• Press Information Releases

PIB Release Dated 5.6.2008 - Approval to Introduction of Bill Amending Prevention of Money Laundering Act, 2002

Union Cabinet gave its approval for introduction of the Prevention of Money-laundering (Amendment) Bill, 2008 in the Parliament. The Amendment Bill Proposed to enable the Government of India to meet certain domestic needs and international obligations.

PIB Release Dated 30.05.2008 - Central Sales Tax (CST) reduced to 2% from 1st June 2008

Central Government has by a notification on 30th May 2008 reduced rate of CST imposed on inter-State sales of goods. The new reduced rate of CST of 2 per cent on inter-State sales of goods has been made effective from 1st June 2008 in place of 3 per cent. This reduction forms a part of the roadmap for phasing out CST completely by 31st March 2010 in preparation of introducing Goods & Services Tax (GST).

• Direct taxation

CBDT

Press Release From File No. 402/92/2008-MC (20 of 2008) Dated 23.05.2008 - Clarifications on delay in issue of Permanent Account Number (PAN) or PAN cards to FIIs by the Income Tax department

CBDT vide this press release denies the report alleging that the delay in decline in FII investments is the delay in issue of Permanent Account Number (PAN) or PAN cards to FIIs by the Income Tax department. It further clarifies that delay in issuance of PAN cards take place usually due to incomplete documentation by applicants. Applicants must, therefore, ensure that the documentation required for making application for PAN is complete in all respects.

• Reserve Bank of India

A.P. (DIR Series) Circular No. 51 Dated 03.06.2008 Deferred Payment Protocols dated April 30, 1981 and December 23, 1985 between Government of India and erstwhile USSR

Special currency basket has been revised from Rs.58.6670 to Rs.60.5828 and bank are advised that a further revision has taken place on May 8, 2008 and consequently, the rupee value of the special currency basket has been fixed at Rs.60.5828 with effect from May 13, 2008.

A.P. (DIR Series) Circular No. 50 Dated 03.06.2008 - Export of Goods and Services Realisation and Repatriation of Export Proceeds Liberalisation

In consultation with Government of India Reserve Bank of India has enhanced the present period of realization and repatriation to India of the amount representing the full export value of goods or software exported, from six months to twelve months from the date of export, subject to review after one year.

A.P. (DIR Series) Circular No. 49 Dated 03.06. 2008 - Export of Goods and Services Payments of Claims by Insurance Companies Write off

In view of the representations received from Exporters / Trade bodies for extending the 'write off' facility applicable to the claims settled by all insurance companies which are registered with Insurance Regulatory and Development Authority (IRDA), Reserve Bank of India has permitted AD Category - I banks to write off. Banks are directed to write-off the relative export bills and delete them from the XOS statement on receiving an application supported by a documentary evidence from ECGC / insurance companies registered with IRDA, confirming that the claim in respect of the outstanding export bills has been settled and that the export incentives, if any, have been surrendered.

A.P. (DIR Series) Circular No. 47 Dated 03.06.2008 - Risk Management and Inter-Bank Dealings Commodity Hedging Exposures of domestic oil refining and marketing companies

Reserve bank has been decided to permit Companies engaged in crude oil refining and marketing to hedge their commodity price risk on domestic purchase of crude oil and sale of petroleum products on the basis of underlying contracts linked to international prices on overseas exchanges / markets. The hedging thus allowed should be strictly on the basis of underlying contracts.B. Hedging of anticipated imports of crude oil and on the basis of their past performance up to 50 per cent of the volume of actual imports during the previous year or 50 per cent of the average volume of imports during the previous three financial years, whichever is higher.

A. P. (DIR Series) Circular No. 46 Dated 02.06.2008 - External Commercial Borrowings (ECB) by Services Sector -Liberalization

Entities in the service sector viz. hotels, hospitals and software companies are allowed to avail ECB up to USD 100 million, per financial year, for the purpose of import of capital goods under the Approval Route. All other aspects of ECB policy shall remain unchanged. This amendment to ECB guidelines will be effective with immediate effect.

A. P. (DIR Series) Circular No. 45 Dated 30.05.2008 - Foreign Exchange Management (Deposit) Regulations, 2000 - Credit to Non Resident (External) Rupee Accounts

In order to meet the genuine needs of the NRE account holders, Reserve bank has decided to authorize AD Category - I banks to credit proceeds of demand drafts / bankers' cheques issued against encashment of foreign currency to the NRE account of the NRI account holder where the instruments issued to the NRE account holder are supported by encashment certificate issued by AD Category - I / Category - II.

DBOD Circular No. Leg BC. 91 /09.07.005/2007-08 Dated 04.06.2008 Banking facilities to the visually challenged

In pursuance of the orders passed by the Honourable Court of Chief Commissioner for Persons with Disabilities banks are advised to ensure that all the banking facilities such as cheque book facility including third party cheques, ATM facility, Net banking facility, locker facility, retail loans, credit cards etc. are invariably offered to the visually challenged without any discrimination

• SEBI

FII Circular - Circular No. IMD/FII & C/ 29 /2007 Dated June 6, 2008 - FII investments in Debt Securities

Central government has increased External Commercial Borrowing policy and cumulative debt investment limits from US $3.2 billion to US $5 billion and US $1.5 billion to US $3 billion for FII investments in Government Securities and Corporate Debt stands increased respectively. These enhanced limits shall be allocated among the FIIs on a 'first come first served' basis subject to a ceiling of US $200 million per registered entity.

Press Release No. PR No.111/2008 Dated 29.05.2008 - Amendment to SEBI (Foreign Institutional Investors) Regulations, 1995

SEBI modifies Application Forms for grant of registration as a FII and Sub Account and widens the type of securities in which FIIs are permitted to invest by including schemes floated by a Collective Investment Scheme. An asset management company, investment manager or advisor or an institutional portfolio manager set up and/ or owned by non resident Indians (NRIs) has been allowed to be registered as FII subject to the condition that they shall not invest their proprietary funds.

• Indirect taxation

Customs

CBEC Customs Circular No. 8/2008 -Dated 02.06.2008 - Simplification and procedural relaxation for issue of pre-authenticated CT-3 to EOUs in textile and chemical sector -reg.

CBEC Extends the facility of issuing CT-3 form booklet to EOUs in textile and chemical sector subject to certain additional safeguards. The request for issuing pre-authenticated CT-3 form booklet by EOUs should be made to the jurisdictional Asst./Dy. Commissioner of Customs /Central Excise and yearly permission for issuing pre-authenticated CT-3 form booklet to such EOUs, who have an unblemished track record could be granted after examination of the request.

Service Tax

Service Tax - Circular No. 102/5/2008-ST Dated 04.06.2008 - Guidelines in Respect of the Dispute Resolution Scheme, 2008-reg.

The Dispute Resolution Scheme, 2008 has been notified as a one time measure for quick resolution of disputes involving small service tax amounts upto Rs 25000 and relating to non-recovery of penalty or interest. However, Scheme shall not apply to cases involving non-payment of service tax after having collected the same from client/customer. This Scheme would be in operation from 1.7.2008 to 30.9.2008 and order passed under it would be conclusive. Guidelines regarding Dispute Resolution Scheme, 2008 deals with the Procedure to be followed compounding amount under the Scheme.

Service Tax - Notification No. 28/2008-ST Dated 04.06.2008 - Dispute Resolution Scheme Rules, 2008

The Dispute Resolution Scheme Rules, 2008 prescribes the manner of declaration to be made under the Scheme by the declarant opting for it. These rules are to be read with the provisions of Chapter VI of the Finance Act, 2008, provide the procedure to be followed for operating the Scheme.

• Directorate General of Foreign Trade (DGFT)

Policy Circular No. 10(RE-2008)/2004-2009 Dated 05.06.2008 Endorsement of Permitted Imports on duty credit scrips, issued under target plus scheme, procedure thereof.

In view of the Representations received from Trade and Industry regarding confusion that exists with respect to 'permitted imports' under the Target plus scheme, it has been decided to list the permitted imports. Accordingly under the said Scheme specified endorsement may be made by RA concerned on duty credit scrips issued under DFCE for the Scheme, upon requests received on the letter head of the applicant..