Refinancing of ECB at lower all-in-cost – Simplification of procedure
RBI/2014-15/196
A.P. (DIR Series) Circular No.21
A.P. (DIR Series) Circular No.21
August 27, 2014
To
All Category – I Authorised Dealer Banks
All Category – I Authorised Dealer Banks
Madam / Sir,
Refinancing of ECB at lower all-in-cost – Simplification of procedure
Attention of Authorized Dealer Category – I (AD Category – I) banks is invited to A.P. (DIR Series) Circular No. 5 dated August 01, 2005 as amended from time to time in terms of which refinancing of existing ECB by raising fresh ECB at lower all-in-cost is permitted subject to the condition that the outstanding maturity of the original loan is maintained. The cases, where the Average Maturity Period (AMP) of the fresh ECB is more than the residual maturity of existing ECB, are examined by the Reserve Bank under the approval route.
2. On a review, it has been decided to simplify the procedure by delegating powers to the AD Category – I banks to approve even those cases where the AMP of the fresh ECB is exceeding the residual maturity of the existing ECB under the automatic route subject to the following conditions:
- Both the existing and fresh ECBs should be in compliance with the applicable guidelines;
- All-in-cost of fresh ECB should be less than that of the all-in-cost of existing ECB;
- Consent of the existing lender is available;
- Refinancing is to be undertaken before the maturity of the existing ECB;
- Borrower should not be in the default / Caution List of RBI and should not be under the investigation of the Directorate of Enforcement (DoE);
- Overseas branches / subsidiaries of Indian banks will not be permitted to extend ECB for refinancing an existing ECB; and
- All requirements in respect of reporting arrangements like filing of revised Form 83, etc. are followed.
3. This facility will be available even in those cases where existing ECBs were raised under the approval route subject to the amount of new ECBs being eligible to be raised under the automatic route.
4. All other aspects of the ECB policy like eligible borrower, recognized lender, permitted end-use, amount of ECB, all-in-cost, average maturity period, reporting arrangements, etc. shall remain unchanged.
5. The modification to the ECB policy will come into force with immediate effect.
6. AD Category – I banks may bring the contents of this circular to the notice of their constituents and customers.
7. 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
(B. P. Kanungo)
Principal Chief General Manager
Principal Chief General Manager
Service Tax on Advertisement and Exchange Rate for Valuation – Clarification
D.O.F. No. 334/15/2014-TRU Dated: August 25, 2014
Subject: Union Budget 2014-15: enactment of the Finance (No.2) Bill -reg.
The Finance (No.2) Bill, 2014 received the assent of the President of India on 6th August, 2014 and has been enacted as the Finance (No.2) Act, 2014 [Act No.25 of 2014] [hereinafter referred to as the said Act].
1.2 In view of the enactment, clauses (D) to (L) of section 114 of the said Act have already come into force. In respect of clauses (A) to (C), the appointed date will be 1st October, 2014 [Notification No.18/2014-ST].
1.3 Broadening of the tax base by extension of service tax levy to all forms of advertising except print media [as defined in section 65B (39a) of the Finance Act, 1994] and on services provided by radio-taxis, will come into effect on 1st October, 2014. In respect of services provided by radio-taxis, taxable portion will be 40% of the amount charged in terms of entry 9A in Notification 26/2012-ST as amended. Therefore, on the services provided by radio taxis, service tax payable will be 4.944% of the amount charged.
1.4 The appointed date in respect of clause (C) of section 114 of the said Act will be 1st October, 2014. Drawing power from the amended Explanation inserted in section 67A of the Finance Act, 1994, Rule 11 is proposed to be inserted in the Service Tax Rules, 1994 [Notification 19/2014-ST] with effect from 1st October, 2014, from when the exchange rate for calculation of value of services sought to be imported into the taxable territory will be based on generally accepted accounting principles.
1.5 Now, vide amended Section 94 of the Finance Act, 1994, rule making powers have been specified
(i) to impose upon persons liable to pay service tax, inter alia, the duty of furnishing information, keeping records and making returns and the manner in which they shall be verified;
(ii) for withdrawal of facilities or imposition of restrictions (including restrictions on utilization of CENVAT credit) on service providers or exporters, to check evasion of duty or misuse of CENVAT credit; and
(iii) to issue instructions in supplemental or incidental matters.
Regarding (ii) above, Notification No.25/2014-CE (NT) is being issued with immediate effect. In Rule 12AAA of Cenvat Credit Rules, 2004, the expression 'provider of taxable service' has been inserted vide the said Notification.
Regarding (iii) above, [Notification 19/2014-ST is being issued, to insert Rule 12 which gives powers to issue supplementary instructions, in the Service Tax Rules, with effect from 1st October 2014.
CASE LAW
M/s Karnavati Synthetics Ltd Vs CCE
Central Excise - Demand - Shortage of processed man made fabrics (MMF) against records in case of first appellant and unaccounted stock in case of second appellant detected on visit by officers - offence case booked and confiscation of seizure, duty demands with interest and penalties proposed on firm and individual in notice - demands confirmed in adjudication, affirmed by Commissioner (Appeals) and agitated herein.
Held: short levy and clandestine removal of goods computed by Revenue on the basis of registers/private records maintained by the appellants and their employees - evidence like shortage, seizure, and the statements of all those who were associated with the manufacturing activity of the main appellant create a very strong suspicion that the appellant is involved in clandestine manufacturing and removal of fabrics; sufficient to establish culpability - duty demands, confiscation and imposition of RF sustained.
Adjudicating Authority held that main appellant is engaged in the processing of cotton fabrics but investigation, inter-alia, alleges that MMF of Chapter 54/55 of Central Excise Tariff Act 1985 was also manufactured by the appellant - There was no stock of either grey or finished man made fabric found in the factory premises of the main appellant nor any such MMF was seized elsewhere - no indication of any additional purchase of raw materials required for processing of the man made fabrics by the main appellant - demands related to MMF does not survive.
Appeal of the main appellant with respect to duty amounts is partly allowed with consequential relief, if any - accordingly, impugned order dated 17/1/2007 is upheld - Considering facts and circumstances including the quantum of demands confirmed, penalties under Rule 173Q/209A of the erstwhile Central Excise Rules 1944, stand modified downward. - Appeals partly allowed : AHMEDABAD CESTAT
Security deposit was to be taxed as income from house property if it was circumventing real rent from property
August 28, 2014[2014] 48 taxmann.com 32 (Mumbai - Trib.)
IT: Where it did not come out from facts that payment of security deposit was to circumvent real rent, same could not be considered for computing income from house property
Sec. 80-IB benefit is available to manufacturer even on income earned from job work
August 28, 2014[2014] 47 taxmann.com 369 (Punjab & Haryana)
IT : Where after section 80-IB deduction, effective tax rate in hands of assessee became less than that of sister concern to whom sale at a price less than market price was allegedly made, no addition was to be made enhancing GP rate of such transactions
IT : Where assessee was engaged in manufacturing of cycle parts, deduction under section 80-IB was to be allowed even on income earned from job work carried out by it
Strategy to crack CA Final Exam in First Attempt
Hello friends,
I am CA Manoj Bothra; secured All India Rank 44 in CA Final May 2014 Exam.
I am here to share a strategy to crack CA Final Exam in First Attempt and study plan.
1. First thing first, you should have at least a period of 6 month to prepare.
2. During this long period, you are required to plan your studies in such a manner that you can complete one time revision of the all eight subjects.
3. One should go for in depth study at first reading; it would make you to learn all the topic of the subjects. None of the topic should be escaped by saying "it can be done at a day prior exam or I will leave it or it's too tough to prepare". I think in such a case you should ask doubt and understand the topic from your teacher or friends.
4. Lets come to the study plan.
You all have 6 months (180 days) to prepare. I think you should have to allot 15 days for 1st depth study of a subject in entirely( we will discuss breakup of 15 days in details further, later on). In this way you can complete all of your subjects in 4 months.
Some of you are thinking that 15 days period is quite long or short for study a subject, believe me guys it is enough time and you may even complete some subject within 12 days too and on the other hand sometime a subject like direct tax may take more than 15 days to prepare.
This is all about 4 months schedule
5. This was your first round of studies and after 4 month, you may have doubt in your mind "I may forget first subject in this long period". Don't worry guys. I have a solution of this problem too.
After completing 4 months successful journey of 1st round of studies, you guys are now required to go through all the subjects once again. But this time you are not been provided such a long period for each subject. Actually this is time of 1st revision.
Let me explain way of revision
Each subject will be given a period of 6 days (6*8=48 days). And you may have 2 days of grace to manage revision within this 50 days period.(discuss it in detail later on)
6. Study plan of last 10 days. This is most precious and valuable time as after 10 days your exam will going to start. Many time students seem confused what to do in these days and how to manage studies..?
I would like to say after going through revision, you will be confident about your preparation and from now onwards you have prepare for exam. I suggest to prepare paper 3 audit and 4 corporate and allied law within 4 days ( 2days for each). In next 2 days you should go through 3 to 4 topics of strategic financial management. And give last 4 days for financial reporting.
7. Now I would like to suggest you on the plan of 15 days details studies
First of all you should list out all the topics and learning objects of a subject. After this you should make a time table for completing the subject within 12 to 13 days. In this period of 12 days, you should have to go through entire studies, notes and practice manual. Remember one thing solve practice manual as you go through the topic, you can say I have completed Director chapter, so go through director chapter of practice manual on the same days.
After this you will have 2 or 3 days, I think now you should summarize the subject in 2 days and with one day remaining in your hand, you will have to do a lot.
On the last day, take a paper of any previous exam and set a clock for 3 hours alarm and sit in an exam like environment and try to complete the paper in 3 hours, so that you can know about your weakness and area of improvements.
8. One important thing you have t do in the depth study time to highlight or mark (), (),() on the various question or short note that are important from your point of view.
What I have said, you have to judge yourself about the question level.
Reason for doing this is that at the exam time or on revision time, you need not have to go through same question again and again so as to save time. This is a way of smart study.
9. Now we will discuss the plan of 6 days of revision. Firstly, you should go through all star marked topics and try to solve at least one question on each topic. Here you are also required to plan for 5 days and save one day for mock test. This is time to check preparations and mistakes, so as to avoid mistake which usually take place in real exam.
This was all about my way of preparing.
Now I would like to give some tips to you-
a. Many times we are confused which subject to start first and which to put on last.
It is easy to select, as you should start that subject which is tough for you and you are weak in that. The reason is that at initial level, you will have time to study hard and come out of your fear of a particular subject. For example- I have gone for Strategic Financial Management First, as I was weak in this but I manage to score 78 marks in this. So now you can imagine how this strategy can help you.
b. Sequence of subject for revision. I think it would be better if you go group wise, 1st group in first 24 days and next 24 days for 2nd group. And after this you will have 10 days to revise you 1st -group again before the exam. In this way, you will be in touch will all the subjects.
c. Now plan about ISCA, it is also important to study this subject. I would like to suggest that manage schedule of study and have one depth study with 2 times of revision near the exam so that all the point and topic refresh your mind again and again.
d. One exam tip, if one of your subject is not gone as per your expectation, never lose hope and please don't waste time on such type of thinking about the past paper, prepare well for next one so as to score good in next subject.
e. Many times we hesitate to get our queries solved by teacher or friend, don't become narrow minded, even ranker may have to go to average one for asking something. Be "Besharm and ask Bindas". At the end you will have clarity of topic.
f. Don't waste time to read same subject again and again, in this way you will not get any productive results and find you are reading what you already know.
g. Make at least 2 papers within a group as your strength so that you can cross 60 in those and clear hurdle of aggregate marks.
h. Last one….—
Subject based tips-
(i) FINANCIAL REPORTING- Never ignore or undervalue Accounting Standards. It is part and parcel of 50-60 marks paper in FR (paper-1) and Audit (paper-3).
(ii) STRATEGIC FINANCIAL MANAGEMENT- Try to solve question from your own, not audit your note book otherwise you will not be able to solve it at the time of Exam Paper. And one more thing to remember, give equal weight to each topic, it is on ICAI to ask anything and in any manner (weight of topic) is not fixed.
(iii) AUDITING- Try to remember topic point wise and present it also in point wise manner to score good marks.
(iv) CORPORATE AND ALLIED LAW- Pay equal attention to allied law too and remember section number and interlinking of section to score well.
(v) ADVANCED MANAGEMENT ACCOUNTING- Make sure that you solve each question from your own and solve practice manual too. Go through development in AMA, these small topics carries handsome amount of marks in exam.
(vi) ISCA- Again Answer in point wise manner and to the point only. Never try to answer a question which is not known to you in exam sheet at early pages. Answer it on the end.
(vii) DIRECT TAX-it is nice subject to read on and learns, prepare well and solve practical question too. One more thing is amendment and case laws will have to be given equal importance
(viii) INDIRECT TAXATION- Topic wise clarity of provision and common topic is required.
Pay attention to valuation rules, case laws and amendment carries high weight-age in exam paper.
At the end I would like wish you a happy study and best of luck.
Thanks & regards,
CA Manoj Bothra
09782322113 [Feel free to contact, but after 8 pm (in the evening) ]
No reassessment by AO to deny sec. 36(1)(viii) relief on basis of material considered during original assessment
August 28, 2014[2014] 48 taxmann.com 28 (Bombay)
IT: Where Assessing Officer allowed assessee's claim for deduction under section 36(1)(viii) in assessment framed under section 143(3), subsequently on basis of same material on record, he could not initiate reassessment proceedings taking a view that excess benefit was granted to assessee in terms of provisions of Act
ICAI members to pay Membership/ COP Fees by 30.09.2014
Dear Sir/Madam,
Subject: - Payment of Annual Membership Fee for the year 2014-15
The annual membership fee, and in the case of members in practice, the annual Certificate of Practice fee, were due and payable on 1st April 2014. A circular to this effect was sent to all the members by this office and an announcement also appeared in The Chartered Accountant Journal.
However, it is observed from our records, that necessary payment is still to be received from you. We would therefore appreciate if you would spare a few minutes and arrange to remit the same by return of post so as to reach the office latest by 31st August, 2014 to avoid issuance of further reminder, however, the last date is 30/9/2014 to avoid removal of your name from the Register of Members with effect from 1st October, 2014.
However, it is observed from our records, that necessary payment is still to be received from you. We would therefore appreciate if you would spare a few minutes and arrange to remit the same by return of post so as to reach the office latest by 31st August, 2014 to avoid issuance of further reminder, however, the last date is 30/9/2014 to avoid removal of your name from the Register of Members with effect from 1st October, 2014.
The schedule of fee payable is as under:
| For Members below age of 60 years (As on 1st April 2014) | For Members above age of 60 years (As on 1st April 2014) | |||
| Associate Without Certificate of Practice | 800/- | Associate Without Certificate of Practice | 600/- | |
| Associate With Certificate of Practice | 2800/- | Associate With Certificate of Practice | 2100/- | |
| Fellow Without Certificate of Practice | 2200/- | Fellow Without Certificate of Practice | 1600/- | |
| Fellow With Certificate of Practice | 4200/- | Fellow With Certificate of Practice | 3100/- |
The remittance may please be sent to the Institute's Office at the address indicated below. The cheque or demand draft should be drawn in favour of "The Secretary, The Institute of Chartered Accountants of India" payable at Mumbai.
Members whose Professional address is at Ahmedabad/Pune/Surat/Vadodara/Nagpur/Thane, may remit their fees in the respective branches by means of Cheque/Demand Draft drawn in favour of 'The Secretary, The Institute of Chartered Accountants of India' payable at Ahmedabad/ Pune/ Surat/ Vadodara/Nagpur/ Thane respectively.
Payment of fee can also be made online. Members are required to fill in the Master / Visa Credit/ Debit card details alongwith the name of the cardholder on the payment gateway page for successful transaction online. For payment of membership fee online, please visit the Institute's website www.icai.org or the linkwww.icai.org/memfee.html.
In case the amount has already been remitted, we would request you to kindly send us the particulars of remittance by return of post to enable us to reconcile it and give due credit to your account.
Kindly note that in the event of your name being removed from the Register of Members on account of non payment of membership fee, you will not be entitled to train articled assistant(s) w.e.f. 1st October 2014 and the article period of existing articled assistant(s) will get terminated with effect from 30 September 2014. In case you are associated with a firm, your name will be deleted from the firm's records w e f 1st October 2014.
We hope you will give utmost priority to this matter and comply with our above requirements.
Yours faithfully,
Sd/
(Y S RAWAT)
JOINT SECRETARY
(Y S RAWAT)
JOINT SECRETARY
On Thursday, 28 August 2014 3:54 PM, ASB - ICAI <email@icai.ind.in> wrote:
Dear Sir/Madam,
Sub: Invitation to comment on the Exposure Draft of Appendix to Ind AS 16, Property, Plant and Equipment, issued by the Accounting Standards Board (ASB) of the ICAI
The International Accounting Standards Board (IASB) issued IFRIC 20 'Stripping Costs in the Production Phase of a Surface Mine', in October 2011. The Accounting Standards Board (ASB) of the Institute of Chartered Accountants of India (ICAI), at its 210th meeting, considered and finalised the Exposure Draft of corresponding Appendix A to Ind AS 16, Property, Plant and Equipment, and decided to invite comments from various stakeholders. The said Exposure Draft can be accessed/downloaded on the Institute's website namely, www.icai.org at the following link: http://220.227.161.86/34529asb24266c.pdf
The Board invites comments on any aspect of the Exposure Draft. Comments are most helpful if they:
(a) comment on the question in exposure draft;
(b) indicate the specific paragraph(s) to which they relate;
(c) contain a clear rationale; and
(d) describe any alternative that the ASB should consider, if applicable.
Comments should be submitted in writing to the Secretary, Accounting Standards Board, The Institute of Chartered Accountants of India, ICAI Bhawan, Post Box No. 7100, Indraprastha Marg, New Delhi – 110 002, so as to be received not later than September 15, 2014. Comments can also be sent by e-mail at commentsasb@icai.in.
A copy of the above mentioned document is also attached for your information and reference.
Further clarifications on any aspect of this Exposure Draft may be sought by e-mail to achin.poddar@icai.in.
With best regards,
(Avinash Chander)
Secretary
Accounting Standards Board
E-mail: asb@icai.in
Sub: Invitation to comment on the Exposure Draft of Appendix to Ind AS 16, Property, Plant and Equipment, issued by the Accounting Standards Board (ASB) of the ICAI
The International Accounting Standards Board (IASB) issued IFRIC 20 'Stripping Costs in the Production Phase of a Surface Mine', in October 2011. The Accounting Standards Board (ASB) of the Institute of Chartered Accountants of India (ICAI), at its 210th meeting, considered and finalised the Exposure Draft of corresponding Appendix A to Ind AS 16, Property, Plant and Equipment, and decided to invite comments from various stakeholders. The said Exposure Draft can be accessed/downloaded on the Institute's website namely, www.icai.org at the following link: http://220.227.161.86/34529asb24266c.pdf
The Board invites comments on any aspect of the Exposure Draft. Comments are most helpful if they:
(a) comment on the question in exposure draft;
(b) indicate the specific paragraph(s) to which they relate;
(c) contain a clear rationale; and
(d) describe any alternative that the ASB should consider, if applicable.
Comments should be submitted in writing to the Secretary, Accounting Standards Board, The Institute of Chartered Accountants of India, ICAI Bhawan, Post Box No. 7100, Indraprastha Marg, New Delhi – 110 002, so as to be received not later than September 15, 2014. Comments can also be sent by e-mail at commentsasb@icai.in.
A copy of the above mentioned document is also attached for your information and reference.
Further clarifications on any aspect of this Exposure Draft may be sought by e-mail to achin.poddar@icai.in.
With best regards,
(Avinash Chander)
Secretary
Accounting Standards Board
E-mail: asb@icai.in
Infrequent share dealings with intent of capital appreciation leads to taxation of resultant profit as capital gain
August 28, 2014[2014] 48 taxmann.com 18 (Delhi)/[2014] 365 ITR 452 (Delhi)
IT: Where investment in shares was made with an objective of capital appreciation, there was infrequent-handful of transactions and dividend was also earned, profit from sale/purchase of shares was treated as capital gain
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