• INDIRECT TAXATION

CBEC Excise

Circular No. 921/11/2010-CX Dated 10.05.2010 - Education Cess and Higher Education Cess under compound levy scheme on S.S. Patta/Patti and Aluminium Circles

It is clarified that education cess and higher education cess would be required to be paid on S.S. Patta Patti and aluminium Circles, covered by the compound levy over and above the notified Central Excise duty as the same has not specifically been included in the compound levy amount specified in the relevant notification. Moreover, there is no exemption provided for the same. The comparison with compound levy scheme in respect of Pan Masala/Gutkha etc. is erroneous as the two schemes are covered under different notifications. The notification No. 42/2008-CE dated 1.7.2008 specifically includes the Education Cess and Higher Education Cess in the amount fixed under compound levy scheme and there is no such stipulation in the scheme in respect of Stainless Steel Patta Patti and Aluminium Circles in the Notification No. 17/2007-CE dated 1-3-2007.

• MINISTRY OF COMMERCE

Industrial Policy and Promotion

Press Note No. 2(2010Series) Dated 10.05.2010 - Prohibition on FDI in manufacture of Cigars, Cheroots, Cigarillos and Cigarettes of tobacco or its substitutes

The Government of India has reviewed the Consolidated FDI Policy and it has been decided to prohibit FDI in manufacturing of 'Cigars, cheroots, cigarillos and cigarettes, of tobacco or of tobacco substitutes' (Code 24.02 of Indian Trade Classification which follows the Harmonized Commodity Description and Coding System) and to include the activity in the list of activities/sectors prohibited for FDI.

• INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY

Circular No. IRDA/F&I/CIR/F&A/076/05/2010 Dated 10.05.2010 - Reporting of Maintenance of Solvency Margin Ratio

IRDA has issued directions regarding submissions of all the Forms of solvency margin as prescribed under IRDA (Assets, Liabilities and Solvency margin of Insurers) Regulations, 2000 w.e.f. FY 2010-11. Date of submission of quarterly solvency reporting will be the same as prescribed for the Public Disclosure. Further, it has been clarified that for the purpose of calculation of RSM 1 premium of the last 12 months on rolling basis will be taken into account and for purpose of calculation of RSM 2 claims will continue to be taken as clarified earlier.

Circular No IRDA/F&I/CIR/AML/ 80 /05/2010 Dated 3.05.2010 - Directions under PMLA Rules 2005 to maintain records of transactions as prescribed in applicable Legislations/Regulations/Rules

In view of the amendments to PMLA Rules 2005, insurance companies are directed to maintain records referred to in Rule 3 (1) Clauses (A) to (D) for a period of ten years from the date of cessation of the transactions between the customer and the insurance company. Further, records pertaining to all other transactions, (for which insurance companies are obliged to maintain records under other applicable Legislations/Regulations/Rules) insurance companies are directed to retain records as provided in the said Legislation/Regulations/Rules but not less than a period of ten years from the date of end of the business relationship with the customer.

• RESERVE BANK OF INDIA

RBI A.P. (DIR Series)

Circular No. A. P. (DIR Series) Circular No. 52 Dated 13.05.2010 - Permission to drawal of foreign exchange for royalty payment under technical collaboration agreements without approval of Commerce Ministry

The Government of India has reviewed the extant policy with regard to liberalization of foreign technology agreement and it was decided to omit item number 8 of Schedule II to the Foreign Exchange Management (Current Account Transaction) Rules, 2000, and the entry relating thereto. Earlier, prior approval of the Ministry of Commerce and Industry, Government of India, was required for drawing foreign exchange for remittances under technical collaboration agreements where payment of royalty exceeds 5% on local sales and 8% on exports and lump-sum payment exceeds USD 2 million [item 8 of Schedule II to the Foreign Exchange Management (Current Account Transactions) Rules, 2000]. Accordingly, AD Category-I banks may permit drawal of foreign exchange by persons for payment of royalty and lump-sum payment under technical collaboration agreements without the approval of Ministry of Commerce and Industry, Government of India.

Circular No. 51 Dated 11.05.2010 - Modification in External Commercial Borrowings Policy in respect of IFCs.

RBI has been decided to modify the extant ECB policy in respect of the Infrastructure Finance Companies (IFCs) i.e. Non Banking Financial Companies (NBFCs) categorised as IFCs by the Reserve Bank permitting IFCs to avail of ECBs for on-lending to the infrastructure sector under the approval route. As a measure of liberalisation of the existing procedures, it has been decided to permit the IFCs to avail of ECBs, including the outstanding ECBs, up to 50 per cent of their owned funds under the automatic route, subject to their compliance with the prudential guidelines already in place. ECBs by IFCs above 50 per cent of their owned funds would require the approval of the Reserve Bank and will, therefore, be considered under the approval route. Designated Authorized Dealer banks are required to ensure compliance with the extant norms while certifying the ECB application both under the automatic and approval routes.

RPCD

Circular No. RPCD.CO.RRB.BC.No. 82 /03.05.33/2009-10 Dated 11.05.2010 - Clarification regarding classification of working capital limits on Priority Sector Lending for agriculture and allied activities

RBI has clarified that loans granted by RRBs for agricultural and allied activities are eligible for classification under priority sector, irrespective of whether borrowing entity is engaged in export or otherwise. The export credit granted for agricultural and allied activities may be reported separately under heading: "Export credit to agriculture sector"

• SECURITIES AND EXCHANGE BOARD OF INDIA

SEBI Mutual Fund

Circular No. Cir/IMD/DF/2/2010 Dated 13.05.2010 - Disclosure of investor complaints with respect to Mutual Funds on websites

SEBI has been decided that Mutual Funds shall henceforth disclose on their websites, on the AMFI website as well as in their Annual Reports, details of investor complaints received by them from all sources and said details should be vetted and signed off by the Trustees of the concerned Mutual Fund. Accordingly, Mutual Funds are accordingly advised to Upload the report for the year 2009-10 by June 30, 2010 and report for the following financial years within 2 months of the close of the financial year. Also instructed Mutual Fund to include the report in their annual reports, as part of the Report of the Trustees, beginning with the annual report for the year 2009-10.

• CENTRAL BOARD OF DIRECT TAXES

Notification No.33/2010 Dated 11.05.2010 - Income-tax (Fourth Amendment) Rules, 2010,

CBDT has notified all Income Tax Return forms [ITR-2, ITR-3, ITR-4, ITR-5, ITR-6, ITR-7 and ITR-V] vide Income-tax (Fourth Amendment) Rules, 2010 effective from April 1, 2010.

• TELECOM REGULATORY AUTHORITY OF INDIA

Press Release No. 22/2010 Dated 11.05.2010 - Telecom Regulatory Authority of India has released a consultation paper on "Review of Telecom Unsolicited Commercial Communications Regulations"

Considering the growing dissatisfaction among consumers and to address the problem of unsolicited commercial communications, Telecom Regulatory Authority of India has decided to review the Telecom Unsolicited Commercial Communications Regulations,2007 and explore all possible alternatives including establishment of "Do Call Registry". Accordingly the consultation process has been initiated suo-motu to seek suggestions of all stakeholders for a comprehensive solution that would curb unsolicited commercial communications.