• SECURITIES EXCHANGE BUREAU OF INDIA

Circular No. SEBI/IMD/CIR No./13/187052/2009 Dated 11.12.2009 - AMFI Guidelines for change of mutual fund distributor

Unwarranted hardship is being caused to investors in mutual fund schemes who wish to switch from an existing mutual fund distributor to either another mutual fund distributor or opt to deal direct as Some Asset Management Companies (AMCs) are insisting on the investor procuring a 'No Objection Certificate' (NoC) from the existing distributor for this switch over. Therefore, it is mandated that all mutual funds are required to comply with the Association of Mutual Funds in India (AMFI) guideline which mandates that on receipt of letter from the investor advising AMCs about his desire to change his distributor, AMCs will act on that instruction.

Press Release No. 386/2009 Dated 10.12.2009 - ASBA facility to be extended to HNIs and corporate investors

SEBI had introduced a new mode of payment in public and rights issues called Application Supported by Blocked Amount (ASBA), wherein the application money remains blocked in the bank account till allotment. ASBA will be now extended to investor categories like High Networth Individuals (HNIs), corporate investors etc. (referred as ASBA Phase II). Thus all investors, except Qualified Institutional Buyers (QIBs) will be eligible to apply for public / rights issues using ASBA facility. Phase II shall be made applicable to all the issues opening on or after January 01, 2010.

• RESERVE BANK OF INDIA

Circular No. UBD.BPD(PCB).Cir No. 29 /09.11.600/2009-10 Dated 08.12.2009 - Provisioning Requirement for Standard Assets

Reserve Bank of India, in view of large increase in credit to the Commercial Real Estate (CRE) sector over the last one year and the extent of restructured advances in this sector, has decided to increase the provisioning requirement for advances by banks to the CRE sector classified as 'standard assets' to 1.00 per cent. This is with a view to build a cushion against likely non-performing assets (NPAs).

• PRESS INFORMATION BUREAU

Dated 11.12.2009 - Voting Power of Foreign Entities in Private Sector Banks

The government is considering a proposal to amend the Banking Regulation Act, 1949 which would provide for addition of a new section 12B to provide prior approval of Reserve Bank of India for acquisition of five per cent or more of shares or voting rights in a banking company by any person. The Reserve Bank of India will also be empowered to impose such conditions as it deems fit in this regard in order to satisfy itself that the acquisition of shares of a banking company is by a person considered 'fit and proper' and that the applicant continues to be 'fit and proper' to hold the shares or voting rights.

• DIRECT TAXATION

Notification No. 93/2009 dated 09.12.2009 - Specified Territory and Specified Association for the purpose of Section 90A of the Income-tax Act, 1961 - Double Taxation Agreement with Taipei

The Central Government has notified the territory in which the taxation law administered by the Ministry of Finance in Taipei is applied and the India-Taipei Association in Taipei and the Taipei Economic and Cultural Centre in New Delhi as specified territory and specified association respectively for the purpose of section 90A of the Income-tax Act, 1961.

Notification No. 91/2009 dated 08.12.2009 - Specified Exemptions to Organizing Committee Commonwealth Games, 2010 Delhi for the purpose of Section 10(39) of the Income-tax Act, 1961

The Central Government notifies the following income arising to Organising Committee Commonwealth Games, 2010 Delhi (i) income arising from the receipt from International Broadcasting rupees one hundred eighty two crore (seventy per cent. of rupees two hundred sixty crore); (ii) income arising from the receipt from domestic broadcasting - rupees sixty six crore (sixty per cent. of rupees one hundred ten crore); (iii) income arising from the receipt of sponsorship rupees nine hundred sixty crore; (iv) income arising from the receipt of ticketing rupees hundred crore; (v) income arising from receipt of licensed merchandise rupees fifty crore; (vi) income from Donations of rupees hundred crore as being exempted from Income Tax.

• INDIRECT TAXATION

CBEC Excise

Instruction From File No. 267141/2009-CX8 dated 07.12.2009 - Leviability of duty on capital goods cleared after being put into use for over 10 years-regarding

The Central Board of Excise and Customs(CBEC) has clarified that in view of specific provisions under Rule 3(5A) of the CENVAT Credit Rules, 2004, if the capital goods, on which cenvat credit has been taken, are cleared as waste and scrap, even after a period of 10 years, an amount equal to the duty leviable on the transaction value for such capital goods cleared as waste and scrap, would be payable.

Circular No. 909/29/09-CX dated 11.12.2009 - Inclusion of After Sale Service and Pre-delivery Inspection Charges in the Assessable Value

The Central Board of Excise and Customs (CBEC) on the question of inclusion of cost of after sales service charges and pre delivery inspection (PDI) charges, incurred by the dealer during the warranty period in the Assessable Value has clarified that show cause notices should be issued demanding duty on the value of these activities, and transferred to Call Book pending the decision of Larger Bench of Supreme Court on the issue.