Category Archives: Uncategorized

bullion trading/ clearing members in IFSC

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.

https://ifsca.gov.in/Viewer/Index/230

On-Boarding of existing registered members in GIFT-IFSC

  1. 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
  2. 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
  3. The net worth requirement for initial 6 months from the date of operationalization of
    Bullion Exchange shall be as under:

  1. Base Minimum Capital
  2. The Base Minimum Capital for initial 6 months from the date of operationalization of Bullion Exchange shall be as under:
  1. Additional Requirements
  2. Any entity desirous of operating as Bullion Trading/Clearing Member shall be a body corporate, incorporated in India or in a foreign jurisdiction.
  3. 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.

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tax compliances extended

https://pib.gov.in/PressReleasePage.aspx?PRID=1755936

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.

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non discriminatory tariff

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.

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clearing membership

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:

https://ifsca.gov.in/Viewer/Index/228

Non-Bank Entity recognised as a custodian by IFSCA

  1. 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
  2. All the other fees applicable to a clearing member in GIFT-IFSC shall be applicable to such an entity.
  3. 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.
  4. The entity shall have adequate mechanisms for the purposes of reviewing, monitoring, and evaluating the controls, systems, procedures and safeguards.

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PLI for auto & drone industry

https://pib.gov.in/PressReleasePage.aspx?PRID=1755062

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.

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relief for telecom sector

https://pib.gov.in/PressReleasePage.aspx?PRID=1755086

Nine structural reforms and Five procedural reforms plus relief measures for the Telecom Service Providers are as below:

Structural Reforms

  1. Rationalization of Adjusted Gross Revenue:  Non-telecom revenue will be excluded on prospective basis from the definition of AGR.
  2. 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.
  3. 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.
  4. 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. 
  5. Spectrum Tenure: In future Auctions, tenure of spectrum increased from 20 to 30 years.
  6. Surrender of spectrum will be permitted after 10 years for spectrum acquired in the future auctions.
  7. No Spectrum Usage Charge (SUC) for spectrum acquired in future spectrum auctions.
  8. Spectrum sharing encouraged- additional SUC of 0.5% for spectrum sharing removed.
  9. To encourage investment, 100% Foreign Direct Investment (FDI) under automatic route permitted in Telecom Sector. All safeguards will apply.

Procedural Reforms

  1. Auction calendar fixed – Spectrum auctions to be normally held in the last quarter of every financial year.
  2. Ease of doing business promoted – cumbersome requirement of licenses under 1953 Customs Notification for wireless equipment removed. Replaced with self-declaration.
  3. 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.
  4. 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.
  5. 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):

  1. 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.
  2. 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.
  3. Option to the TSPs to pay the interest amount arising due to the said deferment of payment by way of equity.
  4. 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.

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dairy terms on food labels

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.

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frauds – KYC updation

https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=52216

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.

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T+1 rolling settlement

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.

https://www.sebi.gov.in/legal/circulars/sep-2021/introduction-of-t-1-rolling-settlement-on-an-optional-basis_52462.html

Introduction of T+1 rolling settlement on an optional basis

  1. 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.
  2. 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.
  3. 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.
  4. 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.
  5. 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.
  6. There shall be no netting between T+1 and T+2 settlements.
  7. 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.
  8. The provisions of this circular shall come into force with effect from January 01, 2022.

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covid specific health insurance policy

IRDAI has extended the time upto which covid specific health insurance policies can be issued, upto 31st March, 2022. Their circular dated 13th September, 2021 extends the said timelines.

https://irdai.gov.in/ADMINCMS/cms/Circulars_Layout.aspx?page=PageNo4562

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.

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carry forward loss – PSU disinvestment

CBDT clarification on the issue of carry forward loss in case of strategic disinvestment of a public sector undertaking. Read

https://pib.gov.in/PressReleasePage.aspx?PRID=1753960

Finance Act, 2021 has amended section 72A of the Income-tax Act, 1961 (the Act) to inter alia provide that in case of an amalgamation of a public sector company (PSU) which ceases to be a PSU (erstwhile public sector company), as part of strategic disinvestment, with one or more company or companies, then, subject to the conditions laid therein, the accumulated loss and the unabsorbed depreciation of the amalgamating company shall be deemed to be the loss, or as the case may be, allowance for unabsorbed depreciation of the amalgamated company for the previous year in which the amalgamation was effected.

In order to facilitate the strategic disinvestment, it has been decided that Section 79 of the Income-tax Act, 1961, shall not apply to an erstwhile public sector company which has become so as a result of strategic disinvestment. Accordingly, loss incurred in any previous year prior to, and including, the previous year of strategic disinvestment shall be carried forward and set off by the erstwhile public sector company. The above relaxation shall cease to apply from the previous year in which the company, that was the ultimate holding company of such erstwhile public sector company immediately after completion of the strategic disinvestment, ceases to hold, directly or through its subsidiary or subsidiaries, fifty-one per cent of the voting power of the erstwhile public sector company.

The term “erstwhile public sector company” and “strategic disinvestment” shall have the meaning in Explanation to clause (d) of sub-section (1) of Section 72A of the Income-tax Act, 1961.

Necessary legislative amendments for the above decision shall be proposed in due course of time.

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4.50 kms

4.50 kms in dry, airless, humid weather in Bombay. Running is a form meditation. It works.

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income tax filing dates extension

https://pib.gov.in/PressReleasePage.aspx?PRID=1753603

On consideration of difficulties reported by the taxpayers and other stakeholders in filing of Income Tax Returns and various reports of audit for the Assessment Year 2021-22 under the Income-tax Act, 1961(the “Act”), Central Board of Direct Taxes (CBDT) has decided to further extend the due dates for filing of Income Tax Returns and various reports of audit for the Assessment Year 2021-22. The details are as under:

  1. The due date of furnishing of Return of Income for the Assessment Year 2021-22, which was 31st July, 2021 under sub-section (1) of section 139 of the Act, as extended to 30th September, 2021 vide Circular No.9/2021 dated 20.05.2021, is hereby further extended to 31st December, 2021;
  2. The due date of furnishing of Report of Audit under any provision of the Act for the Previous Year 2020-21, which is 30th September, 2021, as extended to 31st October, 2021 vide Circular No.9/2021 dated 20.05.2021, is hereby further extended to 15th January, 2022;
  3. The due date of furnishing Report from an Accountant by persons entering into international transaction or specified domestic transaction under section 92E of the Act for the Previous Year 2020-21, which is 31st October, 2021, as extended to 30th November, 2021 vide Circular No.9/2021 dated 20.05.2021, is hereby further extended to 31st January, 2022;
  4. The due date of furnishing of Return of Income for the Assessment Year 2021-22, which is 31st October, 2021 under sub-section (1) of section 139 of the Act, as extended to 30th November, 2021 vide Circular No.9/2021 dated 20.05.2021, is hereby further extended to 15th February, 2022;
  5. The due date of furnishing of Return of Income for the Assessment Year 2021-22, which is 30th November, 2021 under sub-section (1) of section 139 of the Act, as extended to 31st December, 2021 vide Circular No.9/2021 dated 20.05.2021, is hereby further extended to 28th February, 2022;
  6. The due date of furnishing of belated/revised Return of Income for the Assessment Year 2021-22, which is 31st December, 2021 under sub-section (4)/sub-section (5) of section 139 of the Act, as extended to 31st January, 2022, vide Circular No.9/2021 dated 20.05.2021, is hereby further extended to 31st March, 2022;

It is also clarified that the extension of the dates as referred to in clauses (9), (12) and (13) of Circular No.9/2021 dated 20.05.2021 and in clauses (1), (4) and (5) above shall not apply to Explanation 1 to section 234A of the Act, in cases where the amount of tax on the total income as reduced by the amount as specified in clauses (i) to (vi) of sub-section (1) of that section exceeds rupees one lakh. Further, in case of an individual resident in India referred to in sub-section (2) of section 207 of the Act, the tax paid by him under section 140A of the Act within the due date (without extension under Circular No.9/2021 dated 20.05.2021 and as above) provided in that Act, shall be deemed to be the advance tax.

CBDT Circular No.17/2021 in F.No.225/49/2021/ITA-II dated 09.09.2021 issued. The said Circular is available on http://www.incometaxindia.gov.in.

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participation in financial products linked to rupee

IFSCA has vide its circular dated 25th August, 2021 clarified that branches of Indian banks and branches of other financial institutions that are set up in IFSC Gift City are allowed to offer financial products linked to the Indian rupee. As per the RBI definition, these units are classified as “overseas entity”.

https://ifsca.gov.in/Viewer/Index/223

Copy of circular can be accessed here.

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