Issue: July 2018 Vol. 7 No. 3 B Mathur & Co. Company Secretaries MCA Update SEBI Update RBI Update Income Tax Update IPR Update Service Tax Excise Update Custom Update GST Update DGFT Update 1
WEEKLY UPDATES JULY 09 th, 2018- JULY 15 th, 2018 2
INDEX SEBI UPDATE Master Circular for Mutual Funds 4 Core SGF and standardized stress testing for credit risk for commodity derivatives 5-6 Discontinuation of acceptance of cash by Stock Brokers 7 Investment by Foreign Portfolio Investors (FPI) through primary market issuances 8-9 RBI UPDATE Incorporation of Name of the Purchaser on the Face of the Demand Draft 10 Priority Sector Lending - Targets and Classification: Lending to non-corporate farmers System 11 wide average of last three years Period for Submission of Agency Commission Claims 12 Exim Bank's Government of India supported Line of Credit of USD 45.27 million to the 13 Government of Sri Lanka Exim Bank's Government of India supported Line of Credit of USD 36.92 million to the 14 Government of Cambodia Exim Bank's Government of India supported Line of Credit of USD 18 million to the Government 15 of the Republic of Zambia Exim Bank's Government of India supported Line of Credit of USD 17.50 million to the 16 Government of the Cooperative Republic of Guyana INCOME TAX UPDATE Revision of monetary limits for filing of appeals by the Department before Income Tax Appellate Tribunal, High Courts and SLPs/appeals before Supreme Court-measures for reducing litigation-reg. 17-19 CUSTOM UPDATE Seeks to amend the notification No. 27/2011-Customs dated 01st March, 2011 so as to reduce the 20 export duty on export of Iron Ore by MMTC Limited (only NMDC origin) to Japan and South Korea under the Long Term Agreement (LTA), from 30% to 10%, upto and inclusive of 31.03.2021 Amendment to notification no. 12/97-Customs (NT) dated 2nd April, 1997 21 Tariff Notification in respect of Fixation of Tariff Value of Edible Oils, Brass Scrap, Poppy Seeds, 22-23 Areca Nut, Gold and Sliver- Reg DGFT UPDATE Corrigendum to Notification No. 09/ 2015-2020 dated 28.05.2018-reg 24 Clarification on acceptance of any copy of Shipping Bill in lieu of EP copy of Shipping Bill for 25 grant of EODC of Advance Authorisation Addition of Vishakhapatnam port for import of new vehicles. 26 Insertion of import policy conditions under Chapter 29 and 30 of the ITC (HS) 2017, Schedule-I 27-28 (Import Policy). 3
SEBI UPDATES MASTER CIRCULAR SEBI/HO/IMD/DF5/CIR/P/2018/109 July 10, 2018 All Mutual Funds, Asset Management Companies (AMCs) And Association of Mutual Funds in India (AMFI) Dear Sir/ Madam, Sub: Master Circular for Mutual Funds For effective regulation of the Mutual Fund Industry, Securities and Exchange Board of India (SEBI) has been issuing various circulars from time to time. In order to enable the industry and other users to have an access to all the applicable circulars at one place, Master Circular for Mutual Funds has been prepared. This Master Circular is a compilation of all the circulars issued by SEBI on the above subject, which are operational as on date of this circular. This Master Circular shall supersede the previous Master Circular SEBI/HO/IMD/DF3/CIR/P/2016/84 dated September 14, 2016. Yours faithfully, Harini Balaji General Manager Tel no.: 022-26449372 harinib@sebi.gov.in For Full Master Circular, Please refer below mentioned link: https://www.sebi.gov.in/legal/master-circulars/jul-2018/master-circular-for-mutual-funds_39491.html 4
CIRCULAR SEBI/HO/CDMRD/DRMP/CIR/P/2018/111 11 July, 2018 To, The Managing Directors/Chief Executive Officers National Commodity Derivatives Exchanges Sir/Madam, Sub: Core SGF and standardised stress testing for credit risk for commodity derivatives 1. Vide circular SEBI/HO/CDMRD/DRMP/CIP/P/2016/86 dated September 16, 2016, SEBI had continued norms related to, inter-alia, Settlement Guarantee Fund (SGF) and Stress test to determine adequacy of SGF prescribed by erstwhile Forward Markets Commission for National Commodity Derivatives Exchanges. 2. Vide circular SEBI/HO/CDMRD/DRMP/CIR/P/2018/52 dated March 21, 2018 SEBI had inter-alia prescribed that post transfer of clearing and settlement functions from commodity derivatives exchanges to Clearing Corporations, Clearing Corporations shall be required to comply with the risk management norms prescribed by SEBI for commodity derivatives exchanges. 3. Vide Circular CIR/MRD/DRMNP/25/2014 dated August 27, 2014 SEBI had issues norms related to Core Settlement Guarantee Fund, default waterfall, stress testing, back testing etc. for recognised Clearing Corporations and Stock Exchanges. 4. It has been decided that Clearing Corporations clearing commodity derivatives transactions shall comply with the provisions of SEBI circular dated August 27, 2014. The said circular inter-alia stipulated norms for Minimum Required Corpus of Core SGF (MRC) for each segment of each stock exchange of each stock exchange at para 7 of the circular. In addition to those norms, minimum threshold value of MRC for commodity derivatives segment of any stock exchange shall be INR 10 Crores. 5. Further, in light of the different features and concerns of commodity derivatives markets, it has also been decided to prescribe modified standardized stress testing scenarios and methodology (as given in Annexure ) for carrying out daily stress testing for credit risk for commodity derivatives. Clearing Corporation shall use the same for carrying out daily stress testing for credit risk in commodity derivatives within three months from the date of issuance of this circular. Till that time, Clearing Corporations may continue using the stress testing norms specified vide circular dated September 16, 2016 for commodity derivatives. 6. This circular is issues in exercise in exercise of powers conferred under Section 11 (1) of the Securities and Exchange Board of India, 1992, to protect the interests of investors in securities and to promote the development of, and to regulate the securities market. 7. This Circular is available on SEBI websites at www.sebi.gov.in. Yours Faithfully, Shashi Kumar General Manager Division of Risk Management and Agri Products Commodity Derivatives Market Regulation Department Email: shashikumarv@sebi.gov.in 5
For Annexure, Please Refer below mentioned link: https://www.sebi.gov.in/legal/circulars/jul-2018/core-sgf-and-standardized-stress-testing-for-creditrisk-for-commodity-derivatives_39527.html 6
CIRCULAR SEBI/HO/MIRSD/DOP/CIR/P/2018/113 July 12, 2018 To, All Recognised Stock Exchanges Dear Sir/Madam, Subject: Discontinuation of acceptance of cash by Stock Brokers 1. Please refer to SEBI circular SEBI/MRD/SE/Cir-33/2003/27/08 dated August 27, 2003, regarding Mode of Payment and Delivery. 2. Government of India has promoted various means for transfer / receipt of funds through digital mode for encouraging a cashless economy. Financial institutions/ Banks have introduced various modes of electronic payment facility including mobile banking, Unified Payment Interface (UPI) etc. 3. In view of the various modes of payment through electronic means available today, it is directed that Stock Brokers shall not accept cash from their clients either directly or by way of cash deposit to the bank account of stock broker. Accordingly, paragraph3 of the SEBI circular dated August 27, 2003 is modified as under: All payments shall be received / made by the stock brokers from / to the clients strictly by account payee crossed cheques/ demand drafts or by way of direct credit into the bank account through electronic fund transfer, or any other mode permitted by the Reserve Bank of India. The stock brokers shall accept cheques drawn only by the clients and also issue cheques in favour of the clients only, for their transactions. Stock Brokers shall not accept cash from their clients either directly or by way of cash deposit to the bank account of stock broker. 4. All other conditions specified in the SEBI circular dated August 27, 2003 shall continue to remain in force. 5. Stock Exchanges are directed to a) make necessary amendments to the relevant bye-laws, rules and regulations for the implementation of the above direction immediately; b) bring the provisions of this circular to the notice of their members and also disseminate the same on their websites; and c) communicate to SEBI, the status of implementation of the provisions of this circular in their Monthly Report. 6. This circular is being issued in exercise of powers conferred under Section 11 (1) of the Securities and Exchange Board of India Act, 1992 to protect the interests of investors in securities and to promote the development of, and to regulate the securities market. Yours faithfully, D Rajesh Kumar General Manage 7
CIRCULAR To IMD/FPIC/CIR/P/2018/114 July13, 2018 1. All Foreign Portfolio Investors (through their Custodian of Securities) 2. All Custodians 3. The Depositories (NSDL and CDSL) 4. All Registrar and Transfer Agents 5. All Merchant Bankers Dear Sir / Madam, Sub: Investment by Foreign Portfolio Investors (FPI) through primary market issuances 1. Regulation 21(7) of SEBI (Foreign Portfolio Investors) Regulations, 2014 ('FPI Regulations') mandates that the purchase of equity shares of each company by a single foreign portfolio investor or an investor group shall be below ten percent of the total issued capital of the company. 2. Further, Regulation 23(3) of FPI Regulations requires that in case the same set of ultimate beneficial owner(s) invest through multiple entities, such entities shall be treated as part of same investor group and the investment limits of all such entities shall be clubbed at the investment limit as applicable to a single foreign portfolio investor. 3. As prescribed in reply to FAQ No. 58 for FPIs, for the purpose of identifying the investor group, the Designated Depository Participant (DDP) shall obtain the details provided by the FPI under clause 2.2 of the FPI Application form (Form A) specified in First Schedule of FPI Regulations. The monitoring of investment limits at the level of investor group shall be performed by the depositories based on the information provided by DDPs. 4. To ensure compliance of the above, at the time of finalization of basis of allotment during primary market issuances, Registrar and Transfer Agents ('RTAs') shall: a) Use Permanent Account Number (PAN) issued by Income Tax Department of India for checking compliance for a single foreign portfolio investor; and b) Obtain validation from Depositories for the foreign portfolio investors who have invested in the particular primary market issuance to ensure there is no breach of investment limit within the timelines for issue procedure, as prescribed by SEBI from time to time. 5. The depositories shall put in place the necessary systems for sharing of information with RTAs within the timelines for issue procedure, as prescribed by SEBI from time to time. This circular is issued in exercise of powers conferred under Section 11 (1) of the Securities and Exchange Board of India Act, 1992. 8
A copy of this circular is available at the web page Circulars on our website www.sebi.gov.in. Custodians are requested to bring the contents of this circular to the notice of their FPI clients. Yours faithfully, ACHAL SINGH Deputy General Manager Tel No.: 022-26449619 Email: achals@sebi.gov.in 9
RBI UPDATES RBI/2018-19/14 DBR.AML.BC.No.210/14.01.001/2018-19 The Chairperson/CEOs of all Scheduled Commercial Banks including Regional Rural Banks/Urban Co-operative Banks/State Co-operative Banks/ District Central Co-operative Banks/Local Area Banks/Small Finance Banks/Payment Banks July 12, 2018 Dear Sir/Madam, Incorporation of Name of the Purchaser on the Face of the Demand Draft In order to address the concerns arising out of the anonymity provided by payments through demand drafts and its possible misuse for money laundering, it has been decided that the name of the purchaser be incorporated on the face of the demand draft, pay order, banker s cheques, etc., by the issuing bank. These instructions shall take effect for such instruments issued on or after September 15, 2018. Accordingly, Section 66 of the Master Direction on KYC dated February 25, 2016, as amended on April 20, 2018, has been amended and following paragraph has been added: Further, the name of the purchaser shall be incorporated on the face of the demand draft, pay order, banker s cheques, etc., by the issuing bank. These instructions shall take effect for such instruments issued on or after September 15, 2018. 2. You are advised to ensure compliance with the above. Yours faithfully, (Dr. S. K. Kar) Chief General Manager 10
RBI/2018-19/15 FIDD. CO. Plan. BC 07/04.09.01/2018-19 The Chairman/ Managing Director Chief Executive Officer [All Domestic Scheduled Commercial Banks (excluding Regional Rural Banks and Small Finance Banks)] July 12, 2018 Dear Sir/ Madam, Priority Sector Lending - Targets and Classification: Lending to non-corporate farmers System wide average of last three years Please refer to our Circular No. FIDD.CO.Plan.BC.08/04.09.01/2015-16 dated July 16, 2015 advising that the system-wide average of the last three years achievement with regard to overall direct lending to noncorporate farmers will be notified in due course, and thereafter, at the beginning of each year. 2. In this connection, we advise that the applicable system wide average figure for computing achievement under priority sector lending for the FY 2018-19 is 11.99 percent. Yours faithfully, (Gautam Prasad Borah) Chief General Manager-in-Charge 11
RBI/2018-19/16 DGBA.GBD.No.87/31.02.007/2018-19 All Agency Banks July 12, 2018 Dear Sir Period for Submission of Agency Commission Claims Please refer to our circular no.dgba.gbd.n0.3262/31.02.007/2016-17 dated June 15, 2017 through which all agency banks were advised to submit their agency commission claims to the Reserve Bank of India within 90 days from the end of the quarter during which the transactions have been conducted. 2. It has been observed that agency banks are submitting their claims for the agency commission after much delay, even though all the agency banks are under core banking system. This leads to avoidable delays in timely assessment of agency commission payment by RBI. Accordingly, taking into account the steady increase in the electronic transactions, especially after the implementation of GST framework, it has now been decided to reduce the time period allowed to agency banks to furnish their claim on agency commission to Reserve Bank from 90 days to 60 calendar days from the end of the quarter in which the transactions have been conducted. If the banks fail to lodge claims within the stipulated period mentioned above, Reserve Bank will have the discretion to reject the claims. This will be applicable for the agency commission claims for the quarter ended June 30, 2018 onwards. 3. It is also observed that agency banks are not reporting all the requisite information, as per the prescribed format, while claiming agency commission from RBI resulting in gaps and inconsistency in data submission. Thus, agency banks are advised to scrupulously follow the instructions issued by RBI while submitting the claims for agency commission in the prescribed format. 4. It is further advised that the granularity, frequency and process of submission of agency transaction related data by agency banks is being examined by us and detailed instructions will be issued to the banks shortly in this regard. Yours faithfully (Partha Choudhuri) General Manager 12
RBI/2018-19/17 A.P. (DIR Series) Circular No.1 All Category I Authorised Dealer Banks Madam/Sir July 12, 2018 Exim Bank's Government of India supported Line of Credit of USD 45.27 million to the Government of Sri Lanka Export-Import Bank of India (Exim Bank) has entered into an agreement dated January 10, 2018 with the Government of the Democratic Socialist Republic of Sri Lanka for making available to the latter, a Government of India supported Line of Credit (LoC) of USD 45.27 million (USD Forty five million and two hundred seventy thousand only) for financing rehabilitation of Kankesanthurai Harbour in Sri Lanka. Under the arrangement, financing of export of eligible goods and services from India, as defined under the agreement, would be allowed, subject to their being eligible for export under the Foreign Trade Policy of the Government of India and whose purchase may be agreed to be financed by the Exim Bank under this agreement. Out of the total credit by Exim Bank under this agreement, goods and services of the value of at least 75 per cent of the contract price shall be supplied by the seller from India and the remaining 25 per cent of goods and services may be procured by the seller for the purpose of the eligible contract from outside India. 2. The Agreement under the LoC is effective from June 12, 2018. Under the LoC, the terminal utilization period is 60 months from the scheduled completion date of the respective contract. 3. Shipments under the LoC shall be declared in Export Declaration Form as per instructions issued by the Reserve Bank from time to time. 4. No agency commission is payable for export under the above LoC. However, if required, the exporter may use his own resources or utilize balances in his Exchange Earners Foreign Currency Account for payment of commission in free foreign exchange. Authorised Dealer Category- I (AD Category- I) banks may allow such remittance after realization of full eligible value of export subject to compliance with the extant instructions for payment of agency commission. 5. AD Category I banks may bring the contents of this circular to the notice of their exporter constituents and advise them to obtain full details of the LoC from the Exim Bank s office at Centre One, Floor 21, World Trade Centre Complex, Cuffe Parade, Mumbai 400 005 or from their website www.eximbankindia.in. 6. The directions contained in this circular have been issued under section 10(4) and 11(1) of the Foreign Exchange Management Act (FEMA), 1999 (42 of 1999) and are without prejudice to the permissions/ approvals, if any, required under any other law. Yours faithfully (R K Moolchandani) Chief General Manager 13
RBI/2018-19/18 A.P. (DIR Series) Circular No.2 All Category I Authorised Dealer Banks July 12, 2018 Madam/Sir Exim Bank's Government of India supported Line of Credit of USD 36.92 million to the Government of Cambodia Export-Import Bank of India (Exim Bank) has entered into an agreement dated January 27, 2018 with the Government of the Kingdom of Cambodia for making available to the latter, a Government of India supported Line of Credit (LoC) of USD 36.92 million (USD Thirty six million and nine hundred twenty thousand only) for financing the Stung Sva Hab/Slab water resource development project in Cambodia. Under the arrangement, financing of export of eligible goods and services from India, as defined under the agreement, would be allowed subject to their being eligible for export under the Foreign Trade Policy of the Government of India and whose purchase may be agreed to be financed by the Exim Bank under this agreement. Out of the total credit by Exim Bank under this agreement, goods and services of the value of at least 75 per cent of the contract price shall be supplied by the seller from India and the remaining 25 per cent of goods and services may be procured by the seller for the purpose of the eligible contract from outside India. 2. The Agreement under the LoC is effective from June 12, 2018. Under the LoC, the terminal utilization period is 60 months from the scheduled completion date of the respective contract. 3. Shipments under the LoC shall be declared in Export Declaration Form as per instructions issued by the Reserve Bank from time to time. 4. No agency commission is payable for export under the above LoC. However, if required, the exporter may use his own resources or utilize balances in his Exchange Earners Foreign Currency Account for payment of commission in free foreign exchange. Authorised Dealer Category- I (AD Category- I) banks may allow such remittance after realization of full eligible value of export subject to compliance with the extant instructions for payment of agency commission. 5. AD Category I banks may bring the contents of this circular to the notice of their exporter constituents and advise them to obtain full details of the LoC from the Exim Bank s office at Centre One, Floor 21, World Trade Centre Complex, Cuffe Parade, Mumbai 400 005 or from their website www.eximbankindia.in. 6. The directions contained in this circular have been issued under section 10(4) and 11(1) of the Foreign Exchange Management Act (FEMA), 1999 (42 of 1999) and are without prejudice to the permissions/ approvals, if any, required under any other law. Yours faithfully (R K Moolchandani) Chief General Manager 14
RBI/2018-19/20 A.P. (DIR Series) Circular No. 4 All Category I Authorised Dealer Banks July 12, 2018 Madam/Sir Exim Bank's Government of India supported Line of Credit of USD 18 million to the Government of the Republic of Zambia Export-Import Bank of India (Exim Bank) has entered into an agreement dated January 12, 2018 with the Government of the Republic of Zambia for making available to the latter, a Government of India supported Line of Credit (LoC) of USD 18 million (USD Eighteen million only) for the purpose of completion of balance work under the project for establishment of pre-fabricated health posts in the Republic of Zambia. Under the arrangement, financing of export of eligible goods and services from India, as defined under the agreement, would be allowed subject to their being eligible for export under the Foreign Trade Policy of the Government of India and whose purchase may be agreed to be financed by the Exim Bank under this agreement. Out of the total credit by Exim Bank under this agreement, goods and services of the value of at least 75 per cent of the contract price shall be supplied by the seller from India and the remaining 25 per cent of goods and services may be procured by the seller for the purpose of the eligible contract from outside India. 2. The Agreement under the LoC is effective from June 22, 2018. Under the LoC, the terminal utilization period is 60 months after the scheduled completion date of the project. 3. Shipments under the LoC shall be declared in Export Declaration Form as per instructions issued by the Reserve Bank from time to time. 4. No agency commission is payable for export under the above LoC. However, if required, the exporter may use his own resources or utilize balances in his Exchange Earners Foreign Currency Account for payment of commission in free foreign exchange. Authorised Dealer Category- I (AD Category- I) banks may allow such remittance after realization of full eligible value of export subject to compliance with the extant instructions for payment of agency commission. 5. AD Category I banks may bring the contents of this circular to the notice of their exporter constituents and advise them to obtain full details of the LoC from the Exim Bank s office at Centre One, Floor 21, World Trade Centre Complex, Cuffe Parade, Mumbai 400 005 or from their website www.eximbankindia.in 6. The directions contained in this circular have been issued under section 10(4) and 11(1) of the Foreign Exchange Management Act (FEMA), 1999 (42 of 1999) and are without prejudice to permissions/ approvals, if any, required under any other law. Yours faithfully (R K Moolchandani) Chief General Manager 15
RBI/2018-19/19 A.P. (DIR Series) Circular No. 3 All Category I Authorised Dealer Banks July 12, 2018 Madam/Sir Exim Bank's Government of India supported Line of Credit of USD 17.50 million to the Government of the Cooperative Republic of Guyana Export-Import Bank of India (Exim Bank) has entered into an agreement dated July 19, 2017 with the Government of the Cooperative Republic of Guyana for making available to the latter, a Government of India supported Line of Credit (LoC) of USD 17.50 million (USD Seventeen million five hundred thousand only) for financing the up-gradation of three hospitals in Guyana. Under the arrangement, financing of export of eligible goods and services from India, as defined under the agreement, would be allowed subject to their being eligible for export under the Foreign Trade Policy of the Government of India and whose purchase may be agreed to be financed by the Exim Bank under this agreement. Out of the total credit by Exim Bank under this agreement, goods and services of the value of at least 75 per cent of the contract price shall be supplied by the seller from India and the remaining 25 per cent of goods and services may be procured by the seller for the purpose of the eligible contract from outside India. 2. The Agreement under the LoC is effective from June 12, 2018. Under the LoC, the terminal utilization period is 60 months after the scheduled completion date of the project. 3. Shipments under the LoC shall be declared in Export Declaration Form as per instructions issued by the Reserve Bank from time to time. 4. No agency commission is payable for export under the above LoC. However, if required, the exporter may use his own resources or utilize balances in his Exchange Earners Foreign Currency Account for payment of commission in free foreign exchange. Authorised Dealer Category- I (AD Category- I) banks may allow such remittance after realization of full eligible value of export subject to compliance with the extant instructions for payment of agency commission. 5. AD Category I banks may bring the contents of this circular to the notice of their exporter constituents and advise them to obtain full details of the LoC from the Exim Bank s office at Centre One, Floor 21, World Trade Centre Complex, Cuffe Parade, Mumbai 400 005 or from their website www.eximbankindia.in 6. The directions contained in this circular have been issued under section 10(4) and 11(1) of the Foreign Exchange Management Act (FEMA), 1999 (42 of 1999) and are without prejudice to permissions/ approvals, if any, required under any other law. Yours faithfully (R K Moolchandani) Chief General Manager 16
INCOME TAX UPDATES F No 279/Misc. 142/2007-ITJ (Pt) Government of India Ministry of Finance Department of Revenue Central Board Direct Taxes Circular No. 3/2018 New Delhi the 11th July, 2018 Subject: Revision of monetary limits for filing of appeals by the Department before Income Tax Appellate Tribunal, High Courts and SLPs/appeals before Supreme Court-measures for reducing litigation-reg. Reference is invited to Board's Circular No. 21 of 2015 dated 10.12.2015 wherein monetary limits and other conditions for filing departmental appeals (in Income-tax matters) before Income Tax Appellate Tribunal, High Courts and SLPs/ appeals before Supreme Court were specified. 2. In supersession of the above Circular, it has been decided by the Board that departmental appeals may be filed on merits before Income Tax Appellate Tribunal and High Courts and SLPs/ appeals before Supreme Court keeping in view the monetary limits and conditions specified below. 3. Henceforth, appeals/ SLPs shall not be filed in cases where the tax effect does not exceed the monetary limits given hereunder: S. No. Appeals/ SLPs in Income-tax matters Monetary Limit (Rs.) 1. Before Appellate Tribunal 20,00,000 2. Before High Court 50,00,000 3. Before Supreme Court 1,00,00,000 It is clarified that an appeal should not be filed merely because the tax effect in a case exceeds the monetary limits prescribed above. Filing of appeal in such cases is to be decided on merits of the case. 4. For this purpose, 'tax effect' means the difference between the tax on the total income assessed and the tax that would have been chargeable had such total income been reduced by the amount of income in respect of the issues against which appeal is intended to be filed (hereinafter referred to as disputed issues ) Further, 'tax effect' shall be tax including applicable surcharge and cess. However, the tax will not include any interest thereon, except where chargeability of interest itself is in dispute. In case the chargeability of interest is the issue under dispute, the amount of interest shall be the tax effect. In cases where returned loss is reduced or assessed as income, the tax effect would include notional tax on disputed additions. In case of penalty orders, the tax effect will mean quantum of penalty deleted or reduced in the order to be appealed against. 5. The Assessing Officer shall calculate the tax effect separately for every assessment year in respect of the disputed issues in the case of every assessee. If, in the case of an assessee, the disputed issues arise in more than one assessment year, appeal can be filed in respect of such assessment year or years in which the tax effect in respect of the disputed issues exceeds the monetary limit specified in para 3. No appeal shall be filed in respect of an assessment year or years in which the tax effect is less than the monetary limit specified in para 3. In other words, henceforth, appeals can be filed only with reference to the tax effect in the relevant assessment year. However, in case of a composite order of any High Court or appellate authority, which involves more than one assessment year and common issues in more than one assessment year, appeals shall be filed in respect of all such assessment years even if the tax effect is less than the prescribed monetary limits in any of the year(s), if it is decided to file appeal in respect of the year(s) in which tax effect exceeds 17
the monetary limit prescribed. In case where a composite order/judgement involves more than one assessee, each assessee shall be dealt with separately. 6. Further, where income is computed under the provisions of section 115JB or section 115JC, for the purposes of determination of 'tax effect', tax on the total income assessed shall be computed as per the following formula (A - B) + (C - D) where, A = the total income assessed as per the provisions other than the provisions contained in section 115JB or section 115JC (herein called general provisions); B = the total income that would have been chargeable had the total income assessed as per the general provisions been reduced by the amount of the disputed issues under general provisions; C = the total income assessed as per the provisions contained in section 115JB or section 115JC; D = the total income that would have been chargeable had the total Income assessed as per the provisions contained in section 115JB or section 1I5JC was reduced by the amount of disputed issues under the said provisions: However, where the amount of disputed issues is considered both under the provisions contained in section 115JB or section 115JC and under general provision s, such amount shall not be reduced from total income a ssessed while determining the amount under item D. 7. In a case where appeal before a Tribunal or a Court is not filed only on account of the tax effect being less than the monetary limit specified above, the Pr. Commissioner of Income-tax/ Commissioner of Income Tax shall specifically record that "even though the decision is not acceptable, appeal is not being filed only on the consideration that the tax effect is less than the monetary limit specified in this Circular". Further, in such cases, there will be no presumption that the Income-tax Department has acquiesced in the decision on the disputed issues. The Income-tax Department shall not be precluded from filing an appeal against the disputed issues in th e case of the same assessee for any other assessment year, or in the case of any other assessee for the same or any other assessment year, if the tax effect exceeds the specified monetary limits. 8. In the past, a number of instances have come to the notice of the Board, whereby an assessee has claimed relief from the Tribunal or the Court only on the ground that the Department h as implicitly accepted the decision of the Tribunal or Court in the case of the assessee for any other assessment year or in the case of any other assessee for the same or any other assessment year, by not filing an appeal on the same disputed issues. The Departmental representatives/ counsels must make every effort to bring to the notice of the Tribunal or the Court that the appeal in such cases was not filed or not admitted only for the reason of the tax effect being less than the specified monetary limit and, therefore, no inference should be drawn that the decisions rendered therein were acceptable to the Department. Accordingly, they should impress upon the Tribunal or the Court that such cases do not have any precedent value and also bring to the notice of the Tribunal/ Court the provisions of sub section (4) of section 268A of the Income-tax Act, 1961 which read as under: "(4) The Appellate Tribunal or Court, hearing such appeal or reference, shall have regard to the orders, instructions or directions issued under sub-section (1) and the circumstances under which such appeal or application for reference was filed or not filed in respect of any case." 9. As the evidence of not filing appeal due to this Circular may have to be produced in courts, the judicial folders in the office of Pr.CsIT / CsIT must be maintained in a systemic manner for easy retrieval. 18
10. Adverse judgments relating to the following issues should be contested on merits notwithstanding that the tax effect entailed is less than the monetary limits specified in para 3 above or there is no tax effect: (a) Where the Constitutional validity of the provisions of an Act or Rule IS under challenge, or (b) Where Board's order, Notification, Instruction or Circular has been held to be illegal or ultra vires, or (c) Where Revenue Audit objection m the case has been accepted by the Department, or (d) Where the addition relates to undisclosed foreign assets/ bank accounts. 11. The monetary limits specified in para 3 above shall not apply to writ matters and Direct tax matters other than Income tax. Filing of appeals in other Direct tax matters shall continue to be governed by relevant provisions of statute and rules. Further, in cases where the tax effect is not quantifiable or not involved, such as the case of registration of trusts or institutions under section 12A/ 12AA of the IT Act, 1961 etc., filing of appeal shall not be governed by the limits specified in para 3 above and decision to file appeals in such cases may be taken on merits of a particular case. 12. It is clarified that the monetary limit of Rs. 20 lakhs for filing appeals before the ITAT would apply equally to cross objections under section 253(4) of the Act. Cross objections below this monetary limit, already filed, should be pursued for dismissal as withdrawn/ not pressed. Filing of cross objections below the monetary limit may not be considered henceforth. Similarly, references to High Courts and SLPs/ appeals before Supreme Court below the monetary limit of Rs. 50 lakhs and Rs. 1 Crore respectively should be pursued for dismissal as withdrawn/ not pressed. References before High Court and SLPs/ appeals below these limits may not be considered henceforth. 13. This Circular will apply to SLPs/appeals/ cross objections/ references to be filed henceforth in SC/HCs/Tribunal and it shall also apply retrospectively to pending SLPs/ appeals/cross objections/ references. Pending appeals below the specified tax limits in para 3 above may be withdrawn/ not pressed. 14. The above may be brought to the notice of all concerned. 15. This issues under Section 268A of the Income-tax Act 1961. (Neetika Bansal) Director (IT J), CBDT, New Delhi. 19
CUSTOM UPDATES [TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB- SECTION (i)] GOVERNMENT OF INDIA MINISTRY OF FINANCE (DEPARTMENT OF REVENUE) Notification No. 51/2018-Customs New Delhi, the 09th July, 2018 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, being satisfied that it is necessary in the public interest so to do, hereby makes the following further amendments in the notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 27/2011-Customs, dated the 1st March, 2011, published in the Gazette of India, Extraordinary, vide number G.S.R. 153(E), dated the 1st March, 2011, namely :- In the said notification, in the Table, in S. No. 20B, in column (3), for the words and figures the first day of April, 2018, the words and figures the 31st day of March, 2021 shall be substituted. [F.No.354/224/2017 -TRU] (Gunjan Kumar Verma) Under Secretary to the Government of India Note. - The principal notification No.27/2011-Customs, dated the 1st March, 2011 was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 153(E), dated the 1st March, 2011 and last amended vide notification No. 30/2018- Customs, dated the 20th March, 2018 published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 246(E), dated the 20th March, 2018. 20
[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB- SECTION (i)] Government of India Ministry of Finance (Department of Revenue) Central Board of Indirect Taxes and Customs Notification No. 61/2018-Customs (N.T.) New Delhi, the 11 th July, 2018 G.S.R... (E). - In exercise of the powers conferred by clause (aa) of sub- section (1) of section 7 of the Customs Act, 1962 (52 of 1962), the Central Board of Indirect Taxes and Customs, hereby makes following further amendments in the notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 12/97-CUSTOMS (N.T.), dated the 2 nd April, 1997, published in the Gazette of India, Extraordinary, Part II, Section 3, sub-section (i), vide number G.S.R. 193 (E), dated the 2 nd April, 1997, namely:- In the said notification, in the Table, against serial number 4 relating to the State of Gujarat, after item (xiii) and the entries relating thereto, in columns (3) and (4), the following item and the entries shall respectively be inserted, namely:- (3) (4) "(xiv) Village Varnama, Taluka District Vadodara. Unloading of imported goods and loading of export goods. [F.No.434/12/2017-Cus lv] (Z R Kamili) Director (Customs) Note. - The Principal notification No. 12/97-CUSTOMS (N.T.), dated 2 nd April, 1997 was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R, 193 (E), dated the 2 nd April, 1997 and last amended vide notification No. 2/2018- CUSTOMS (N.T.), dated the 5 th January, 2018 vide number G.S.R. 13(E), dated the 5 th January, 2018. 21
[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART-II, SECTION-3, SUB- SECTION (ii)] Government of India Ministry of Finance (Department of Revenue) (Central Board of Indirect Taxes and Customs) Notification No. 62/2018-CUSTOMS (N.T.) New Delhi, 13 th July, 2018 22 Ashadha, 1940 (SAKA) S.O. (E). In exercise of the powers conferred by sub-section (2) of section 14 of the Customs Act, 1962 (52 of 1962), the Central Board of Indirect Taxes & Customs, being satisfied that it is necessary and expedient so to do, hereby makes the following amendments in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 36/2001-Customs (N.T.), dated the 3 rd August, 2001, published in the Gazette of India, Extraordinary, Part-II, Section-3, Sub-section (ii), vide number S. O. 748 (E), dated the 3 rd August, 2001, namely:- In the said notification, for TABLE-1, TABLE-2, and TABLE-3 the following Tables shall be substituted, namely: - Sl. No. Chapter/ heading/ sub-heading/tariff item TABLE-1 Description of goods Tariff value (US $Per Metric Tonne) (1) (2) (3) (4) 1 1511 10 00 Crude Palm Oil 614 2 1511 90 10 RBD Palm Oil 629 3 1511 90 90 Others Palm Oil 622 4 1511 10 00 Crude Palmolein 637 5 1511 90 20 RBD Palmolein 640 6 1511 90 90 Others Palmolein 639 7 1507 10 00 Crude Soya bean Oil 743 8 7404 00 22 Brass Scrap (all grades) 3774 9 1207 91 00 Poppy seeds 2531 Sl. No. Chapter/ heading/ sub-heading/tariff item TABLE-2 Description of goods Tariff value (US $) (1) (2) (3) (4) 1 71 or 98 Gold, in any form, in respect of 401 per 10 grams which the benefit of entries at serial number 356 and 358 of the Notification No. 50/2017- Customs dated 30.06.2017 is availed 2 71 or 98 Silver, in any form, in respect of which the benefit of entries at serial number 357 and 359 of the Notification No. 50/2017- Customs dated 30.06.2017 is availed 511 per kilogram 22
Sl. No. Chapter/ heading/ sub-heading/tariff item TABLE-3 Description of goods Tariff value (US $ Per Metric Tonne) (1) (2) (3) (4) 1 080280 Areca nuts 3947 [F. No. 467/01/2018 -Cus-V] (Dr. Sreeparvathy S.L.) Under Secretary to the Govt. of India Note: - The principal notification was published in the Gazette of India, Extraordinary, Part-II, Section-3, Sub-section (ii), vide Notification No. 36/2001 Customs (N.T.), dated the 3 rd August, 2001, vide number S. O. 748 (E), dated the 3 rd August, 2001 and was last amended vide Notification No. 58/2018-Customs (N.T.), dated the 29 th June, 2018, e-published in the Gazette of India, Extraordinary, Part-II, Section-3, Sub-section (ii), vide number S. O. 3148(E), dated 29 th June, 2018. 23
DGFT UPDATES To be published in the Gazette of India Extraordinary Part II Section 3, Sub-Section (II) Government of India Ministry of Commerce & Industry Department of Commerce Directorate General of Foreign Trade CORRIGENDUM to the Notification no. 09/2015-20 dated 28.05.2018 Subject: Corrigendum to Notification No. 9/2015-20 dated 28.05.2018. Udyog Bhawan, New Delhi Dated: 9 July, 2018 In the Notification No. 9/2015-20 dated 28.05.2018, para 1.41 sub para (iii) shall be read as follows: Para 1.41 Sub-para (iii) Clause (b) As existing in Notification No. 9/2015-20 dated 28.05.2018 Duty free entitlement for import of trimmings, embellishments and footwear components for footwear (leather as well as synthetic), gloves, travel bags and handbags upto 3 % of FOB value of export of previous financial year. Such entitlement shall cover packing material, such as printed and non-printed shoeboxes, small cartons made of wood, tin or plastic materials for packing footwear. Corrected Duty free entitlement for import of trimmings, embellishments and footwear components for footwear (leather as well as synthetic), and other leather products upto 5% of FOB value of export of previous financial year. (Alok Vardhan Chaturvedi) Director General of Foreign Trade E-mail: dgft@nic.in 24
File No. 01/94/180/078/AM19/PC-4 Government of India Ministry of Commerce and Industries (Department of Commerce) Directorate General of Foreign Trade POLICY CIRCULAR NO: 09 Udyog Bhawan 09 th July, 2018 Subject: Clarification on acceptance of any copy of Shipping Bill in lieu of EP copy of Shipping Bill for grant of EODC of Advance Authorisation - reg. Attention is invited towards sub- Para (ii) under heading (a) Documents for physical export in the ANF-4F published vide PN 9 dated 14.05.2018 thereby it was decided to allow self-certified exporter copy of Shipping bill in lieu of EP copy of shipping bills for exports made after 23.11.2016 till such time of online verification facility is made available. 2. Representations have been received from Trade and Industry to allow acceptance of Exchange Control Copy of Shipping Bill in lieu of EP copy of Shipping Bill/ Exporter Copy of Shipping Bill which is prescribed under ANF-4F published vide Public Notice No 9/2015-2020 dated 14 May, 2018. 3. A viewing facility has been made available for RAs to view shipping bill details available in DGFT servers. However, many shipping bills are associated with an Advanced Authorisation and it is difficult at present for RAs to verify from the details available online. The facility is being improved to make it more user-friendly so that physical copy may not be required in future. 4. However, in the interim, in order to reduce transaction cost and for ease of doing business, it has been decided that exporter shall have option to furnish self-certified copy of any copy of shipping bill i.e. Exporter copy/ep Copy/CHA copy/ Exchange Control Copy of shipping bill along with application for EODC in ANF-4F where exports were made on or after 23.11.2016 5. This issues with the approval of DGFT. Jay Karan Singh Joint Director General of Foreign Trade 25
To be Published in the Gazette of India Extraordinary Part-II, Section-3, Sub-Section (ii) Government of India Ministry of Commerce & Industry Department of Commerce Udyog Bhawan Notification No. 18/2015-2020 New Delhi, Dated the 12 July, 2018 Subject: Addition of Vishakhapatnam port for import of new vehicles. S.O.(E) In exercise of powers conferred by Section 3 of FT (D&R) Act, 1992, read with paragraph 1.02 and 2.01 of the Foreign Trade Policy, 2015-2020, as amended from time to time, the Central Government hereby amends the Import Policy Condition 2 to Chapter 87 of ITC(HS) 2017, Schedule 1 (Import Policy) as under: 2. Vishakhapatnam port is added to the existing list of 15 ports 1 ICDs through which import of new vehicles is permitted under Policy Condition 2(11) (d) of Chapter 87 of ITC (HS) 2017, Schedule 1 (Import Policy). Accordingly, Policy Condition 2(11)(d) of Chapter 87 is revised to read as under: "The import of new vehicles shall be permitted only through the following Customs Ports: Seaports- (i) Nhava Sheva, (ii) Mumbai, (iii) Kolkata, (iv) Chennai, (v) Ennore, (vi) Cochin, (vii) Kattupalli, (viii) APM Terminals Pipavav, (ix) Krishnapatnam, (x) Vishakhapatnam; Airports- (xi) Mumbai Air Cargo Complex, (xii) Delhi Air Cargo, (xiii) Chennai Airport; and ICDs - (xiv) Telegaon Pune, (xv) Tughlakabad & (xvi) Faridabad" 3. Effect of this notification: Vishakhapatnam port is being added to the list of 15 existing ports/icds, thereby taking the total number of ports/icds to 16, for importing new vehicles. (Alok Vardhan Chaturvedi) Director General of Foreign Trade 26
To be published in the Gazette of India Extraordinary Part-II, Section-3, Sub-Section (ii) Government of India Ministry of Commerce & Industry Department of Commerce Udyog Bhawan Notification No. 19/2015-2020 New Delhi, Dated the 12 July, 2018 Subject: Insertion of import policy conditions under Chapter 29 and 30 of the ITC (HS) 2017, Schedule- I (Import Policy). S.O. (E): In exercise of powers conferred by Section 3 of FT (D&R) Act, 1992, read with paragraph 1.02 and 2.01 of the Foreign Trade Policy, 2015-2020, as amended from time to time, the Central Government, hereby amends the policy conditions of the following Exim Codes as under: Exim Code Item Description Poli cy Policy Condition s Revised Policy Conditions 2937 HORMONES, - - - PROSTAGLANDINS, THROMBOXANES AND LEUKOTRIENES, NATURAL OR REPRODUCED BY SYNTHESIS; DERIVATIVES AND STRUCTURAL ANALOGUES THEREOF, INCLUDING CHAIN MODIFIED POLYPEPTIDES, USED PRIMARILY AS HORMONES 29371900 Other Fre - Import of Oxytocin is e Prohibited 29372900 Other Fre - Import of Oxytocin is e Prohibited 29379019 Other Fre - Import of Oxytocin is e Prohibited 29379090 Other Fre - Import of Oxytocin is e Prohibited 3004 MEDICAMENTS(EXCLUDIN G GOODS OF HEADING 3002, 3005 OR 3006) CONSISTING OF MIXED OR UNMIXED PRODUCTS FOR THERAPEUTIC OR PROPHYLACTIC USES, PUT UP IN MEASURED DOSES (INCLUDING THOSE IN THE FORM OF TRANS DERMAL ADMINISTRATION SYSTEMS) OR IN FORMS OR PACKINGS FOR RETAIL SALE Import of Oxytocin is Prohibited 27
2. Effect of this Notification: Import of Oxytocin is 'Prohibited". (Alok Vardhan Chaturvedi) Director General of Foreign Trade E-mail: dgft@nic. In 28
Company Secretaries Delhi I Mumbai I Hyderabad I Kanpur Corporate Office: 63/12, First Floor, Main Rama Road, New Delhi-110015 Ph: +91 11 25101016/17, Mob: +91-9971666825 Email: brijesh@bmathurco.in, brijesh@brijeshmathur.com Website: www.bmathurco.in 29