IFSCA has vide its circular dated 17th September, 2021 allowed all members of stock exchanges and clearing corporation in the IFSC to become automatic members of the bullion exchange and bullion clearing corporation. All new members will have to follow the registration criteria and make fresh applications in this regard.
The existing members will be added subject, of course, to fulfilling the net worth criteria as is specified by the bullion exchange.
On-Boarding of existing registered members in GIFT-IFSC
IFSCA has received representation from market participants requesting for all registered trading members and clearing members of the stock exchanges and clearing corporations respectively to be grandfathered as members of the Bullion Exchange and Bullion Clearing Corporation. Accordingly, it has been decided to permit all members of the stock exchanges and clearing corporations in GIFT-IFSC to be enabled as Bullion Trading/ Clearing Members subject to the fulfilment of requisite net worth criteria as specified by the Authority. New entities desirous of operating as Bullion Trading/Clearing Members
New entities who intend to become Bullion Trading/Clearing Members shall follow the membership criteria and registration process for membership as determined by the Bullion Exchange /Bullion Clearing Corporation, subject to eligibility criteria as specified in IFSCA circular No. 415/IFSCA/Consolidated Operating Guidelines/2021-22 dated August 25, 2021. Net-Worth criteria
The net worth requirement for initial 6 months from the date of operationalization of Bullion Exchange shall be as under:
Base Minimum Capital
The Base Minimum Capital for initial 6 months from the date of operationalization of Bullion Exchange shall be as under:
Any entity desirous of operating as Bullion Trading/Clearing Member shall be a body corporate, incorporated in India or in a foreign jurisdiction.
Any entity desirous of functioning as a trading member / clearing member under the branch structure in GIFT-IFSC shall adequately ring fence the operational, technology and financial aspects of its branch in IFSC from its overseas operations.
To help importers of goods, and recipients of supplies from SEZ, search Bill of Entry details, which did not auto-populate in GSTR-2A, a self-service functionality has been made available on the GST Portal that can be used to search such records in GST System, and fetch the missing records from ICEGATE.
Please note that it usually takes 2 days (after reference date) for BE details to get updated on GST Portal from ICEGATE. This functionality should, therefore, be used if data is not available after this period. Note: The reference date would be either Out of charge date, Duty payment date, or amendment date – whichever is later.
Taxpayers can follow the below steps to fetch the requisite details:
Login to GST Portal
Navigate to Services > User Services > Search BoE
Enter the Port Code, Bill of Entry Number, Bill of Entry Date and Reference Date and click the SEARCH button. Note: The reference date would be either Out of charge date, Duty payment date, or amendment date – whichever is later.
If the BoE details do not appear in the Search results, click on the QUERY ICEGATE button, at the bottom of the screen, to trigger a query to ICEGATE.
History of fetched BoE details from ICEGATE along with status of query are displayed after 30 minutes from the time of triggering the query.
For records of type IMPG (Import of Goods), details of: Period for Form GSTR-2A (system generated Statement of Inward Supplies); Reference Date; Bill of Entry Details like Port Code, BoE Number, BoE Date & Taxable Value; and Amount of Tax would be displayed. For records of type IMPGSEZ (Import of Goods from SEZ), details of: Period for Form GSTR-2A; Reference Date; GSTIN of Supplier; Trade Name of Supplier; Bill of Entry Details like Port Code, BoE Number, BoE Date & Taxable Value; and Amount of Tax would be displayed.
Taxpayers are advised to confirm correct details either from BE documents, or using ICEGATE portal
The Central Government, in continuation of its commitment to address the hardship being faced by various stakeholders on account of the Covid-19 pandemic, has, on consideration of representations received from various stakeholders, decided to extend timelines for compliances under the Income-tax Act, 1961 (hereinafter referred to as “the Act”) in the following cases, as under:
Time limit for intimation of Aadhaar number to the Income tax Department for linking of PAN with Aadhaar has been extended from 30th September, 2021 to 31st March, 2022.
The due date for completion of penalty proceedings under the Act has also been extended from 30th September, 2021 to 31st March, 2022.
Further, the time limit for issuance of notice and passing of order by the Adjudicating Authority under the Prohibition of Benami Property Transactions Act, 1988 has also been extended to 31st March, 2022.
Notification no. 113 of 2021 dated 17th September, 2021 has been issued in this regard and can be accessed at www.incometaxindia.gov.in.
Life-saving drugs Zolgensma and Viltepso used in treatment of Spinal-Muscular Atrophy exempted from GST when imported for personal use
Extension of existing concessional GST rates on certain COVID-19 treatment drugs upto 31st December 2021
GST rates on 7 other medicines recommended by Department of Pharmaceuticals reduced from 12% to 5% till 31st December 2021
GST rate on Keytruda medicine for treatment of cancer reduced from 12% to 5%
GST rates on Retro fitment kits for vehicles used by persons with special abilities reduced to 5%
GST rates on Fortified Rice kernels for schemes like ICDS reduced from 18% to 5%
Council also recommends major changes in GST rates and scope of exemption on Services
Recommends several clarifications in relation to GST rates on Goods and Services
Council recommends several measures relating to GST law and procedure
Council decides to set up 2 GoMs to examine issue of correction of inverted duty structure for major sectors and for using technology to further improve compliance, including monitoring
The GST Council’s 45th meeting was held today in Lucknow under the chairmanship of the Union Finance & Corporate Affairs Minister Smt. Nirmala Sitharaman. The GST Council has inter-alia made the following recommendations relating to changes in GST rates on supply of goods and services and changes related to GST law and procedure:
I. Recommendations relating to GST rates on goods and services
A. COVID-19 relief measure in form of GST rate concessions
1. Extension of existing concessional GST rates (currently valid till 30th September, 2021) on following Covid-19 treatment drugs, up to 31st December, 2021, namely-
Amphotericin B -nil
Remdesivir – 5%
Anti-coagulants like Heparin – 5%
2. Reduction of GST rate to 5% on more Covid-19 treatment drugs, up to 31st December, 2021, namely-
Casirivimab & Imdevimab
Bamlanivimab & Etesevimab
B. Major recommendations on GST rate changes in relation to Goods [w.e.f 1.10.2021 unless otherwise stated]
GST rate changes
Retro fitment kits for vehicles used by the disabled
Fortified Rice Kernels for schemes like ICDS etc.
Medicine Keytruda for treatment of cancer
Biodiesel supplied to OMCs for blending with Diesel
Ores and concentrates of metals such as iron, copper,aluminum, zinc and few others
Specified Renewable Energy Devices and parts
Cartons, boxes, bags, packing containers of paper etc.
Waste and scrap of polyurethanes and other plastics
All kinds of pens
Railway parts, locomotives & other goods in Chapter 86
Miscellaneous goods of paper like cards, catalogue,printed material (Chapter 49 of tariff)
IGST on import of medicines for personal use, namelyZolgensma for Spinal Muscular AtrophyViltepso for Duchenne Muscular DystrophyOther medicines used in treatment of muscular atrophy recommended by Ministry of Health and Family Welfare and Department of Pharmaceuticals.
IGST exemption on goods supplied at Indo-Bangladesh Border haats
Unintended waste generated during the production of fishmeal except for Fish Oil
Nil (for theperiod 1.7.2017 to 30.9.2019)
C. Other changes relating to GST rates on goods
Supply of mentha oil from unregistered person has been brought under reverse charge. Further, Council has also recommended that exports of Mentha oil should be allowed only against LUT and consequential refund of input tax credit.
Brick kilns would be brought under special composition scheme with threshold limit of Rs. 20 lakhs, with effect from 1.4.2022. Bricks would attract GST at the rate of 6% without ITC under the scheme. GST rate of 12% with ITC would otherwise apply to bricks.
D. Correction in Inverted Duty structure in Footwear and Textiles sector
GST rate changes in order to correct inverted duty structure, in footwear and textiles sector, as was discussed in earlier GST Council Meeting and was deferred for an appropriate time, will be implemented with effect from 01.01.2022.
E. In terms of the recent directions of the Hon’ble High Court of Kerala, the issue of whether specified petroleum products should be brought within the ambit of GST was placed for consideration before the Council. After due deliberation, the Council was of the view that it is not appropriate to do so at this stage.
F. Major GST changes in relation to rates and scope of exemption on Services [w.e.f 1.10.2021 unless otherwise stated]
Validity of GST exemption on transport of goods by vessel and air from India to outside India is extended upto 30.9.2022.
Services by way of grant of National Permit to goods carriages on payment of fee
Skill Training for which Government bears 75% or more of the expenditure [ presently exemption applies only if Govt funds 100%].
Services related to AFC Women’s Asia Cup 2022.
Licensing services/ the right to broadcast and show original films, sound recordings, Radio and Television programmes [ to bring parity between distribution and licencing services]
Printing and reproduction services of recorded media where content is supplied by the publisher (to bring it on parity with Colour printing of images from film or digital media)
Exemption on leasing of rolling stock by IRFC to Indian Railways withdrawn.
E Commerce Operators are being made liable to pay tax on following services provided through themtransport of passengers, by any type of motor vehicles through it [w.e.f. 1st January, 2022]restaurant services provided through it with some exceptions [w.e.f. 1st January, 2022]
Certain relaxations have been made in conditions relating to IGST exemption relating to import of goods on lease, where GST is paid on the lease amount, so as to allow this exemption even if (i) such goods are transferred to a new lessee in India upon expiry or termination of lease; and (ii) the lessor located in SEZ pays GST under forward charge.
G. Clarification in relation to GST rate on Goods
Pure henna powder and paste, having no additives, attract 5% GST rate under Chapter 14.
Brewers’ Spent Grain (BSG), Dried Distillers’ Grains with Soluble [DDGS] and other such residues, falling under HS code 2303 attract GST at the rate of 5%.
All laboratory reagents and other goods falling under heading 3822 attract GST at the rate of 12%.
Scented sweet supari and flavored and coated illachi falling under heading 2106 attract GST at the rate of 18%
Carbonated Fruit Beverages of Fruit Drink” and “Carbonated Beverages with Fruit Juice” attract GST rate of 28% and Cess of 12%. This is being prescribed specifically in the GST rate schedule.
Tamarind seeds fall under heading 1209, and hitherto attracted nil rate irrespective of use. However, henceforth they would attract 5% GST rate (w.e.f. 1.10.2021) for use other than sowing. Seeds for sowing will continue at nil rate.
External batteries sold along with UPS Systems/ Inverter attract GST rate applicable to batteries [ 28% for batteries other than lithium-ion battery] while UPS/inverter would attract 18%.
GST on specified Renewable Energy Projects can be paid in terms of the 70:30 ratio for goods and services, respectively, during the period from 1.7.2017 to 31.12.2018, in the same manner as has been prescribed for the period on or after 1st January 2019.
Due to ambiguity in the applicable rate of GST on Fibre Drums, the supplies made at 12% GST in the past have been regularised. Henceforth, a uniform GST rate of 18% would apply to all paper and paper board containers, whether corrugated or non-corrugated.
Distinction between fresh and dried fruits and nuts is being clarified for application of GST rate of “nil” and 5%/12% respectively;
It is being clarified that all pharmaceutical goods falling under heading 3006 attract GST at the rate of 12% [ not 18%].
Essentiality certificate issued by Directorate General of Hydrocarbons on imports would suffice; no need for taking a certificate every time on inter-state stock transfer.
H. Clarification in relation to GST rate on services
Coaching services to students provided by coaching institutions and NGOs under the central sector scheme of ‘Scholarships for students with Disabilities” is exempt from GST
Services by cloud kitchens/central kitchens are covered under ‘restaurant service’, and attract 5% GST [ without ITC].
Ice cream parlor sells already manufactured ice- cream. Such supply of ice cream by parlors would attract GST at the rate of 18%.
Overloading charges at toll plaza are exempt from GST being akin to toll.
The renting of vehicle by State Transport Undertakings and Local Authorities is covered by expression ‘giving on hire’ for the purposes of GST exemption
The services by way of grant of mineral exploration and mining rights attracted GST rate of 18% w.e.f. 01.07.2017.
Admission to amusement parks having rides etc. attracts GST rate of 18%. (author’s comment – this should have been reduced to 5%) The GST rate of 28% applies only to admission to such facilities that have casinos etc.
Alcoholic liquor for human consumption is not food and food products for the purpose of the entry prescribing 5% GST rate on job work services in relation to food and food products.
II.On the issue of compensation scenario, a presentation was made to the Council wherein it was brought out that the revenue collections from Compensation Cess in the period beyond June 2022 till April 2026 would be exhausted in repayment of borrowings and debt servicing made to bridge the gap in 2020-21 and 2021-22. In this context various options, as have been recommended by various committees/ forums were presented. The Council deliberated at length on the issue. The Council decided to set up a GoM to examine the issue of correction of inverted duty structure for major sectors; rationalize the rates and review exemptions from the point of view of revenue augmentation, from GST. It was also decided to set up a GoM to discuss ways and means of using technology to further improve compliance including monitoring through improved e-way bill systems, e-invoices, FASTag data and strengthening the institutional mechanism for sharing of intelligence and coordinated enforcement actions by the Centre and the States.
III. Recommendations relating to GST law and procedure
I. Measures for Trade facilitation:
Relaxation in the requirement of filing FORM GST ITC-04: (author’s comment – still too much of forms to be filed under the GST)
Requirement of filing FORM GST ITC-04 under rule 45 (3) of the CGST Rules has been relaxed as under:
Taxpayers whose annual aggregate turnover in preceding financial year is above Rs. 5 crores shall furnish ITC-04 once in six months;
Taxpayers whose annual aggregate turnover in preceding financial year is upto Rs. 5 crores shall furnish ITC-04 annually.
In the spirit of earlier Council decision that interest is to be charged only in respect of net cash liability, section 50 (3) of the CGST Act to be amended retrospectively, w.e.f. 01.07.2017, to provide that interest is to be paid by a taxpayer on “ineligible ITC availed and utilized” and not on “ineligible ITC availed”. It has also been decided that interest in such cases should be charged on ineligible ITC availed and utilized at 18% w.e.f. 01.07.2017.
Unutilized balance in CGST and IGST cash ledger may be allowed to be transferred between distinct persons (entities having same PAN but registered in different states), without going through the refund procedure, subject to certain safeguards.
Issuance of the following circulars in order to remove ambiguity and legal disputes on various issues, thus benefiting taxpayers at large:
Clarification on scope of “intermediary services”;
Clarification relating to interpretation of the term “merely establishment of distinct person” in condition (v) of the Section 2 (6) of the IGST Act 2017 for export of services. A person incorporated in India under the Companies Act, 2013 and a person incorporated under the laws of any other country are to be treated as separate legal entities and would not be barred by the condition (v) of the sub-section (6) of the section 2 of the IGST Act 2017 for considering a supply of service as export of services;
Clarification in respect of certain GST related issues:
W.e.f. 01.01.2021, the date of issuance of debit note (and not the date of underlying invoice) shall determine the relevant financial year for the purpose of section 16(4) of CGST Act, 2017;
There is no need to carry the physical copy of tax invoice in cases where invoice has been generated by the supplier in the manner prescribed under rule 48(4) of the CGST Rules, 2017;
Only those goods which are actually subjected to export duty i.e., on which some export duty has to be paid at the time of export, will be covered under the restriction imposed under section 54(3) of CGST Act, 2017 from availment of refund of accumulated ITC.
Provision to be incorporated in in CGST Rules, 2017 for removing ambiguity regarding procedure and time limit for filing refund of tax wrongfully paid as specified in section 77(1) of the CGST/SGST Act and section 19(1) of the IGST Act.
J. Measures for streamlining compliances in GST
Aadhaar authentication of registration to be made mandatory for being eligible for filing refund claim and application for revocation of cancellation of registration.
Late fee for delayed filing of FORM GSTR-1 to be auto-populated and collected in next open return in FORM GSTR-3B.
Refund to be disbursed in the bank account, which is linked with same PAN on which registration has been obtained under GST.
Rule 59(6) of the CGST Rules to be amended with effect from 01.01.2022 to provide that a registered person shall not be allowed to furnish FORM GSTR-1, if he has not furnished the return in FORM GSTR-3B for the preceding month.
Rule 36(4) of CGST Rules, 2017 to be amended, once the proposed clause (aa) of section 16(2) of CGST Act, 2017 is notified, to restrict availment of ITC in respect of invoices/ debit notes, to the extent the details of such invoices/ debit notes are furnished by the supplier in FORMGSTR-1/ IFF and are communicated to the registered person in FORM GSTR-2B.
K. GST Council has also recommended amendments in certain provisions of the Act and Rules.
TRAI has issued a directive on 2nd September, 2021 asking TSP (Telecom Service Provider) to adhere to the TRAI guidelines, regulations in the matter of tariff.
There shall be no discrimination between subscribers of the same class, and the classification, if any, ,shall not be arbitrary;
Classification between subscribers should be on the basis of intelligible eligibility criteria;
There should not be differential tariff to subscribers porting from a different network;
Channel partners/ retailers/ distributors/ third party apps are unlicensed service providers and they are the responsibility of the TSPs and it is the TSPs who are responsible to ensure that the channel partners etc. adhere to the TRAI guidelines on tariff.
Only the tariffs reported to the TRAI are offered through their channel partners etc.
All tariff offers should comply with the extant TRAI guidelines/ regulations in this regard and where the name/ brand of TSP is being used in marketing and selling of products and services, it is the responsibility of TRAI to ensure that the guidelines are fully adhered to.
Advisory for Taxpayers regarding Generation of EWB where the principal supply is Supply of services.
1. Representations have been received from various trade bodies stating that they are not able to generate EWB bill for movement of those goods where their principle supply is classifiable as a service, since there is no provision for generating E-way Bill by entering SAC (Service Accounting Code-Chapter 99) alone on the E- way bill portal.
2. To overcome this issue, the taxpayers are advised as below:
a) Rule 138 of CGST Rules, 2017, inter alia, states “Information to be furnished prior to commencement of movement of goods and generation of e-way bill.-(1) Every registered person who causes movement of goods of consignment value exceeding fifty thousand rupees….” Thus, E way bill is required to be generated for the movement of Goods.
b) Therefore, in cases where the principal supply is purely a supply of service and involving no movement of goods, the e-way bill is not required to be generated.
c) However, in cases where along with the principal supply of service, movement of some goods is also involved, e-way bill may be generated. Such situations may arise in cases of supply of services like printing services, works contract services, catering services, pandal or shamiana services, etc. In such cases, e-way bill may be generated by entering the details of HSN code of the goods, along with SAC (Service Accounting Code) of services involved.
Central Government guarantee of Rs.30,600 crore to back Security Receipts issued by National Asset Reconstruction Company Limited (NARCL) for acquiring stressed loan assets was approved by Union Cabinet yesterday.
NARCL proposes to acquire stressed assets of about Rs. 2 Lakh crore in phases within extant regulations of RBI. It intends to acquire these through 15% Cash and 85% in Security Receipts (SRs). The following Frequently asked questions explain various aspects regarding Central Government guarantee to back Security Receipts issued by National Asset Reconstruction Company Limited for acquiring of stressed loan assets.
What isNational Asset Reconstruction Company Limited (NARCL)? Who has set it up?
NARCL has been incorporated under the Companies Act and has applied to Reserve Bank of India for license as an Asset Reconstruction Company (ARC). NARCL has been set up by banks to aggregate and consolidate stressed assets for their subsequent resolution. PSBs will maintain51% ownership inNARCL.
What is India Debt Resolution Company Ltd. (IDRCL)? Who has set it up?
IDRCL is a service company/operational entity which will manage the asset and engage market professionals and turnaround experts. Public Sector Banks (PSBs) and Public FIs will hold a maximum of 49% stake and the rest will be with private sector lenders.
Why is NARCL-IDRCL type structure needed when there are 28 existing ARCs?
Existing ARCs have been helpful in resolution of stressed assets especially for smaller value loans. Various available resolution mechanisms, including IBC have proved to be useful. However,considering the large stock of legacy NPAs, additional options/alternatives are needed and the NARCL-IRDCL structure announced in the Union Budget is this initiative.
Why is a Government Guarantee needed?
Resolution mechanisms of this nature which deal with a backlog of NPAs typically require a backstop from Government. This imparts credibility and provides for contingency buffers. Hence, GoI Guarantee of up to Rs 30,600 crore will back Security Receipts (SRs) issued by NARCL. The guarantee will be valid for 5 years. The condition precedent for invocation of guarantee would be resolution or liquidation. The guarantee shall cover the shortfall between the face value of the SR and the actual realisation. GoI’s guarantee will also enhance liquidity of SRs as such SRs are tradable.
How will NARCL and IDRCL work?
The NARCL will acquire assets by making an offer to the lead bank. Once NARCL’s offer is accepted, then, IDRCL will be engaged for management and value addition.
What benefit do banks get from this new structure?
It will incentivize quicker action on resolving stressed assets thereby helping in better value realization. This approach will also permit freeing up of personnel in banks to focus on increasing business and credit growth. As the holders of these stressed assets and SRs, banks will receive the gains. Further, it will bring about improvement in bank’s valuation and enhance their ability to raise market capital.
Why is it being set up now?
Insolvency and Bankruptcy Code (IBC), strengthening of Securitization and Reconstruction of Financial Assets and Enforcement of Securities Interest (SARFAESI Act) and Debt Recovery Tribunals, as well as setting up of dedicated Stressed Asset Management Verticals (SAMVs) in banks for large-value NPA accounts have brought sharper focus on recovery. In spite of these efforts, substantial amount of NPAs continue on balance sheets of banks primarily because the stock of bad loans as revealed by the Asset Quality Review is not only large but fragmented across various lenders. High levels of provisioning by banks against legacy NPAs has presented a unique opportunity for faster resolution.
Is the guarantee likely to be invoked?
Government guarantee will be invoked to cover the shortfall between the amount realised from the underlying assets and the face value of SRs issued for that asset, subject to overall ceiling of ₹30,600 crore, valid for 5 years. Since there shall be a pool of assets, it is reasonable to expect that realisation in many of them will be more than the acquisition cost.
How will Government ensure faster and timely resolution?
The GoI guarantee will be valid for five years and condition precedent for invocation of guarantee will be resolution or liquidation.Further, to disincentivize delay in resolution, NARCL has to pay a Guarantee fee which increase with passage of time.
What will be the capital structure of NARCL and how much will Government contribute?
Capitalization of NARCL would be through equity from banks and Non-Banking Financial Companies (NBFCs). it will also raise debt as required.The GoI guarantee will reduce upfront capitalization requirements.
What will be NARCL’s strategy for resolution of stressed assets?
NARCL is intended to resolve stressed loan assets above ₹500 crore each amounting to about ₹ 2 lakh crore. In phase I, fully provisioned assets of about Rs. 90,000 crores are expected to be transferred to NARCL, while the remaining assets with lower provisionswould be transferred in phase II.
IFSCA has vide its circular dated 15th September, 2021 allowed IFSCA recognized non bank custodians who have set up entity through their branch in IFSC GIFT City to become a clearing member. Earlier they had allowed overseas entities to operate as a clearing member through their branch office. So this i guess is for the Indian non bank custodians to operate as a clearing member through their branch office. Some conditions are stipulated as under:
Non-Bank Entity recognised as a custodian by IFSCA
Any non-bank entity recognised as a custodian of assets/securities by IFSCA through the branch structure, shall be permitted to become a Clearing Member of a Clearing Corporation in GIFT-IFSC. For this purpose, the entity shall comply with the following conditions: a) The entity can clear and settle trades only of its custodial clients b) The entity should be ring fenced financially, technologically, and operationally from its parent company and its functions, as a clearing member, shall be limited only to clearing and settlement services of its custodial clients. c) The entity shall ensure financial segregation by allocating funds to the tune of USD 1,500,000 (USD 1.5 mn) towards its clearing and settlement operations. The entity shall submit a declaration to the Authority in this regard. d) The entity shall participate in the Settlement Guarantee Fund contribution (SGF), as decided by the clearing corporation from time to time. e) The total exposure which the entity shall take on behalf of its registered clients shall be determined by its Board. Additional requirements
All the other fees applicable to a clearing member in GIFT-IFSC shall be applicable to such an entity.
The entity shall comply with all the necessary rules, bye-laws and guidelines prescribed by the clearing corporation with which it is registered as a clearing member and the Authority from time to time.
The entity shall have adequate mechanisms for the purposes of reviewing, monitoring, and evaluating the controls, systems, procedures and safeguards.
Taking steps forward towards the vision of an ‘Aatmanirbhar Bharat’, Government led by Hon’ble Prime Minister, Shri Narendra Modi, has approved the PLI Scheme for Automobile Industry and Drone Industry with a budgetary outlay of ₹ 26,058 crore. The PLI scheme for the auto sector will incentivize high value Advanced Automotive Technology vehicles and products. It will herald a new age in higher technology, more efficient and green automotive manufacturing.
PLI Scheme for Automobile Industry and Drone Industry is part of the overall announcement of PLI Schemes for 13 sectors made earlier during the Union Budget 2021-22, with an outlay of ₹ 1.97 lakh crore. With the announcement of PLI Schemes for 13 sectors, minimum additional production in India is expected to be around ₹ 37.5 lakh crore over 5 years and minimum expected additional employment over 5 years is nearly 1 crore.
The PLI Scheme for the auto sector envisages to overcome the cost disabilities to the industry for manufacture of Advanced Automotive Technology products in India. The incentive structure will encourage industry to make fresh investments for indigenous global supply chain of Advanced Automotive Technology products. It is estimated that over a period of five years, the PLI Scheme for Automobile and Auto Components Industry will lead to fresh investment of over ₹42,500 crore, incremental production of over ₹2.3 lakh crore and will create additional employment opportunities of over 7.5 lakh jobs. Further this will increase India’s share in global automotive trade.
The PLI Scheme for auto sector is open to existing automotive companies as well as new investors who are currently not in automobile or auto component manufacturing business. The scheme has two components viz Champion OEM Incentive Scheme and Component Champion Incentive Scheme. The Champion OEM Incentive scheme is a ‘sales value linked’ scheme, applicable on Battery Electric Vehicles and Hydrogen Fuel Cell Vehicles of all segments. The Component Champion Incentive scheme is a ‘sales value linked’ scheme, applicable on Advanced Automotive Technology components of vehicles, Completely Knocked Down (CKD)/ Semi Knocked Down (SKD) kits, Vehicle aggregates of 2-Wheelers, 3-Wheelers, passenger vehicles, commercial vehicles and tractors etc.
This PLI Scheme for automotive sector along with the already launched PLI scheme for Advanced Chemistry Cell (ACC) (₹18,100 crore) and Faster Adaption of Manufacturing of Electric Vehicles (FAME) (₹10,000 crore) will enable India to leapfrog from traditional fossil fuel based automobile transportation system to environmentally cleaner, sustainable, advanced and more efficient Electric Vehicles (EV) based system.
The PLI Scheme for the Drones and Drone components industry addresses the strategic, tactical and operational uses of this revolutionary technology. A product specific PLI scheme for drones with clear revenue targets and focus on domestic value addition is key to building capacity and making these key drivers of India’s growth strategy. The PLI for Drones and Drone components industry, will over a period of three years, lead to investments worth ₹ 5,000 Crore, increase in eligible sales of ₹ 1500 crore and create additional employment of about 10,000 jobs.
Nine structural reforms and Five procedural reforms plus relief measures for the Telecom Service Providers are as below:
Rationalization of Adjusted Gross Revenue: Non-telecom revenue will be excluded on prospective basis from the definition of AGR.
Bank Guarantees (BGs) rationalized: Huge reduction in BG requirements (80%) against License Fee (LF) and other similar Levies. No requirements for multiple BGs in different Licenced Service Areas (LSAs) regions in the country. Instead, One BG will be enough.
Interest rates rationalized/ Penalties removed: From 1st October, 2021, Delayed payments of License Fee (LF)/Spectrum Usage Charge (SUC) will attract interest rate of SBI’s MCLR plus 2% instead of MCLR plus 4%; interest compounded annually instead of monthly; penalty and interest on penalty removed.
For Auctions held henceforth, no BGs will be required to secure instalment payments. Industry has matured and the past practice of BG is no longer required.
Spectrum Tenure: In future Auctions, tenure of spectrum increased from 20 to 30 years.
Surrender of spectrum will be permitted after 10 years for spectrum acquired in the future auctions.
No Spectrum Usage Charge (SUC) for spectrum acquired in future spectrum auctions.
Spectrum sharing encouraged- additional SUC of 0.5% for spectrum sharing removed.
To encourage investment, 100% Foreign Direct Investment (FDI) under automatic route permitted in Telecom Sector. All safeguards will apply.
Auction calendar fixed – Spectrum auctions to be normally held in the last quarter of every financial year.
Ease of doing business promoted – cumbersome requirement of licenses under 1953 Customs Notification for wireless equipment removed. Replaced with self-declaration.
Know Your Customers (KYC) reforms: Self-KYC (App based) permitted. E-KYC rate revised to only One Rupee. Shifting from Prepaid to Post-paid and vice-versa will not require fresh KYC.
Paper Customer Acquisition Forms (CAF) will be replaced by digital storage of data. Nearly 300-400 crore paper CAFs lying in various warehouses of TSPs will not be required. Warehouse audit of CAF will not be required.
SACFA clearance for telecom towers eased. DOT will accept data on a portal based on self-declaration basis. Portals of other Agencies (such as Civil Aviation) will be linked with DOT Portal.
Addressing Liquidity requirements of Telecom Service Providers
The Cabinet approved the following for all the Telecom Service Providers (TSPs):
Moratorium/Deferment of upto four years in annual payments of dues arising out of the AGR judgement, with however, by protecting the Net Present Value (NPV) of the due amounts being protected.
Moratorium/Deferment on due payments of spectrum purchased in past auctions (excluding the auction of 2021) for upto four years with NPV protected at the interest rate stipulated in the respective auctions.
Option to the TSPs to pay the interest amount arising due to the said deferment of payment by way of equity.
At the option of the Government, to convert the due amount pertaining to the said deferred payment by way of equity at the end of the Moratorium/Deferment period, guidelines for which will be finalized by the Ministry of Finance.
The above will be applicable for all TSPs and will provide relief by easing liquidity and cash flow. This will also help various banks having substantial exposure to the Telecom sector.
FSSAI has issued a press release dated 3rd september, 2021 advising that use of dairy terms on the labels of plant based beverages and food items are not allowed under the Food Safety and Standards (Food Products Standards and Food Additives) Regulations, 2011 as encapsulated in its ‘General Standards for Milk and Milk Products’. The Food Business Operators will be given 15 days’ time to improve/ modify their labels, failing which enforcement action will be initiated against them.
Gist of the circular is given below:
The Food Regulator, in a recent order, has directed the State Food Safety Departments to investigate and identify specific instances for violation of the use of dairy terminology for non-dairy or plant based products by Food Business Operators (FBOs).
In case of any violation, FBOs may be granted 15 days’ time to suitably improve/modify their product labels and strictly comply with the relevant provisions of FSS (Food Products Standards and Food Additives) Regulation, 2011 before the Food Safety Departments take any enforcement action. This step will ensure an appropriate enforcement action against such defaulting FBOs as per the provisions of Food Safety and Standards (FSS) Act, 2006 and Rules/Regulations made thereunder.
As per the ‘General Standards for Milk and Milk Products’ under the ‘Food Safety and Standards (Food Products Standards and Food Additives) Regulations, 2011’, use of any dairy term(s) for a product which is not milk/ a milk product or a composite milk product (e.g. plant based products / beverages) is prohibited and any such action is in contravention of the said Regulations. Further, the term ‘curd’ is also not considered a dairy term exclusively for such products, and has been associated with non-dairy products such as ‘soybean curd’ in our regulations which also is in consistency with the relevant Codex standards.
However, exceptions are permissible for usage of dairy terminology in the nomenclature of certain products like coconut milk, peanut butter etc. in reference to the internationally accepted principle that dairy terms were being traditionally used in their nomenclature and such products are not substitutes for milk or milk products.
Since, a lot of such products are sold through E-Commerce Food Business Operators (FBOs), FSSAI has also instructed all E-Commerce platforms to delist such products which are reported to be in contravention to the regulatory provisions related to the application of dairy ‘terms’ from their online platforms immediately. FSSAI has further directed that no such defaulting products listed on the online platforms are allowed for sale in the future as well.
The Reserve Bank has been receiving complaints/reports about customers falling prey to frauds being perpetrated in the name of KYC updation. The usual modus operandi in such cases include receipt of unsolicited communication, such as, calls, SMSs, emails, etc., by customer urging him/her to share certain personal details, account / login details/ card information, PIN, OTP, etc. or install some unauthorised/ unverified application for KYC updation using a link provided in the communication. Such communications are also reported to carry threats of account freeze/ block/closure. Once customer shares information over call/message/unauthorised application, fraudsters get access to customer’s account and defraud him/her.
Members of public are hereby cautioned not to share account login details, personal information, copies of KYC documents, card information, PIN, password, OTP, etc. with unidentified persons or agencies. Further, such details should not be shared through unverified/unauthorised websites or applications. In case they receive any such requests, customers are requested to get in touch with their bank/branch.
It is also clarified that while the Regulated Entities (REs) are required to undertake periodic updation of KYC, the process of periodic updation of KYC has been simplified to a large extent vide circular dated May 10, 2021. Further, vide circular dated May 5, 2021, REs have been advised that in respect of customer accounts where periodic updation of KYC is due and pending as on date, no restrictions on operations of such account shall be imposed till December 31, 2021, for this reason alone, unless warranted under instructions of any regulator/ enforcement agency/court of law, etc.
RBI is vide its circular dated 13th September, 2021 opening up the window for NBFCs, payment system providers and payment system participants to obtain aadhar authentication e-KYC licence (KYC User Agency) or sub KUA. What is this now? I wonder what happened to the Central KYC registry. There are no parameters specified, which means any such NBFCs etc. can apply?
Application for Aadhaar e-KYC Authentication Licence
In terms of Section 11A of the PML Act, 2002, entities other than banking companies may, by notification of the Central Government, be permitted to carry out authentication of client’s Aadhaar number using e-KYC facility provided by the Unique Identification Authority of India (UIDAI). Such notification shall be issued only after consultation with UIDAI and the appropriate regulator.
A detailed procedure for processing of applications under the aforementioned Section for use of Aadhar authentication services by entities other than banking companies has been provided by the Department of Revenue, Ministry of Finance vide their circular dated May 9, 2019.
2. Accordingly, Non-Banking Finance Companies (NBFCs), Payment System Providers and Payment System Participants desirous of obtaining Aadhaar Authentication License – KYC User Agency (KUA) License or sub-KUA License (to perform authentication through a KUA), issued by the UIDAI, may submit their application to this Department for onward submission to UIDAI. The applications can also be forwarded over email. The format of the application is provided in the Annex to this circular.
SEBI circular dated 7th September, 2021 allowing introduction of T+1 rolling settlement on optional basis by the stock exchanges. Some pre-conditions have been specified. This will come into effect from 1st January, 2022.
Introduction of T+1 rolling settlement on an optional basis
SEBI, vide circular no. SMD/POLICY/Cir – /03 dated February 6, 2003, shortened the settlement cycle from T+3 rolling settlement to T+2 w.e.f. April 01, 2003.
SEBI has been receiving request from various stakeholders to further shorten the settlement cycle. Based on discussions with Market Infrastructure Institutions (Stock Exchanges, Clearing Corporations and Depositories), it has been decided to provide flexibility to Stock Exchanges to offer either T+1 or T+2 settlement cycle.
Accordingly, a Stock Exchange may choose to offer T+1 settlement cycle on any of the scrips, after giving an advance notice of at least one month, regarding change in the settlement cycle, to all stakeholders, including the public at large, and also disseminating the same on its website.
After opting for T+1 settlement cycle for a scrip, the Stock Exchange shall have to mandatorily continue with the same for a minimum period of 6 months. Thereafter, in case, the Stock Exchange intends to switch back to T+2 settlement cycle, it shall do so by giving 1-month advance notice to the market.
Any subsequent switch (from T+1 to T+2 or vice versa) shall be subject to minimum period and notice period as mentioned in Para 4 above.
There shall be no netting between T+1 and T+2 settlements.
The settlement option for security shall be applicable to all types of transactions in the security on that Stock Exchange. For example, if a security is placed under T+1 settlement on a Stock Exchange, the regular market deals as well as block deals will follow the T+1 settlement cycle on that Stock Exchange.
The provisions of this circular shall come into force with effect from January 01, 2022.
Re: Extension of timelines for sale and renewal of short term Covid specific health insurance policies
1. Reference is invited to the short term Covid specific health insurance policies permitted to be offered by all Insurers.
2. In partial modification of Clause 2 of Circular ref.no: IRDAI/HLT/REG/CIR/061/03/2021 dated 24.03.2021, all insurers are permitted to offer and renew short term Covid specific health policies up to 31.03.2022.
3. Accordingly, Corona Kavach Policies offered as per Guidelines on Covid Standard Indemnity based Health Policy of Circular ref no. IRDAI/HLT/REG/CIR/163/06/2020 dated 26.09.2020 and Corona Rakshak Policies offered as per Guidelines on Covid Standard benefit based Health Policy of Circular ref no. IRDAI/HLT/REG/CIR/164/06/2020 dated 26.09.2020 are also permitted to be offered and renewed by all insurers up to 31.03.2022.
4. All other terms and conditions remain valid as specified under the respective guidelines.