• RESERVE BANK OF INDIA

RBI A.P. (DIR Series)

Circular No. 38 Dated 02.03.2010 - Expansion of the definition of Infrastructure Sector for the purpose of External Commercial Borrowings (ECB)

The RBI has notified that, as announced in para 54 of the Union Budget for the Year 2010-11, it has been decided to expand the definition of infrastructure sector, for the purpose of availing of ECB. Accordingly, the infrastructure sector would henceforth be defined to include (i) power, (ii) telecommunication, (iii) railways, (iv) road including bridges, (v) sea port and airport, (vi) industrial parks, (vii) urban infrastructure (water supply, sanitation and sewage projects), (viii) mining, exploration and refining and (ix) cold storage or cold room facility, including for farm level pre-cooling, for preservation or storage of agricultural and allied produce, marine products and meat. All other aspects of the ECB policy stipulated in the A.P. (DIR Series) Circulars shall remain unchanged.

Circular No.39 Dated 02.03.2010 - Introduction of separate category of NBFCs viz. Infrastructure Finance Companies (IFCs) for the purpose of External Commercial Borrowings (ECB) Policy

As per the extant External Commercial Borrowings(ECB policy), Non-Banking Finance Companies (NBFCs), which are exclusively engaged in financing of infrastructure sector, are permitted to avail of ECB from the recognized lender category including international banks, under the approval route, for on- lending to the infrastructure sector, as defined in the extant ECB policy. In view of the thrust given to the development of the infrastructure sector, a separate category of NBFCs viz. Infrastructure Finance Companies (IFCs) has been introduced in terms of the guidelines contained in circular DNBS.PD.CC No. 168/03.02.089/2009-10 dated February 12, 2010. In view of the new category of NBFCs being in place, the dispensation provided in extant ECB policy is not considered necessary. Accordingly, proposals for ECBs by the IFCs, which have been classified as such by the Reserve Bank, for on-lending to the infrastructure sector, as defined in the extant ECB policy may be considered under the approval route, subject to their complying with specified conditions.

Press Release

Press Release No. 2009-2010/1209 Dated 06.03.2010 - Report of Working Group to Review the Credit Guarantee Scheme of the Credit Guarantee Fund Trust for MSEs released

The Report of the Working Group set up to review the Credit Guarantee Scheme of the Credit Guarantee Fund Trust has been released on March 6, 2010. Major recommendations of the Working Group include mandatory doubling of the limit for collateral free loans to micro and small enterprises (MSEs) sector to Rs.10 lakh from the present Rs. 5 lakh, increase in the extent of guarantee cover, absorption of guarantee fees for the collateral free loans by CGTMSE subject to certain conditions, lower guarantee fees for women entrepreneurs and enterprises in the North-East, simplification of procedure for filing claims with CGTMSE and increasing awareness about the scheme.

• INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY

Circular No. IRDA/CAGTS/CIR/LCE/039/03/2010 Dated 02.03.2010 - Guidelines on Licensing of Corporate Agents

The Authority, in order to streamline the system of licensing of Corporate Agents in groups already engaged in insurance business, has in addition to the Regulations and Guidelines already in force, issued specified instructions under Section 14 of the IRDA Act, 1999 for compliance by the Insurance companies while issuing license to the Corporate Agents. Accordingly, all applications for Corporate Agency license from such a person or group of persons who is/are already engaged in any insurance business shall be referred to IRDA by the designated person concerned; the licenses shall be issued by Designated Persons, only after approval by the Authority; Persons from any group which is having a Broking License shall not be eligible for corporate agency; Any of the persons which are regulated by RBI within the group may apply and obtain a corporate agency license provided they have "substantial client base of their own or access to data which would facilitate identification of prospects" ; Persons who are not regulated by RBI, shall not be eligible for corporate agency license, unless they have "a substantial client base of their own or access to data to identify the prospective policyholders" and have a turnover, assets or income of at least Rs. 15 crores and only those persons which are part of a group having Indian Insurance Company or a scheduled commercial Bank within the group shall be eligible for issue of corporate agency license to do insurance distribution as the principle business, provided this shall be the only corporate agency amongst all the entities in the group, subject to fulfillment of conditions Para 3 of licensing of Corporate Agency guidelines.

• DIRECTORATE GENERAL OF FOREIGN TRADE

Public Notice No. 48/2009-14 Dated 05.03.2010 - Amendments in Public Notice No. 20(RE-2006)/2004-2009 dated 13th June, 2006 regarding Indo - China Border Trade

The Director General of Foreign Trade has made amendments in the Public Notice No. 20(RE-2006)/2004-2009 dated 13th June, 2006 wherein the existing part of paragraph 1 i.e. "In terms of the provisions contained in the Foreign Trade Policy, import/export of the following locally produced commodities by the people living along both sides of Indo - China Border as per the prevailing customary practice will be allowed freely" is amended to read as" In terms of the provision contained in the Foreign Trade Policy, Import/Export of the following commodities by residents of border districts who are issued trade passes, as per the prevailing customary practice will be allowed freely". 

• CENTRAL BOARD OF DIRECT TAXES

Press Release From File No. 402/92/2006-MC (012 of 2010) Dated 04.03.2010:- Direct Tax Collections from different avenues

Net direct tax collections during first eleven months of the present fiscal (up to February 2010) have registered a growth of 7.52 percent. Growth in Corporate Taxes was 10.89 percent (Rs.1,80,318 crore as against Rs.1,62,617 crore), while Personal Income Tax (including STT, and residual FBT and BCTT) grew at 1.84 percent (Rs.97,692 crore as against Rs.95,930 crore).

The final installment of advance tax for both corporate and non-corporate taxpayers is due by 15th March 2010. The Corporate taxpayers are required to pay 25 percent and non-corporate taxpayers 40 percent of their advance taxes in March.

Circular No. 3/2010 Dated 02.03.2010  - TDS under Section 194A of the Income Tax Act, 1961 for Banks using Core-Branch Banking Solutions (CBS) software

Representations have been received from Indian Banks Association (IBA) seeking clarification regarding deduction of tax at source from payment of interest on time deposits by banks using Core-Branch Banking Solutions (CBS) software. Accordingly, it is clarified that since no constructive credit to the depositor's / payee's account takes place while calculating interest on time deposits on daily or monthly basis in the CBS software used by banks, tax need not be deducted at source on such provisioning of interest by banks for the purposes of macro monitoring only. In such cases, tax shall be deducted at source on accrual of interest at the end of financial year or at periodic intervals as per practice of the bank or as per the depositor's / payee's requirement or on maturity or on encashment of time deposits; whichever event takes place earlier; whenever the aggregate of amounts of interest income credited or paid or likely to be credited or paid during the financial year by the banks exceeds the limits specified in section 194A.

• INDIRECT TAXATION

Excise Circular No. 918/08/2010-CX Dated 04.03.2010 - Implementation of the provisions of COTP Act, 2003 and The Cigarettes and Other Tobacco Products (Packaging and Labelling) Rules, 2008"- Empowering the Customs & Central Excise Officers - regarding

The Ministry of Health & Family Welfare has amended the Notification dated 30.07.2009 [S.O.1866 (E)] vide Notification dated 06.01.10 [S.O.23 (E)]. The effect of the Notification is that the officers at the level of Superintendents and above of the Customs & Central Excise department are empowered for entry, search and seizure only at the premises registered under the Central Excise & Customs. Therefore, officers are not empowered to enter, search etc. for premises which are not registered with the department for carrying out any act under the COTP Act, 2003.

• FINANCIAL SERVICES

Financial Services Notification No. SO429(E) Dated 16.02.2010: Provisions of Sub-section (1) of Section 15 of the Banking Regulation Act not to apply to the United Bank of India for a period of one year - effective 19.02.2010

The Central Government, on the recommendations of Reserve Bank of India, has declared that the provisions of Sub-section (1) of Section 15 of the said Act, shall not apply to the United Bank of India for a period of one year from the date of this Notification, in so far as they relate to the writing off of all its capitalised expenses pertaining to its Initial Public Offer.

• PRESS INFORMATION BUREAU

PIB Dated 03.03.2010 - New Visa-on Arrival Facility

The Government has, w.e.f. 1.1.2010 introduced a 'Tourist Visa-on-Arrival" scheme for citizens of five countries viz., Finland, Japan, Luxembourg, New Zealand and Singapore at four international airports in the country, viz., Delhi, Mumbai, Chennai and Kolkata. A fee of US $60/- or an equivalent amount in Indian rupees per passenger (including children) is to be charged from each applicant for grant of a Tourist Visa-on-Arrival. The "Tourist Visa-on-Arrival" scheme with these five countries has been implemented as a unilateral initiative of the Government of India with the objective of promoting tourism.