COMPANIES ACT, 2013

COMPANIES ACT

Untitled37ASECTION 397

OPPRESSION AND MISMANAGEMENT

Where CLB passed status quo order in respect of subject property to restrain creation of third party rights, construction done by respondent tenant to repair that property could not be considered as detriment to interest of anybody and, therefore, contempt application filed to restrain construction by respondent was to be dismissed –[2015] (CLB – New Delhi)

COMPETITION ACT

SECTION 3

PROHIBITION OF AGREEMENTS – ANTI-COMPETITIVE AGREEMENTS

Where real estate developers i.e., Jaiprakash Associates (JAL) and JaypeeInfratech (JIL) did not have ability to influence conditions of competition in relevant market for provision of services for development and sale of residential apartments in Noida and Greater Noida and there were several established real estate players offering world class amenities, JAL/JIL was not in a dominant position in relevant market and, therefore, question of examining alleged abusive conduct did not arise – [2015] (CCI)

Where evidence available on record was insufficient to hold Opposite Parties responsible for having colluded in tenders for supply of AMDBS, a critical safety item required for railway coaches, complaint of alleged unfair business practices made by Informant against Opposite Parties was to be dismissed – [2015] (CCI)

FOREIGN TRADE (DEVELOPMENT AND REGULATION) ACT, 1992

SECTION 5

EXPORT AND IMPORT POLICY

Notification No. 48/2005 dated February 20, 2006 and Notification No. 8/2006 dated June 12, 2006 amending ‘Target Plus Scheme’ under EXIM Policy/Foreign Trade Policy 2004-2009 to restrict/reduce benefit to exporter retrospectively from 1-4-2005 were ultra vires, as already accrued benefit cannot be taken away by retrospective amendment; therefore, the said notifications were read down to be effective only from dates they are issued –[2015] (SC)

CUSTOMS ACT

SECTION 129A

APPEALS – RESTORATION OF – APPELLATE TRIBUNAL

Issue ‘whether Tribunal can restore appeals even when assessee made pre-deposit only after due date specified by High Court’ was referred to Third Member owing to difference of opinion – [2015] (Mumbai – CESTAT)

CUSTOMS TARIFF ACT

SECTION 3

LEVY OF ADDITIONAL DUTY EQUAL TO EXCISE DUTY

In view of Explanation 1 to Section 3 of Central Excise Act, 1944, in case of DTA clearances by 100% EOUs, CVD portion equal to excise duty is leviable at highest of excise duty rates in India. Thus, in case of goods liable to excise duty at different rates owing to exemptions or otherwise, CVD portion would be computed using highest rate of excise duty. This principle is analogous to principles in Section 3(1) of Customs Tariff Act, 1975 – [2015] (Mumbai – CESTAT)

SECTION 9A

CHARGE/LEVY – ANTI DUMPING DUTY

Where: (a) provisional anti-dumping was levied on 2-5-2002 and same became ineffective on completion of 6 months on 1-11-2002, and (b) final anti-dumping was levied only on 1-5-2003, then, no anti-dumping duty could be levied during gap period, viz., 2-11-2002 to 30-4-2003 – [2015] (SC)

CST & VAT

SECTION 2(xv) OF THE KERALA VALUE ADDED TAX ACT, 2003

DEALER

‘Flipkart’ is merely facilitating sales, purchase and delivery of goods, it can’t be considered as dealer of goods under Kerala VAT Act – [2015] (Kerala)

SECTION 6 OF UTTAR PRADESH VALUE ADDED TAX ACT, 2008

TAX INCIDENCE AND LEVY – COMPOSITION OF TAX LIABILITY

Compounding Scheme dated 9-6-2009 (Int Bhatta Samadhan Yojna) announced under section 6 for seasons 2007-08 (1-1-2008 to 31-9-2008) and 2008-09 (1-10-2008 to 31-9-2009) is not ultra vires to Constitution – [2015] (Allahabad)

CENVAT CREDIT RULES

RULE 2(l)

CENVAT CREDIT – INPUT SERVICE – GENERAL

Dealers of SIM Cards/Recharge vouchers cannot be regarded as ‘recipients of telecom services’ provided by telecom companies; hence, said dealers cannot take input service credit of service tax paid by telecom companies – [2015] (New Delhi – CESTAT)

STATUTES

DIRECT TAX LAWS 

Section 245R of the Income-tax Act, 961 – Procedure on receipt of application – Representation of cases before Authority for Advance Ruling – LETTER F.NO.225/261/2015/ITA.II, DATED 28-10-2015

Section 54EC of the Income-tax Act, 1961 – Capital Gain not to be charged on Investment in certain Bonds – Taxation of income from offshore rupee denominated bonds – PRESS RELEASE, DATED 29-10-2015

Section 92C of the Income-tax Act, 1961 – Transfer Pricing – Computation of Arm’s Length Price – Notified Tolerance Limit – NOTIFICATION NO.86/2015 [F.NO.500/1/2014-APA-II], DATED 29-10-2015

CORPORATE LAWS

IRDAI (Registration and Operation of Branch Offices of Foreign Reinsurers other Than Lloyd’s) Regulations, 2015 – NOTIFICATION F.NO.IRDAI/REG/17/107/2015, DATED 19-10-2015

Clarifications on Applicability of Provisions of section 45 of Insurance Act, 1938 in various scenarios – CIRCULAR NO. IRDA/LIFE/GDL/MISC/186/10/2015, DATED 28-10-2015

SEBI (Issue of Capital and Disclosure Requirements) (Seventh Amendment) Regulations, 2015 – Amendment in Regulation 58 and Schedule VIII – NOTIFICATION NO.SEBI/LAD-NRO/GN/2015-16/025, DATED 27-10-2015

IRDAI (Acquisition of Surrender and Paid Up Values) Regulations, 2015 – NOTIFICATION F.NO.IRDAI/REG/15/105/2015, DATED 16-9-2015

INDIRECT TAX LAWS (ST./EX./CUS. & (CST & VAT)

Extension of Filing of Online Return for Second Quarter 2015-16 –CIRCULAR NO.27 OF 2015-16 [NO.F.7(420)/VAT/POLICY/2011/PF/955-961], DATED 28-10-2015

Extension of time limit for Filing of Annual Return and Filing of Audit Report by a Dealer – NOTIFICATION NO.FTX.49/2014/88, DATED 12-10-2015

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances; Hope the information will assist you in your Professional endeavors. For query or help, contact: info@carajput.com  or call at 9555555480

Disclaimer: The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances; before making any decisions do consult your Professional / tax advisor. For misrepresentation or interpretation of act or rules Author does not take any responsibility. Neither the author nor the firm accepts any liability for the loss or damage of any kind arising out of information in this document or for any action taken in reliance there on. carajput.com is committed to helping entrepreneurs and small business owners to start, manage and grow their business with peace of mind. Our goal is to support the entrepreneur on legal and regulatory requirements and to be a partner throughout the entire business life cycle, offering support to the company at every stage to ensure that it is compliant and consistently growing. Hope the information will assist you in your Professional endeavors. For query or help, contact: info@carajput.com or call at 09811322785/4 9555 5555 480)

EXPORT PROMOTION ON CAPITAL GOODS

EXPORT PROMOTION ON CAPITAL GOODS

Untitled89AExport promotion on capital goods is a scheme provided by Director General of Foreign Trade (DGFT), which provides a concession on custom duty on import of Capital Goods in order to promote Exports.

This is a policy under which many schemes are available for different kinds of Industrial units under which the company needs to apply for the license to avail benefits under the scheme the company wants to opt for

ZERO DUTY EPCG SCHEME:

This scheme allows import of capital goods for pre-production, production, post-production purposes at Zero custom duty subject to export obligation of 6 times duty saved over imports for 6 years.

This is available to the variety of industries such as textiles, plastics, handicrafts, chemicals, ceramic products etc.

But this scheme is not available to such exporters who are already covered under Technology Upgradation Fund Scheme (TUFS), Status Holder Incentive Scheme (SHIS), which are other schemes provided by DGFT. But if the business line under different schemes is different from the one covered under EPCG, such benefits can be availed.

CONCESSIONAL 3% DUTY EPCG SCHEME:

This scheme allows import of capital goods for pre-production, production, post-production purposes on payment of 3% of Basic custom duty subject to export obligation of 8 times duty saved over imports for 8 years.

Export Obligation of 6 times of duty saved for the Export Obligation Period of 12 years is available to Agri units and Cottage Sectors and EO of 6 times and EoP of 8 years is available to SSI units whose investment does not exceed Rs.50 Lakhs

Also Motor cars can also be imported but such provision is available only to Hotels, Tourism industry and Tour Operators subject to the conditions such as:

  1. Total earnings from such Hotel and tourism industry in current and preceding three years should exceed Rs. 1.5 Crores
  2. Duty saved should not exceed 50% of average foreign exchange earnings from such hotel and tourism industry.
  1. Vehicle imported should be registered under tourism purpose only and a copy of registration should be submitted concerned Regional Authority (RA).
  2. However vehicle parts cannot be imported under this scheme.

Second Hand capital goods can also be imported under this scheme and can avail benefits of same.

Spares, moulds, Dies, Jigs, Fixtures, and Tools can also be imported under this scheme. Also the same cane imported for existing machinery subject to export obligation of 4 times duty saved in case of Concessional 3% duty scheme and 3 times of duty saved in case of Zero Duty scheme.

Note: If any Countervailing Duty is paid in cash, that would not be taken into computation of net duty save.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances; Hope the information will assist you in your Professional endeavors. For query or help, contact:info@carajput.com or call at 9555555480

Disclaimer: The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances; before making any decisions do consult your Professional / tax advisor. For misrepresentation or interpretation of act or rules Author does not take any responsibility. Neither the author nor the firm accepts any liability for the loss or damage of any kind arising out of information in this document or for any action taken in reliance there on. carajput.com is committed to helping entrepreneurs and small business owners to start, manage and grow their business with peace of mind. Our goal is to support the entrepreneur on legal and regulatory requirements and to be a partner throughout the entire business life cycle, offering support to the company at every stage to ensure that it is compliant and consistently growing. Hope the information will assist you in your Professional endeavors. For query or help, contact: info@carajput.com or call at 09811322785/4 9555 5555 480)

ADVANTAGE OF FOREIGN INWARD REMITTANCE CERTIFICATION (FIRC)

ADVANTAGE OF FOREIGN INWARD REMITTANCE CERTIFICATION (FIRC)

www.carajput.com;Business setup outside India

www.carajput.com;Business setup outside India

FOREIGN INWARD REMITTANCE CERTIFICATE (FIRC)

1. Introduction

 Foreign Inward Remittance Certificate (FIRC) is a document that provides proof of inward remittance to India. Such remittance could be either on account of Foreign Direct Investment (FDI) or towards export receivables or towards sale of securities by resident to a non resident. It is treated as documentary evidence by most of the statutory authorities for confirming the validity of the convertible foreign exchange received by the beneficiary.

2. Purpose

When a beneficiary receives fund from outside India, it will be credited to his account only through an Authorized Dealer (normally a Bank). (Authorized dealer means an authorized person by the Reserve Bank of India to deal in foreign exchange or in foreign securities under the Foreign Exchange Management Act). If the bank, in which the beneficiary has an account, is not an Authorized Dealer, then the remittance needs to be received by the beneficiary through an Authorized Dealer. Based on the information provided by the beneficiary upon receipt of foreign remittance, the banker issues FIRC stating the purpose of receipt i.e. towards equity investment, advance against export of services / goods, capital expenditure etc.

3. Relevance

 A few cases where FIRC assumes importance

  1. In case of Issue of Shares to a Foreign Entity/person, FIRC is a proof for receipt of share application money.
  2. Similarly it is also proof that share purchase consideration has been received by a resident seller, in case of transfer of shares by a resident Indian to a non-resident buyer.
  3. In case of export of services there is no Service tax to be paid, subject to Export of Services Rules. Here again FIRC becomes a documentary proof for exports made and remittances received thereof in freely convertible foreign exchange.
  4. In case of export promotion schemes like Advance Licensed, EPCG (Export Promotion Capital Goods) etc., FIRC is one of the important documents to be submitted to DGFT as a proof of export made.   

4. Contents and issue procedure 

FIRC normally contains the following details:

  • Name of the beneficiary
  • Whether the amount is paid by cash or by crediting the beneficiary’s a/c
  • Name and address of the remitted
  • Name and address of the remitting bank
  • DD/TT No/Cheque No
  • Foreign Direct Investment amount in Foreign currency
  • Equivalent rupee amount (in figures as well as words)
  • In favour of whom the amount has come
  • Exchange rate applied
  • Purpose of the remittance as stated by beneficiary

It is signed by the Authorized signatory of the AD bank and countersigned by one more person.  As a procedure, this Certificate is issued to the address of the account holder, normally within a period of 15 days from the date of credit of funds to beneficiary’s account. FIRC must be kept in safe custody since issue of duplicate involves certain complicated procedure which is time consuming.

Generally there is confusion about which bank should issue FIRC in case the inward remittance has come into the beneficiary’s account through more than one bank.  In our practical experience and as per clarifications received from RBI as well as provisions under FEMA, the first bank that receives the inward remittance in convertible foreign exchange must issue the FIRC since it would have the details of the overseas remitting bank.

5. Conclusion

As explained above, FIRC assumes great importance in respect of remittances received from outside India.  Therefore, it is critical that beneficiaries follow up with the banks and obtain the FIRC immediately after credit of inward remittance.  Particular attention needs to be paid to “purpose of Foreign Direct Investment” because any wrong mention of this has serious implications in terms of remittance, usage and accounting of the same.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances; Hope the information will assist you in your Professional endeavors. For query or help, contact: info@carajput.com or call at 9555555480

Disclaimer: The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances; before making any decisions do consult your Professional / tax advisor. For misrepresentation or interpretation of act or rules Author does not take any responsibility. Neither the author nor the firm accepts any liability for the loss or damage of any kind arising out of information in this document or for any action taken in reliance there on. carajput.com is committed to helping entrepreneurs and small business owners to start, manage and grow their business with peace of mind. Our goal is to support the entrepreneur on legal and regulatory requirements and to be a partner throughout the entire business life cycle, offering support to the company at every stage to ensure that it is compliant and consistently growing. Hope the information will assist you in your Professional endeavors. For query or help, contact: info@carajput.com or call at 09811322785/4 9555 5555 480)