central Government’s marketborrowing program. The general practice is that the RBI invites bids from the Primary Dealers, who in their bidsindicate the amount to be underwritten and the underwriting fee expected by them. RBI examines these bids and



decides the amount to be underwritten and underwriting fee to be paid to aPrimary Dealer. Underwriting Fee is also known as Underwriting Commissionin common parlance. Thus the conclusion drawn is that government securitiesare not securities of a body corporate.

6. As the service tax law stands today, service tax liability does not arise onUnderwriting Fee or Underwriting Commission received by the PrimaryDealers during the course of the dealing in Government Securities.

7. Trade Notice/Public Notice may be issued to the field formations accordingly.

8. Please acknowledge the receipt of this circular. Hindi version follows.

F.No.332/13/2010-TRU J. M. KennedyTel: 011-23092634 Director, TRU


Tax Research Unit

Circular No.127/08/2010 - ST Dt. 16-08-2010

Service tax on commercial training and coaching –clarification whether ‘donation’ is ‘consideration’ – regarding.

A representation has been received seeking clarification whether donationsand grants-in-aid received from different sources by a charitable Foundationimparting free livelihood training to the poor and marginalized youth, will betreated as ‘consideration’ received for such training and subjected to servicetax under ‘commercial training or coaching service’.

2. The matter has been examined. The important point here is regarding thepresence or absence of a link between ‘consideration’ and taxable service.It is a settled legal position that unless the link or nexus between the amountand the taxable activity can be established, the amount cannot be subjectedto service tax. Donation or grant-in-aid is not specifically meant for a personreceiving such training or to the specific activity, but is in general meant forthe charitable cause championed by the registered Foundation. Betweenthe provider of donation/grant and the trainee there is no relationship otherthan universal humanitarian interest. In such a situation, service tax is notleviable, since the donation or grant-in-aid is not linked to specific trainee ortraining.

4. Trade Notice/Public Notice may be issued to the field formations accordingly

5. Please acknowledge the receipt of this circular. Hindi version follows.

F.No.354/119/2010-TRU J. M. KennedyDirector, TRU

Tel: 011-23092634

OVERNMENT OF INDIAMinistry of Finance - Department of Revenue

CENTRAL BOARD OF EXCISE & CUSTOMS(Tax Research Unit)

Circular No.128/10/2010 - ST Dt. 24-08-2010

„Ñ¨Éèí∞ «fi Ãã‰õΩºi\˜ JO_»~ü–Ô~·@~üûÅHõg∞+¨<£ÃÑ· ¿ã"å Ñ¨#∞fl qkèOK«|_» Œ∞.

¿Ñ ŒÅ‰õΩ, Ü«Ú= =~åæxH r=<ÀáêkètHõΔ}ÔH· èŒ~°‡ ã¨Oã÷ÅH˜KÕÛ ^•#O =∞iÜ«Úã¨Ç¨Ü«∞O#∞ ''„Ñ¨uÑ¶ÅO——QÍÉèÏqOK«ÖË#O Œ∞#, g\ÃÑ· ¿ã"å Ñ#∞flqkèOK«|_»^Œ∞.



Service tax on on-going works contracts entered intoprior to 01.06.2007 – regarding –

It has been brought to the notice of the Board that the following confusions/disputes prevail with respect to long term works contracts which were enteredinto prior to 01.06.2007 (when the taxable service, namely, Works contract cameinto effect) and were continued beyond that date:

(i) While prior to the said date services like Construction; Erection,commissioning or installation; Repair services were classifiable underrespective taxable services even if they were in the nature of workscontract, whether the classification of these activities would undergo achange?

(ii) Whether in such cases of continuing contracts, the Works Contract(Composition Scheme for payment of Service Tax) Rules, 2007 underNotification No. 32/2007-ST dated 22/05/2007 would be applicable?

2. The matter has been examined. As regards the classification, with effectfrom 01.06.2007 when the new service ‘Works Contract’ service was madeeffective, classification of aforesaid services would undergo a change incase of long term contracts even though part of the service was classifiedunder the respective taxable service prior to 01.06.2007. This is because‘works contract’ describes the nature of the activity more specifically and,therefore, as per the provisions of section 65A of the Finance Act, 1994, itwould be the appropriate classification for the part of the service providedafter that date.

3. As regards applicability of composition scheme, the material fact would bewhether such a contract satisfies rule 3 (3) of the Works Contract(Composition Scheme for payment of Service Tax) Rules, 2007. Thisprovision casts an obligation for exercising an option to choose the schemeprior to payment of service tax in respect of a particular works contract.Once such an option is made, it is applicable for the entire contract andcannot be altered. Therefore, in case a contract where the provision ofservice commenced prior to 01.06.2007 and any payment of service taxwas made under the respective taxable service before 01.06.2007, the saidcondition under rule 3(3) was not satisfied and thus no portion of that contractwould be eligible for composition scheme. On the other hand, even if theprovision of service commenced before 01.06.2007 but no payment of servicetax was made till the taxpayer opted for the composition scheme after itscoming into effect from 01.06.2007, such contracts would be eligible foropting of the composition scheme.

4. The Board’s previous Circular No. 98/1/2008-ST dated 04.01.2008 and theratio of judgement of the High Court of Andhra Pradesh in the matter of M/s.Nagarjuna Construction Company Limited vs. Government of India (2010TIOL 403 HC AP ST) are in line with the above interpretation.

5. Trade Notice/Public Notice may be issued accordingly.

F.No.354/141/2010-TRU J.M. KennedyDirector (TRU)

Tel: 011-23092634

ÕII 4–01–2008 QÆÅ ã¨~°∞¯ºÅ~ü <≥O.98/1/2008 =∞iÜ«Ú <åQÍ~°∞˚# Hõ<£¢ã¨ìHõΔ<£HõOÃÑh eq∞>ˇ_£ ˆHã¨∞Ö’ PO„ èŒ „Ñ¨ ÕâòÃÇ·ÏHÀ~°∞ì f~°∞Ê##∞ã¨iã¨∂Î, H˘#™êQÆ∞ «∞#fl=~ü û HÍO„\ÏH±ìÃÑ· ÕII 1–06–2007«~°∞"å « JO Œ∞‰õΩ#fl „ÑuÑ¶ÅOÃÑ· ¿ã"å

Ñ#∞fl qkèOK«|_»∞ «∞Ok.


HÕ~„ Œ HÍi‡Hõ âßY - <À\Ñ¶≤H+<£û

GOVERNMENT OF INDIAMinistry of Labour and Employment

EMPLOYEES PROVIDENT FUND ORGANISATIONBhavishya Nidhi Bhawan, 14-Bhikaji Cama Place, New Delhi 110088

No.ACC(IS)/PS/Misc/SMS/2010 Dt. 15-07-2010

Introduction of SMS System in EPFO

To

All Additional Central Commissioners (Political States)All Regional Offices & Sub-Regional Offices

It gives me great pleasure to announce launching of SMS basedcommunication platform of EPFO. It is a state of art communication platformusing which EPFO will be able to proactively communicate with all customers.Implementation of ths system will go a long way in complete automation ofestablishing a central depository of data base of Employers and Employees.

We are pleased to inform that a comprehensive solution based onthe needsof EPFO has been customised with the help of BSNL and IS Division. Thesolution shall offer a centralised SMS based communication platform which willbe connected with all 120 field offices. The SMS service has been taken up forthe employees, employers and EPFO officials. The range of services to beprovided are explained below in brief.

SMS facility for the PF Member

1. Automatic SMS Broadcast of Claim, Pension settlement and NEFT transfer.

2. Automatic SMS Broadcast of all EPF account holders at the end of themonth regarding their account balance.

3. SMS Broadcast informing the missing information/document on receivingthe Claims from PF beneficiary.

4. PF Customers will themselves be able to get information of their PF balanceensuring that information is passed on to the right person.

5. Anytime from anywhere the PF claimant may check up their claim status bysending their “Claim ID”.

SMS facility fo the Employer:-

➢ Registration/updation of mobile Number of the Establishment

➢ Remittance status

➢ Return status

➢ Send SMS alert to companies informing short/excess payment, when theCompany files return.

SMS service for the EPFO staff shall also commence simultaneously by way of

l Group SMS

l Scheduled SMS

l Flash SMS

l SMS based Project monitoring

All the Officer Incharge are requested to take some extra effort to collect themobile numbers of all the employers and subscribers (employees) of theestablishments covered under their jurisdiction. The following may be done forcollecting the mobile numbers.

ZOáê¡~Úãπ „áêq_≥O\ò Ñ¶O_£ P~°æ<≥·*Ë+¨<£L^ÀºQÆ∞Å∞, Ü«∞[=∂#∞ÅO ŒiH© qq èŒ=º=Ç¨~åÅ „Ñ¨QÆux ã¨OHΔÑ¨Î ã¨=∂Kå~°~°∂ÑOÖ’ "åi"åi ÃãÖòá¶È#¡‰õΩ ÑOÑ≤OKÕ=º=ã÷#∞ „áê~°OaèOzOk. ã¨ Œ~°∞ =º=ã÷q=~åÅ#∞, qk èq è•<åÅ#∞ D x~Ìâ◊#Ö’á⁄O^Œ∞Ñ¨iKå~°∞.


HÕ~„ Œ HÍi‡Hõ âßY - <À\Ñ¶≤H+<£û¡

a) A seperate column for providing mobile number be given in the claim form. On pre-printed stationery, arubber stamp for the same may be fixed while distributing the claim form.

b) The mobile numbers of all the pensioner may be got collected by writing to them to their addresses given inthe file.

c) The establishment may be asked to provide its own mobile number under the signature of authorised signatory.

d) The employer may also be encouraged to provide the mobile number of their employees. This may be doneby the employer in the following format.Ad

Sl. No. PF Acc. No. Name of the Employee Mobile No.

1

2

This information may be provided in a Excel file format alongwith hard copy as well as soft copy. The hardcopy should be signed by the authorised signatory of the establishment. The soft copy should have thefollowing naming convention “office name-pf code estt. xls”

The soft copy may be got verified with the hard copy and sent to Head Quarter for keeping in the data base.The same procedure may be adopted for submission of mobile numbers of the establishment to the HeadOffice.

e) Advertisement in the local news paper may be given in this regard.

f) The employer and employees association/unions may be informed in this regard and their help may be takento complete the mobile number data base.

Apart from the above mobile number of all the officers of the rank of AO/EO and above may be collected andforwarded to IS Division.

This may be done at the earliest so that we can provide the facility of Short Messaging Services (SMS) tomaximum number of employers and employees covered under EPF and MP Act.

Initially a beginning has been made by providing information through SMS to the members who have given theirmobile number alongwith the claim form. This service shall be gradually expanded to cover other areas of customerservice.

All the offices in the filed are requested that they should transfer the file containing NEFT payment amount andmobile number on daily basis to the Secure File Transfer Protocol Server (SFTPS) in order to send the SMS to all thebeneficiary whose claims are to be settled and payments are released through NEFT. In case you have any questionyou may like to inform the same to IS/Project Division. The technical details of how to send/upload the data/file isenclosed as Annexure - I. This may be treated as urgent. Further, instructions in the matter will follow shortly.

B.K. PandaAdditional Central Commissioner (IS)

T A X T O D A Y - N o . 1 M O N T H L Y B U S I N E S S L A W M A G A Z I N E I N T E L U G U

„Ñu <≥Å 10= Õk# "≥Å∞=iOK«|_»∞ «∞Ok.XHõ "å~°O ~ÀAÖ’¡ HÍÑ‘ JO Œ∞HÀx K«O^•^•~°∞Å∞, "≥O@<Õ \ÏH±û @∞_Õ HÍ~åºÅÜ«∂xHáÈã∞ìHÍ~°∞¤ ^•fi~å ≥eÜ«∞ Ñ~°K«O_ç. g∞ il„¿ãì+<£ <≥O. „"åÜ«∞@O =∞~°= Œ∞Ì.

ã^•ƒù=# g∞_çÜ«∂ ¢ÃÑ·"Õ\ò eq∞@_£501, Z<£.q.P~ü. ÇÏŸ"£∞û, 6–1–190/12, Ñ^•‡~å=Ù #QÆ~ü, ã≤HO„^•ÉÏ £ – 500 025. á¶È<£ : 9885 980 999 W–"≥∞~ÚÖò : [email protected]


P~ü.a.S. - <À\˜Ñ¶ ≤ ˆH+¨<£û

'u~°∞QÆ∞— ÖÏ"å Õgx «=∞ JH“O\ò¿ãì\ò"≥∞O\òÖ’ á⁄O Œ∞Ñ~°K«@OÖË Œ<ËMÏ^•^•~°∞Å Ñ¶≤~åº Œ∞Å‰õΩ ãÊOkã∂Î,ÕII 1–10–2010 #∞O_ç Jxfl ÉÏºO‰õΩÅ∞

'u~°∞QÆ∞— ÖÏ"å Õg q=~åÅ#∞MÏ`å^•~°∞x JH“O\ò ¿ãì\ò"≥∞O\òÖ’ qkèQÍ¿Ñ~˘¯<åÅx i[~üfi ÉÏºOH± P ÕtOzOk.

JÅÊ ã¨OMÏºHõ =~åæÅ q^•º~°∞úÅ∞„Ñ¨Éèí∞ «fi ™ê¯Å~ü+≤Ñ¡#∞ á⁄O ÕO Œ∞‰õΩgÅ∞QÍ "åiH U q èŒ"≥∞ÿ# x~°ƒO è•Å∞ÖËx MÏ`åÅ#∞ «ÑÊxãiQÍ ≥~°"åÅxÉÏºO‰õΩÅ#∞ P ÕtOK«@"≥∞ÿ#k.

RESERVE BANK OF INDIA

RBI/2010-11/169DPSS (CO) RTGS No. 341 / 04.04.002 / 2010-2011 Dt. 13-08-2010

RTGS / NEFT Return Transactions – Information for Account Statement

Please refer to our circular RBI / 2008-09 / 499 (DPSS CO RTGS No. 2246/ 04.04.002 / 2008-2009) dated June 16, 2009. The banks were advised to providenecessary information in RTGS Return messages uniformly.

2. However, it has been brought to our notice that the customers are notprovided with the necessary information on 'Return' transaction in theiraccount statement. In the absence of required information in the accountstatement customers face reconciliation issues.

3. Accordingly it has been decided that all RTGS and NEFT member banksshould provide the following description in the account statement ofcustomers for RTGS and NEFT Return transactions.

RTGS / NEFT Description to be provided

RTGS Return transactions RTGS-RETURN---

NEFT Return transactions NEFT-RETURN---

4. All RTGS and NEFT participants are advised to implement the instructionslatest by October 1, 2010.

Please acknowledge receipt.

G. PadmanabhanChief General Manager


RBI/2010-11/182RPCD.CO.FID. BC.No. 2433 /12.01.012/2010-11 Dt. 26-08-2010

Opening of No-Frills accounts by studentsfor availing various Government Scholarships.

It has been brought to our notice by the Secretary, Government of India,Ministry of Minority Affairs that banks are not opening ‘no-frills’ accounts infavour of students from minority communities who wish to avail of the scholarshipsbeing awarded by the Ministry through the State/UT Governments. This is causinghardship to the applicants for scholarship schemes of the Government and isinviting criticism.

2. In this connection, we draw your attention to our circular DBOD.Leg.BC.44/09.07.005/2005-06 dated November 11, 2005 with regard to opening of no-frills accounts by Scheduled Commercial Banks . A reference is also invitedto our Master Circular RPCD.SP.BC.No.4/09.10.01/2010-11 dated July 1,2010 on Priority Sector Lending-Credit Facilities to Minority Communitieswherein it has been stated that care should be taken to see that minoritycommunities secure, in a fair and adequate measure, the benefits flowingfrom various Government sponsored special programmes.

3. You are also advised to ensure opening of no-frills accounts or other accountsfor students from minority communities or other disadvantaged groups, when


P~ü.a.S. - <À\˜Ñ¶ ≤ ˆH+¨<£û¡

they approach banks, for availing various scholarships or other benefitsoffered by the Government. However, while opening such accounts, KYCnorms as appropriate may be followed for the purpose.

Sushma VijDeputy General Manager


RBI/2010 -11/187DBOD. AML.BC. No. 38 /14.01.001/2010 -11 Dtd. 31-08-2010

Know Your Customer (KYC) guidelines –accounts of proprietary concerns

Please refer to our circular DBOD.AML.BC.No. 80/14.01.001/2009-10 datedMarch 26, 2010 advising banks to lay down criteria in their customer identificationprocedure for opening accounts of proprietary concerns.

2. In this connection, it is clarified that in addition to the documents listed inparagraph 2(i) of our circular referred to above for opening a bank accountin the name of a proprietary concern, banks may also accept any registration/licensing document issued in the name of the proprietary concern by theCentral Government or State Government Authority/Department. Banksmay also accept IEC (Importer Exporter Code) issued to the proprietaryconcern by the office of DGFT as an identity document for opening of bankaccount.

Vinay BaijalChief General Manager


RBI/2010-11/188DPSS (CO) EPPD No. 477/ 04.03.01 / 2010-11 Dtd. 1-09-2010

Uniformity in penal interest payable by banksfor delays in credit / return of NEFT / NECS / ECS transactions

As you are aware, the recent past has been witness to significant growth inretail electronic payment products - both in terms of reach and volume. NEFT isoffered by close to 70,000 bank branches in the country and ECS is available at89 centres. More than 9 million transactions in NEFT and 25 million transactionsin NECS / ECS were processed during the month of July 2010 alone. While thisaugurs well for the migration of payment transactions to the electronic mode, itis imperative that customer service and efficiency parameters are effectivelydealt with as well by the member banks.

In terms of the NEFT / NECS / ECS Procedural Guidelines as also therelevant circulars / instructions issued by us from time to time, member banksneed to afford credits to beneficiary accounts or return transactions (uncreditedfor whatever reason) to the originating / sponsor bank within the prescribedtimeline. Any delays in doing so attract penal provisions specified therein.

The penal provisions are not uniform across these retail electronic paymentsystems. While banks have to pay penal interest @ prevailing Bank Rate + twoper cent in NECS (Paragraph 15.4 of Procedural Guidelines) and ECS-Credit(Paragraph 29 of Procedural Guidelines), the relevant provision is Bank Rate inNEFT (Paragraph 6.7 of Procedural Guidelines). In order to ensurestandardisation of the benchmark rate used and bring in uniformity in penalprovisions across the retail payment products, the following modifications arebeing made:

UHõ™êfi=∞º ãOã÷Å (MÏ`åÅ#∞)≥iKÕO Œ∞‰õΩ WÑ¨Ê\˜H xˆ~ÌtOz# Œ¢™êÎÅ

*Ïa`åÖ’ WOáÈ~üì, ZH±ûáÈ~üì HÀ_£ À áê@∞ˆHO„ Œ, ~å¢+¨ì „Ñ¨Éèí∞`åfiÅ U âßYÜ≥ÿ∞<å*ÏsKÕã≤# il¢¿ãì+¨<£ ÖËHõ Öˇ·Ãã<£ûÑ„`å<≥·fl<å P"≥∂kOKåÅx ÉÏºO‰õΩÅ#∞P^ÕtOK«@"≥∞ÿ#k.

HÍ~°}"Õ∞ ≥·<å ã¨~, NEFT, NECS,

ECS ÖÏ"å ÕgÅ‰õΩ x~ÌtOz#HÍÖÏ=kèÖ’ MÏ`å^•~°∞xH [=∞KÕÜ«∞xÑ¨HõΔOÖ’, MÏ`å^•~°∞x ÔH·¡"£∞`À xq∞ «ÎOÖË‰õΩO_®, J «x MÏ`å‰õΩ JÑ~å èŒ =_ô¤x[=∞KÕÜ«∂Åx, PÅ™êºxH HÍ~°}ÏÅ#∞q=iOKåÅx Jxfl ÉÏºOH±Å#∞P^ÕtOK«@"≥∞ÿ#k.

D x~Ìâ◊#Å∞ "≥O@<Õ J=∞Å∞Ö’H=™êÎ~Ú.


P~ü.a.S. - <À\˜Ñ¶ ≤ ˆH+¨<£û

NECS / ECS-Credit

“........Destination Bank would be held liable to pay penal interest at the current RBI LAF Repo Rate plus two percent from the due date of credit till the date of actual credit for any delayed credit to the beneficiaries’ account. Penalinterest shall be credited to the Beneficiary's Account even if no claim is lodged.”

NEFT

Paragraph 6.7 - “In the event of any delay or loss on account of error, negligence or fraud on the part of an employeeof the destination bank in the completion of funds transfer pursuant to receipt of payment instruction by the destinationbank leading to delayed payment to the beneficiary, the destination bank shall pay compensation at current RBI LAFRepo Rate plus two per cent for the period of delay. In the event of delay in return of the funds transfer instruction forany reason whatsoever, the destination bank shall refund the amount together with interest at the current RBI LAFRepo Rate plus two per cent till the date of refund.';

Paragraph 6.8 is also being substituted as under –

';During the NEFT operating hours, originating banks should endeavour to put through the requests for NEFTtransactions received by them, either online or across the counters, preferably in the next available batch but, in anycase, not exceeding two hours from the time of receipt of the requests. In the likelihood of any delay / possible delayin adhering to this requirement, the originators / customers should be informed of the delay / possible delay and thereasons for the same.';

Member banks may take note of the above changes in the Procedural Guidelines. These changes are applicablewith immediate effect.

G. PadmanabhanChief General Manager


BI/2010-11/190DPSS.CO.CHD.No. 485 / 03.06.01 / 2010-11 Dtd. 1-09-2010

Dishonour / Return of Cheques - Need to Mentionthe 'Date of Return' in the Cheque Return Memo

As you are aware, the 'Cheque Return Memo' that should accompany acheque dishonoured / returned for any reason is a critical document, more so incase recourse to legal action is necessitated. The procedure for handlingdishonoured cheques including the return / dispatch thereof to the payee hasbeen advised, vide, Reserve Bank circular DBOD.BC.Leg.No.113 / 09.12.001 /2002-03 dated June 26, 2003.

Rule 6 of the Uniform Regulations and Rules for Bankers’ Clearing Houses(URRBCH) also prescribes that instruments returned unpaid should have asigned / initialed objection slip on which a definite and valid reason for refusingpayment must be stated. Format of the Return Memo (including the field forindicating the Date of Return) and the Model List of Objections is contained inAnnexure D to the URRBCH.

Certain instances of banks not mentioning the date of return on the ChequeReturn Memo have been brought to our notice.

Keeping in view the larger interests of customers and to ensure that uniformpractices are adopted, banks are hereby advised to indicate the 'date of return'in the Cheque Return Memo without fail.

P.VasudevanDeputy General Manager

K≥e¡OÑÙ ÖË‰õΩO_® uiy =zÛ# K≥‰õΩ¯eflMÏ`å^•~°∞Å‰õΩ "åÑã≤KÕÛ@ÑC_»∞''K≥H± i\~üfl "≥∞"≥Ú——Ö’ K≥‰õΩ¯uiy =zÛ# Õkx qkèQÍ „"åÜ«∂ÅxP^ÕtOK«@"≥∞ÿ#k.


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Tax Today 09 2010

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