• Indirect Taxation

SERVICE TAX

Notification No. 33/2009-ST Dated 01.09.2009 - Service Tax Exemption on Service provided in relation to transport of goods by rail

The Central Government in public interest and in exercise of the powers conferred by section 93(1) of the Finance Act has exempted the taxable service provided to any person in relation to transport of goods by rail, as referred to in the Finance Act section 65(105)(zzzp), from the whole of the service tax leviable thereon under section 66 of the Finance Act provided, nothing contained in this notification shall apply to any service provided or to be provided, by any person other than government railway, in relation to transport of goods in containers by rail.

Notification No. 32/2009-ST Dated 01.09.2009 - Service Tax Exemption on Service in relation to Manufacture of Pharmaceutical Products

The Central Government has in public interest in exercise of the powers conferred by Finance Act, 1994 section 93 exempted the taxable service referred to in section 65(19)(zzb) of the Finance Act, 1994 provided by any person, to a client as defined in the Finance Act, 1994 section 65(19), in relation to the manufacture of pharmaceutical products, medicines, perfumery, cosmetics or toilet preparations containing alcohol, which are charged to excise duty under Medicinal and Toilet Preparations (Excise Duties) Act, 1955 from the whole of the service tax leviable thereon under section 66 of the said Finance Act.

Notification No. 31/2009-ST Dated 01.09.2009 - Service Tax Exemption on Service provided by Sub-Broker

The Central Government has in public interest in exercise of the powers conferred by Finance Act, 1994 section 93(1) exempted the taxable service referred to in sub-clause (zzb) of clause (105) of section 65 of the Finance Act,1994, provided by a sub-broker, to a stock-broker as defined in clause (101) of Section 65 of the Finance Act,1994, in relation to sale or purchase of securities listed on a registered stock exchange from the whole of the service tax leviable thereon under section 66 of the said Finance Act.

• INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY

Circular No. CIR/41/IRDA/Health/SN/09-10/32 Dated 02.09.2009 - Free Look Period in Health Insurance Policies issued by General Insurance Companies

Instructions are issued on the subject of free look period for health insurance policies issued by general insurance companies under the provisions of Section 14 (1) and Section 14 (2) (b) of the IRDA Act, 1999. All health insurance policies which have a duration of three years or more, will include a provision within the meaning of section 7 (m) of IRDA (Protection of Policyholders' Interests) Regulations, 2002, that on the first inception of the policy, the insured has a period of 15 days from the date of receipt of the documents to review the terms and conditions of the policy. Where the policyholder disagrees to any of those terms or conditions, he has the option to return the policy stating the reasons for his objection,when he shall be entitled to a refund of the premium paid, subject only to a deduction of the expenses incurred by the insurer on medical examination of the insured persons and the stamp duty charges. In cases where the risk has already commenced when the option of returning the policy is exercised by the policyholder, the refund of the premium paid will also be subject to a deduction for proportionate risk premium for the period on cover. Where only part of the risk (e.g. only accidental hospitalization risk) has commenced, such proportionate risk premium shall be calculated as commensurate with the risk covered during such period. Any failure to comply would render the companies liable to appropriate action under the provisions of the IRDA Act, 1999.

• INDUSTRIAL POLICY AND PROMOTION

Press Note No. 6 (2009 Series) Dated 04.09.2009 - Foreign Direct Investment (FDI) into a Small Scale Industrial Undertaking (SSI)/ Micro & Small Enterprises (MSE) and in Industrial Undertaking manufacturing items reserved for SSI/MSE - clarification

The Press Note, in first paragraph mentions about FDI into SSI/MSE. Present policy on FDI in MSE permits FDI subject only to the sectoral equity caps, entry routes and other relevant sectoral regulations. The Press Note 18(1997 series) is modified through the present Press Note. In the Second paragraph it mentions about the FDI in Industrial Undertaking manufacturing items reserved for SSI/MSE. It also mentions that any industrial undertaking, with or without FDI, which is not a MSE, manufacturing items reserved for manufacture in the MSE sector (presently 21 items) as per the Industrial Policy, would require an Industrial License under the Industries (Development & Regulation) Act, 1951, for such manufacture.

• RESERVE BANK OF INDIA

Press Release No. 2009-2010/364 Dated 03.09.2009 - DRG Study on "Monetary Policy, Forex Markets and Feedback under Uncertainty in An Open Economy"

The Reserve Bank of India has released a DRG Study entitled, "Monetary Policy, Forex Markets and Feedback under Uncertainty in An Open Economy". The Study is co-authored by Prof. Ashima Goyal, Indira Gandhi Institute of Development Research along with staff members from the Reserve Bank. The Study attempts to examine options for monetary policy arising from its intervention in Indian foreign exchange markets. Beginning with a brief survey of current microstructure of foreign exchange markets in India and its monetary policy institutions, the study brings out policy trilemmas in dealing with large cross border flows in a rapidly growing emerging market, where fundamentals are uncertain.

• SECURITIES AND EXCHANGE BOARD OF INDIA

Press Release No. 271/2009 Dated - SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 notified

SEBI (Issue of Capital and Disclosure requirements) Regulations, 2009 (ICDR Regulations), have been notified. The matters relating to issue of capital, the manner in which such matters shall be disclosed and other matters incidental thereto were hitherto provided in the SEBI (Disclosure and Investor Protection) Guidelines, 2000 (DIP Guidelines) issued under Section 11(1) of the SEBI Act, 1992. These provisions, along with few changes, have since been incorporated in the ICDR Regulations, which were notified on August 26, 2009. Consequently, the DIP Guidelines stand rescinded. A Circular has been issued to merchant bankers / stock exchanges to inform them about the ICDR Regulations, its applicability and the significant changes vis-a-vis the rescinded Guidelines. Consequential amendments have also been made to the SEBI (ESOS and ESPS) Guidelines, 1999 and Equity Listing Agreement through the Circulars issued. The text of the ICDR Regulations and the Circulars is available on the website at www.sebi.gov.in under the categories "Legal Framework" and "Issues and Listing".

Circular No.  SEBI/CFD/SCRR/01/2009/03/09 Dated 03.09.2009 - Application under sub-rule (7) of rule 19 of the Securities Contracts (Regulation) Rules, 1957 for relaxing strict enforcement of clause (b) to sub-rule (2) of rule 19 thereof

This circular is issued in exercise of powers conferred by section 11 of the SEBI Act, read with sub-rule (7) of rule 19 of the SCRR, to specify the requirements for considering applications seeking relaxation from strict enforcement of clause (b) to sub-rule (2) of rule 19 thereof under sub-rule (7) of rule 19 of the SCRR. These requirements are contained in Annexure to this circular.

Notification No. LAD-NRO/GN/2009-10/15/174471 Dated 26.08.2009 - Securities and Exchange Board Of India (Issue Of Capital And Disclosure Requirements) Regulations, 2009

In exercise of the powers conferred by section 30 of the Securities and Exchange Board of India Act, 1992 (15 of 1992), the Board has made Securities and Exchange Board Of India (Issue Of Capital And Disclosure Requirements) Regulations, 2009 replacing the existing SEBI (Disclosure and Investor Protection) Guidelines, 2000 ('the DIP Guidelines'), along with a list of changes effected in the proposed ICDR Regulations vis-à-vis the DIP Guidelines.

Dated 03.09.2009 - Securities and Exchange Board of India Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999

ESOP committee was reconstituted to review the SEBI (Employee Stock Option Scheme and Employees Share Purchase Scheme) Guidelines, 1999 (hereinafter referred as '1999 Guidelines') . Accordingly the present guidelines are issued based upon the recommendations of the committee. The present guidelines has modified certain rules earlier mentioned in the 1999 Guidelines.

• TELECOM REGULATORY AUTHORITY OF INDIA

Press Release No. 65 / 2009 Dated 01.09.2009 - TRAI further extends time for submission of forms in the matter of Cable TV services in non-CAS areas

TRAI was directed by the Supreme Court of India to consider the matter relating to tariff for Cable TV services in non-CAS areas. To get a realistic understanding of the financials and operations of various stakeholders, TRAI had prepared formats and had requested all stakeholders to submit the required information in prescribed format by August 17, 2009 and on request of the stakeholders extended the date upto 31 August. Several stakeholders have requested for further extension of time for submission and to enable all the stakeholders to submit the information, the time limit is extended, as a special case till September 22, 2009. The formats for submission of information by various stakeholders are available on the TRAI website.