• PRESS INFORMATION BUREAU

Dated : 08.07.2008 - Emigration Act to be tightened shortly Vayalar Ravi warns of stringent action against human smugglers

The amendments to the Emigration Act have been finalized and the changes will be placed shortly. While addressing a consultation Meeting with the State Governments on issues relating to the Overseas Indian Community the Union Minister of Overseas Indian Affairs, Shri Vayalar Ravi said that the law would now provide for stringent action against those indulging in 'human smuggling' and would also prevent illegal recruitment and exploitation of workers. He wanted the state agencies to take up a drive to prosecute unscrupulous middlemen and stop illegal migration. The Minister also mentioned said that the Centre is working to establish an Overseas Workers Resource Center in Kerala, such centers in the states will provide information and assistance to potential emigrants. Advocating a human and orderly migration process and concern over the plight of women emigrant workers, particularly in the household sector, he asked State Governments to strengthen exit controls so that women do not exit the country on visit visas.

Dated 30.06.2008 - CBDT clarifies on tax holiday on oil and natural gas production

CBDT clarifies on its commitment to provide tax holiday in respect of profits derived from the commercial production of both oil and natural gas. Section 80-IB(9) replaced section 80-IA(4E) with effect from the financial year 1999-2000 which was introduced in the financial year 1997-98. However, there is no material difference in the content or substance of the old provision and the new provision. Subsequent to its introduction, bidding has taken place under NELP I to NELP VI and no request for amendment of the section was received from any quarter. The contracting parties raised the question whether natural gas is included in the expression "mineral oil" before different authorities including courts and tribunals. To this Finance Minister has replied that the issue is sub-judice and it would only be appropriate to allow the courts to resolve this issue.

• INDIRECT TAX

Custom

Circular No: 11/2008 Dated 01.07.2008 Issues relating to classification of Large Format Printers - reg.

An issue has been raised related to the classification of Large Format Printers (LFP). Whether LFP is classifiable as 'other printers' under sub-heading 8443 31 / 8443 32 for they are capable of connecting to an Automatic Data Processing (ADP) machine; or if it is classifiable under sub-heading 8443 39, as these are much closer in features and applications to the inkjet printing machines, which perform a specific function other than data processing. CBEC Custom board clarifies that the appropriate classification of Large Front Printers would be under sub-heading 8443 32. The LFP which satisfies the conditions of connectability would be classified under tariff heading 8443 32 50 as 'Ink Jet printers' and if they have more than one function of printing, copying or facsimile transmission then would be classified under tariff heading 8443 31 00.

Service Tax

Circular No. : 103/06/2008-ST dated 01.07.2008-Instructions regarding provisional attachment of property under section 73 C of the Finance Act, 1994-reg

CBEC issues Guidelines under Section 73C of the Finance Act, 1994 providing for the provisional attachment of property, for the purposes of protecting the interests of revenue during the pendency of any proceedings under section 73 or section 73A of the Act. Guidelines provides for time of initiation of proceedings, procedure during pendency of proceedings, manner of service of notice, offences considered for the attachment, Period of attachment, type of the property to be attached ,preparation of inventory and type of the property to be exempted from the attachment.

Excise

Notification No. 42/2008 Dated : 01.07.2008 -Central Government specifies rates of duty per packing machine per month on pan masala under Central Excise Act, 1944

Central Government in exercise of the section 3A(3) of the Central Excise Act, 1944 specifies the rates of duty on Pan masala falling under tariff item 2106 90 20 of the First Schedule to the Central Excise Tariff Act, 1985 except the pan masala containing not more than 15% betel nut and Pan masala containing tobacco, generally known as gutkha manufactured with the aid of packing machine and packed in pouches having specified retail sale prices.

Circular No. 874/12/2008-CX Dated. 30.06.2008 -Instructions regarding Section 11 DDA of the Central Excise Act, 1944

The Central Excise Act, 1944 vide section 11DDA provides for provisional attachment of property for the purpose of protecting the interests of revenue during the pendency of any proceedings under Section 11A or Section 11D of the Central Excise Act, 1944. Exhaustive guidelines has been issued vide this circular to maintain uniformity in its implementation by field formations as per the recommendation of the law ministry. These guideline deals with the process that has to be followed for the provisional attachment of the property, types of offences committed by a manufacturer or an exporter that can be considered for provisional attachment of property, period of attachment and types of property that can be attached.

• DIRECT TAXATION

CBDT Press Release From File No: 402/92/2006-MC (29 of 2008) Dated : 03.07.2008 -Amendments to the Industrial Park Scheme 2008

The Central Board of Direct Taxes has expanded the ambit of "industrial activity" by notifying amendments to the Industrial Park Scheme 2008 under sub-section (4) of section 80IA of the Income Tax Act, 1961 on 2ndJuly 2008. The term "Industrial activity" will now include Research and experimental development on natural sciences and engineering as defined in the National Industrial Classification, 2004 Code issued by the Central Statistical Organisation, Department of Statistics and development of computer software and information technology enabled services

The minimum constructed floor area has been reduced to 15,000 square from 50,000 square meters and area allocated or to be allocated to industrial units has been reduced to 75% of the allocable area from 90%.

Amendment provides for the allocate area for commercial activity with a cap of 10% of the allocable area.

• SECURITIES AND EXCHANGE BOARD OF INDIA

Press Release No : PR No.131/2008 Dated. 04.07.2008 -Mandatory requirement of Permanent Account Number (PAN)

It has been clarified by the SEBI that of exemption from mandatory Permanent Account Number (PAN) requirement available to Central Government, State Government, and the officials appointed by the Courts e.g. Official Liquidator, Court Receiver etc. (under the category of Government) for transacting in the securities market applies to transactions undertaken on behalf of the Central and State Government and not to the transactions of the employees of Central and State Government in their personal capacity as was wrongly reported by the certain media reports.

FII Circular No. IMD/FII&C/30/2008 Dated : 04.07.2008 -FII investments in Debt Securities

SEBI has decided to grant a period of upto five business days for replacement of the disposed off/ matured debt instrument/ position. An unutilised limit stands withdrawn and the same could be allocated to the next waitlisted entity. Therefore, respective custodians are requires to monitor and provide information of the unutilised limit on an event basis upon expiry of the five-day period. Due to individual limits applicable for these investments, Switch by way of sell off and replacement between government securities and corporate debt are not be allowed.

PMD Circular No. MIRSD/ DPSIII/ Cir-21/ 20 08 Dated: 07.07.2008 -Designated e-mail ID for regulatory communication with SEBI

SEBI has decided to extend the system of issuance of digitally signed circulars to all other registered intermediaries. In order to put in place a system for issuance of digitally signed circulars with respect to stock exchanges, depositories and merchant bankers, it is obligatory on the part of all registered intermediaries to create a designated email id for regulatory communications. These designated email ids shall be an exclusive email id only for this purpose.

• DIRECTORATE GENERAL OF FOREIGN TRADE

Policy Circular No : 17(RE-08)/2004-2009 dated 04.07.2008- Submission of multiple applications and part payments for claiming deemed export benefits under para 8.3.1 of HBP- Clarification regarding

To reduce the multiple application and the paper work and to ensure proper monitoring, it is clarified that in respect of all the claims arising for a particular calendar month /quarter a single consolidated application should be filed within the stipulated time period. This may cover claims arising in respect of more than one EPCG license and /or Invalidation letters / ARO, project supplies etc. Any subsequent application filed later on, in respect of claims arising in the same calendar month / quarter will be treated as supplementary claim for the purpose of applying cut.

• RESERVE BANK OF  INDIA

Circular No. DBOD No.DL.BC.1/20.16.003/2008-09 Dated 01.07.2008 Master Circular on willful Defaulters

The Reserve Bank of India issued the present circular to put on place a system to disseminate credit information pertaining to willful defaulters for cautioning banks and financial institutions so as to ensure that further bank finance is not made available to them.

Circular No. DBOD. No. BP.BC. 2 /21.01.002/2008-09 dated 01.07.2008 Master Circular - Prudential Norms on Capital Adequacy-Basel I Framework

The circular issued by the RBI prescribes the risk weights for the balance sheet assets, non-funded items and other off-balance sheet exposures and the minimum capital funds to be maintained as ratio to the aggregate of the risk weighted assets and other exposures as also, capital requirements in the trading book, on an ongoing basis.

Circular No. DBOD No. BP. BC. 5/21.04.141/2008-09 Dated 01.07.2008 Master Circular - Prudential norms for classification, valuation and operation of investment portfolio by banks

RBI vide present circular updated the Master Circular No. DBOD. BP. BC.15 / 21.04.141/ 2007-08 dated July 2, 2007, containing consolidated instructions/guidelines issued to banks till June 30, 2007, on matters relating to prudential norms for classification, valuation and operation of investment portfolio by banks. The said Master Circular was suitably updated by incorporating instructions/guidelines issued between July 2007 and June 30, 2008.

Circular No. DBOD. No. Dir. BC. 14/13.03.00/2008- 09 Dated 01.07.2008 Master Circular - Interest Rates on Advances

The present circular updated the Master Circular DBOD.No.Dir.BC.6/13.03.00/2007-08 dated July 2, 2007 consolidating instructions / guidelines issued to banks till June 30, 2007 on matters relating to Interest Rates on Advances.

Circular No. DBOD. No. BL.BC. 21 /22.01.001/2008-09 Dated 01.07.2008 Section 23 of Banking Regulation Act, 1949 - Master Circular on Branch Authorisation

The Master Circular DBOD. No. BL.BC.16/22.01.001/2007-08 dated July 2, 2007 consolidating instructions / guidelines issued to banks on Branch Authorisation till June 30, 2007 was suitably updated by the present circular by incorporating the instructions issued upto June 30, 2008.

Circular No. DBOD. No. DIR. (HSG). BC.10 /08.12.01/2008--09 Dated 01.07.2008 Master Circular on HOUSING FINANCE

The Master Circular No. DBOD. DIR(Hsg.)No.02/08.12.01/2007-08 dated July 2, 2007 issued by Reserve Bank of India has been updated by the present circular. The said Master Circular consolidates and updates all the instructions contained in the circulars listed in the Appendix, in so far they relate to providing bank finance to the housing sector. This Master Circular also incorporates instructions contained in certain clarifications issued by RBI to banks during the course of the year.

Circular No. DBOD No. DIR. (Exp).BC 09/04.02.02/2008-09 Dated 01.07.2008 Master Circular on Rupee/ Foreign Currency Export Credit and Customer service to exporters

The present circular revised the master Circular DBOD. DIR(Exp.)No.01/04.02.02/2007-08 dated July 2, 2007 on the captioned subject which is now updated up to 30th June 2008. It may be noted that the Master Circular consolidates and updates all the instructions contained in the circulars listed in the Appendices, in so far they relate to providing export credit by banks to the exporters. This Master Circular also incorporates instructions contained in certain clarifications issued by RBI to banks / exporters / export organizations during the course of the year.

Circular No. DGBA. GAD. No.H- 09/ 31.05.001/ 2008-09 Dated 01.07.2008 Master Circular- Disbursement of Pension by Agency Banks

The present Circular updates the instructions relating to Payment of Government pension by Agency banks, conveyed in RBI's master circular RBI/ 2007-08/64 (DGBA. GAD. No. H-09/ 31.05.001/ 2007-08 dated July 2, 2007.

Circular No. UBD. CO. BPD. (PCB) No.1/12.05.001/ 2008-09 Dated : 02.07.2008 -Prevention of Money Laundering Act, 2002 - Obligation of banks in terms of Rules notified there under - UCBs

RBI has issued guidelines to banks under Section 35A of the Banking Regulation Act, 1949. Banks are advised to maintain and preserve information in respect of transactions with its client and prepare a profile for each customer based on risk categorization. As a part of transaction monitoring mechanism banks are required to put in place an appropriate software application to throw alerts when the transactions are inconsistent with risk categorization and updated profile of customers. Various Directions has been issued to the banks in order to ensure electronic filing of Cash Transaction Report (CTR) and Suspicious Transaction Reports (STR) to Financial Intelligence Unit-India (FIU-IND).