MCA warns strict action against professionals for defects in eforms
GOVERNMENT OF INDIA, MINISTRY CORPORATE AFFAIRS, Office of the REGIONAL DIRECTOR (SOUTH EASTERN REGION), 2nd Floor, Kendriya Sadan,, Sultan Bazar, Hyderabad – 500 195.
LETTER D.O. NO.IC/CIR.14/PLS/MCA21/2013, DATED 19-12-2013
Ministry of Corporate Affairs (MCA) has taken serious view of the pendency of eforms in various offices of the MCA in South East Region and issued instructions to this Directorate to take steps to impress upon the certifying professionals (CA/CS/CMA) to completely avoid defective filings so as to facilitate early disposal of eforms.
I am writing to you to impress upon all your members the need and importance of ensuring defect free filing of all eforms in MCA21 portal in accordance with the provisions of Companies Act, 1956 and Rules/Regulations/guidelines/Circulars, as applicable. Further, Help Kit prepared and made available in MCA21 portal along with blank eforms need to be followed and complied with before efiling so as to avoid defective filing/certification causing increased levels of pendency of eforms in various offices of MCA in South East Region.
It is noted by this Directorate that complete attachments are not being made or several attachments to eforms are found to be not legible and some times contain cut & paste signatures instead of clear scanned image of original documents. Further, certifying professionals are not attaching the search report(s) to the application form for name availability before certifying the name availability in eform 1A causing non-compliance of guideline no.3 of Name Availability Guidelines vide General Circular No. 45/2011 dated 8.7.2011. Like wise, there are many such defective/wrong filings which were certified by the professionals causing high levels of pendency in MCA21 portal.
In this regard, your kind attention is also invited to the Ministry's Circular No. 14/2011 dated 8 April 2011 (can be downloaded from Ministry's website at http://www.mca.gov.in/Ministry/pdf/Circular 14-2011 12apr2011.pdf) and it is also learnt that Ministry, after enquiry, has debarred certain professionals and not allowed them to submit any document on MCA21 Portal, in addition to taking necessary action under the provisions of Companies Act, 1956, for making wrong filings/submissions in MCA21 portal.
This communication may be brought to the notice of all your members impressing upon them the seriousness of the issue and ensure strict compliance.
Yours Sincerely
(Henery Richard)
Brief Discussion on Drafting of Agreement
CS Akhilesh Kumar Jha
Agreements are the essential of our day to day life. We need to draft various agreements for different matters. Suppose, we are purchasing a home or renting a home, doing any business, the agreement is required after every step.In view of above, some important points of discussion is mentioned below which may be useful at the time for Drafting and Vetting of Agreements:-
A) BASIC FEATURES
1- Agreement must be written:-
The Agreement must be written. Only oral agreement is not considered under the preview of law unless you present related proofs. Every Terms and Conditions, but whatever you want to write it should be in affected structure, you may mention in the Agreement.
2- Language:-
It is not a hard and fast rule that we should write Agreement in English Language. It may be written in local language of that area or in Hindi or in English. The words, which are being used in the Agreement, must be easy and understandable so that General People may understand the real meaning instantly.
3- Explanation:-
The words which are being mentioned in the agreements must be explanative nature. Any words, which are full of confusion, should be avoided.
4- Simple and Clear:-
The drafting of agreement must be in simple way. There is no need to put complicated sentences or words. The following do and do not should be considered at the time of drafting of agreement so that the agreement may be appeared in simple and Clear:-
Do:-
- Avoid unnecessary repetition
- Write shorter sentences
- Choose the right words
- Prefer the active to the passive sentences
- Express the ideas in fewer words
- Know exactly the meaning of the word
- Put yourself in place of reader, read the documents and satisfy yourself about the content, interpretation and sense it carries.
Don't:-
- Avoid the use of words of same sound (Employer & Employee)
- We should avoid the use of words "Less than" or "more than", we must use "not exceeding"
5- Organized:-
The paragraphs of the agreement should be in sequence which is the art of drafting. At the time of drafting of Agreement, First, visualize the body of agreement and thereafter we should start to put the facts accordingly. In result of that the final structured and managed Agreement shall seem more clear and effective.
6- Knowledge of Facts:-
Well knowledge of facts is more useful for drafting, without knowledge of facts, the drafting is just a formalities. Hence, before starting to draft of any agreement, we must be well versed of each facts of connected subject matter and full of awareness of that so that the drafting may be good and well.
7- Numbering and Paragraph:-
Paragraph is made according to the contents. As soon as one incident of related facts is completed, make paragraph. Paragraph shows clear story and text. So every Paragraph should be in meaning full. It should be noted the at the time of making paragraphs, the sense of paragraph must be clear according to contents and similar types sentence shall be avoided during the Paragraph.
The numbering is the important part of Drafting. In case we do not put numbers on the pages, it may be that someone may change the page or pages or modify the page accordingly. So future precautions, we need to mention the page number on each page.
8- Intention of Agreement
Legal officer must be aware the intention of agreement at the time of drafting. He is the person who knows the facts, who knows the intention and who knows the result of drafting. Hence, whatever he wants to reflect in the agreement, it must be shown thereafter so that other party may easily understand the meaning and intention of first party vice versa.
B) LEGAL POINTS
1- Parties enter into agreement freely,
At the time of entering into agreement, it must be sure that the parties which shall be bind through agreement have mutually agreed for binding. They are not bind by any ways.
As per Section 10 of the Indian Contract Act, 1872, all agreements are contracts if they are made by the free consent of parties competent to contract, for a lawful consideration and with a lawful object, and are not hereby expressly declared to be void. Nothing herein contained shall affect any law in force in India, and not hereby expressly repealed, by which any contract is required to be made in writing or in the presence of witnesses, or any law relating to the registration of documents.
2- Offer
In simple view, when a person gives proposal to another person to signify his assent to do or not to do is called offer.
As per Section 2 (a) of the Indian Contract Act, 1872, when one person signify to another his willingness to do or do abstain from doing anything with a view to obtaining assent of that other to such act or abstinence.
It means the parties of agreement who are entering a contract. Before signing an agreement, it must be sure that the proposal for offer has been accepted by the other party. It is preferable that back ground story about offer, proposal and acceptance of offer must be narrated in the Agreement.
3- Acceptance
In simple view, when a person signifies his assent to do or abstain from doing anything, the assent is called Acceptance of the Proposal or Offer.
As per Section 2 (b) of the Indian Contract Act, 1872, a proposal or offer is said to have been accepted when the person to whom the proposal is made signify his assent to the proposal to do or not to do something.
4- Contracts
As per Section 2 (h) of the Indian Contract Act, 1872, an agreement enforceable by law. A final agreement shall be legally enforced when we take care followings:-
1- Stamp Duty must be paid as per the prescribed rate of states.
2- Wherever is required for Registration of Agreement, it also be registered accordingly.
3- Both the parties must be signed.
4- In case of parties is body corporate, the person who is signing on Agreement must have the board resolution, ID proof, One passport size photo and authority letter from Company. Thereafter the Company Seal shall be affixed.
5- Witness clause is also important. At least Two Witness for each party must be present and they must put their hand on Agreement. As per person opinion each witness must be mentioned following sentence. The ID proof and address proof must be enclosed by the witness who put their signature with the agreement for future purpose:-
| Witness :- I,……………………s/o………………………..r/o……………………………, confirm and state that above mentioned signature is made in presence of me. Signature Name (As per ID Proof):- Address (AS per Address Proof):- |
C) IMPORTANT PARTS OF AGREEMENTS
1-TITLE
The Title must be written in the way, if someone sees this, that one may understand the almost matter of the Agreement. So at the time of writing agreement its name (Title) must be clear and understandable. There is some example below:-
LEASE AGREEMENT FOR 1ST FLOOR
LEASE AGREEMENT FOR 2ND FLOOR
SHAREHOLDERS ADMINISTRATIVE AGREEMENT
SHAREHOLDER AGREEMENT
TAKEOVER OF………… AGREEMENT
Note: – it is suggested that the name should be in Capital Letter.
2-DATE AND PLACE
There is no specific format for dates. Hence, we may use any type of format of date. There is some format below. Let's see:-
| Format | British: Day-Month-Year | American: Month-Day-Year |
A | the Fourteenth of March, 20… | March the Fourteenth, 20… |
B | 14th March 20…. | March 14th, 20… |
C | 14 March 20… | March 14, 20… |
D | 14/3/20… | 3/14/20… |
E | 14/3/… | 3/14/… |
F | 14/03/… | 03/14/… |
Personally, we prefer to write the 14th day of March, 20….
Place should be also mentioned clearly. It is too much important because the place decides the jurisdiction of the Agreement and stamp duty. So it must be written clearly.
3-PARTIES
Normally, Agreement is entered between two parties but it is not necessary that the parties always be only two. It may be more than Two Parties. In that case we should write among instead of between. Sometimes, we observe in the agreement that the detail of parties is not mentioned completely. So this indication is always wrong. The details of parties must be clear and understandable.
The following are some formats:-
In case of Proprietorship Concern/ Partnership Firm/ LLP/ Company
M/s ……………………(Proprietorship)/…………………………(Partnership Firm/LLP) registered under the Partnership Act 1932 or Limited Liabilities Partnership Act 2008. ……………………… Private Limited/ Limited, a company incorporated under the provisions of Companies Act 1956 (1 of 1956)/ having its registered office/administrative office situated at…………………….. and having its factory premises situated at……………………., (if applicable) (Hereinafter referred to as the "the ……..", which expression, unless it be repugnant to the context and meaning thereof, shall mean and include its successors, affiliates, and assigns and acting through Mr………….son of shri………………..resident of………………..having PAN No……., Propriter/ Partner/ Designated Partner/ Directors of the Company, duly authorized in the Board Meeting held on……………., (only applicable for company) of the ONE PART.
In case of Individual
Mr./ Mrs/…………………… Son of/ wife of………………………..resident of……………………….. having PAN no…………………….. which is the part of this agreement, herein after referred to as the First Party (which term shall mean and include wherever the context so requires or admits his heirs, successors, administrators, executors, attorneys and assigns) of the One Part.
4-RECITLES
As per dictionary meaning
"A formal statement appearing in a legal document such as a deed that is preliminary in nature and provides an explanation of the reasons for the transaction. The recital in a deed, for example, might indicate the reasons why the owner is selling the property."
In Simple meaning Recitals is just a back ground story of the terms and conditions. The Terms and Conditions cannot be started without briefing of agreement. Such briefing shows the initiation of terms and conditions of any agreement.
It is noted that the facts which is mentioning in the agreement must be clear. If any ambiguity exists there, it may create huge difficulties in coming future.
Some format of Recitals:-
Starting of Recitals
Whereas……………
And whereas……….
And whereas……….
And whereas……….
Noted that in modern agreement, we may avoid to use too much time "Whereas…" we just put main heading Recitals and start to put facts like below that:-
Recitals
This agreement is entered with reference of following facts:-
1-
2-
3-
5-CONSIDERATION
Consider clause is the most important part of agreement. Consideration clause should be written clear in descriptive mode. The mode and description of consideration may be differing on different agreement. Hence, at the time of drafting of Consideration Clause, the following point should also be considered:-
1- Amount must be written in Numeric Values as well in words.
2- At the point of fixation of Consideration or Price, the parties' consent should be specified therein.
3- Consideration against numbers or quantity, if any, must be specified
4- In case, the detail of number of Services or Quantity of Products must be shown. If possible, clarify each item in descriptive mode.
5- Details of Performance of Payment like it shall be paid through chequ or installment bases etc. it shall also be clarified.
6-DEFINATIONS
At the time of drafting we put various words in the Agreement. Some words have unclear meaning or full of confusion. In that case such types of specified words must have definition or explanation so that the matter may be cleared at the time reading.
7-INTERPERTATIONS
Interpretation is most important technique for understanding the matter. The words or sentences, which you want to express, must be simple and small sentences so that the Interpretation may be easily and understandable. To avoid harsh, complicated and confused sentences, its create ambiguity to read. In that case the interpretation of sentences may go in other direction.
8-TERMS AND CONDITIONS
Now, Terms and Conditions of both parties must be clear. Every agreement has different terms and conditions depend on subject of agreement. There is no specific rule of terms and conditions for whole agreement like drafting a Rent Agreement we put various conditions like period of months, registration clause, sub letting clause. Monthly rent, security clause etc. in case of gift deed we put gift details, structure, mutual consent, consideration, registration etc.
So we cannot fix a particular standard for terms and conditions for all type of agreements but we may put common clause which is used in every agreement at the time of drafting like:-
1- Board resolution clause (In case of Company)
2- Indemnity Clause
3- Force Major Clause
4- Severability
5- Confidentiality
6- Renewal (if applicable)
7- Termination Clause
8- Termination Notice
9- Permission Clause
10- Undertaking Clause
11- Waiver Clause
12- Arbitration Clause
13- Jurisdiction Clause
14-Testimonials and attestation
9-SIGNATURE AND SEALS
Finally, the parties put their signature in the presence of witness. In case of Company the board resolution must be enclosed with Agreement. The Stamp of the company should also be affixed.
10- ANNEXURE OR SCHEDULES
In case any Annexure or Schedules, which are attached therein, must be signed. Normally annexure is not been signed by the parties. It is wrong practice is going on. As we know well that where the Annexure is part of Agreement and if annexure is not properly cared, it may create difficulties. Hence, The Annexure is part of Agreement. So every pages of agreement including annexure should be signed.
Eligibility of Cenvat Credit on Input Service Debit Notes
Eligibility of Cenvat Credit on Input Service Debit Notes – An Analysis of Relevant Judgements
Cenvat Credit is always subjected to many queries, restrictions and ambiguities regarding its eligibility on both the legal and documentary (physical) end. In such a Scenario it becomes essential to understand the conceptual framework before establishing the eligibility of Proper Cenvat Document. This article discusses whether
- A Debit Note can be held as proper Cenvat Document?
- A multipage annexure debit note is a proper Cenvat Document?
Before going in the depths, it is imperative to brush the relevant legal structure of governing physical documents under Cenvat of Input Service.
As per Rule 4A of Service tax Rules, 1994, Every person providing taxable service shall not later than thirty days from the date of completion of such taxable service or receipt of any payment towards the value of such taxable service, whichever is earlier issue an invoice, a bill or, as the case may be, with following requirements :-
- It shall be serially numbered and shall contain following details,
- the name, address and the registration number of such person
- the name and address of the person receiving taxable service
- description and value of taxable service provided or agreed to be provided
- the service tax payable thereon
As per Rule 9(1)(f) of Cenvat Credit Rules,2004 an invoice, a bill or challan issued by a provider of input service on or after the 10th day of, September, 2004 shall be a valid documents for Cenvat.
In a Simplified reply to the above queries, it is held by the judgements that where the above particulars are duly disclosed on "any document (even if named as debit note)" the same shall envisage to be a proper cenvat document even if all the particulars are not disclosed on one page but as annexure to the main page of such debit note.
The above view is supported by several judgements.
In case of M/s. Jyoti Industries Unit-II Versus CCE & ST, Ludhiana 2013 (11) TMI 949 it has been held that :-
"The documents title debit notes/invoice and the same mentioned service tax registration number of the service provider, mentioned the nature of the service as Business Auxiliary Service and also the details of value of the taxable service and service tax paid – all the information which is required to be mentioned in invoice issued by the service provider is available in the documents and just because before the word invoice, the word debit note has been added, these documents would not cease to be a valid document for the purpose of cenvat credit"
In case of Atlas Documentary Facilitators Co Pvt Ltd Versus Commissioner Of Service Tax 2013 (12) TMI 440 it has been held that :-
"Purpose of prescribing a document for availment of credit is to enable the Revenue to verify the fact of payment of service tax by the service provider and the receipt and consumption of service by the service recipient in further provision of output service. The prescription of document is only a machinery provision for achieving the object of law. In the present case, Rule 4A of the Service Tax Rules, 1994 does not prescribe any format of document to be issued by the service-provider. It only specifies what are the particulars which should be contained in the document. These particulars are, namely and, address of the service provider, service tax registration number, name and address of the service recipient, description of the service rendered and the value thereof and the service tax paid. If this information is available in any document, the same would constitute a valid document for the purpose of availing CENVAT credit."
In case of M/s Unique Pharmaceuticals Laboratories Versus CCE Surat-II 2013 (10) TMI 266 it has been held that :-
It is also an established law that CENVAT Credit cannot be denied merely on the basis of certain procedural lapses when the duty paid nature and its receipt in the factory and utilization in the manufacturing activity are not disputed
Hence where all the information contained and required to be mentioned on invoices is contained in the debit notes the same shall be valid cenvat documents. The same view is accepted in plethora of judgements, some of them are :-
- Misson pharma Logistics (I) P. Ltd. [2012 (11) TMI 117 - CESTAT, AHMEDABAD],
- Indore Vs. Gwalior Chemical Industries Ltd. [2012 (5) TMI 352 - CESTAT, NEW DELHI] and
- CCE, Nasik Vs. Graphite (I) Ltd. [2006 (10) TMI 224 - CESTAT, MUMBAI]
- M/s. Diamond Cements Versus CCE, Bhopal 2013 (5) TMI 243 – CESTAT NEW DELHI
Even where the particulars are mentioned not on the same page but as an annexure still the same shall be held as proper cenvat Documents as accepted in Hybrid Electronic Systems P. Ltd. vs. Commissioner of Central Excise, Mumbai – I 1996 (87) ELT 526 (Tribunal) wherein it has been held that if all the material particulars cannot be accommodated in one page of the invoice, there cannot be any objection in having annexure giving the particulars to the invoice.
Though in Godrej Consumer Products Ltd. vs. Commissioner of Central Excise, Indore 2010 (20) STR 609 (Tri.-Del.) wherein it has been held that denial of credit on the strength of debit notes cannot be regarded as incorrect in law.
Recently in case of Atlas Documentary Facilitators Co Pvt Ltd Versus Commissioner Of Service Tax 2013 (12) TMI 440 the Hon'ble CESTAT has accepted the view in case of Hybrid Electronic Systems P. Ltd. vs. Commissioner of Central Excise, Mumbai – I 1996 (87) ELT 526 (Tribunal) as against the view as held in case of Godrej Consumer Products Ltd. vs. Commissioner of Central Excise, Indore 2010 (20) STR 609 (Tri.-Del.)
About the Author: CA Ankit Gulgulia – Author is Practicing Chartered Accountant in New Delhi/NCR and specialising in Indirect Taxes, Corporate Laws and Transfer Pricing. He can be reached at ankitgulgulia@gmail.com / +91-9811653975
DISCLAIMER: This article is provided purely for your information only and you should check other information sources before taking any action based on any of the content in this article. Neither the authors nor website hosting the article make any warranty as to the quality or currency of the information contained in any of the site's articles.
Readers are advised to consult the professional for understanding applicability of this article as a matter of jurisprudence. While due care has been taken in preparing this document, the existence of mistakes and omissions herein is not ruled out. No part of this document should be distributed or copied (except for personal, non-commercial use) without our written permission.
10 Qualities of Sachin Tendulkar That Can Make Your Professional Career / Studies Flourish
I just keep it simple. Watch the ball and play it on merit. – Sachin Tendulkar
I hated every minute of training, but I said, 'Don't quit. Suffer now and live the rest of your life as a champion.' – Muhammad Ali
Having my morning tea and just as today it has sunk in that the Little Master from India has retired now from all forms of cricket could not resist myself from writing this blog about the qualities that he has portrayed for last 24 years in his personal and professional career.
I write this to be read by the Students and Professionals of all fields who very well know that their life is very similar to a sportsman who needs to constantly perform, manage fitness and sharpness of his/her skills.
These are 10 most important qualities that each one us shall try to adopt in our lives to ensure a long and successful career and personal life. Let's get started!!
1) Concentration
This is his most important asset. His concentration has been remarkable and this is what allows him to get up even after defeats and perform with even the limited resources. Professionals and students shall adhere to concentration as their jewel of life. The concentration is more valuable than anything else, even more than your KNOWLEDGE!!
2) Self Belief
Self belief is a quality that you would find in every elite performer. Sachin is just another fine example of the same. The belief that you can perform and extract your best is what will allow you to stand and fight even in drastically repugnant situations. The belief is what makes you WIN!!. Remember, Mind Sight is more important that Eye Sight !!
3) Hard Work
A dream doesn't become reality through magic; it takes sweat, determination and hard work. – Colin Powell
Indeed, it is hard work that is the propelling fuel of any professional career. Once you decide your goals in life it then needs to fuel with the efforts of hard work. The routines and discipline of working hard becomes the most difficult yet most important at the pinnacle of success. You stop working, things stop working (you may be at whatever heights) !!
4) Skilfulness
Skill is important in life. His skill of batting is his skill of life. Sachin has portrayed his life on the epicentre of his batting skill. Professional skill is the asset of professionals and this should be protected and nutrified at all costs and at all times.
5) Always on Learning Mode
Seekhna Band toh Jeetna Band !! – Amitabh Bachhan
Isn't that the reality of life. The dead end of life is not when we stop breathing, but it is when we feel saturated and feel that there is no more scope of learning. The more you learn is the more one can grow, improve his professional and personal life.
6) Respectful
Sachin has portrayed a remarkable quality of humility and grace throughout his career. It takes some efforts to respect every person when you are a heartthrob of the entire country and literal licensee of anything you want to do. He has shown that the professional success shall be kept completely aloof from basic human values of compassion, dignity and integrity.
7) Team Play
As professionals this is most important for all of us to learn. Even the professionals can't work without their team be it their parents, siblings, friends, mentors, staff, colleques etc. It's the efforts of the entire team that comes out in the form of a beautiful career of a player/professional. One shall always remember the pivotal role the team has played to his / her success.
8) Soft Spoken
This quality of his is my personal favourite. Despite all the success and fame, Sachin has always been a soft spoken person and has restrained himself from any personal talks or allegations etc. His soft spokenness has even made his fame grow more and more as this is basic human instinct that every human approximates.
9) Satisfaction
Content with getting what arrives of itself. Passed beyond the pairs, free from envy, not attached to success or failure. Even acting, he is not bound. He is recognized as eternally free, who neither loathes nor craves; For he that is freed from the pairs, is easily freed from conflict. – Bhagvad Gita
One cannot be happy without a sense of satisfaction / content in his / her life. Sachin is a fine example of how one needs to manage sometimes conflicting values of ambition and satisfactions in life simultaneously. Ambition shall not over shadow one's satisfaction in his / her life, lest he will just keep searching happiness but shall never meet it.
10) Clarity of Vision
Whatever he has done, he has looked completely clear in his mind and this is what makes him a champion. He has never been boggled by the the criticism of his critics, always working on his basics. Similarly, the professionals needs to be clear in what they aspire and needs to execute in their career.
It's not the failures in life which fail us, It's the lack of will to get up is what fails us!! – CA Ankit Gulgulia
About the Author:
CA Ankit Gulgulia (Jain) – Author is practicing Chartered Accountant in New Delhi. A Writing enthusiast, a speaker, blogger and a Sachin FAN !! He can be reached at Ankitgulgulia@gmail.com.DISCLAIMER: Personal Views of author strictly.
Free Supplies Does Not Constitutes Non Monetary Consideration under Service tax
"Free supplies", incorporated into construction (cement or steel for instance), even on an extravagant inference, would not constitute a non-monetary consideration remitted by the service recipient to the service provider for providing a service, particularly since no part of the goods and materials so supplied accrues to or is retained by the service provider. – CESTAT, Delhi
In its recent conflict resolving judgement between earlier contrary judgements of Division bench in case of Cemex Engineers vs. CST, Cochin (Tri. Bang) and Jaihind Projects Ltd. vs. CST, Ahmedabad (Tri. Ahmd.) the larger bench in case of M/s Bhayana Builders (P) Ltd. & Others v. CST, Delhi & Others has held that free supplies provided by service recipient to service provider for use in provision of service shall not be considered in the ambit of gross amount charged as contained in notification 15/2004 including the explanation thereto as introduced by Notification No. 4/2005-ST.
The judgement has come as major breather for the assessees who claimed the benefit of Notification 15/2004 which governed the abatement code in respect of taxable service provided by a commercial concern to any person in relation to construction service subject to the conditions as detailed therein.
Explanation to 15/2004 was inserted vide Notification 4/2005-ST dated 01.03.2005 – For the purposes of this notification, the "gross amount charged" shall include the value of goods and materials supplied or provided or used by the provider of the construction service for providing such service. In brief, it was contended by the revenue that expression 'used' as contained in explanation shall include the free supplies received by service provider from service recipient and thus shall become the part of value of services for service tax purpose.
On the above, Hon'ble CESTAT has observed that :-
a) The expression "used" in the 'Explanation' to Notification No.15/2004-ST is the problematic. It is
preceded by two other expressions "supply" and "provided", the three expressions interspersed by the disjunctive "or". The expression "used" would bear a particular meaning on its literal construction but becomes plurilisignative in the society of the two other expressions. This potential for multiple meanings of the expression 'used', has triggered the forensic effort of assessees' counsel, inviting us to apply the noscitur principle.
preceded by two other expressions "supply" and "provided", the three expressions interspersed by the disjunctive "or". The expression "used" would bear a particular meaning on its literal construction but becomes plurilisignative in the society of the two other expressions. This potential for multiple meanings of the expression 'used', has triggered the forensic effort of assessees' counsel, inviting us to apply the noscitur principle.
b) Elaborating on the noscitur principle it is contended that the expression "used" in the Explanation to Notification No. 15/2004-ST (to explain the meaning of "gross amount charged", an expression in the preamble to the Notification), cannot be construed, in so far as language permits, as be inconsistent with the meaning of the expression "gross amount charged" in the preamble to the Notification. In substance, the contention is that the Notification exempts service tax to the extent of the tax leviable on 67% of the "gross amount charged", in relation to construction service; Section 67 (a provision dealing with valuation of taxable services for charging tax) enacts that the value of any taxable service shall be the "gross amount charged"; and "gross amount charged" under Section 67 would not include the value of free supplies.
c) Etymologically the words supplied and provided are closely associated words. Provided also means to supply; furnish. Supply bears a similar connotation. The word used is structurally associated (in the Explanation) with the earlier two words and the three words are employed to define the meaning of the expression gross amount charged, an expression that occurs in the preamble to Notification No. 15/2004-ST.
d) Noscitur principle could be gainfully employed to identify the legal meaning of the word used from several grammatical/ literal meanings of the said word, by employing the associational context.
In another very important aspect of judgement that Hon'ble CESTAT by relying on CIT, Bangalore vs. B.C. Srinivasa Setty where it held that
"The character of the computation provisions in each case bears a relationship to the nature of the charge. Thus the charging section and the computation provisions tougher constitute an integrated code. When there is a case to which the computation provisions cannot apply at all, it is evident that such a case was not intended to fall within the charging section"
based on above principle enunciated in Srinivasa Setty it is held that since the value of free supplies is incapable of computation (since no principle of computation of free supplies is indicated and the provisions of Section 67(1) (iii) would not apply as free supplies would not fall within Section 67), the computation provision fails and consequently this restriction on the availability of the benefits of exemption under the said Notification would nugatory.
Though the Hon'ble CESTAT in above case has restricted to decide on the only matter whether the free supplies constitutes the valid component of Gross amount charged as contained in the notification 15/2004-ST r.w. Section 67 this judgement shall pre-cede other aspects of litigation including legislative competence of current valuation rules which considers explicit inclusion of value of free supplies by service recipient for the purpose of computing service tax.
About the Author:
CA Ankit Gulgulia – Author is Practicing Chartered Accountant in New Delhi/NCR and specialising in Indirect Taxes, Corporate Laws and Transfer Pricing. He can be reached at ankitgulgulia@gmail.com / +91-9811653975DISCLAIMER: This article is provided purely for your information only and you should check other information sources before taking any action based on any of the content in this article. Neither the authors nor website hosting the article make any warranty as to the quality or currency of the information contained in any of the site's articles.
Readers are advised to consult the professional for understanding applicability of this article as a matter of jurisprudence. While due care has been taken in preparing this document, the existence of mistakes and omissions herein is not ruled out. No part of this document should be distributed or copied (except for personal, non-commercial use) without our written permission.
A Sedan is Not A SUV thus only 27% Duty – Central Excise (DR-TRU)
Yes that's how the Central Excise clarifies it, much to the relief of Sedan car manufacturers in its recent Circular No. 972/06/2013.CX dated 24th July, 2013. The issue gains significance from the fact that notification No. 12/2013-Central Excise dated 1st March, 2013 (vide Budget 2013-14) introduced a higher level of excise duty i.e. at the rate of 30% on motor vehicles of engine capacity exceeding 1500 cc, popularly known as Sports Utility Vehicles (SUVs) including utility vehicles vide Sl. No. 284A of the above-said notification. In the Explanation appended at Sl. No. 284A of the afore-cited notification, it has been mentioned that for the purposes of this entry, SUV includes a motor vehicle of length exceeding 4000 mm and having ground clearance of 170 mm and above.
This clarification from TRU suggests that that the higher excise duty of 30% is applicable on motor vehicles which are popularly known as SUVs and which satisfy all the three conditions, viz. (i) the engine capacity exceeds 1500 cc, (ii) the length exceeds 4000 mm; and (iii) the ground clearance is 170 mm and above.
Any car stated to satisfy all the three conditions but, they are not popularly known as SUVs and neither are they known so in trade parlance. They are reportedly known as sedans in trade and common parlance.
Hence the cars which are known as sedans, will attract the excise duty of 27% as applicable to large segment cars.[Sl. No. 284 (ii) of the Table in notification ibid]
About the Author:
CA Ankit Gulgulia (Jain) - Author is practicing Chartered Accountant in New Delhi and specialising in Indirect Taxes, Corporate Laws and Transfer Pricing. He can be reached at ankitgulgulia@gmail.com or +91-9811653975DISCLAIMER: This article is provided purely for your information only and you should check other information sources before taking any action based on any of the content in this article. Neither the authors nor website hosting the article make any warranty as to the quality or currency of the information contained in any of the site's articles.
Trade Discount after Issue of Invoice – Is it a Sales Tax 'Mirage'?
The intent behind this write-up is to discuss the intricacies of several seemingly inconsistent judgements which have made the matter of availing trade discount a discounting issue in itself.
Though the VAT provisions are similar at large across the states, there are variances observed with respect to the deductions allowed against sales price or gross turnover under different state vat laws. For example:-
a) DVAT – Allows any discount as per practice.
b) Haryana VAT – Allows cash discount or trade discount at the time of sales.
c) Karnataka VAT – Allows only if explicitly effectuated through invoice.
d) Kerala VAT – Allows any discount if books speak so and passed as per trade practice (as per KGST Rules).
From above it is quite understandable that the judgements (in relation to discounts) under one law have to be interpolated by other state dealers to locate the position of law in their state unless their jurisdictional High court produces an applicable ruling or Hon'ble Supreme Court clears the law.
It has been generally understood and widely held practice that the discount to be eligible for deduction from sales price of selling price shall be as disclosed / effectuated on the invoice and only the net amount shall be effectively collected. In such cases where it is claimed on the invoice it shall be a straight forward deduction if broadly applicable compliance is made.
The concern is where the discount is passed on to the purchasing dealer after the sales are affected via the credit note, whether such credit note adjustment shall qualify for deduction from sales price remains a question that seeks our discussion.
In case of M/s Monga Trading Co. vs. State of Haryana (2009) 33 PHT 651 (HTT) it was held that credit notes issued as business promotion incentive for achieving sales targets are not recognised by Haryana VAT Act or rules thereunder.
In case of Priya Agencies vs CTO (2008) 14 VST 293 (Ker) it was held that
"From the above, it is clear that discount to be allowed as deduction in the turnover is only trade discount, which is shown separately in the invoice, whereunder the purchaser pays for the goods, only the amount, reduced by discount, shown in the bill. In other words, under the above provision, discount given through credit notes, periodically, will not be entitled to any deduction from the turnover."
In case of DCCT vs M.R.F. Ltd. (2008) 14 VST 124 (WBTT), it has been held that
"If the listed price is realised from the purchaser and shown in the invoice or seller's account as sale price without any indication about such discount, subsequent adjustment of an amount against price of subsequent purchases cannot ordinarily qualify as trade discount."
..
"(6) Discount allowed long after the invoice is raised and/or removal of goods which is in the nature of bonus or incentive is not a trade discount."
"Object of allowing trade discount is to enable the purchasers to earn profit by selling at the listed price. The system of allowing discount by issuing credit notes and adjustment thereof at the time of subsequent purchase indicates that the real purpose behind such discount was to compel the purchasers to continue to purchase goods from the respondent-dealer if they wanted to avail of the discount facility. If a purchaser did not purchase any goods from the dealer after a particular purchase, he might not get the discount at all."
In many sense MRF's judgement has enlightened the concept of trade discount and also provided the broad features to identify the trade discount, some of them are :-
(1) The discount is to be an integral part of transaction of sale itself.
(2) The discount should be related to the price of the goods sold and it cannot have any relation to any other goods supplied or service rendered.
(3) The invoice should at least reflect that the discount is allowed or will be allowed.
(4) A discount which is in the nature of compensation for any loss suffered by the purchaser in the previous purchase is not a trade discount.
(5) Trade discount should be known and understood at or before the time of removal of the goods.
(6) Discount allowed long after the invoice is raised and/or removal of goods which is in the nature of bonus or incentive is not a trade discount.
(7) The outward invoice sent by a wholesale dealer to a retailer should show the catalogue price and the deduction of the trade discount.
(8) The object of allowing trade discount is to enable the retailers to earn profit by selling the goods at the catalogue price.
(9) Sale price payable by the retailer will be the difference between the catalogue price and trade discount.
(10) There will be only one agreement between the parties to the effect that the goods will be sold by the dealer to the retailer at the net sale price calculated after allowing the discount.
(11) Trade discount is to be deducted from the catalogue price in accordance with the terms of the agreement.
(12) Net amount of sale price after deduction of the discount will be entered in the sale book of the dealer.
(13) Net amount of price payable by the retailer after deduction of the discount will be entered in the purchase book of the purchaser (retailer).
(14) Trade discount as a rule does not appear in the books of the seller or the purchaser.
(15) Trade discount need not be always allowed at the time of sale and may be allowed on a later date at the end of the month or quarter if computation of discount was not possible at the time of making the invoice.
Note: - Point no. 15 above might not be applicable in various VAT's like Haryana where specifically it is provided that allowability of 'cash or trade discount at the time of sales'.
In a judgment of the Orissa High Court in Orient Paper Mills Ltd. v. State of Orissa reported in [1975] 35 STC 84 concept of trade discount was discussed
"Para 8. The resultant position, therefore, is that trade discount is to be deducted from the catalogue price in accordance with the terms of the agreement and it is only thereafter that the consideration is to be fixed which is the sale price within the meaning of section 2(h). Such a concept has nothing to do with the deduction of cash discount as referred to in the definition."
In case of Deputy Commissioner of Sales Tax (Law) v. Advani Oerlikon (P.) Ltd. [1980] 45 STC 32 wherein which it has been pointed out (at page 35) :
"Trade discount is usually and almost invariably reflected in the invoice as a discount and ultimate sale price payable by the buyer is mentioned in the invoice after deducting the discount. Allowing discount by issuing credit notes in favour of the purchaser after realisation of the price mentioned in the invoice is not a usual accountancy practice in the trade circle."
"Nor is there any question here of two successive agreements between the parties, one providing for sale of the goods at the catalogue price and the other providing for an allowance by way of trade discount. Having regard to the nature of a trade discount, there is only one sale price between the dealer and the retailer, and that is the price payable by the retailer calculated as the difference between the catalogue price and the trade discount. There is only one contract between the parties, the contract being that the goods will be sold by the dealer to the retailer at the aforesaid sale price."
Now by reading above, one would clearly assume that any discount of perhaps any nature shall fail to qualify as trade discount unless it is effectuated through the invoice but it is not the case unanimously. Silver-lining on the issue was provided by recent Hon'ble Supreme Court's judgement in case of IFB Industries (Ker) & India Cement's* case.
In Union of India and Others v. Bombay Tyres International (P) Ltd., (2005) 3 SCC 787 it was held that trade discounts are discounts allowed in the trade (by whatever name such discount is described) should be allowed to be deducted from the sale price having regard to the nature of the goods, if established under agreements or under terms of sale or by established practice, the allowance and the nature of the discount being known at or prior to the removal of the goods. Such trade discounts shall not be disallowed only because they are not payable at the time of each invoice or deducted from the invoice price."
In IFB Industries Ltd. vs State of Kerala 2012 (3) TMI 666 (SC) read with Andhra Pradesh High Court's ruling in Godavari Fertilizers and Chemicals Ltd. v. Commissioner of Commercial Taxes, (2004) 138 STC 133 it has been held that that a discount given by means of credit notes issued subsequent to the sale is as much a trade discount admissible to deduction in determining the turnover of a dealer. Further it was held that unless the requirement of deduction of trade discount is explicitly on the account of invoice it cannot be understood as mandatory requirement to claim the benefit of trade discount passed at later stage in form of credit note.
Note: – This ruling clearly won't apply in state laws where there is mandatory requirement of discount being allowed only on the strength of invoice say as in Karnataka VAT provisions, further deepening the cob-web's jargon.
Before Parting…
Considering the growing complicacies in the retail market and companies looking for most innovative ways to provide the customer with discount benefits, it is high time that the room for such deductions shall be made the part of law as clear eligible deductions.
Avoiding a legal perspective's implementation just because of difficulty in execution of assessment of dealers might become hindrance in several industries including Indian Retail Industry. India Inc. would relish a non discriminatory discount deduction mechanism for sales tax purpose.
Also, conditional discounts as discussed in MRF's case by Hon'ble West Bengal Tax Tribunal shall be considered for deduction by law makers as this may happen to boost the retail sector which in large tends to offer such discounts.
About the Author:
CA Ankit Gulgulia (Jain) – Author is Practicing Chartered Accountant in New Delhi/NCR and specialising in Indirect Taxes, Corporate Laws and Transfer Pricing. He can be reached at ankitgulgulia@gmail.com.DISCLAIMER: This article is provided purely for your information only and you should check other information sources before taking any action based on any of the content in this article. Neither the authors nor website hosting the article make any warranty as to the quality or currency of the information contained in any of the site's articles.
Borrowing and Lending in Rupees – Investments by persons resident outside India in the tax free, secured, redeemable, non-convertible bonds
RBI/2013-14/416
A.P. (DIR Series) Circular No.81
A.P. (DIR Series) Circular No.81
December 24, 2013
To
All Authorised Dealer Category – I Banks
All Authorised Dealer Category – I Banks
Madam / Dear Sir
Borrowing and Lending in Rupees – Investments by persons resident outside India in the tax free, secured, redeemable, non-convertible bonds
Attention of Authorized Dealer Category – I (AD Category – I) banks is invited to the Regulation No. 6 (2) of Foreign Exchange Management (Borrowing and Lending in Rupees) Regulations, 2000 (Notification No. FEMA 4/2000-RB dated May 03, 2000) which imposes restrictions on person resident in India who have borrowed in Rupees from a person resident outside India to the effect that such borrowed funds cannot be used for any investment, whether by way of capital or otherwise, in any company or partnership firm or proprietorship concern or any entity, whether incorporated or not, or for relending.
2. On a review, it has been decided to permit such resident entities / companies in India, authorised by the Government of India, to issue tax-free, secured, redeemable, non-convertible bonds in Rupees to persons resident outside India to use such borrowed funds for the following purposes:
(a) for on lending / re-lending to the infrastructure sector; and(b) for keeping in fixed deposits with banks in India pending utilization by them for permissible end-uses.
3. AD Category-I banks may bring the contents of this circular to the notice of their constituents and customers.
4. Reserve Bank has since amended the subject Regulations accordingly through the Foreign Exchange Management (Borrowing and Lending in Rupees) (Amendment) Regulations, 2013 which have been notified vide Notification No. FEMA.287/2013-RB dated September 17, 2013, vide G.S.R. No. 645(E) dated September 20, 2013, read with Corrigendum dated October 24, 2013 vide G.S.R.No.741(E) dated November 19, 2013.
5. The directions contained in this circular have been issued under sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and are without prejudice to permissions / approvals, if any, required under any other law.
Yours faithfully,
(Rudra Narayan Kar)
Chief General Manager-In-Charge
Chief General Manager-In-Charge
Criteria to treat Credit Card dues as NPA
RBI/2013-14/414
DBOD.No.BP.BC.78/21.04.048/2013-14
DBOD.No.BP.BC.78/21.04.048/2013-14
December 20, 2013
The Chairman and Managing Director/
Chief Executive Officer of
All Scheduled Commercial Banks
Chief Executive Officer of
All Scheduled Commercial Banks
Dear Sir,
Prudential Norms on Income Recognition, Asset Classification and Provisioning pertaining to Advances – Credit Card Accounts
Please refer to paragraph 2.1 of the Master Circular dated July 01, 2013 on Prudential Norms on Income Recognition, Asset Classification and Provisioning pertaining to Advances, wherein definitions of non-performing assets (NPAs) have been indicated.
2. In credit card accounts, the amount spent is billed to the card users through a monthly statement with a definite due date for repayment. Banks give an option to the card users to pay either the full amount or a fraction of it, i.e., minimum amount due, on the due date and roll-over the balance amount to the subsequent months' billing cycle.
3. It has come to our notice that there are divergent practices being followed by banks with regard to asset classification status of credit card accounts if minimum amount due is not paid on the specified due date. While some banks reckon the due date specified in the statement for payment of minimum amount due to determine the over-due status, some banks reckon the subsequent billing date to determine the over-due status of the minimum amount due. In order to bring in consistency and induce transparency, it is advised that a credit card account will be treated as non-performing asset if the minimum amount due, as mentioned in the statement, is not paid fully within 90 days from the next statement date. The gap between two statements should not be more than a month.
4. Banks should follow this uniform method of determining over-due status for credit card accounts while reporting to credit information companies and for the purpose of levying of penal charges, viz. late payment charges, etc., if any.
Yours faithfully,
(Chandan Sinha)
Principal Chief General Manager
Principal Chief General Manager
CBI arrests DCIT, Delhi in alleged bribery case
CBI Press Release- New Delhi , 24.12.2013
The Central Bureau of Investigation has arrested a Deputy Commissioner of Income Tax (IRS-2006 Batch), New Delhi in an ongoing investigation relating to alleged bribery case.
A Case was registered by CBI on 09.01.2013 U/s 120 B IPC & Sec. 7,12,13(2)r/w 13(1)(d) of PC Act, 1988 against a Dy. Commissioner, Income Tax, New Delhi (the then ADIT- Income Tax, Jhandewalan, New Delhi) ; a private person & other unknown persons. It was alleged that private person gave huge cash to the Income Tax Officer (the then ADIT- Income Tax, Jhandewalan, New Delhi) during Income Tax raids at his offices & residences on 18-19.01.2011. The same was allegedly given on assurance to settle his case and for not informing other investigative agencies.
CBI investigation till now has revealed that the then ADIT- Income Tax, Jhandewalan, New Delhi in furtherance of the said conspiracy had allegedly demanded and obtained bribe from the private person.
Searches were conducted at nine places including office and residence of Dy. Commissioner, Income Tax; his relatives and two other Income Tax Officers.
The arrested accused was produced before the Special Judge CBI cases, Patiala House Courts, New Delhi and was granted three days Police Custody.
As per PTI the name of the officer is Yogendra Mittal.
SEBI approves the proposal to make the IPO grading mechanism "voluntary"
PR No. 125/2013
SEBI Board Meeting
The SEBI Board met in Mumbai today and took the following decisions:
1. The Amendment to Securities and Exchange Board of India (Collective Investment Schemes) Regulations, 1999
The Securities Laws (Amendment) Ordinance, 2013 provides for regulation of pooling of funds under any scheme or arrangement, involving a corpus amount of one hundred crore rupees or more, to be deemed to be a Collective Investment Scheme, subject to sub-section (3) of section 11AA of the SEBI Act.
Accordingly, a proposal to amend the Securities and Exchange Board of India (Collective Investment Schemes) Regulations, 1999, providing a framework for regulation of such deemed Collective Investment Schemes and additional requirements for continuous compliance by a registered Collective Investment Scheme, was approved by the Board.
2. Amendments to SEBI (Investor Protection and Education Fund) Regulations, 2009
Consequent to the promulgation of Securities Laws (Amendment) (Second) Ordinance, 2013, the Board has approved amendment to SEBI (IPEF) Regulations, 2009 enabling utilization of such amounts primarily for restitution to investors and in case of failure of identification of investors, for the credit of amounts disgorged under the SEBI Act 1992, the Securities Contracts (Regulation) Act 1956 or the Depositories Act 1996 to the Investor Protection and Education Fund of SEBI.
3. Class of companies eligible to file shelf prospectus for public issuance of non-convertible debt securities
While Companies Act, 1956 had allowed only Banks and Public Financial institutions to file Shelf Prospectus, the Companies Act, 2013 enables SEBI to specify the class of the companies which can be allowed to file Shelf Prospectus. In this regard, the Board has decided to allow the following class of entities to file Shelf Prospectus for public issuance of non-convertible debt securities:
(i) Public financial institutions and Scheduled Banks;
(ii) Issuers authorized by the notification of CBDT to make public issue tax free secured bonds;
(iii) Infrastructure Debt Funds – Non-Banking Financial Companies;
(iv) NBFCs, registered with RBI, Housing Finance Companies registered with National Housing Bank (NHB) and entities which have listed their shares/debentures in the stock exchanges for at least three years complying with the following criteria:
- net worth of Rs. 500 Crores,
- track record of three years of distributable profits,
- having a credit rating of not less than "AA-",
- having no default history or regulatory action pending with RBI, SEBI or NHB;
To avoid fragmentation of the issues, which will affect the floating stock and thereby liquidity, it is further stipulated that only a maximum of four issuances can be made under a Shelf Prospectus.
Further, companies filing a shelf prospectus with the Registrar of Companies are not required to file prospectus afresh at every stage of offer of securities, within the period of validity of such shelf prospectus i.e. one year. They are required to file only an information memorandum, containing material updations, with respect to subsequent issues.
4. SEBI (Procedure for Search and Seizure) Regulations, 2013
The Securities Laws (Amendment) Second Ordinance, 2013, inter alia, confers direct powers on Chairman, SEBI to authorize the Investigating Authority or any other officer of SEBI to search any premises where incriminating documents are lying and seize such documents for the purpose of investigation. The Ordinance also empowers SEBI to make regulations for executing the search operations and to ensure safe custody of any books of account or other documents that are seized.
In this respect, the Board approved the SEBI (Procedure for Search and Seizure) Regulations, 2013, made on the lines of the provisions in the Income Tax Act, 1961 and for providing the detailed procedures for such search and seizures by SEBI.
5. Making IPO Grading Mechanism Voluntary – Amendment to SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009
Considering the requests received from market participants, viz. investor associations and Association of Investment Bankers of India (AIBI), the recommendation of the advisory committee of SEBI, and to align with the principles laid down by Financial Stability Board (FSB) on reducing the reliance on Credit Rating Agencies, the Board approved the proposal to make the IPO grading mechanism "voluntary" as against the current provision of the same being "mandatory".
6. SEBI (Settlement of Administrative and Civil Proceedings) Regulations, 2013
The SEBI (Settlement of Administrative and Civil Proceedings) Regulations, 2013 were approved by the Board, subject to inclusion of the guidelines determining the settlement terms as part of regulations These regulations have been framed, keeping in view the provisions of the SEBI Act, as modified by the Securities Laws (Amendment) Second Ordinance, 2013, as also the public comments received on the Consultation Paper on the draft regulations that was placed on the SEBI website.
The salient features of the SEBI (Settlement of Administrative and Civil Proceedings) Regulations, 2013 are as under:
(i) The Regulations lay down the stand alone common substantive procedure for settlement of administrative and civil proceedings under all the securities laws;
(ii) The Regulations formalize the already existing settlement process;
(iii) They also provide for the guiding factors for dealing with the settlement process;
(iv) Serious offences such as insider trading, etc. are excluded from the scope of settlement;
(v) In order to impart transparency in the process, the roles of the of internal committee(s) and high powered advisory committee are specifically defined;
(vi) The Regulations also provide for terms of settlement in monetary as well as non- monetary terms or combination of both.
7. FPI Regulations
As regards FPI Regulations, the communication from the Department of Economic Affairs to the CBDT and to SEBI, conveying the decision that all three categories of FPIs would be given similar tax treatment as available to FIIs presently, was noted.
Mumbai
December 24,
RBI cautions users of Virtual Currencies against Risks
The Reserve Bank of India has today cautioned the users, holders and traders of Virtual currencies (VCs), including Bitcoins, about the potential financial, operational, legal, customer protection and security related risks that they are exposing themselves to.
In its cautionary advice, the Reserve Bank has been mentioned that it has been looking at the developments relating to certain electronic records claimed to be "Decentralised Digital Currency" or "Virtual Currency" (VCs), such as, Bitcoins, litecoins, bbqcoins, dogecoins etc., their usage or trading in the country and the various media reports in this regard.
The creation, trading or usage of VCs including Bitcoins, as a medium for payment are not authorised by any central bank or monetary authority. No regulatory approvals, registration or authorisation is stated to have been obtained by the entities concerned for carrying on such activities. As such, they may pose several risks to their users, including the following:
- VCs being in digital form are stored in digital/electronic media that are called electronic wallets. Therefore, they are prone to losses arising out of hacking, loss of password, compromise of access credentials, malware attack etc. Since they are not created by or traded through any authorised central registry or agency, the loss of the e-wallet could result in the permanent loss of the VCs held in them.
- Payments by VCs, such as, Bitcoins take place on a peer-to-peer basis without an authorised central agency which regulates such payments. As such, there is no established framework for recourse to customer problems / disputes / charge backs etc.
- There is no underlying or backing of any asset for VCs. As such, their value seems to be a matter of speculation. Huge volatility in the value of VCs has been noticed in the recent past. Thus, the users are exposed to potential losses on account of such volatility in value.
- It is reported that VCs, such as, Bitcoins are being traded on exchange platforms set up in various jurisdictions whose legal status is also unclear. Hence, the traders of VCs on such platforms are exposed to legal as well as financial risks.
- There have been several media reports of the usage of VCs, including Bitcoins, for illicit and illegal activities in several jurisdictions. The absence of information of counterparties in such peer-to-peer anonymous/ pseudonymous systems could subject the users to unintentional breaches of anti-money laundering and combating the financing of terrorism (AML/CFT) laws.
The Reserve Bank has also stated that it is presently examining the issues associated with the usage, holding and trading of VCs under the extant legal and regulatory framework of the country, including Foreign Exchange and Payment Systems laws and regulations.
Ajit Prasad
Assistant General Manager
Source- RBI
Revised Customs Duty Rate on Natural Rubber
In Order to Protect the Interest of Rubber Growers, The Basic Customs Duty on Natural Rubber has been increased from 20 percent or Rs. 20 Per Kg Whichever is Lower, to 20 percent or Rs. 30 Per Kg Whichever is Lower
In recent months, the prices of rubber in the domestic market have fallen considerably. The fall in prices is stated to be due to increased imports. To protect the interest of rubber growers, the basic customs duty on natural rubber has been increased from 20% or Rs. 20 per kg, whichever is lower, to 20% or Rs. 30 per kg, whichever is lower, vide notification No. 51/2013-Customs dated 20-12-2013. Over 12 lakh farmers who are dependent on this crop for their livelihood, are to be benefitted.
—-
Notification
No. 51/2013-Customs
New Delhi, the 20th December, 2013
G.S.R. (E). – In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962), the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby makes the following further amendment in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 12/2012-Customs, dated the 17th March, 2012 which was published in the Gazette of India, Extraordinary, vide G.S.R. 185(E) dated the 17th March, 2012, namely: -
In the said notification, in the Table, against serial number 252, in column (3), against item (ii), for the entry in column (4), the entry "20% or Rs.30/- per kg, whichever is lower" shall be substituted;
[F. No.354/111/2011-TRU]
[Raj Kumar Digvijay]
Under Secretary to the Government of India
Under Secretary to the Government of India
Note.- The principal notification No. 12/2012-Customs, dated the 17th March, 2012 was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 185(E) dated the 17th March, 2012 and was last amended vide notification No. 43/2013-Customs, dated the 13th September, 2013 which was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 630(E) dated the 13th September, 2013.
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