Service Tax Notifications 51-58/10, 21-12-10

[TO BE PUBLISHED IN THE GAZZETE OF INDIA, EXTRAORDINARY, PART II,

SECTION 3, SUB-SECTION (i)]

Government of India

Ministry of Finance

(Department of Revenue)

Notification No. 51/2010 - Service Tax

New Delhi, the 21st December, 2010

G.S.R. (E).- In exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994), the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby rescinds the notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 02/2010- Service Tax, dated 27th February, 2010 published in the Gazette of India, Extraordinary, Part II, Section3, Sub-section (i) vide number G.S.R. 146 (E), dated 27th February, 2010, except as respects things done or omitted to be done before such rescission.

[F. No. 354/189/2010-TRU]

(VIKAS)

Under Secretary to the Government of India

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[TO BE PUBLISHED IN THE GAZZETE OF INDIA, EXTRAORDINARY, PART II,

SECTION 3, SUB-SECTION (i)]

Government of India

Ministry of Finance

(Department of Revenue)

Notification No. 52/2010 - Service Tax

New Delhi, the 21st December, 2010

G.S.R. (E).- In exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994), the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby rescinds the notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 17/2010- Service Tax, dated 27th February, 2010 published in the Gazette of India, Extraordinary, PartII, Section3, Sub-section (i) vide number G.S.R. 161 (E), dated 27th February, 2010, except as respects things done or omitted to be done before such rescission.

[F. No. 354/189/2010-TRU]
(VIKAS)
Under Secretary to the Government of India

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[TO BE PUBLISHED IN THE GAZZETE OF INDIA, EXTRAORDINARY, PART II, SECTION 3,

SECTION (i)]

Government of India

Ministry of Finance

Department of Revenue

Notification No. 53/2010 - Service Tax

New Delhi, the 21st December, 2010

G.S.R. (E).- In exercise of the powers conferred by sub-section (1) of section 93 of the finance Act, 1994 (32 of 1994), the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby exempts the taxable service referred to in item (v) of sub-clause (zzzze) of clause (105) of section 65 of the said Finance Act (hereinafter referred to as ‘such service’), for packaged or canned software (hereinafter referred to as ‘said goods’) from the whole of service tax, subject to the condition that-

(i) the value of the said goods domestically produced or imported, for the purposes of levy of the duty of Central Excise or the additional duty of customs leviable under sub-section (1) of section 3 of the Customs Tariff Act, 1975 (51 of 1975), if imported, as the case may be, has been determined under section 4A of the Central Excise Act 1944 (1 of 1944) (hereinafter referred to as ‘such value’); and

(ii) (a) the appropriate duties of excise on such value have been paid by the manufacturer, duplicator or the person holding the copyright to such software, as the case may be, in respect of software manufactured in India; or

(b) the appropriate duties of customs including the additional duty of customs on such value, have been paid by the importer in respect of software which has been imported into India;

(iii) a declaration made by the service provider on the invoice relating to such service that no amount in excess of the retail sale price declared on the said goods has been recovered from the customer.

Explanations.- For the purpose of this notification, the expression,-

(i) “appropriate duties of excise” shall mean the duties of excise leviable under section 3 of the Central Excise Act, 1944 (1 of 1944) and a notification, for the time being in force, issued in accordance with the provision of sub-section (1) of section 5A of the said Central Excise Act; and

(ii) “appropriate duties of customs” shall mean the duties of customs leviable under section 12 of the Customs Act, 1962 (52 of 1962) and any of the provisions of the Customs Tariff Act, 1975 (51 of 1975) and a notification, for the time being in force, issued in accordance with the provision of subsection (1) of section 25 of the said Customs Act.

[F. No. 354/189/2010-TRU]

(VIKAS)

Under Secretary to the Government of India

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[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUBSECTION (i)]

Government of India

Ministry of Finance

(Department of Revenue)

Notification No.54/2010-Service Tax

New Delhi, the 21st December, 2010.

G.S.R. (E).- In exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994), the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby makes the following further amendment in the notification of the Government of India in the Ministry of Finance (Department of Revenue), notification No. 24/2009- Service Tax, dated the 27th July, 2009, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 551(E), dated the 27th July, 2009, namely :-

In the said notification, for the words “management, maintenance or repair of roads”, the words “management, maintenance or repair of roads, bridges, tunnels, dams, airports, railways and transport terminals” shall be substituted.

[F.No.137/80/2010-CX.4]

(VIKAS)

Under Secretary to the Government of India

Note.- The principal notification No. 24/2009-Service Tax, dated the 27th July, 2009, was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 551(E), dated the 27th July, 2009.

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[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUBSECTION (i)]

Government of India

Ministry of Finance

(Department of Revenue)

Notification No.55/2010-Service Tax

New Delhi, the 21st December, 2010

G.S.R. (E).- In exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994) (hereinafter referred to as the Finance Act), the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby makes the following amendment in the notification of the Government of India in the Ministry of Finance (Department of Revenue) No.07/2010-Service Tax, dated the 27th February, 2010, published in the Gazette of India, Extraordinary Part II, Section 3, Sub-section(i), vide number G.S.R. 151 (E), dated the 27th February, 2010, namely:-

2. In the said notification in para 2, for the word and figures ‘January 2011’, the word and figures ‘April 2011’, shall be substituted.

[F. No. B-1/2/2010-TRU]

(VIKAS)

Under Secretary to the Government of India

Note.- The principal notification No. 07/2010-Service Tax, dated the 27th February, 2010, was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 151(E), dated the 27th February, 2010 and last amended vide Notification No.33/2010-Service Tax, dated the 22nd June,2010 was published vide number G.S.R. 539 (E) dated 22nd June,2010.

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[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUBSECTION (i)]

Government of India

Ministry of Finance

(Department of Revenue)

Notification No.56/2010-Service Tax

New Delhi, the 21st December, 2010

G.S.R. (E).- In exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994) (hereinafter referred to as the Finance Act), the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby makes the following amendment in the notification of the Government of India in the Ministry of Finance (Department of Revenue) No.08/2010-Service Tax, dated the 27th February, 2010, published in the Gazette of India, Extraordinary Part II, Section 3, Sub-section(i), vide number G.S.R. 152 (E), dated the 27th February, 2010, namely:-

2. In the said notification in para 2, for the word and figures ‘January 2011’, the word and figures ‘April 2011’, shall be substituted.

[F. No. B-1/2/2010-TRU]

(VIKAS)

Under Secretary to the Government of India

Note.- The principal notification No. 08/2010-Service Tax, dated the 27th February, 2010, was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 152(E), dated the 27th February, 2010 and last amended vide Notification No.34/2010-Service Tax, dated the 22nd June,2010 was published vide number G.S.R. 540 (E) dated 22nd June,2010.

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[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUBSECTION (i)]

Government of India

Ministry of Finance

(Department of Revenue)

Notification No.57/2010-Service Tax

New Delhi, the 21st December, 2010

G.S.R. (E).- In exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994) (hereinafter referred to as the Finance Act), the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby makes the following amendment in the notification of the Government of India in the Ministry of Finance (Department of Revenue) No.09/2010-Service Tax, dated the 27th February, 2010, published in the Gazette of India, Extraordinary Part II, Section 3, Sub-section(i), vide number G.S.R. 153 (E), dated the 27th February, 2010, namely:-

2. In the said notification in para 3, for the word and figures ‘January 2011’, the word and figures ‘April 2011’, shall be substituted.

[F. No. B-1/2/2010-TRU]

(VIKAS)

Under Secretary to the Government of India

Note.- The principal notification No. 09/2010-Service Tax, dated the 27th February, 2010, was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 153(E), dated the 27th February, 2010 and last amended vide Notification No.35/2010-Service Tax, dated the 22nd June,2010 was published vide number G.S.R. 541 (E) dated 22nd June,2010.

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[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUBSECTION (i)]

Government of India

Ministry of Finance

(Department of Revenue)

Notification No.58/2010-Service Tax

New Delhi, the 21st December, 2010.

G.S.R. (E).- In exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994), the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby exempts the taxable services in relation to general insurance business provided under the Weather Based Crop Insurance Scheme or the Modified national Agricultural Insurance Scheme, approved by the Government of India and implemented by the Ministry of Agriculture, from the whole of service tax leviable thereon under section 66 of the said Act.

[F.No.137/80/2010-CX.4]

(VIKAS)

Under Secretary to the Government of India

Note.- The principal notification No. 24/2009-Service Tax, dated the 27th July, 2009, was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 551(E), dated the 27th July, 2009.

Amendments to the Equity Listing Agreement

SBI has amended following Clauses of the Equity Listing Agreement.

1. Clause 35 - Disclosure relating to shareholding pattern;
2. Clause 40A – Minimum public shareholding;
3. Clause 5A - Uniform procedure for dealing with unclaimed shares;
4. Clause 20 & 22- Corporate Announcement;
5. Clause 21 - Notice Period;
6. Clause 53 - Disclosures regarding agreements with the media companies;  
and has inserted clause Clause 54 – Maintenance of a website

Click here for the text of the circular CIR/CFD/DIL/10/2010.

Order relating to Price Waterhouse entites in the matter of Satyam Computer Services Limited

Click here for the text of the order.

Mobile Number Portability

Press Information Bureau

Government of India

Ministry of Communications & Information Technology

13-December-2010 18:05 IST

Mobile Number Portability

Telecom Service Providers have made necessary changes in their network for implementation of Mobile Number Portability (MNP). The MNP has been launched in Haryana on 25-11-2010 and it is to be launched in rest of the country w.e.f. 20-01-2011.

The guidelines for criteria to be adopted for MNP services have laid down by TRAI (Telecom Regulatory Authority of India). The consumers will have the choice of selecting their Telecom Service Provider (operator) without changing their number, provided a minimum period of 90 days has elapsed after subscription to the mobile service of the current service provider. For change of service provider i.e. porting, a subscriber has to send a SMS (short message service) from the number he wishes to be ported, to number 1900 whereby a Unique Porting Code (UPC) will be received on SMS from his current service provider. The subscriber will need to apply in the prescribed application form to the chosen new service provider quoting the UPC which will act as a reference while filling up the application form with new service provider. The new service provider will then take action to get the required process completed to enable the subscriber to get connected to his network. Porting has to be completed within 7 working days. TRAI has put a ceiling of Rs. 19/- on porting charges which the new service provider may collect from the subscriber. Post-paid subscribers before making the porting request, have to make sure that their last bill has been paid failing which the request for change to new service provider shall be rejected. In the case of pre-paid subscriber any balance amount left will not be carried forward when the number is transferred to the new service provider.

This information was given by the Minister of State for Communications & Information Technology, Shri Sachin Pilot in written reply to a question in Lok Sabha today.

SP/AS

CBDT - INSTRUCTION NO. 8/2010 and INSTRUCTION NO. 9/2010

Section 200 of the Income-tax Act, 1961 - Deduction of tax at source - Duty of person deducting tax - Instruction regarding parameters for processing of E-TDS Returns

INSTRUCTION NO. 8/2010 [F.NO. 275/73/2009-IT(B)], DATED 8-12-2010

In the present system of processing of e-TDS returns, the returns are processed online and mismatch report showing defaults on various accounts is generated. Based on this mismatch report, the assessing officers issue show-cause notices to the deductors and take follow up actions.

2. It has come to the notice of the Board that substantial number of TDS returns are pending where the deductee-wise default on account of short deduction of tax is less than Rs. 10.

3. This issue has been considered by the Board and it has been decided that:

(i) where the default on account of short deduction is less than Rs.10 for each deductee, the demand is round off to zero; and

(ii) after considering (i) above, deductor-wise demand/default, if any, of Rs.100 or less will also be ignored for further action.

4. However, the DDOs in such cases may be warned to be careful in future so as to ensure that they do not become habitual in short deduction of tax.

5. Earlier Instruction No. 11/2007, dated 18-12-2007 issued under F. No. 385/56/2007-IT(B) on the subject stands superseded by this instruction.

6. These instructions shall apply to all TCS/TDS cases under all Direct Tax Enactments. These instructions will come into force immediately.

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Section 143 of the Income-tax Act, 1961 - Assessment - General - Clarification regarding processing of ITR-1 and ITR-2 returns - Credit for tax deducted at source for A.Y. 2009-10

INSTRUCTION NO. 9/2010 [F. NO. 225/25/2010/IT (A-II)], DATED 9-12-2010

1. Reference may be made to Board’s Instruction No. 7, dated 16-8-2010 in which it has been stated, inter alia, that in cases where the return is filed in ITR-1 and ITR-2 for the A.Y. 2009-10, and where the TDS claim does not exceed Rs. three lakh and where the refund computed does not exceed Rs. Twenty five thousand, the TDS claim of the taxpayer shall be accepted at the time of processing of the returns provided the TDS payment reported in AS-26 is more than Rs. zero.

2. Board has reconsidered the above instruction and it has been decided to increase the limit of TDS claim from Rs. three lakh to Rs. four lakh as was applicable for the A.Y. 2008-09. It is further clarified that if the limit of Rs. four lakh, or Rs.25,000 is exceeded in case of a return filed in ITR-1 and ITR-2 or there is nil matching with AS-26 statement, the credit should be allowed by the Assessing Officer after make ‘due verification’. This verification may be done in the same manner as was being done in the earlier years.

3. This may be brought to the notice of all the Assessing Officers in your region for immediate compliance.

Easy Exit Scheme, 2011

In order to give an opportunity to the defunct companies, for getting their names strike off from the Register of Companies, the Ministry had launched a Scheme namely, "Easy Exit Scheme, 2010" under Section 560 of the Companies Act, 1956 during May-Aug, 2010. A large number of companies availed this scheme. However, on huge demands from corporate sector, the Ministry has decided to re-launch the Scheme as, "Easy Exit Scheme, 2011" under Section 560 of the Companies Act, 1956. 

 Details of the scheme are given in the General Circular No. 6 /2010.  

Submission of Balance sheet and Profit and Loss Account - NBFCs

RBI/2010-11/295

DNBS.PD/ CC.No. 204 / 03.05.002 /2010-11 December 1, 2010

All NBFCs

Dear Sir,

Submission of Balance sheet and Profit and Loss Account

In terms of para 12 of both the Non-Banking Financial (Deposit Accepting) Companies Prudential Norms Directions, 2007 and Non-Banking Financial (Non-Deposit Accepting) Companies Prudential Norms Directions, 2007, every NBFC shall prepare its balance sheet and profit and loss account as on March 31 every year and extension of date of balance sheet requires prior approval of RBI. Further in terms of para 15 of the above Directions, all NBFCs are required to submit a certificate from Statutory Auditor with respect to the position of the company as on March 31st every year within one month from the date of finalization of the balance sheet and in any case not later than December 30th of that year.

2. While emphasizing that the certificate from Statutory Auditor shall be submitted to RBI within one month from the date of finalization of the balance sheet, it is also advised that all NBFCs shall finalise their balance sheet within a period of 3 months from the date to which it pertains. For eg: balance sheet as on March 31st of an year shall be finalized by June 30th of the year.

3. A copy each of amending Notifications No.DNBS.217/CGM(US)-2010 and Notification No.DNBS.218/CGM(US)-2010 both dated December 1, 2010 is enclosed.

Yours sincerely,

(Uma Subramaniam)

Chief General Manager-in-Charge

Encl: As above

Revision in forms - MCA circulars

GSR 849(E) - Companies (Director Identification Number) Rules 2006, (Amendment),2010-Revision of Form DIN-1 and Form DIN-3, effective from 05-12-2010.

GSR 848(E) - Companies (Central Government's) General Rules and Forms (Third Amendment), 2010-Revision of Form No. 1 and Form No. 32, effective from 05-12-2010.

Income Tax Notification No. 84/2010 and Notification No. 85/2010

Income-tax (Eighth Amendment) Rules, 2010 - Amendment in Rule 2BB

Notification No. 85/2010 [F. No. 149/45/2010-S.O. (TPL)], dated 22-11-2010

In exercise of the powers conferred by section 295 read with clause (14) of section 10 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rule further to amend Income-tax Rules, 1962, namely :—

1. (1) These Rule may be called the Income-tax (8th Amendment) Rules, 2010.

(2) They shall be deemed to have come into force retrospectively with effect from 1st day of September, 2008.

2. In the Income-tax Rules, 1962, in rule 2BB, in sub-rule (2), in the Table, against serial number 4, in column 4, for letters, figures and words “Rs. 6,000 per month” the letters, figures and words, Rs. 10,000 per month” shall be substituted.

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Tax Return Preparer (First Amendment) Scheme, 2010 - Amendment in paragraphs 2 and 11

Notification No. 84/2010 [F. No. 142/16/2010-S.O. (TPL)], dated 22-11-2010

In exercise of the powers conferred by sub-section (1) of section 139B of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby amends the Tax Return Preparer Scheme, 2006, published vide notification number S.O. 2039(E) dated the 28th November, 2006 namely :—

1. (1) This Scheme may be called the Tax Return Preparer (First Amendment) Scheme, 2010.

(2) It shall come into force from the date of its publication in the Official Gazette.

2. In the Tax Return Preparer Scheme, 2006, :—

(a) for the proviso to sub paragraph (f) of paragraph 2, the following proviso shall be substituted, namely :—

"Provided that a person being a person referred to in clause (ii) or clause (iii) or clause (iv) of sub-section (2) of section 288 shall not be entitled to act as Tax Return Preparer.”

(b) for clause (xii) of sub paragraph (1) of paragraph II, the following shall be substituted, namely :—

“(xii) if he, after issue of Tax Return Preparer Certificate to him under clause (viii) of paragraph 4 of the Scheme, becomes a person referred to in clause (ii) or clause (iii) or clause (iv) of sub-section (2) of section 288 of the Act.”

MCA Circulars

The MCA has issued two circulars on following issues.

1. Reopening/revision of annual accounts after their adoption in the annual general meeting.- General Circular No.: 5/2010

2. Change in additional fee to be levied for delays in filing Forms.- General Circular No.4/2010

Empanelment of Chartered Accountant firms for the year 2011-2012 for audit of PSUs.

OFFICE OF THE COMPTROLLER AND AUDITOR GENERAL (CAG) OF INDIA

10, BAHADUR SHAH ZAFAR MARG, NEW DELHI – 110 124

Empanelment of Chartered Accountant firms for the year 2011-2012.

Applications are invited online from the firms of Chartered Accountants who intend to be empanelled with this office for the year 2011-2012 for appointment as auditors of Government Companies/Corporations. The format of application will be available on our website: www.cag.gov.in from 1st January 2011. Chartered Accountant firms can apply/update the data showing the status of the firm as on 1st January 2011, till 31st March 2011 and generate online acknowledgement letter for the year. Only firms who have generated online acknowledgement letter for the year 2011-2012 will be considered for empanelment.

Any changes in the constitution of the firm occurring after the cutoff date of 1st January 2011 should continue to be updated by the CA firms in the website which will be available throughout the year. However, the changes in the firm occurring after 1st January 2011 till the time of preparing the panel that will lead to a reduction in the rank of the applicant firm shall only be taken into account for ranking the CA firms.

Sd/-

Director General (Commercial)

SEBI (ICDR) (Fourth Amendment) Regulations, 2010

Click here for the text of the notification. The notification amends the provision related to increase in limit of retail investor to Rs. 2lacs, provision related to issues of insurance companies, Promoter preferential allottement etc.

Press Release- SEBI Board Meeting- Increase in limit for retails investor to rs. 2lacs, Preferential allottment to promoters etc

PR No.231/2010

SEBI Board Meeting

The Board met on October 25, 2010 in Mumbai and took the following decisions:

1. Public issues by Insurance Companies

The Board noted that the SEBI (ICDR) Regulations, 2009, which are sector neutral would also apply to insurance companies. The Board also noted and approved the recommendations of SEBI Committee on Disclosures and Accounting Standards (SCODA) for the following additional disclosures, having regard to the specific nature of insurance companies:

Disclosure of risk factors specific to insurance companies;

Broad headings under which an overview of the insurance industry shall be disclosed;

Other disclosures specific to insurance companies;

Formats for disclosure of financial information as specified by IRDA;

Glossary of terms used in the insurance sector;

The Board also approved the two amendments to SEBI (ICDR) Regulations, 2009, viz., exemption from appointment of monitoring agency and disclosure of disclaimer clause of IRDA in the offer documents of insurance companies.

2. Preferential issue of equity shares or convertible securities or warrants to promoters and promoter group

In order to further tighten the preferential allotment framework, the Board decided that in case of preferential issues, where any promoter or any promoter group entity has previously subscribed to the warrants of the company but failed to exercise the warrants, the promoters and promoter group shall be ineligible for issue of equity shares or convertible securities or warrants for a period of one year from the date of expiry of the currency /cancellation of the warrants. The Board further decided that if any member of the promoters/ promoter group has sold shares in the previous six months, then the promoters/ promoter group would be ineligible for allotment on preferential basis.

3. Fixed Pay Date

In order to enable investors to manage their cash/ securities flows efficiently and to enhance process transparency, the Board decided to mandate companies to have a pre-announced fixed pay date for payment of dividends and for credit of bonus shares.

4. Enhancement of limit for defining retail individual investors

The Board decided that the maximum application size for retail individual investors may be increased to Rs.2 lakh across all issues.

5. Rights issue framework for IDRs

In order to facilitate simultaneous rights offering by the foreign issuers (who have listed their Indian Depository Receipts (IDRs) in Indian Stock Exchanges) in their home jurisdiction and in India, SEBI Board has decided to notify the framework for rights issue of IDRs. It is decided that for circulation in India, an additional wrap (disclosing information required in Indian jurisdiction and issue process relevant for the IDR holders) can be attached with the letter of offer, circulated by the overseas issuer in their home jurisdiction. Disclosure requirements for IDR rights would more or less be in line with the reduced disclosure requirements, applicable for domestic rights issues. Further, it is decided that IDR issuers, who are in compliance with the continuous listing requirements, can avail the facility of filing the offer document on fast track basis.

6. Public Announcement by Companies proposing to access the capital market

In order to draw the attention of investors about filing of Draft Offer Document (DOD) so as to elicit timely comments without adversely impacting the issue process, the Board decided that the issuer company may make a simultaneous public announcement about filing of DOD.

7. News reports appearing in the media after filing of Draft Offer Document (DOD) with SEBI

In order to ensure that the information appearing in media is consistent with the disclosures made in the offer document, the Board decided that the merchant bankers may submit a compliance certificate as to whether the contents of the news reports that appear after filing of DOD are supported by disclosures in the offer document or not. This would apply in respect of news reports appearing in newspapers stipulated in ICDR for issue advertisements, major business magazines and also in the print and electronic media controlled by any media group where the media group has a private treaty/shareholders’ agreement with the issuer company/promoters of the issuer company.

8. Uniform/single payment option in rights issues

In order to ensure uniform treatment for all classes of investors in rights issues, the Board decided that only one payment option may be given by the issuer to all the investors i.e. either (i) part payment on application with balance money to be paid in calls or (ii) full payment on application. The Board also decided that where the issuer opts for part payment, it shall be incumbent on them to obtain approvals, if any, as may be necessary for the purpose.

9. Minimum Promoters’ contribution in Further Public Offers (FPOs)

In order to enable listed issuers to have more flexibility in raising capital through various instruments, the Board decided that the requirement of promoters’ contribution shall not be applicable to FPOs where equity shares of the issuer are not infrequently traded in a recognised stock exchange for three years and the issuer has a track record of dividend payment for three years.

10. Proforma Financial Statements in Offer Documents

It has been observed that the company proposing a public issue, at times, acquires an entity just after the end of the latest disclosed financial year and as a result of such acquisition / restructuring, certain companies become direct or indirect subsidiaries of the issuer company. In order to understand the financial impact of such acquisition / restructuring on the financial statements of the issuer company, the Board decided to mandate the inclusion of a proforma financial statement in Offer Documents in cases where the acquisition is material for the issuer company. Materiality for this purpose would mean:

a) the total book value of the assets of the acquired entity amounts to more than 20% of the pre-acquisition book value of the assets of the issuer company;

OR

b) the total income of the acquired entity amounts to more than 20% of the total income of the issuer company.

11. QIB Status to Postal Life Insurance Funds

The Board decided to accord QIB status to insurance funds set up by Department of Posts such as Postal Life Insurance Fund (PLIF) and Rural Postal Life Insurance Fund (RPLIF).

12. Amendments to SEBI (FVCI) Regulations

The Board approved amendments to the SEBI (Foreign Venture Capital Investors) Regulations, 2000 with regard to the registration procedure for Foreign Venture Capital Investors (FVCIs). The key amendments include furnishing firm commitment letter from investor for investing at least USD 1 million, (introduced by SEBI vide Circular No.IMD/DOF-1/FVCI/CIR No.1/2009 dated July 03, 2009). The amendments further provide for furnishing copies of financial statements of the applicant and the investor and furnishing of email address of applicant and the investor.

Mumbai

October 25, 2010

Empanlement for urban co-op banks and credit socities

WIRC of ICAI has hosted on its website empanelment forms

1.For Empanelment of Individual Chartered Accountants/ proprietary firms for Audit of Urban Credit Societies and other Societies (other than UCBs) of Maharashtra.

2.For Empanelment of Chartered Accountant firms for Audit of Urban Co-operative Banks of Maharashtra.

The Bank Branch Auditors' Panel for the year 2010-11

The Bank Branch Auditors' Panel for the year 2010-11, prepared by ICAI is hosted at the following links.

1.Application No MEF00001 to MEF10000

2.Application No MEF10001 to MEF20000

3.Application No MEF20001 to MEF30000

4.Application No MEF30001 onwards.

CORP CA - Loan Scheme for Chartered Accountnats

The Committee for Capacity Building of CA Firms and Small & Medium Practitioners, ICAI is set up to promote capacity enhancement of members and firms through Networking, Merger and raising core competency of CA professionals.

The Committee has taken a major initiative to arrange financial assistance to all members in practice / firms in the form of specially designed loan scheme through Corporation Bank.

Through the scheme, eligible Chartered Accountants can avail finance for setting up of offices including cost of furniture/fixture/office equipments-computers and other accessories. The scheme would also enable the Chartered Accountants to finance a part of the working capital for building their profession and will also take care of the needs of fresher.

Click here for further details.

Long Term Infrastructure Bonds u/s 80CCF

Section 80CCF of the Income-tax Act, 1961 - Deduction - In respect of subscription to long-term infrastructure bonds - Notified long-term infrastructure bond

Notification No. 77/2010 [F.No.178/31/2010-SO(ITA.I), dated 11-10-2010

In exercise of the powers conferred by section 80CCF of the Income Tax Act, 1961 (43 of 1961), the Central Government hereby notifies the following bonds that shall be subject to the following conditions, as long-term infrastructure bonds for the purposes of the said section, namely:-

(a) Name of the bond: "Long term infrastructure Bond" of India Infrastructure Finance Company Ltd. (IIFCL)

(b) Issuer of the bond: "Long term infrastructure Bond" of India Infrastructure Finance Company Ltd. (IIFCL)

(c) Limit on issuance

(i) The bond shall be issued during the financial year 2010-2011;

(ii) the volume of issuance during the financial year shall be restricted to twenty-five percent of the incremental infrastructure investments made by the issuer during the financial year 2009-2010;

(iii) 'investments' for the purposes of this limit shall include loans, bonds, other forms of debt, quasi-equity, preference equity and equity;

(d) Tenure of the bond-

(i) a minimum period of ten years;

(ii) the minimum lock-in period for an investor shall be five years

(iii) after the lock-in, the investor may exit either through the secondary market or through a buyback facility, specified by the issuer in the issue documents at the time of issue;

(iv) The bonding shall also be allowed as pledge or lien or hypothetication for obtaining loans fromScheduled Commercial Banks, after the said lock-in period;

(e) Permanent Account Number (PAN) to be furnished:- It shall be mandatory for the subscribers to furnish their PAN to the issuer;

(f) Yield of the bond:- The yield of the bond shall not exceed the yield on government securities of corresponding residual maturity as reported by the Fixed Income Money Market and Derivatives Association of India (FIMMDA), as on the last working day of the month immediately preceding the month of the issue of the bond;

(g) End-use of proceeds and reporting or monitoring mechanism-

(i) The proceeds shall be utilized towards ‘infrastructure lending’ as defined by the Reserve Bank of India in the Guidelines issued by it

(ii) the end-use shall be duly reported in the Annual Reports and other reports submitted by the issuer to the Regulatory Authority concerned, and specifically certified by the Statutory Auditor of the issuer;

(iii) the issuer shall also file these along with term sheets to the Infrastructure Division, Department of Economic Affairs, Ministry of Finance within three months from the end of financial year.

Fresh Guidelines for disbursement of refunds - Trade Circular 22T of 2010

In supersession of all earlier trade circulars relating to grant of refunds, the above circular is issued for fresh guidelines for disbursement of refunds under MVAT.

Click here for the text of the circular. 

Draft Bank Branch Auditors' Panel 2010-11

The ICAI has prepared The draft Bank Branch Auditors’ panel for the year 2010-11.

Click here for the details.

Consolidated FDI policy wef 1st october 2010

Department of Industrial Policy and Promotion has issued consolidated FDI policy vide circular 2 of 2010 dated 30-9-2010.

The Circular 1 of 2010 issued by this Department on 31st March 2010 and consolidated into one document all the prior policies/regulations on FDI which are contained in FEMA, 1999, RBI Regulations under FEMA, 1999 and Press Notes/Press Releases/Clarifications issued by DIPP and reflected the current policy framework on FDI. The present consolidation subsumes and supersedes all Press Notes/Press Releases/Clarifications/ Circulars issued by DIPP, which were in force as on September 30th, 2010, and reflects the FDI Policy as on October 1st, 2010. This Circular accordingly will take effect from October 1, 2010. Its next revision will be published on 31.03.2011.

Click here for the text of the circular.

Due date for Filing Return of Income Extended to 15-10-2010 for AY 2010-11

Due date for filing returns for AY 2010-11 extended from 30/9/2010 to 15/10/2010

Order [F.NO. 225/72/2010/ITA.II], dated 27-9-2010

On consideration of the reports of disturbance of general life caused due to floods and heavy rains, the Central Board of Direct Taxes, in exercise of powers conferred under section 119 of the Income Tax Act, 1961, hereby extends the due date of filing of returns of income for the Assessment Year 2010-11 from 30-09-2010 to 15th October 2010. Accordingly the due date for Tax Audit report u/s 44AB of the Income Tax Act is also extended to 15th October 2010.

Due date for filing of Income-tax returns for A.Y. 2010-11 extended for all category of cases in Jammu & Kashmir

Order under section 119 of the Income Tax act, 1961

Order [F.No.225/72/2010/ITA-II], dated 23-9-2010

On consideration of the reports of disturbance of general life caused due to the law and order problem in the State of Jammu and Kashmir, the Central Board of Direct Taxes, in exercise of powers conferred under section 119 of the Income Tax Act, 1961, hereby extends the due date of filing of returns of income for the Assessment Year 2010-11 for all category of cases in the State of Jammu & Kashmir to 30th November 2010. Accordingly the date for obtaining and furnishing Tax Audit report u/s 44AB of the Income Tax Act is also extended to 30th November 2010.

Section 10(15)(iv)(h) of the Income-tax Act, 1961 - Exemption - Interest payable by public sector company on specified bonds/debentures - Notified tax free bonds

Notification No. 72/2010 [F.No. 178/126/2009-ITA-I]/S.O. No. 2194(E), dated 8-9-2010

In exercise of the powers conferred by item (h) of sub-clause (iv) of clause (15) of Section 10 of the Income Tax Act, 1961 (43 of 1961), the Central Government hereby authorizes the Indian Railway Finance Corporation (IRFC) to issue, during Financial Year 2010-11, tax free secured, redeemable, non-convertible Railway Bonds of Rs. 1,000 each in case of public issue and Rs. 1,00,000 each in other cases, aggregating to an amount of three thousand and eighty crore rupees only, carrying an interest rate in the range of 6% to 7.25% per annum, depending upon the size and tenor of a tranche :

Provided that the benefit under the said item shall be admissible only if the holder of such bonds registers his or her name and the holding with the said Corporation.

Reporting under Foreign Direct Investment (FDI) Scheme

A.P. (DIR Series) Circular No. 13, dated 14-9-2010

1.Attention of Authorised Dealer Category-I (AD Category - I) banks is invited to para 9 of Schedule 1 to the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2000 notified vide Notification No. FEMA 20/2000-RB dated May 3, 2000 (the Notification), as amended from time to time, and A.P. (DIR Series) Circular No. 44 dated May 30, 2008.

2. In terms of para 9 of Schedule 1 to the Notification, Indian companies are required to report, the details of the amount of consideration received for issue of FDI instruments, viz. equity shares, fully and mandatorily convertible preference shares and debentures under the FDI scheme, in the Advance Reporting Format along with the KYC report on the non-resident investor, to the Regional Office of the Reserve Bank in whose jurisdiction the Registered Office of the company operates, within 30 days of receipt of the amount of consideration. Further, the Indian company is required to issue the FDI instruments to the non-resident investor within 180 days of the receipt of the inward remittance and report the same in Form FC-GPR, to the Regional Office concerned of the Reserve Bank, within 30 days from the date of issue of shares.

3. FDI is an important component of the Balance of Payments (BoP) statistics, which is being compiled and published on a quarterly basis. Any delay in submission of the FDI data results in under-reporting of FDI in the BoP statistics. Further, delay in reporting of the FDI transactions (receipt of advance consideration and issue of FDI compliant instruments) and issuance of shares/ refund of advance consideration beyond 180 days of receipt of the same without the Reserve Bank’s approval are considered as violations under the provisions of the Foreign Exchange Management Act, 1999 (FEMA). Therefore, AD Category - I banks are advised to sensitise and impress upon their clients the importance of strict adherence to the FDI reporting requirements including the KYC report. In this regard, AD Category-I banks may make suitable internal arrangements to monitor / track the inward remittances reported through Advance Reporting Format and the subsequent issue of shares or refund of share application money by the companies.

4. AD Category - I banks may bring the contents of this circular to the notice of their constituents and customers concerned.

5. The directions contained in this circular have been issued under sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and is without prejudice to permissions / approvals, if any, required under any other law.

Trading Rules and shareholding in dematerialized mode

CIRCULAR

SEBI/Cir/ISD/ 1 /2010

September 2, 2010

To,

The Managing Directors/Chief Executive Officers/

Executive Directors/Officiating Executive Directors

of all the Recognized Stock Exchanges

Dear Sir (s),

Sub: Trading Rules and shareholding in dematerialized mode

I. In order to moderate sharp and destabilizing price movements in shares of companies, to encourage better price discovery and to increase transparency in securities market, SEBI in consultation with Stock Exchanges has decided to adopt following measures:-

a. The securities of all companies shall be traded in the normal segment of the exchange if and only if, the company has achieved at least 50% of non-promoters holding in dematerialized form by October 31st 2010

b. In all cases, wherein based on the latest available quarterly shareholding pattern, the companies do not satisfy above criteria, the trading in such scrips shall take place in Trade for Trade segment (TFT segment) with effect from the time schedule specified above.

c. In addition to above measures, in the following cases (except for the original scrips, on which derivatives products are available or included in indices on which derivatives products are available) the trading shall take place in TFT segment for first 10 trading days with applicable price band while keeping the price band open on the first day of trading.

• Merger, demerger, amalgamation, capital reduction/consolidation, scheme of arrangement, in terms of the Companies Act and/or as sanctioned by the Courts, in cases of rehabilitation packages approved by the Board of Industrial and Financial Reconstruction under Sick Industrial Companies Act and in cases of Corporate Debt Restructuring (CDR) packages by the CDR Cell of the RBI.

• Securities that are being admitted to trading from another exchange by way of direct listing/MOU/securities admitted for trading under permitted category,

• Where suspension of trading is being revoked after more than one year.

d. Further in all cases, the exchanges shall ensure that before starting trading in scrips, the companies have complied with the disclosure requirements and the same is publicly disseminated on the website of exchanges to enable investors to take informed decision.

II. The Stock Exchanges are advised to:

• put in place the adequate systems and issue the necessary guidelines for implementing the above decision.

• make necessary amendments to the relevant bye-laws, rules and regulations for the implementation of the above decision immediately.

• bring the provisions of this circular to the notice of the member brokers of the Exchange and also to disseminate the same on the website.

• communicate to SEBI, the status of the implementation of the provisions of this circular in the Monthly Development Report.

III. This circular is issued in exercise of powers conferred by sub-section (1) of Section 11 of the Securities and Exchange Board of India Act, 1992, to protect the interests of investors in securities and to promote the development of, and to regulate the securities market.

IV. This circular is available on SEBI website at www.sebi.gov.in

Yours faithfully,

S. Ramann

Officer on Special Duty

Integrated Surveillance Department

022-26441450

ramanns@sebi.gov.in

Time limit for filing ITR-V for assessment year 2009-10 extended

Press Release, dated 1-9-2010

1.The Central Board of Direct Taxes (CBDT) has decided to extend the time limit for filing ITR-V forms relating to income-tax returns for A.Y. 2009-10 filed electronically (without digital signature) on or after 1st April 2009. These ITR-V forms can now be filed up to 31st December 2010 or within a period of 120 days of uploading of the electronic return data, whichever is later.

2. The relaxation has been made since there are still returns relating to A.Y. 2009-10 for which the ITR-V forms have not been received at the Centralised Processing Centre (CPC), Bengaluru or have been received after 31st March 2010 or have been filed with the Assessing Officers. These taxpayers are being given a final opportunity to send ITR-V forms to the CPC by the dates mentioned in para 1 above.

3. The ITR-V forms should be sent by ordinary post or speed post to Post Bag No.1, Electronic City Post Office, Bengaluru:– 560100 (Karnataka).

Mandatory disclosures by the media of its stake in corporate sector - Sebi Press Release

PR No.200/2010

Mandatory disclosures by the media of its stake in corporate sector

SEBI had taken up with Press Council of India its concerns on practice of many media groups entering into agreements, such as ‘Private Treaties’, with companies. Typically, such arrangements are with companies which are listed or which proposes to come out with public offerings. These, in general, entail a company giving stake in it (shares, warrants, bonds etc.) in return for media coverage through advertisements, news reports, advertorials etc. in the print or electronic media.

It was felt that such agreements may give rise to conflict of interest and may, therefore, result in dilution of the independence of press. This may consequently compromise the nature, quality and content of the news/editorials relating to such companies. Needless to say, biased and motivated dissemination of information, guided by commercial considerations can potentially mislead investors in the securities market. Such journalism would not be in the interest of securities market.

SEBI, given its legal mandate to protect the interest of investors felt that such brand building strategies of media groups, without appropriate and adequate disclosures may not be in the interest of investors and financial markets. There are prescribed norms of Journalistic Conduct that require journalists to disclose any interest that they may have in the company about which they are reporting. However, there are no equivalent requirements in the case of media companies holding a stake in the company which is being reported / covered.

Press Council of India has informed SEBI that in its meeting held on 22.02.2010 at New Delhi, it has accepted the following suggestions of SEBI and has mandated the following:

1) Disclosures regarding stake held by the media company should be made in the news report/ article/ editorial in newspapers/television relating to the company in which the media group holds such stake.

2) Disclosure on percentage of stake held by media groups in various companies under such 'Private Treaties' on the website of media groups should be made.

3) Any other disclosures relating to such agreements such as any nominee of the media group on the Board of Directors of the company, any management control or other details which may be required to be disclosed and which may be a potential conflict of interest for media group, should also be mandatorily disclosed.

The copy of the Press Release sent to SEBI by Press Council of India in the matter, is enclosed.

The above is for information and necessary compliance by all concerned.

Mumbai

August 27, 2010

Procedure for filing statutory returns 2010

TO AVOID LAST MINUTE RUSH AND SYSTEM CONGESTION IN MCA21 DUE TO HEAVY FILING IN LAST 10 DAYS OF THE MONTHS OF OCTOBER AND NOVEMBER 2010, IT IS REQUESTED BY MCA THAT FILING OF ANNUAL RETURN AND BALANCE SHEET MAY BE DONE AS PER THE DATES MENTIONED IN THE ATTACHED DOCUMENT.

Name availability guidelines for Companies

Superseding all previous Circulars and Instructions (Circular Letter No. 10(1)–RS/60, dated 01-04-1960 and Circular Letter No. 10 / (19)-RS/61, dated 15-03-1962) the Department of Company Affairs has laid down the new principles for deciding cases for availability of names.

Click here for the new guidelines.

Foreign Trade Policy 2009-2014

In exercise of powers conferred by Section 5 of the Foreign Trade (Development & Regulation) Act,1992 (No.22 of 1992) read with paragraph 1.2 of the Foreign Trade Policy, 2009- 2014, the Central Government hereby notifies the Foreign Trade Policy, 2009-2014 incorporating the Annual Supplement as updated on 23rd August, 2010. The policy shall come into force w.e.f. 23rd August, 2010.

Click here for the highlights of the Foreign Trade Policy.

Click here for thefull text of the Foreign Trade Policy.

Click here for the Foreign Trade Procedures.

Requirement to mention the firm registration number

Announcement on – Requirement to mention the firm registration number allotted by ICAI in all reports issued, including certificates, by members of the ICAI - (16-08-2010)

ANNOUNCEMENT FOR THE ATTENTION OF THE MEMBERS

Attention of the members is invited to the announcement regarding requirement relating to mentioning the firm registration number in the audit reports and resolution passed by the company for appointment of statutory auditors, published on page 1312 of the February 2010 issue of the Journal.

The Council of the Institute of Chartered Accountants of India, in terms of the decision taken at the 296th meeting held in June 2010 has decided to extend the requirement to mention the firm registration number to all reports issued pursuant to any attestation engagement, including certificates, issued by the members as proprietor of/ partner in the said firm. The requirement shall apply where such firm registration number has been allotted by the Institute of Chartered Accountants of India.

The Council further decided to make this requirement effective for all attestation reports/ certificates issued on or after 1st October, 2010.

Securities Contracts (Regulation) (Second Amendment) Rules, 2010 - Amendment in rules 2, 19 and 19A

Securities Contracts (Regulation) (Second Amendment) Rules, 2010 - Amendment in rules 2, 19 and 19A

Notification No. G.S.R. 662(E), dated 9-8-2010

In exercise of the powers conferred by clause (ha) of sub-section (2) of section 30 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956), the Central Government hereby makes the following rules further to amend the Securities Contracts (Regulation) Rules, 1957, namely:-

1. (1) These rules may be called the Securities Contracts (Regulation) (Second Amendment) Rules, 2010.

(2) They shall come into force on the date of their publication in the Official Gazette.

2. In the Securities Contracts (Regulation) Rules, 1957,-

(i) in rule 2, after clause (d), the following clause shall be inserted , namely:-

"(da) "public sector company" means a body corporate constituted by an Act of Parliament or any State Legislature and includes a government company;"

(ii) in rule 19,-

(a) in sub-rule (2),

(A) in clause (b), in sub-clause (ii),-

(I) for the second proviso, the following shall be substituted, namely :-

"Provided further that the company, referred to in sub clause (ii), shall increase its public shareholding to at least twenty five percent, within a period of three years from the date of listing of the securities, in the manner specified by the Securities and Exchange Board of India.”

(II) the third proviso shall be omitted;

(B) after clause (b), the following shall be inserted, namely:-

"(c) Notwithstanding anything contained in clause (b), a public sector company, shall offer and allot at least ten per cent, of each class or kind of equity shares or debentures convertible into equity shares to public in terms of an offer document."

(b) for sub-rule (6A), the following shall be substituted, namely:-

"(6A) Except as otherwise provided in these rules or permitted by the Securities and Exchange Board of India under sub-rule (7), all requirements with respect to listing prescribed by these rules shall, so far as they may be, also apply to a public sector company."

(iii)for rule 19A,-

(a) in sub-rule (1),-

(A) after the words "Every listed company" and before the words "shall maintain public shareholding" the bracket and words "(other than public sector company)" shall be inserted;

(B) for the existing provisos, the following shall be substituted, namely:-

"Provided that any listed company which has public shareholding below twenty five per cent, on the commencement of the Securities Contracts (Regulation) (Amendment) Rules, 2010, shall increase its public shareholding to at least twenty five per cent, within a period of three years from the date of such commencement, in the manner specified by the Securities and Exchange Board of India.

Explanation: For the purposes of this sub-rule, a company whose securities has been listed pursuant to an offer and allotment made to public in terms of sub-clause (ii) of clause (b) of sub-rule (2) of rule 19, shall maintain minimum twenty five per cent, public shareholding from the date on which the public shareholding in the company reaches the level of twenty five percent in terms of said sub-clause."

(b) after sub-rule (2), the following shall be inserted, namely:-

"(3) Notwithstanding anything contained in this rule, every listed public sector company shall maintain public shareholding of at least ten per cent.:

Provided that a listed public sector company-

(a) which has public shareholding below ten per cent, on the date of commencement of the Securities Contracts (Regulation) (Second Amendment) Rules, 2010 shall increase its public shareholding to at least ten per cent, in the manner specified by the Securities and Exchange Board of India, within a period of three years from the date of such commencement;

(b) whose public shareholding reduces below ten per cent, after the date of commencement of the Securities Contracts (Regulation) (Second Amendment) Rules, 2010 shall increase its public shareholding to at least ten per cent, in the manner specified by the Securities and Exchange Board of India, within a period of twelve months from the date of such reduction,."

External Commercial Borrowings (ECB) Policy – Liberalisation

External Commercial Borrowings (ECB) Policy – Liberalisation

A.P. (DIR Series) Circular No. 8, dated 12-8-2010

1.Attention of Authorised Dealer Category - I (AD Category - I) banks is invited to para 2 (iv) of the A.P. (DIR Series) Circular No. 46 dated January 02, 2009 relating to External Commercial Borrowings (ECB) Policy.

2. At present, entities in the services sectors viz., Hotels, Hospitals and Software are allowed to avail of ECB up to USD 100 million per financial year under the Automatic Route, for foreign currency and/or Rupee capital expenditure for permissible end-uses. On a review, it has now been decided to consider applications from the corporates in the Hotel, Hospital and Software sectors to avail of ECB beyond USD 100 million under the Approval Route, for foreign currency and / or Rupee capital expenditure for permissible end-uses. The proceeds of the ECB should not be used for acquisition of land.

3. The modifications to the ECB guidelines will come into force with immediate effect. All other norms of the extant ECB policy relating to eligible borrower, recognized lender, end-use, all-in-cost ceiling, average maturity period, prepayment, refinancing of existing ECB and reporting arrangements would continue to apply in the case of ECBs availed of by the aforesaid sectors under the Automatic Route as indicated above.

4. AD Category - I banks may bring the contents of this circular to the notice of their constituents and customers concerned.

5. The directions contained in this circular have been issued under sections 10(4) and 11 (1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and is without prejudice to permissions/approvals, if any, required under any other law.

Establishment of Branch Offices (BO) / Liaison Offices (LO) in India by Foreign Entities – Delegation of Powers

Shareholding pattern of listed entities- Press Release

PR No.184/2010

SEBI Board Meeting

The Board met on August 04, 2010 in Mumbai and took the following decisions:

Shareholding pattern of listed entities

Currently, the shareholding pattern of companies is contained in initial public offer document and upon listing, companies file shareholding pattern with stock exchanges every quarter. The Board decided to mandate that the companies shall file shareholding pattern as per Clause 35 one day prior to the date of listing, which shall be uploaded on the website of exchanges before commencement of trading.

The Board also decided that in order to ensure updated public dissemination of shareholding pattern, whenever the change exceeds +/- 2% of the paid up share capital of the company post a corporate event, the companies shall file revised shareholding pattern with the stock exchanges within 10 days from the date of such change in the capital structure.

The Board further decided that in the quarterly shareholding pattern, the disclosure of shares held by custodians, against which depository receipts have been issued, shall be classified as 'promoter/promoter group' and 'non-promoter'.

Mumbai

August 05, 2010

Guidelines on trading of Currency Options on Recognised Stock / New Exchanges

In order to expand the existing menu of exchange traded hedging tools, it was announced in the Monetary Policy Statement 2010-11 (para 62) that recognised stock exchanges would be permitted to introduce plain vanilla currency options on spot US Dollar/ Rupee exchange rate for residents.

Accordingly, it has been decided b RBI to permit trading of currency options on spot USD-INR rate in the currency derivatives segment of the stock exchanges, recognized by the Securities and Exchange Board of India (SEBI). The currency options market would function subject to the directions, guidelines, instructions, rules, etc issued by the Reserve Bank and the SEBI from time to time.

Click here for the text of the A.P. (DIR Series) Circular No. 05 dated July 30, 2010.

Mandatory requirement of Permanent Account Number (PAN)

CIRCULAR

CIR/MRD/DP/ 22 /2010                                    July 29, 2010

To,
The Depositories

Dear Sir/Madam,

Sub: Mandatory requirement of Permanent Account Number (PAN)

1. Please refer to SEBI circular No.MRD/DoP/Cir-05/2007 dated April 27, 2007 making PAN mandatory for all transactions in the securities market.

2. As you are aware, the demat accounts for which PAN details have not been verified are “suspended for debit” until the same is verified with the Depository Participant (DP). However, it has come to our notice that despite follow up, investors are not furnishing the PAN details.

3. In order to ensure better compliance with the Know Your Client (KYC) norms it has been decided that with effect from August 16, 2010 such PAN non-compliant demat accounts shall also be "suspended for credit" other than the credits arising out of automatic corporate actions. It is clarified that other credits including credits from IPO/FPO/Rights issue, off-market transactions or any secondary market transactions shall not be allowed into such accounts.

4. The Depositories are advised to:-

a) make amendments to the relevant bye-laws, rules and regulations for the implementation of the above decision immediately, as may be applicable/necessary ;

b) bring the provisions of this circular to the notice of their DPs and advising them to also communicate the same to all the Beneficial Owners (BOs); and

c) disseminate the same on the website.

5. This circular is being issued in exercise of the powers conferred by Section 11(1) of Securities and Exchange Board of India Act, 1992 and Section 19 of the Depositories Act, 1996 to protect the interests of investors in securities and to promote the development of, and to regulate, the securities market.

Harini Balaji

Deputy General Manager

022-26449372

email: harinib@sebi.gov.in

Securities and Exchange Board Of India (Mutual Funds) (Amendment) Regulations, 2010

In exercise of the powers conferred by section 30 of the Securities and Exchange Board of India Act, 1992 (15 of 1992), the Board hereby makes the Securities and Exchange Board of India (Mutual Funds) (Amendment) Regulations, 2010 to further amend the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996.

Click here for the text of the notification.

Cost Inflation Index for 2010-11

Section 48, Explanation (v) of the Income-tax Act, 1961 - Capital gains - Computation of - Notified Cost Inflation Index for financial year 2009-10 - Amendment in Notification No. S.O. 2292(E), dated 9-9-2009

Notification No. 59/2010 [F.No.142/11/2010-TPL], dated 21-7-2010

In exercise of the powers conferred by clause (v) of the Explanation to section 48 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby makes the following amendment in the notification of the Government of India in the Ministry of Finance (Department of Revenue), Central Board of Direct Taxes number S.O. 2292(E), dated the 9th September, 2009, namely:-

In the said notification, in the Table, after serial number 29 and the entries relating thereto, the following serial number and entries shall be inserted, namely :-

 “30                               2010-2011                                711”

Physical Settlement of Stock Derivatives

SEBI has now permitted to settle stock options and futures by delivery of underlying stock.

Click here for the text of the circular no. CIR/DNPD/ 4 /2010 dated July 15, 2010.

Compulsory filing of e return

CBDT has vide notification 49 dated July 7, 2010 has made compulsary to file eloctronic return with or without digital signature for firm, HUF and Individuals to whom provisions of section 44AB applies.  

Also, it has been manatory for all companies to file the return of income electronically under digital signature.

Click here for the text of the notification 49 dated July 7, 2010.  

Export of Goods and Software - Realisation and Repatriation of export proceeds - Liberalisation

RBI had vide A.P.(DIR Series) Circular No.70 dated June 30, 2009 increased the period of realisation and repatriation to India of the amount representing the full export value of goods or software exported, from six months to twelve months from the date of export, subject to review after one year.

The issue has since been reviewed and it has been decided, in consultation with the Government of India, to extend the above relaxation up to March 31, 2011.

 

Click here for the text of the A.P. (DIR Series) Circular No.57 dated June 29, 2010.

Securities Contracts (Regulation) (Amendment) Rules, 2010

Securities Contracts (Regulation) (Amendment) Rules, 2010 Amendment in rules 2 & 19 and insertion of rule 19A.


By Notification No. G.S.R. 469(E), dated 4-6-2010.

Explanatory notes to the provisions of the Finance (No.2) Act, 2009

Explanatory notes to the provisions of the Finance (No.2) Act, 2009 CIRCULAR NO. 05 /2010.

Gratuity Limit increased to Rs. 10 lakhs

Gratuity Limit increased to Rs. 10 lakhs CBDT notification 43 dated June 11, 2010.

New / Revised discusion paper on Direct tax code

Click here for the text of the new discussion paper on direct tax code.

Gratuity exemption limit increased to Rupees 10 lakhs - CBDT press release

The Central Board of Direct Taxes has approved notification of ten lakh rupees as the maximum amount of gratuity entitled to exemption under sub-clause (iii) of clause (10) of section 10 of the Income Tax Act 1961.

The notification will be applicable to employees who retire, or become incapacitated before retirement, or expire, or whose services are terminated, on or after the 24th May 2010.

Click here for the text of the press release No.402/92/2006-MC (30 of 2010)

Clarification regarding Service Tax on re-insurance Commission

In terms of Section 101A (Part IV-A) of the Insurance Act, 1938, every insurer dealing in insurance business is required to re-insure a specified percentage of sum assured with another insurance company.

The insurance company pays premium to the reinsuring company for this service. However, a part of such premium is deducted and kept by the insurance company for meeting the administrative expenditure. In other words, the insurance company and the re-insurance company jointly bear the expenses for running the insurance/reinsurance business. This shared expense is commonly known as ‘commission’ though strictly it is not in the nature of a commission. It may be pertinent to mention that the customer/beneficiary deals only with the insurance company and may not even be aware of the role of re-insurer and the backroom operations between the insurance company and the reinsurer.

As per the provision of the Finance Act, 1994, insurance as well as reinsurance are subject to service tax. The Board has received representations that notices have been issued demanding service tax on the amounts deducted by the insurance company (in other words paid by the reinsurance company) on the ground that it is the consideration for the insurance company providing business auxiliary service (BAS) to the re-insuring company. The notices alleged that the insurance companies are promoting the business of re-insurers thereby providing them the BAS.

The issue has been examined. As explained in para 2 above, the arrangement between the insurance company and the reinsurer is only sharing of expenses and there is no service provided by the insurance company to the re-insurer for a consideration. Since the policy holder may not even be aware of the operations of the re-insurer, it cannot be said that the payment made by the re-insurer to the insurance company is for its business promotion or a service on behalf of the re-insuring company (i.e. Business Auxiliary Service). In fact, it is the reinsurer which provides insurance service to the insurance company. As both the insurance company and reinsurer pay service tax on the entire amount of premium charged by them, the question of charging service tax under any other taxable service does not arise.

The Board desires that all pending cases on this subject may be decided keeping in view the above clarification.

Circular No. 120(a)/2/2010-ST, dated 16-4-2010.

Amendment to public shareholding requirement - Press Release

The Securities Contracts (Regulation) Rules 1957 provide for the requirements which have to be satisfied by companies for the purpose of getting their securities listed on any stock exchange in India. A dispersed shareholding structure is essential for the sustenance of a continuous market for listed securities to provide liquidity to the investors and to discover fair prices. Further, the larger the number of shareholders, the less is the scope for price manipulation. Accordingly, the Finance Minister in his Budget speech for 2009-10, inter- alia, proposed to raise the threshold for non- promoter, public shareholding for all listed companies. To implement the Budget announcement the Securities Contracts(Regulation) (Amendment) Rules, 2010 has been notified.

The salient features of the amendment are as follows:

a) The minimum threshold level of public holding will be 25% for all listed companies.

b) Existing listed companies having less than 25% public holding have to reach the minimum 25% level by an annual addition of not less than 5% to public holding.

c) For new listing, if the post issue capital of the company calculated at offer price is more than Rs. 4000 crore, the company may be allowed to go public with 10% public shareholding and comply with the 25% public shareholding requirement by increasing its public shareholding by at least 5% per annum.

d) For companies whose draft offer document is pending with Securities and Exchange Board of India on or before these amendments are required to comply with 25% public shareholding requirement by increasing its public shareholding by at least 5% per annum, irrespective of the amount of post issue capital of the company calculated at offer price.

e) A company may increase its public shareholding by less than 5% in a year if such increase brings its public shareholding to the level of 25% in that year.

f) The requirement for continuous listing will be the same as the conditions for initial listing.

g) Every listed company shall maintain public shareholding of at least 25%. If the public shareholding in a listed company falls below 25% at any time, such company shall bring the public shareholding to 25% within a maximum period of 12 months from the date of such fall.

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F.No.5/35/2006-CM New Delhi, dated June 04, 2010

The Press Information Bureau is requested to give wide publicity to this Press Release.

(K.P.Krishnan)

Joint Secretary to the Government of India

Press Information Officer,

Press Information Bureau, Shastri Bhawan,

New Delhi.