Nov 27, 2014

Modified DBTL scheme for LPG Gas cylinders

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Modified DBTL scheme for LPG Gas cylinders
 The DBTL scheme was earlier launched on 1st June 2013 and finally covered 291 districts. It required the consumer to mandatorily have an Aadhaar number for availing LPG Subsidy. The government has comprehensively reviewed the scheme and after examining the difficulties faced by the consumer substantively modified the scheme prior to launch. The modified scheme is now being re-launched in 54 districts on 15.11.2014 in the 1st Phase and in the rest of the country on 1.1.2015. The modified scheme is given as under:

Options to receive LPG subsidy
Under the modified scheme, the LPG consumer can now receive subsidy in his bank account by two methods. Such a consumer will be called CTC (Cash Transfer Compliant) once he joins the scheme and is ready to receive subsidy in the bank account. The two options are:

Option I (Primary): Wherever Aadhaar number is available it will remain the medium of cash transfer. Thus, an LPG consumer who has an Aadhaar Number has to link it to the bank account number and to the LPG consumer number.

Option II (Secondary): If LPG consumer does not have an Aadhaar number, then he can directly receive subsidy in his bank account without the use of Aadhaar number. This option which has now been introduced in the modified scheme ensures that LPG subsidy is not denied to an LPG consumer on account of lack of Aadhaar number. In this option,Either consumer canPresent bank account information (bank account holder name /account number /IFSC code) to the LPG distributor for capture in LPG database OR Present LPG consumer information (17 digit LPG consumer ID) to his bank

LPG Consumers who are already CTC prior to launch on modified DBTL
Domestic LPG Consumer who had already joined the earlier DBTL scheme by linking their Aadhaar to bank and LPG database don’t need to take fresh action for receiving subsidy as the subsidy will be transferred to their bank accounts via Aadhaar based on the previous seeding. Such CTC consumers cannot exercise Option II above.

Pricing under DBTL
In the DBTL district(s), domestic LPG cylinders will be sold to CTC domestic LPG consumers at Market Determined Price (does not include subsidy) from the date of launch of the scheme.
Amount transferred to consumer 

The total cash applicable on LPG cylinder will then be transferred to the CTC consumer for each subsidized cylinder delivered (up to the cap) as per his entitlement. 

Grace Period
Non-CTC consumers will be allowed 3 months from the date of launch of DBTL to become CTC. During this period such consumers will receive their entitlement of subsidized cylinders at the then applicable subsidized retail selling price. 

Parking Period
After the grace period of 3 months, all non-CTC LPG consumers will get an additional 3 month Parking Period, during which the sale will happen at Market Determined Price for all LPG consumers..

But for non-CTC consumers the total cash on the sale made to such consumers (as per their entitlement) shall be held back with the respective OMC to be transferred to the LPG consumers’ bank account in case consumer becomes CTC anytime during the Parking Period.

In case consumer does not become CTC during this Parking Period, the parked funds will lapse and consumer shall become ineligible to receive the parked funds and sale will continue at market determined price till consumer becomes CTC.

After the expiry of the Grace Period of 3 months, and thereafter an additional Parking Period of 3 months, all non-CTC consumers will receive cylinders at marker determined price and will not be entitled to total cash until they become CTC. When non-CTC consumers become CTC beyond the parking period they will be eligible to get one time permanent advance and total cash entitlement on balance subsidized cylinders in that financial year.

Permanent Advance
A one-time Advance will be provided to every CTC consumer joining DBTL.

The Advance will be notified, from time to time and will remain fixed for a financial year.
It will remain with the consumer till the time of termination of connection, when it will be finally adjusted.

LPG consumers who were provided permanent advance on a previous scale will not be eligible for any differential payment on account of the revision in the permanent advance.

RBI make more easy to take loans for low cost home

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RBI make more easy to take loans for low cost home
Reserve bank of India make more easy to take home loans for low cost home as allowed banks to extend loans against long term infrastructure bonds. RBI issued a note dated 27 November 2014 regarding this issue. Full note is as under.

Please refer to our circular DBOD.BP.BC.No.25/08.12.014/2014-15 dated July 15, 2014 on the captioned subject. In continuation of the same, banks are advised as under:

2. In order to provide liquidity to retail investors in such bonds, it has been decided that banks can extend loans to individuals against long-term bonds issued by them under the provisions of the above-mentioned circular. Boards of the banks should lay down a policy in this regard prescribing suitable margins, purpose of the loan and other safeguards. Further, such loans should be subject to a ceiling, say, Rs.10 lakh per borrower, and tenure of loan should be within the maturity period of the bonds. It is also clarified that banks are not permitted to lend against such bonds issued by other banks.

3. Further, in the formula for ‘Eligible Credit (EC)’ as given in paragraph 7 of the above-mentioned circular dated July 15, 2014, ‘B’ (one of the two factors of EC) has been explained as Outstanding ‘standard’ loans to Infrastructure sector (project loans) and affordable housing on the date of issuance of the bonds. On a review, it has been decided that ‘B’ should be read as Outstanding ‘standard’ loans to the Infrastructure sector (project loans) and affordable housing on the date of reporting to RBI (reporting Fridays for reserve requirements and March 31 of a year for computing priority sector obligation). Other instructions in this regard remain unchanged.

Nov 24, 2014

RBI put some conditions only with banks charge minimum balance charges

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RBI put some conditions only with banks charge minimum balance charges
Reserve bank of India put some conditions on banks with only banks can charge minimum balance penalty on non maintenance of minimum balance in saving bank account. RBI issued a direction no. 47 dated 20 November 2014 regarding this issue. Full direction is as under.

 Please refer to our circular DBOD.Dir.BC.53/13.10.00/2002-03 dated December 26, 2002 on ‘Minimum Balance in Savings Bank Accounts’ advising banks to inform customers, in a transparent manner, regarding the requirement of minimum balance in savings bank account and levy of penal charges for non-maintenance of the same at the time of opening the account.

2. In this connection, a reference is invited to paragraph 30 of Part B of First Bi-monthly Monetary Policy Statement, 2014-15 announced on April 1, 2014, regarding ‘Developmental and Regulatory Policies’ proposing certain measures towards consumer protection. One of the proposals contained therein was that banks should not take undue advantage of customer difficulty or inattention. Instead of levying penal charges for non-maintenance of minimum balance in ordinary savings bank accounts, banks should limit services available on such accounts to those available to Basic Savings Bank Deposit Accounts and restore the services when the balances improve to the minimum required level. A reference is also invited to the recommendations of Damodaran Committee on customer service in banks which, inter-alia, recommended that ‘banks should inform the customer immediately on the balance in the account breaching minimum balance and the applicable penal charges for not maintaining the balance by SMS/Email/letter. Further, the penal charges levied should be in proportion to the shortfall observed’.

3. The policy announcement has been reviewed after extensive consultation with banks. Consequent to these deliberations and after taking into consideration the recommendation of Damodaran Committee, it has been decided that while levying charges for non-maintenance of minimum balance in savings bank account, banks shall adhere to the additional guidelines given in Annex. The guidelines come into effect from April 1, 2015.

4. These guidelines should be brought to the notice of all customers apart from being disclosed on the bank’s website.

5. In the meantime, all banks are advised to take immediate steps to update customer information so as to facilitate sending alerts through electronic modes (SMSs/emails etc) for effective implementation of the guidelines.

Yours faithfully

(Lily Vadera)
Chief General Manager


Levy of charges for non-maintenance of minimum balance in savings bank account shall be subject to the following additional guidelines:

(i) In the event of a default in maintenance of minimum balance/average minimum balance as agreed to between the bank and customer, the bank should notify the customer clearly by SMS/ email/ letter etc. that in the event of the minimum balance not being restored in the account within a month from the date of notice, penal charges will be applicable.

(ii) In case the minimum balance is not restored within a reasonable period, which shall not be less than one month from the date of notice of shortfall, penal charges may be recovered under intimation to the account holder.

(iii) The policy on penal charges to be so levied may be decided with the approval of Board of the bank.

(iv) The penal charges should be directly proportionate to the extent of shortfall observed. In other words, the charges should be a fixed percentage levied on the amount of difference between the actual balance maintained and the minimum balance as agreed upon at the time of opening of account. A suitable slab structure for recovery of charges may be finalized.

(v) It should be ensured that such penal charges are reasonable and not out of line with the average cost of providing the services.

(vi) It should be ensured that the balance in the savings account does not turn into negative balance solely on account of levy of charges for non-maintenance of minimum balance.

Banks will charge more for using ATM from December

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Banks will charge more for using ATM from December
Banks will charge more for ATM withdrawal or checking your balance at ATMs from 1 December 2014. The free limit is limited to 5 in own bank ATM and above   for a financial transaction may cost you over Rs 20 and a non-financial transaction will attract over Rs 8.5 as penalty. Several banks have already announced that they will charge customers for additional transactions.

As per the directive issued by the Reserve Bank of India (RBI) dated August 14 and then on October 10, 2014, with effect from November 1, 2014, the number of free transactions at your ATMs of your own bank has been limited to 5 in a month (as against unlimited free transactions till now). In case of other bank’s ATM, the number of free transactions have been brought down from five to three (in the six metros) while it has been kept at 5 for non-metros.

The six cities that RBI has identified as metros for the same are —Mumbai, New Delhi, Chennai, Kolkata, Bangalore and Hyderabad.

“Banks are advised that at least five free transactions (inclusive of financial and non financial transactions) per month should be permitted to the savings bank account customers for use of own bank ATMs at all locations,” said the RBI directive which has put a cap of Rs 20 (plus service tax) as charge for every additional transaction.

Several banks including State Bank of India, HDFC Bank, Axis Bank have already announced that they will be levying charges on ATM usage over and above the minimum permitted by the RBI, beginning December 1, 2014. ICICI Bank has, however, not yet announced the same.

The impact
If you live in one of the metros and visit your ATM once in two days to withdraw cash then you will exceed your monthly free withdrawal limit (including own and other bank ATM) by 7 times which means that you will have to pay a penalty of over Rs 140 in the month which comes to Rs 1,680 in a year.

Ways by which you can reduce your ATM visits
There are however some ways by which bank customers seek to bring down their ATM visits and thereby avoid paying the penalty on such transactions.

Most monetary transactions and a lot of non-financial transactions such as cheque book requests, credit card payments, checking your account balance or generating a mini statement can be done by logging into the net banking account and customers can avoid visiting ATMs for such purposes.

Some banks including HDFC Bank, ICICI Bank and Axis bank offer a missed call service for non-cash transactions where the customer can call a dedicated number from their registered mobile number following which an SMS is sent by the bank. Customers can use it for balance enquiries , checking mini-statements, cheque books and making account statement requests.

All that a customer needs to do is to store the toll free numbers of his/her bank and call on it. Customers can also go for more debit card transactions rather than cash transactions as it reduces the need for cash withdrawals.

Nov 21, 2014

TDS statement filed for Q1 but not filed Q2 FY 2014-15-TRACES

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TDS statement filed for Q1 but not filed Q2 FY 2014-15-TRACES
As per the records of the Centralized Processing Cell (TDS), you have filed TDS Statements for Q1, FY 2014-15, however, no TDS Statements have been filed for Quarter 2 as of November 1, 2014.

If you are not required to submit the relevant statement, you are requested to submit a declaration by taking appropriate action as suggested under "Action to be taken" in this communication. Otherwise, your urgent attention is invited to relevant CBDT Circulars and provisions of the Income Tax Act, mandating filing of TDS Statements and Issuance of TDS Certificates downloaded from TRACES.

1. Mandatory filing of TDS Statements:

Please refer to the provisions of section 200(3) of the Income Tax Act, 1961 read with Rule 31A, which reads as follows:

Every person responsible for deduction of tax under Chapter XVII-B, shall, in accordance with the provisions of sub-section (3) of section 200, deliver, or cause to be delivered, the following quarterly statements to the Director General of Income-tax (Systems) or the person authorised by the Director General of Income-tax (Systems), namely:
Statement of deduction of tax under section 192 in Form No. 24Q;
Statement of deduction of tax under sections 193 to 196D in -
Form No. 27Q in respect of the deductee who is a non-resident not being a company or a foreign company or resident 
but not ordinarily resident; and
Form No. 26Q in respect of all other deductees.
It is, therefore, advised to file the applicable TDS Statements at the earliest to comply with the above provisions.

2. Implications of Non/ Late filing of TDS Statements:

For Deductors:

In case of late filing of TDS Statements, a fee shall be levied on the deductor u/s 234E of the Act, which reads as under:

Where a person fails to deliver or cause to be delivered a statement within the time prescribed in sub-section (3) of section 200 or the proviso to sub-section (3) of section 206C, he shall be liable to pay, by way of fee, a sum of two hundred rupees for every day during which the failure continues.
For Tax payers:

Non/ Late filing of TDS statements results into the TDS Credit not being available to the deductees. They, therefore, will not be able to claim the credit for tax already deducted from the payments made to them. Please note that TDS Certificates will not be available until the TDS Statements are duly filed

3. Actions to be taken:

Please file the relevant TDS Statement without any further delay.
If you are not required to file the same, please submit a declaration for Non-filing on TRACES. For this purpose, you can login to TRACES, navigate to "Statements/ Payments" menu and submit details under "Declaration for Non-Filing of Statements"
Issue TDS certificates after generating and downloading the same from TRACES. TDS Certificates downloaded only from TRACES Portal will be valid.

Nov 20, 2014

Now you can deposit and withdraw money from same ATM machine

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AXIS Bank announced launch of smart terminal which can be used both to deposit and withdrawal of money like ATM. This smart terminal is self service like ATM which deposit as well as withdraw cash for the customers.

Customers can use this smart terminal without debit or credit card and the money will be deposited instantly as it accepts the money. There is no cap in depositing money in an account as far as the customer shared PAN information with the bank.

The concept of depositing money as well as withdrawing from the same machine will be very useful for the customers as they needn’t to visit branch and stand in queue. This concept is very useful for Banks too as they needn’t refill the ATM machine so often because cash deposited will be used for cash withdrawal. Moreover there will be less rush at branches.

Speaking on the occasion, Rajiv Anand, Group Executive & Head- Retail Banking, Axis Bank, said, "Axis Bank has been a pioneer in launching customer-friendly technology initiatives in the banking space. The self-service terminal is another innovative product by the bank, which will help customers carry out all financial and non-financial transactions in a convenient and hassle-free manner."

Reasons why you should not invest in Kisan Vikas Patra KVP

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Reasons why you should not invest in Kisan Vikas Patra KVP
Finance Minister Mr. Arun Jaitley re launched Kisan Vikas Patra after the discontinue it earlier. Kisan Vikas Patra gives annualized return of 8.7% and money is doubled in 100 months. This option to invest money is reintroduced to stop the public in investing in chit fund or ponzi scheme.
Investing in KVP is not a good option when you have many other options available. Some points are as under.

1-  KVP may be a good option where no banking facility is available. But where banking is available PPF may be the good scheme as rate of interest is almost the same of 8.5%  and offer tax benefits which are not applicable in KVP.

2-  Tax saving FDR with State Bank of India gives 8.75% annualized return compare to 8.7 in KVP. Fixed deposit has the maximum liquidity and you can break it anytime and get your money. However there is a cap of maximum 1 lakh rupees FDR compare to no upper limit in KVP.

3-  If we calculate it with inflation index, KVP is total loss for people come in to 30% tax bracket. KVP gives around 6 % return on investment after deducting tax and inflation is around 6-7 % now a days. So it left lesser money than you invested.

4-  KVP is mainly introduced for gold rush as people treats investing in gold and silver a safe and fruitful investment. Now a day’s gold and silver in red but if we see 5 tears horizon, gold and silver gave a great return compare to KVP.

Gold performance report
Percentage %
1 Month
6 Months
1 Year
5 Years
So we can see gold has given good return in 5 years tenure.

Nov 19, 2014

Features of latest relaunch of Kisan Vikas Patra

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Features of latest relaunch of Kisan Vikas Patra
Government of India has relaunched Kisan  Vikas Patra which is the small saving scheme which was discontinued earlier hoping to lure investors away from gold and fraudulent schemes by offering attractive terms. There won't be any upper limit on investments, the minimum denomination being Rs 1,000.

Investors will be able to double their money in 100 months but the government has bundled in a number of features to enhance liquidity of the instrument as the new regime looks to raise the level of financial savings that fell to 7.1 per cent of GDP in FY13 from more than 12 per cent in FY10.

There are many features of new Kisan Vikas Patra which are as under.

 1- The Kisan Vikas Patra shall be issued in denominations of Rs. 1,000/-, Rs. 5,000/-, Rs.10,000/- and Rs. 50,000/-. 

2- Money will be doubled in 100 Months in KVP certificates.

3- Purchase of Certificate.—Any number of Certificates of the denominations specified in rule 4 may be purchased. 

4- KVP can be purchased as a single holder or joint holder names.

5- A single holder type certificate may be issued to an adult for himself or on behalf of a minor or to a minor.

6- An application In Form A to be submitted in post office or bank to purchase the KVP certificate.

7- Payment can be made in cash, cheque or withdrawl form attaching pass book of saving account in the bank.

8- Certificates will be issued immediately on receiving the payment. However in the case of cheques or pay order, certificate will be issued only after realization.

9- A provisional receipt will be given if no certificate issued in any case which can be later exchanged with the certificates.

10- KVP is transferrable from post office to bank and vice versa.

11- Certificate can be transferred from one person to another in death, joint to single name, single to joint name or any court order etc.

12- No transfer shall be permitted in respect of a Certificate held by or on behalf of a minor till the minor is alive. 

13- Nomination is must in single holder account.

14- Simple interest rate will be given after maturity of certificates.

15- Duplicate certificates can be issued in case of lost certificates.

16- Maturity time is 8 years and 4 Months of KVP certificates.

17- KVP certificate investment is eligible for 80C deduction under income tax act.
Download Full government notification on Kisan Vikas patra

Custom duty drawback rates for all industries effective from 22 November 2014

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Custom duty drawback rates for all industries effective from 22 November 2014
Custom department revised all industries custom drawback duty rates. These rates are effective from 22 November 2014. Custom department issued a circular no. 13/2014 dated 18 November 2014 regarding new custom drawback duty rates. Full circular is as under.

 The Ministry has notified revised All Industry Rates (AIR) of Duty Drawback vide Notification 
No. 110/2014- Customs (N.T.), dated 17.11.2014. This notification comes into force on 22.11.2014.

2. Some of the broad aspects, from amongst the changes notified with respect to AIR of duty drawback and entries in the Schedule, are the following –

(a) As before, the drawback rates have been determined on the basis of certain broad average parameters including, inter alia, prevailing prices of inputs, input output norms, share of imports
in input consumption, the applied rates of central excise and customs duties, the factoring of incidence of service tax paid on taxable services which are used as input services in the 
manufacturing or processing of export goods, factoring incidence of duty on HSD/furnace oil, 
value of export goods, etc. 

(b) Many items already covered under the Drawback Schedule prior to incorporation of erstwhile 
DEPB items, shall see a change in the AIR. In continuation of a transitory arrangement, for the 
items incorporated in the drawback schedule from the erstwhile DEPB Scheme there is a 
reduction in the AIR.

(c) Drawback caps continue on most tariff items with AIRs above 2%. The caps have been 
revised. At rates below 2% there is cap with respect to guar gum and frozen marine products. 

(d) Further, in the case of project exports, where export product is accompanied with ARE-1 and for which no drawback cap has been prescribed in the Schedule, the Note/Condition (6) in the AIR notification now specifies a cap. It has been provided that such cases shall be declared by the exporter and the maximum amount of drawback that can be availed under the Schedule shall not exceed the amount calculated by applying the ad valorem rate of drawback to one and half times the ARE-1 value. In such cases, before Let Export Order is made, the relevant ARE-1 value (s) are to be recorded in the “Departmental Comments” field which is to be also taken into account at the subsequent stage of drawback processing.2

(e) Several entries have been rationalized by merging them at respective four digit level or under the respective residuary sub-heading ‘others’. Tariff item numbers have seen a change in many cases. 

(f) The hitherto residuary rate of 1% (composite) and 0.3% (Customs) is changed to 1% (composite) and 0.15% (Customs). Further existing residuary rates of 1.3% and 1.7%, have been increased to 1.4% and 1.9%, respectively, with some exceptions.

(g) In chapter 57, the six digit tariff item (TI) under 5705 have been changed to refer to the composition of fibre as is under other four digit tariff items. Further, all caps have been madeon the basis of per instead of earlier per kg (for some items) in the chapter. 

(h) Several entries have been modified /amended to address issues brought to Ministry’s notice. 
Laptop bags and shopping bags have been specifically mentioned at six digit level below TI 
4202. ‘Cami’ has been included with women’s/girl’s tops in TI 611402 and 621102; ‘three fourth 
pants’ along with ‘capris’ included in TI 610302, 610402, 620302, and 620402; and ‘leggings” included in TI 610402. An entry for ‘other jackets’ below TI 6114 and 6211 has been made. 

Mountain terrain bicycles have been specified against TI 871203. Cricket bats made from English willow (TI 9506) have been distinguished from other cricket bats.

(i) Separate entries have been created distinguishing certain export products such as cotton yarn of less than 50 counts or 50 or more counts (Chapter 52); core spun cotton yarn containing 3% or more of lycra /spandex/ elastane (TI 5205); flame retardant fabric treated with organic phosphorous compound (TI 5209); knotted/tufted woolen /fine animal hair carpets containing 15% or more by weight of silk (TI 5701, 5703); embroidery in the piece, in strips or in motifs, of flax/linen (TI 5810); cotton blankets (TI 6301); leather safety footwear with protective toe caps of composite/synthetic material (TI 6403); glass artware/handicraft made out of two or more ply glass with or without metallic fusion (TI 7020); delivery tricycles/cycle rickshaws (TI 8712); specified electrical apparatus, of aluminium (TI 8536) and parts of aluminium for specified electrical apparatus (TI 8538). 

(j) AIR has been provided to calcined kaolin packed in HDPE/ LDPE/ PP bags (TI 2507), umbrellas, etc. of Chapter 66 and artificial flowers, etc. (TI 6702). Composite rate of 7% has been provided for all agricultural machinery etc. of TI 8432.

(k) AIR has been fixed as Rs. 219.9/gm for gold jewellery /parts and Rs. 3112.5/kg for silver jewellery /articles. Guar Gum has been provided ad valorem rate (composite) of 0.75% with a cap of Rs. 1270 per MT.

(l) Note/Condition (20) in the AIR Notification specifies that “shirts” shall include “shirts with hoods”. Similarly, Note (25) specifies that “vehicles” of Chapter 87 shall comprise completely 
built unit or completely knocked down (CKD) unit or semi knocked down (SKD) unit.

3. It has been made explicit that where the claim for duty drawback is filed with reference to the rate in the AIR Schedule, an application for fixation of Brand Rate under Rule 7 of the Customs, Central 
Excise Duties and Service Tax Drawback Rules, 1995 shall not be admissible. For this, para 2 of the 
Notification and amendment to the said Rule vide Notification No.109/2014-Customs (N.T.) dated 17.11.2014 may be referred. 

4. In this context, it is also clarified that the exporters opting for claim of brand rate shall declare the 
figure “9801” as an identifier in the shipping bill under the Drawback Details on basis of which they may subsequently apply to Central Excise for determination of brand rate. The Commissioners of Central Excise shall facilitate such exporters in terms of paras 5A-5C of Instruction No. 603/01/2011-DBK dated 11.10.2013 with, interalia, the grant of provisional brand letters.

5. The Commissioners are expected to ensure that the due diligence is exercised to prevent any 
misuse. As before, it may be ensured that exporters do not avail of the refund of service tax paid on taxable services which are used as input services in the manufacturing or processing of export goods through any other mechanism while claiming AIR. Moreover, there is need for continued scrutiny for preventing any excess drawback arising from mismatch of declarations made in the Item Details and the Drawback Details in a shipping bill. Also, in case of claim of the composite (higher) rate of AIR, the processing at the time of export should specifically ensure availability of ‘Non-availment of Cenvat certificate’ etc at that stage itself.

6. It is requested to download the notifications from the Board’s website ( and carefully peruse them and thereby take note of all the specific changes notified. 

7. With trade facilitation in view, tenure of the Drawback Committee constituted by Central Government has been temporarily extended. Therefore, if any inconsistency or error is noticed or difficulty faced, the Board may be apprised so that the appropriate action can be initiated.

8. Suitable public notice and standing order may also be issued for guidance of the trade and officers.

Central excise clarification about availment of CENVAT credit after 6 monts

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Central excise clarification about availment of CENVAT credit after 6 monts
Central excise department issued a clarification regarding availment of CENVAT credit after 6 months with a circular no. 990/14/2014 dated 19 November 2014. Full circular is as under.

Attention is invited to the Notification of the Government of India in the Ministry of Finance, Department of Revenue No. 21/2014-CE (NT) dated 11.07.2014, vide which, inter alia, amendment was made in Rule 4(1) and 4(7) of CENVAT Credit Rules, 2004 (CCR, 2004) to prescribe that manufacturer or output service provider shall not take CENVAT credit after six months of the date of issue of any of the documents specified in sub-rule (1) of Rule 9.

2.     Concerns have been expressed by trade that in view of above changes, the re-credit taken in following three situations may be hit by the time limit of six months prescribed:

 i.    3rd proviso to Rule 4(7) of CCR, 2004 prescribes that if the payment of value of input service and service tax payable is not made within three months of date of invoice, bill or challan, then the CENVAT Credit availed is required to be paid back by the manufacturer or service provider. Subsequently, when such payment of value of input service and service tax is made, the amount so paid back can be re-credited.

 ii.   According to Rule 3(5B) of CCR, 2004, if the value of any input or capital goods before being put to use on which CENVAT Credit has been taken, is written off or such provisions made in Books of Account, the manufacturer or service provider is required to pay an amount equal to credit so taken. However, when the inputs or capital goods are subsequently used, the amount so paid can be re-credited in the account.

 iii.   Rule 4(5)(a) of CCR, 2004 prescribes that in case inputs sent to job worker are not received back within 180 days, the manufacturer or service provider is required to pay an amount equal to credit taken on such inputs in the first instance. However, when the inputs are subsequently received back from job worker, the amount so paid can be re-credited in the account.

3.      The matter has been examined. The purpose of the amendment made by Notification No. 21/2014-CE (NT) dated 11.07.2014 is to ensure that after the issue of a document under sub-rule (1) of Rule 9, credit is taken for the first time within six months of the issue of the document. Once this condition is met, the limitation has no further application. It is, therefore, clarified that in each of the three situations described above pertaining to Rule 4(7), Rule 3(5B) or Rule 4(5) (a) of CCR, 2004, the limitation of six months would apply when the credit is taken for the first time on an eligible document. It would not apply for taking re-credit of amount reversed, after meeting the conditions prescribed in these rules

4.      Difficulties faced, if any, in implementation of this Circular may be brought to the notice of the Board. Hindi version follows.

Nov 18, 2014

5 Reasons why credit card in better than cash

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5 Reasons why credit card in better than cash
Credit cards concept is still mystery for Indians and many of us hate credit cards. People think it can lead to a trouble with cyber fraud or using in wrong ways. But using credit card rationally will be very useful in many circumstances compare to bring cash and paying in cash. These are 5 ways where using credit card will be very useful.

 1. Ease in travelling: Imagine you are travelling abroad. You want to buy an expensive gift for your wife, let’s say a diamond ring, which could run into some $1,000, which is around Rs 60,000. Would you carry that much cash in a foreign country? If you had planned to withdraw cash from your bank account, think again. Does your debit card allow you to withdraw that much cash? No. Every bank sets limit over debit card swipes and withdrawal limits in a single day. A credit card is a clear winner in this case.

2. After you lose it? What will you do after you lose money or it is stolen? Do you think it can be replaced? Your credit card can be replaced after it is lost or stolen. Yes, it comes at a nominal cost, but still there is scope to replace it, but when it comes to cash? No way.

3. Build or repair your credit score: No, it is not like what you thought. Cash transactions and debit card transactions are not reported to Credit Information Bureau of India Limit (Cibil) and other credit bureaus. So, you cannot build your Cibilcredit score based on debit card usage. A credit card is any day convenient way to build your Cibil score or repair your damaged score. Credit card usage is a manifestation of your credit behavior and also your credit card repayment pattern shows if you are following financial discipline scrupulously.

4. Rewards: Using a credit card can be rewarding if used wisely. Credit card companies or banks issuing these cards have tie-ups with top retailers, e-commerce websites, e-ticketing websites, malls, restaurants, cinema houses, etc. The more you spend on your credit cards the more points you can collect that can be later redeemed from the wide range of offerings. However, just to collect points one must not spend an amount one can’t repay to the lender. Can you think of any such rewards or freebies by spending cash?

5. Anything else? These days credit limit on credit cards easily touch Rs 50,000 to Rs 1,00,000. That is how much you can buy from your credit card. Imagine carrying around that much cash? Moreover, sometime when you are extremely cash strapped you can just pay the minimum amount due on your credit card and keep sailing. Please make sure that you chose this option as one off instance and not a regular practice.

Hence, it is important to understand that the only advantage, cash offers is controlling spends. If you are one of those who do not overspend, we advise you to get yourself a credit card. It will open up a whole new world of benefits.

Income tax clarification on making an application to Commission

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Income tax clarification on making an application to Commission
The Income tax department issued a clarification on circular no. 3 dated 12-03-2008 about making an application to Commission. Income tax department issued circular no. 16 dated 17 November 2014 regarding this issue. Full circular is  as under.

Chapter XIX-A of the Income-tax Act, 1961 contains provisions relating to settlement of cases by the Income-tax Settlement Commission (ITSC). The provisions contained in the said chapter were amended by Finance Act, 2007 and a Revised Settlement Scheme was put in place. Explanatory Circular No.3/2008 dated 12.03.2008 issued by CBDT vide para 61 (comprising sub paras 61.1 to 61.17) deals with Revised Settlement Scheme. 

2. Para 61.2 of Circular No.3 of 2008 reads:-

 “61.2 under the existing provisions, an assessee may make an application to the Commission at any stage of the proceedings in his case pending before any Income-tax Authorities. After 31st May, 2007, an assessee can make an application to the Commission only during the pendency of the proceedings before the Assessing Officer. It is further clarified that (a) since intimation under section 143(1) is not an assessment order, there will be no bar in filing an application for settlement
subsequent to receipt of an intimation under section 143(1). It is not material whether time-limit for issue of notice under section 143(2) has expired or not; (b) the assessment shall be deemed to have
been completed only on the date of service of assessment order to the applicant”. 

3. It has been inadvertently stated in para 61.2 of Circular No.3 of 2008 that the assessment shall be deemed to have been completed only on the date of service of assessment order to the applicant. This statement is not inconsonance with the provisions contained in Explanation to clause (b) of section 245A of the Income-tax Act which, inter alia, provides that a proceeding for assessment of any assessment year shall be deemed to have concluded on the date on which the assessment is made.

4. In view of the above, para 61.2 of Circular No.3 of 2008 is replaced with the following with effect from the 1st day of June, 2007:-

“61.2 Under the existing provisions, an assessee may make an application to the Commission at any stage of the proceedings in his case pending before any Income-tax Authorities. After 31st May, 2007, an assessee can make an application to the Commission only during the pendency of the
proceedings before the Assessing Officer. It is further clarified that (a) since intimation under section 143(1) is not an assessment order, there will be no bar in filing an application for settlement subsequent to receipt of an intimation under section 143(1). It is not material whether time-limit for issue of notice under section 143(2) has expired or not; (b) the assessment shall be deemed to have been completed on the date on which the assessment order is passed.”

Nov 17, 2014

Consumers need to buy LPG gas cylinders at market price from 1 January 2015

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Consumers need to buy LPG gas cylinders at market price from 1 January 2015
All consumers will have to buy cooking gas at market rates from New Year's Day as the government has issued firm instructions that the subsidy will be transferred directly to bank accounts as it seeks to end illicit supplies to restaurants, cars and factories, besides slashing the subsidy bill and boosting private investment. 

 After recently eliminating the diesel subsidy, which had ballooned to Rs 62,837 crore, Oil Minister Dharmendra Pradhan has now ordered state oil companies to ensure that the scheme — which is being launched as a pilot on Saturday for 2.33 crore customers in 54 districts — is smoothly expanded to the entire country on January 1, 2015. 

Some oil industry executives had expressed doubts about the successful rollout of the scheme to the entire country in barely six weeks of the launch in 54 districts after the UPA government botched up the programme after expanding it to 291 districts just before the general election. It had been forced to withdraw the programme after Congress leaders said it was costing them votes 

The oil ministry is, however, confident about success this time around. "The old DBTL (direct benefit transfer of LPG) scheme failed because Aadhaar number was made mandatory to avail subsidy. We have modified the scheme so that the consumer will not face any difficulty in getting subsidised cylinders," Pradhan told ET.

Under the modified DBTL, a consumer will be eligible for subsidised LPG cylinders even without the Aadhaar number, Pradhan said. 

Embracing DBT Principle

Consumers without the unique ID will also receive cash directly in their bank accounts. They can switch to Aadhaar-based cash transfers once they have been enrolled by informing dealers and banks.

Customers have six months to tell LPG dealers their bank account numbers without losing the subsidy amount. While subsidised cylinders will be delivered to them in the first three months, they will have to buy at market rates after that. The subsidy will be remitted to their bank accounts within the next three months, officials said.

For the first subsidy payment, the money will be transferred to the bank account of consumers as soon as they make the first booking for a cylinder after joining the scheme, prior to delivery. This advance ensures that consumers have extra cash to pay for the first cylinder at market price. The permanent advance shall be notified for consumers now joining the scheme separately. 

The move reflects the embrace of the direct benefits transfer principle introduced, albeit with limited success, by the UPA government. Aadhaar has meanwhile covered more than half the country's population.

"The UIDAI (Unique Identification Authority of India) has, till date, issued over 70.7 crore Aadhaar numbers," the government said in a release on Friday. "Nine states/UTs including Andhra Pradesh, Kerala, Delhi and Himachal Pradesh have crossed 90% Aadhaar coverage, while a further seven states/UTs have Aadhaar coverage of between 70% and 90%."

In the 54 districts in which the pilot is being launched, 95% of consumers already have Aadhaar numbers. The new scheme ensures that consumers receive SMS alerts on their registered mobile numbers at every stage of enrollment in the scheme. 

Bank FDR limit u/s 80C has increased to 150000

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Bank FDR limit u/s 80C has increased to 150000

CBDT has increased the bank fixed deposit limit from 1 Lakh ruppes to 1.5 Lakh rupees for the exemption u/s 80C. This is called Bank term deposit scheme. CBDT made an amendment and increased to 1.5 Lakh with a notification no. 63/2014 dated 13 November 2014. Full notification is as under.

S.O. 2906(E).In  exercise  of  the  powers  conferred  by  clause  (xxi)  of  sub‐section  (2)  of section  80C  of  the  Income‐tax  Act,  1961  (43  of  1961),  the  Central  Government  hereby makes the following amendments to the the Bank Term Deposit Scheme, 2006, namely:‐ 

1.    (1) This scheme may be called the Bank Term Deposit (Amendment) Scheme, 2014. 

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

2.  In the Bank Term Deposit Scheme, 2006, in para 3, in clause (1), for the words “one lakh rupees” ,the words “one hundred and fifty thousand rupees” shall be substituted. 

Mismatch of BIN reported in TDS statements for govt employees

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Mismatch of BIN reported in TDS statements for govt employees
Centralized Processing Cell (TDS) has observed substantial cases of mismatch in Book Identification Number (BIN) in Quarterly TDS Statements

As you may be aware that at the time of filing TDS statements, it is mandatory:
To quote the BIN particulars correctly, through which TDS payments have been made.

The TDS forms prescribe quoting of such BINs and the underlying deductee transactions corresponding to such BINs.

However, it has been observed that mistakes have been committed earlier, while reporting tax payments, in some of your TDS statements.

Please be advised that mismatch of such BINs may lead to Defaults on account of "Short Payment".
You are therefore, advised to ensure that Correct BIN details, as communicated to you through your respective Pay and Account Office (PAO) after filing their respective Form No. 24G, are quoted in your TDS Statements for avoiding mismatch of BIN.

For any assistance, you can call our toll-free number 1800 103 0344.

CPC (TDS) is committed to provide best possible services to you.

Nov 7, 2014

RBI advised banks to send SMS to payer when cheque received for clearing

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RBI advised banks to send SMS to payer when cheque received for clearing
The Reserve bank of India issued some advise to banks for cheque related fraud cases and preventive measures. Full preventive measures are as under.
Cheque related fraud cases - preventive measures

The rise in the number of cheque related fraud cases is a matter of serious concern. It is evident that many of such frauds could have been avoided had due diligence been observed at the time of handling and/or processing the cheques and monitoring newly opened accounts. Banks are, therefore, advised to review and strengthen the controls in the cheque presenting/passing and account monitoring processes and to ensure that all procedural guidelines including preventive measures are followed meticulously by the dealing staff/officials. Given below are some of the preventive measures banks may follow in this regard. The list is only indicative.

1- Ensuring the use of 100% CTS - 2010 compliant cheques.

2- Strengthening the infrastructure at the cheque handling Service Branches and bestowing special attention on the quality of equipment and personnel posted for CTS based clearing, so that it is not merely a mechanical process.

3- Ensuring that the beneficiary is KYC compliant so that the bank has recourse to him/her as long as he/she remains a customer of the bank.

4- Examination under UV lamp for all cheques beyond a threshold of say, Rs.2 lakh.

5- Checking at multiple levels, of cheques above a threshold of say, Rs. 5 lakh.

6- Close monitoring of credits and debits in newly opened transaction accounts based on risk categorization.

7- Sending an SMS alert to payer/drawer when cheques are received in clearing.

The threshold limits mentioned above can be reduced or increased at a later stage with the approval of the Board depending on the volume of cheques handled by the bank or it's risk appetite.

2. In addition to the above, banks may consider the following preventive measures for dealing with suspicious or large value cheques (in relation to an account’s normal level of operations):

a) Alerting the customer by a phone call and getting the confirmation from the payer/drawer.

b) Contacting base branch in case of non-home cheques.

The above may be resorted to selectively if not found feasible to be implemented systematically.

3. It has been reported that in some cases even though the original cheques were in the custody of the customer, cheques with the same series had been presented and encashed by fraudsters. In this connection, banks are advised to take appropriate precautionary measures to ensure that the confidential information viz., customer name / account number / signature, cheque serial numbers and other related information are neither compromised nor misused either from the bank or from the vendors’ (printers, couriers etc.) side. Due care and secure handling is also to be exercised in the movement of cheques from the time they are tendered over the counters or dropped in the collection boxes by customers.

Nov 1, 2014

9 Crores can lift out of poverty with a nominal tax on super rich

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9 Crores can lift out of poverty with a nominal tax on super rich
As many as nine crore people would be out from the state of abject poverty in next 5 years if India could stop inequality from rising and levy a nominal tax on the super riches to narrow the rich and poor divide, a report said today.

Levying a wealth tax of 1.5 per cent on super rich could help attain the objective of raising people out of extreme poverty, development organisation Oxfam India said in its latest report 'Even it Up: Time to End Extreme Inequality'.

"...research has found that if India stopped inequality from rising, they could lift 90 million more people out of extreme poverty by 2019.

"This is an easy win for the government. By levying a wealth tax of only 1.5 per cent on the 65 super rich, 90 million people can lead a life of dignity and free of poverty" said Nisha Agrawal, CEO, Oxfam India.

The study found that in India, the number of billionaires increased from two in the 1990s to 65 in 2014 and the net worth of these super rich people is enough to eliminate absolute poverty in the country, twice over.

It revealed that more than half of the foreign direct investment (FDI) in India is channelled through tax havens and the government spends almost twice as much on its military as on health.
"Money that can be invested to tackle inequality is diverted by tax breaks and public-private partnerships," the report said.

Oxfam India said that an urgent action is needed to clamp down on tax evasion by multinational corporations and the world's richest individuals.

"Global corporations and the wealthiest people must pay their fair share to governments', so that countries can tackle inequality and build fairer societies," it added.

A report by UN-ESCAP earlier this month said that the gap between the poor and the rich is growing in the Asia-Pacific region, including India, and there has been an increase in income inequality in many major economies in this region.

According to government data, the poverty ratio in the country declined to 21.9 per cent in 2011-12 from 37.2 per cent in 2004-05 on account of increase in per capita consumption.

In 2011-12, the national poverty line was estimated at Rs 816 per capita per month in villages and Rs 1,000 per capita per month in cities.

This meant people consuming goods and services over Rs 33.33 in cities and Rs 27.20 per capita per day in villages were not classified as poor.