All about Sovereign Gold Bonds 2015-16

All about Sovereign Gold Bonds 2015-16

Government of India starts a new scheme Sovereign Gold Bonds 2015-16 on investment on gold basis. Earlier Government of India also introduced Gold Monetisation Scheme 2015   . The features of Sovereign Gold Bonds Scheme 2015-16 are as under.

It has been decided by the Government of India, as per their Notification F.No. 4(19)-W&M/2014 dated October 30, 2015, to issue Sovereign Gold Bonds, 2015 (“the Bonds”) with effect from November 05, 2015 to November 20, 2015. The Government of India may, with prior notice, close the Scheme before the specified period. The terms and conditions of the issuance of the Bonds shall be as follows:

1. Eligibility for Investment:
The Bonds under this Scheme may be held by a person resident in India, being an individual, in his capacity as such individual, or on behalf of minor child, or jointly with any other individual. “Person resident in India” is defined under section 2(v) read with section 2 (u) of the Foreign Exchange Management Act, 1999.

2. Form of Security
The Bonds shall be issued in the form of Government of India Stock in accordance with section 3 of the Government Securities Act, 2006. The investors will be issued a Holding Certificate (Form C). The Bonds shall be eligible for conversion into de-mat form.

3. Date of Issue
Date of issuance shall be November 26, 2015.
The investors can apply for the Bonds in receiving offices from November 05, 2015 to November 20, 2015. The issuance can be closed by Government of India earlier than November 20, 2015 with a prior notice.

4. Denomination
The Bonds shall be denominated in units of one gram of gold and multiples thereof. Minimum investment in the Bonds shall be 2 grams with a maximum subscription of 500 grams per person per fiscal year (April – March). In case of joint holding, the limit applies to the first applicant.

5. Issue Price
Price of the Bonds shall be fixed in Indian Rupees on the basis of the previous week’s (Monday – Friday) simple average closing price for gold of 999 purity, published by the India Bullion and Jewellers Association Ltd. (IBJA).

6. Interest
The Bonds shall bear interest at the rate of 2.75 per cent (fixed rate) per annum on the amount of initial investment. Interest shall be paid in half-yearly rests and the last interest shall be payable on maturity along with the principal.

7. Receiving Offices
Scheduled commercial banks (excluding RRBs) and designated Post Offices (as may be notified) are authorized to receive applications for the Bonds either directly or through agents.

8. Payment Options
Payment shall be accepted in Indian Rupees through Cash or Demand Drafts or Cheque or Electronic banking. Cheque or draft should be drawn in favour of the bank / post office (Receiving Office), specified in paragraph 7 above and payable at the place where the applications are tendered.

9. Redemption
The Bonds shall be repayable on the expiration of eight years from the date of issue. Pre-mature redemption of the Bond is allowed from fifth year of the date of issue on the interest payment dates.
The redemption price shall be fixed in Indian Rupees on the basis of the previous week’s (Monday – Friday) simple average closing price for gold of 999 purity, published by IBJA.

10. Repayment
The receiving office shall inform the investor of the date of maturity of the Bonds, one month before its maturity.

11. Eligibility for Statutory Liquidity Ratio (SLR)
The investment in the Bonds shall be eligible for SLR.

12. Loan against Bonds
The Bonds may be used as collateral for loans. The Loan to Value ratio will be as applicable to ordinary gold loan mandated by the RBI from time to time. The lien on the Bonds shall be marked in the depository by the authorized banks.

13. Tax Treatment
Interest on the Bonds shall be taxable as per the provisions of the Income-tax Act, 1961. Capital gains tax treatment will be the same as that for physical gold.

14. Applications
Subscription for the Bonds may be made in the prescribed application form (Form ‘A’)  or in any other form as near as thereto stating clearly the grams of gold and the full name and address of the applicant. The receiving office shall issue an acknowledgment receipt in Form ‘B’ to the applicant.

15. Nomination
Nomination and its cancellation shall be made in Form ‘D’ and Form ‘E’, respectively, in accordance with the provisions of the Government Securities  Act, 2006 (38 of 2006) and the Government Securities Regulations, 2007, published in part III, Section 4 of the Gazette of India dated the 1st December, 2007.

16. Transferability
The Bonds shall be transferable by execution of an Instrument of transfer as in Form ‘F’, in accordance with the provisions of the Government Securities Act, 2006 (38 of 2006) and the Government Securities Regulations, 2007, published in part III, Section 4 of the Gazette of India dated the 1st December, 2007.

17. Tradability in Bonds
The Bonds shall be eligible for trading from such date as may be notified by the Reserve Bank of India.

18. Commission for distribution
Commission for distribution shall be paid at the rate of rupee one per hundred of the total subscription received by the receiving offices on the applications received and receiving offices shall share at least 50% of the commission so received with the agents or sub-agents for the business procured through them.

19. All other terms and conditions specified in the notification of Government of India in the Ministry of Finance (Department of Economic Affairs) vide number F. No.4(13) W&M/2008, dated the 8th October, 2008 shall apply to the Bonds.

Yours faithfully,
(Chandan Kumar)
Deputy General Manager 
Custom clarification on self sealing and self examination of bulk cargo

Custom clarification on self sealing and self examination of bulk cargo

CBEC department issued a circular about clarification onself sealing and self examination of bulk cargo. 

References have been received from trade as well as from field formations regarding problems faced by trade in sealing of Bulk Cargo for export under bond under Notification No. 42/2001-Central Excise (N.T.), dated 26.06.2001. It has been pointed out that bulk cargo for e.g. coal, iron-ore, alumina Concentrate, heavy machinery etc. are difficult to seal in packages or container and hence a suggestion has been made that there is a need to prescribe procedure for export of such goods.

2. The matter has been examined. Notification No.42/2001-Central Excise (N.T.), dated 26.06.2001, has been amended vide
Notification No. 23/2015, dated 30.10.2015 thereby exempting bulk cargo from sealing in packages or container. The Principal Chief Commissioner/ Chief Commissioner of Central Excise has been empowered to grant exemption from self sealing of bulk cargo for export on case to case basis.

3. In the said Notification, in paragraph 2, in sub-paragraphs (ii) and (iii), after clause (a) occurring in both sub-paragraph , following proviso shall respectively be inserted, namely:-

“ Provided that where the nature of goods is such that the goods cannot be sealed in a package or a container such as coal or ore, etc., exemption from sealing of package or container may be granted by the Principal Chief Commissioner or Chief Commissioner of Central Excise subject to safeguard as may be specified by him in the permission.

The safeguards shall, inter-alia, include the following:-
i.method of verification of quantity and quality of goods including testing of goods where necessary at the place of removal or despatch and at the port of export or SEZ, where the goods are received;

ii.no remission of duty shall be allowed for loss of goods within transit;

iii.permission shall be given on case to case basis for a specified period not exceeding one year at a time and may be withdrawn in case of misuse; and

iv.any additional safeguards as may be specified ” .

4. In this regard, following procedures is prescribed while allowing export without sealing in packages or container:-

i.The assessee who desires to avail facility of export of bulk cargo without sealing shall write to the Principal Chief Commissioner/ Chief Commissioner of Central Excise with a copy to jurisdictional Assistant/ Deputy Commissioner of Central Excise, giving details of bulk cargo to be exported with proper justification regarding difficulties faced by him in sealing of the cargo.

ii.The Jurisdictional Assistant/ Deputy Commissioner after receipt of such application from the exporter shall forward it to the Principal Commissioner/ Commissioner with his comments within fifteen days of receipt of such application with due verification as needed.

iii.The Jurisdictional Principal Commissioner/ Commissioner of Central Excise forward all such application to the Principal Chief Commissioner/ Chief Commissioner of Central Excise with his recommendation within three weeks of receipt of the application with report from the Assistant/ Deputy Commissioner. The jurisdictional Principal Commissioner/ Commissioner of Central Excise shall also consult the Principal Commissioner/ Commissioner having jurisdiction over the port of export or Development Commissioner of SEZ where the goods are received and incorporate the inputs appropriately in his recommendation.

iv.Principal Chief Commissioner/ Chief Commissioner of Central Excise shall grant or reject the request for waiver of sealing of bulk cargo with in fifteen days of receipt of the application from the Principal Commissioner/ Commissioner of Central Excise.

5. The final decision taken on the application shall be communicated to the applicant in writing and in cases where the permission is granted, conditions and safeguards prescribed shall be clearly mentioned.

6. Difficulty experienced, if any, in implementing the circular should be brought to the notice of the Board. Hindi version will follow.

(Santosh Kumar Mishra)
Under Secretary to the Government of India
New rule of change in name in account after marriage or otherwise

New rule of change in name in account after marriage or otherwise

Reserve Bank of India amend to provision of money laundering rules 2015 on 29 October 2015 and issued new rules of change in the name in account after marriage or otherwise. The new rule is as under.

The Chairpersons/ CEOs of all Scheduled Commercial Banks/ Regional Rural Banks/ Local Area Banks/ All India Financial Institutions/ all NBFCs/ All Primary (Urban) Co-operative Banks /State and Central Co-operative Banks (StCBs / CCBs) /All Payment System Providers/ System Participants and Prepaid Payment Instrument Issuers/ All authorised persons including those who are agents of Money Transfer Service Scheme

Dear Sir /Madam,
Amendment to Prevention of Money Laundering (Maintenance of Records) Rules, 2005 – Submitting ‘Officially Valid Documents’ - Change in name on account of marriage or otherwise

Please refer to paragraph 3.2.2.I.A of our Master Circular DBR.AML.No. 15/14.01.001/2015-16 dated July 1, 2015 on KYC/AML/CFT specifying Customer Due Diligence requirements (CDD) while opening accounts of individuals.

2. Reserve Bank has been receiving references/representations from banks and individuals regarding the problems faced by persons who change their name due to marriage or otherwise, in submitting an ‘Officially Valid Document’ (OVD) while opening a new bank account or during periodic updation exercise or incorporating the name change in the existing accounts. The OVD issued in the original name, which is not updated due to various reasons, still show the maiden/ previous name of such persons.

3. The Government, in consultation with the Reserve Bank has since amended the Prevention of Money Laundering (Maintenance of Records) Rules, 2005 and issued a gazette notification G.S.R.730(E) dated September 22, 2015 regarding Prevention of Money Laundering (Maintenance of Records) (PML) Third Amendment Rules, 2015 (copy enclosed).

4. In terms of clause 2 of the PML third amendment rules, an explanation has been inserted in the clause (d) of Rule 2. Sub rule (1) which reads as under:
“Explanation: For the purpose of this clause, a document shall be deemed to an “officially valid document” even if there is a change in the name subsequent to its issuance, provided it is supported by a marriage certificate issued by the State Government or a Gazette notification, indicating such a change of name”.

5. Accordingly, regulated entities are advised that they may accept a copy of marriage certificate issued by the State Government or Gazette notification indicating change in name together with a certified copy of the ‘officially valid document’ in the existing name of the person while establishing an account based relationship or while undergoing periodic updation exercise.

6. Further, Amendment to Rule 7 (3) and 7(4) has also been notified which reads as under:
(7)(3): Every reporting entity shall evolve an internal mechanism having regard to any guidelines issued by the director in consultation with its regulator, for detecting the transactions referred to in clauses (A), (B), (BA), (C), (D), (E) and (F) of sub-rule (1) of rule 3 and for furnishing information about such transactions in such form as may be directed by the director in consultation with its Regulator.

(7)(4): It shall be the duty of every reporting entity, its designated director, officers and employees to observe the procedure and the manner of furnishing information as specified by the director in consultation with its Regulator.”

7. Regulated entities may revise their KYC policy in the light of the above instructions and ensure strict adherence to the same.
Yours faithfully,
(Lily Vadera) 
Chief General Manager
Subscription to National Pension Scheme by Non Resident of India

Subscription to National Pension Scheme by Non Resident of India

Reserve bank of India issued a circular no. 24 dated 29 October 2015 about subscription to National Pension Scheme by Nonresident of India. 

Attention of Authorised Dealers Category – I (AD Category - I) banks is invited to the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2000, notified vide Notification No. FEMA 20/2000-RB dated May 3, 2000, as amended from time to time.

2. With a view to enabling NRIs’ access to old age income security, it has now been decided, in consultation with the Government of India, to enable National Pension System (NPS) as an investment option for NRIs under FEMA, 1999. Accordingly, NRIs may subscribe to the NPS governed and administered by the Pension Fund Regulatory and Development Authority (PFRDA), provided such subscriptions are made through normal banking channels and the person is eligible to invest as per the provisions of the PFRDA Act.

3. The subscription amounts shall be paid by the NRIs either by inward remittance through normal banking channels or out of funds held in their NRE/FCNR/NRO account. There shall be no restriction on repatriation of the annuity/ accumulated savings.

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

5. Reserve Bank has since amended the subject Regulations accordingly through the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) (Ninth Amendment) Regulations, 2015 which have been notified vide Notification No. FEMA.353/2015-RB dated October 6, 2015, vide G.S.R. No. 759 (E) dated October 6, 2015.

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

Yours faithfully
(B. P. Kanungo)
Principal Chief General Manager


No capital gains on appreciation in value of rupee in Rupee Infrastructure Bonds

No capital gains on appreciation in value of rupee in Rupee Infrastructure Bonds

CBDT has issued a press release on Taxation of income from off-shore Rupee Denominated Bonds- as no capital gains on appreciation in value of rupee in Rupee Infrastructure Bonds. 

The Reserve Bank of India has recently permitted Indian corporates to issue rupee denominated bonds outside India.

The matter of taxation of income from such bonds under Income-tax Act, 1961 has been considered by the Government.

In so far as taxation of interest income from these INR off-shore bonds in the case of non-resident investors is concerned, it is clarified that withholding tax at the rate of 5 percent, which is in the nature of final tax, would be applicable in the same way as it is applicable for off-shore dollar
denominated bonds.

Further, it has been decided that the Capital gains, arising in case of appreciation of rupee between the date of Issue and the date of redemption against the foreign currency in which the investment is made; would be exempted from capital gains tax. Legislative amendment in this regard will be proposed through the Finance Bill, 2016.

(Shefali Shah)
Pr. Commissioner of Income Tax (OSD)
Official Spokesperson, CBDT
Last date of filing e-form AOC-4 AOC-4 XRBL and MGT-7 has extended

Last date of filing e-form AOC-4 AOC-4 XRBL and MGT-7 has extended

Ministry of Corporate affairs has extended the last date of filing forms AOC-4, AOC-4 XRBL and MGT-7 to 30 November 2015.

In continuation of this Ministry's General Circular No.10/2015 dated 13.07.2015, keeping in view the request received from various stakeholders, it has been decided to relax the additional fee payable on forms AOC-4 and AOC-4 XBRL upto 30th November, 2015. The additional fee requirement for MGT-7 E-Form is also relaxed for all such forms filed till 30th November, 2015, wherever additional fee is applicable.
2. This issues with the approval of competent authority.
Delhi VAT extends last date of  filing of online return of second quarter

Delhi VAT extends last date of filing of online return of second quarter

Delhi VAT department extended last date of filing online return for second quarter pf 2015-16 to 16 November 2015.

In exercise of the powers conferred under Rule 49A of the Delhi Value Added Tax Rules, 2005, 1, S.S.Yadav, Commissioner, Value Added Tax, do hereby extend the last date of filing of online/hard copy of second quarter return for the year 2015-16, in Form DVAT-16, DVAT-17 and DVAT-48 along with required annexure/enclosures to 16/11/2015. 

However, the tax due shall continue to be paid in the usual manner as per the provisions of section 3(4) of the Delhi Value Added Tax Act, 2004. The dealers filing the returns through digital signature need not file hard copy of the return/Form DVAT-56. 
Last date of filing annual VAT return of Assam has extended

Last date of filing annual VAT return of Assam has extended

Government of Assam has extended last date of filing annual VAT return and filing of audit report to 31 December 2015.

No.FTX.49/2014/88.-Whereas it has been represented by various chambers of commerce and trade and professional bodies that the time limit for filing of annual return under section 29 of the Assam Value Added lax Act, 2003 (Assam Act VIII of 2005) read with proviso to rule 17(5) and rule 176 of the Assam Value Added Tax Rules, 2005 by a dealer, is insufficient to comply with, as the auditor gets a time period of only one month to prepare and file VAT audit report, because without completion of Income lax audit report, which has to be filed by 30th September, the auditor is not in a position to verify the data for the purpose of filing VAT audit report and thereby cannot comply with the provisions of proviso to rule 17(5) and 176 of the Assam Value Added Tax Rules, 2005; 

And whereas, the Government is satisfied that the circumstances exist which render it necessary for it to remove the said difficulty arising in giving effect to the provisions of the Act. 

Now, therefore, in exercise of powers conferred by section 110 of the Assam Value Added Fax Act, 2003 (Assam Act VIII of 2005), the Governor of Assam is hereby pleased to extend the time limit for filing of annual return under section 29 of the said Act read with proviso to rule 17(5) and rule 176 of the Assam Value Added Tax Rules 2005 and the filing of audit report connected therewith by a dealer, upto 31' December, 2015: 

Provided that such extension of time shall not in any way affect the original time limit as provided under proviso to rule 17(5) and rule 1713 of the said Rules in respect of the subsequent filing to he made after the expiry of the. aforesaid extended period. 
Official Gazette. 

This notification shall come into force on the date of its publication in the Official Gazette.
S. K. KHARE,
Principal Secretary to the Government of Assam,
Finance (Taxation) Department, Dispur.  
New e-Sahyog pilot project of Income tax department

New e-Sahyog pilot project of Income tax department

Finance Minister launches the“e-Sahyog” pilot project of the Income-tax Department.

The Income-tax Department is committed to the ‘Digital India’ initiative of the Government of India.The Finance Minister today launched an “e-Sahyog” pilot project which furthers the
Department’s commitment to work in an e-environment and reduces the need for the taxpayer to physically appear before tax authorities.

The “e-Sahyog” project launched on a pilot basis, is aimed at reducing compliance cost, especially for small taxpayers. The objective of “e-Sahyog” is to provide an online mechanism to resolve mismatches in Income-tax returns to taxpayers whose returns have not been selected for scrutiny, without visiting the Income Tax Office. Under this initiative the Department will provide an end to end e-service using SMS, e-mails to inform the taxpayers of the mismatch. The taxpayer will simply need to visit the e-filing portal and log in with their user-ID and password to view mismatch related information and submit online response on the issue. The responses submitted online by the taxpayers will be processed and if the response and other information are found satisfactory as per automated closure rules, the issue will be closed. The taxpayer can check the updated status by logging in to the e-filing portal.

The Finance Minister also inaugurated a drive to provide public service by holding “special PAN camps in remote areas”. Under this drive, special PAN camps are being held over two days at forty- three remote semi urban and rural locations across India in the first instance to facilitate obtaining of PAN by persons residing in such areas. The Finance Minister interacted with applicants and officials at seven of these camps through a video conference. More such camps will be held through the year. The camps will ease the burden of compliance for persons residing in remote semi urban and rural areas who wish to enter into transactions of purchase or sale above rupees one lakh and will be required to quote PAN as announced in the Budget speech of 2015-16.

On this occasion, the Finance Minister stated that the objective of the Income Tax Department is to make life as easy as possible for the assessees and difficult only for those who consciously evade taxes. These digital initiatives will help in creating a positive environment.

These initiatives of the Department are expected to significantly reduce the burden of compliance on taxpayers and enhance the taxpayer satisfaction.

(Shefali Shah)
Pr. Commissioner of Income Tax (OSD)
Official Spokesperson, CBDT
New committee to view to simplify the Income tax provision

New committee to view to simplify the Income tax provision

With a view to simplify the provisions of the Income Tax Act, 1961, a Committee has been
constituted with the following composition:

(i) Justice R.V. Easwar, (Retd.), former Judge,
Delhi High Court and former President, ITAT - Chairman

(ii) Shri V.K. Bhasin, former Law Secretary - Member

(iii) Shri Vinod Jain, Chartered Accountant - Member

(iv) Shri Rajiv Memani, Consultant - Member

(v) Shri Ravi Gupta, Sr. Advocate - Member

(vi) Shri Mukesh Patel, Chartered Accountant - Member

(vii) Shri Ajay Bahl, Consultant - Member

(viii) Shri Pradip P. Shah, Investment Adviser - Member

(ix) Shri Arvind Modi, IRS (IT:81009) - Member

(x) Dr. Vinay Kumar Singh, IRS (IT:95006) - Member

2. The Terms of Reference (ToR) of the Committee shall be as follows:
i) To study and identify the provisions/phrases in the Act which are leading to litigation due to
different interpretations;

ii) To study and identify the provisions which are impacting the ease of doing business;

iii) To study and identify the areas and provisions of the Act for simplification in the light of the existing jurisprudence;

iv) To suggest alternatives and modifications to the existing provisions and areas so identified to bring about predictability and certainty in tax laws without substantial impact on the tax base and revenue collection; and

3. The Committee shall set its own procedures for regulating its work. The Committee can also work
in Sub-Groups and the draft prepared by the Sub-Groups can then be approved by the whole Committee. The Committee will put its draft recommendations in the public domain. After stakeholder consultations, the Committee will formalise its recommendations. The Committee can give its recommendations in batches. The first batch containing as many recommendations as possible shall be submitted by 31st January, 2016.

4. The Term of the Committee shall be for a period of one year from the date of its constitution.

(Shefali Shah)
Pr. Commissioner of Income Tax (OSD)
Official Spokesperson, CBDT
No service tax on mere transfer of title in immovable property

No service tax on mere transfer of title in immovable property

Mininstry of Finance issued a note on 26 October 2015 about Mere transfer of title in immovable property is exempted from Service Tax. 

 In order to resolve a long standing issue relating to levy of Service Tax on sale of flats/dwellings etc. after issue of occupancy certificate but before issue of completion certificate in areas under the jurisdiction of Municipal Corporation of Greater Mumbai i.e. Brihanmumbai Municipal Corporation (BMC), it has been conveyed to the Service Tax Authorities in Mumbai on Friday, 23rd October, 2015 that sale of flats/dwellings etc., where the entire consideration is received after issue of occupancy certificate by BMC, leading to a mere transfer of title in immovable property, falls outside the definition of “Service” provided in Section 65B (44) of the Finance Act, 1994, and is therefore, not taxable.

New monetary limits for Arrest in Service tax and Central excise

New monetary limits for Arrest in Service tax and Central excise

CBEC issued a circular no. 1010/2015 dated 23 October 2015 about new revised monetary limit for arrest in service tax and central excise default. Full circular is as under.

Kind attention is invited to circular number 1009/16/2015-CX dated 23.10.2015 on the subject of prosecution under the Central Excise Act, 1944 and the Finance Act, 1994 (Service Tax cases). Revised monetary limits have been prescribed in the circular for launching prosecution. Prosecution can now be launched where evasion of Central Excise duty or Service Tax or misuse of Cenvat Credit in relation to offences specified under sub-section (1) of Section 9 of the Central Excise Act, 1944 or sub-section (1) of section 89 of the Finance Act, 1994 is rupees one crore or more.

2. Consequently, it has been decided to revise the limits for arrests in Central Excise and Service tax. Henceforth, arrest of a person in relation to offences specified under clause (a) to (d) of sub-section (1) of Section 9 of the Central Excise Act, 1944 or under clause (i) or (ii) of sub-section (1) of section 89 of the Finance Act, 1994, may be made in cases where
the evasion of Central Excise duty or Service Tax or the misuse of Cenvat Credit is equal to or more than rupees one crore. Central Excise circular no.974/08/2013-CX and Service Tax circular no. 171/6 /2013-ST both dated 17-7-2015 stand amended accordingly.

3. Difficulty if any, in the implementation of the circular should be brought to the notice of the Board. Hindi version would
follow.
All about Prosecution under Central Excise

All about Prosecution under Central Excise

Central Excise department issued a circular no.1009/2015 dated 23 October 2015 about Guidelines for launching of prosecution under central excise act. Full circular is as under.

1.In supersession of these instructions and circulars, following consolidated guidelines are hereby issued for launching prosecution under the Central Excise Act, 1944 and the Finance Act, 1994. 

2.3. Person liable to be prosecuted 
3.1 Whoever commits any of the offences specified under sub-section (1) of Section 9 of the Central Excise Act, 1944 or sub-section (1) of section 89 of the Finance Act, 1994, can be prosecuted. Section 9AA (1) of Central Excise Act, 1944 provides that where an offence under this Act has been committed by a company, every person who, at the time offence was committed was in charge of, and was responsible to, the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly. Section 9AA (2) of Central Excise Act, 1944 provides that where an offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly. Explanation to Section 9AA provides that (a) “Company” means anybody corporate and includes a firm or other association of individuals and (b) “director” in relation to a firm means a partner of the firm. These provisions under Section 9AA of Central Excise Act, 1944 have been made applicable to Service Tax also vide Section 83 of the Finance Act, 1994. 

4.1 Monetary Limit: In order to optimally utilize limited resources of the Department, prosecution should normally not be launched unless evasion of Central Excise duty or Service Tax, or misuse of Cenvat credit in relation to offences specified under sub-section (1) of Section 9 of the Central Excise Act, 1944 or sub-section (1) of section 89 of the Finance Act, 1994 is equal to or more than Rs. One Crore.

 4.2 Habitual evaders: Notwithstanding the above limits, prosecution can be launched in the case of a company/assessee habitually evading tax/duty or misusing Cenvat Credit facility. A company/assessee would be treated as habitually evading tax/duty or misusing Cenvat Credit facility, if it has been involved in three or more cases of confirmed demand (at the first appellate level or above) of Central Excise duty or Service Tax or misuse of Cenvat credit involving fraud, suppression of facts etc. in past five years from the date of the decision such that the total duty or tax evaded or total credit misused is equal to or more than Rs. One Crore. Offence register (335J) may be used to monitor and identify assessees who can be considered to be habitually evading duty. 

4.3 Sanction of prosecution has serious repercussions for the assessee and therefore along with the above monetary limits, the nature of evidence collected during the investigation should be carefully assessed. The evidences collected should be adequate to establish beyond reasonable doubt that the person, company or individual had guilty mind, knowledge of the offence, or had fraudulent intention or in any manner possessed mens-rea (guilty mind) for committing the offence. 

5. Authority to sanction prosecution 
5.1 The criminal complaint for prosecuting a person should be filed only after obtaining the sanction of the Principal Chief/ Chief Commissioner of Central Excise or Service Tax as the case may be. 

5.2 In respect of cases investigated by the Directorate General of Central Excise Intelligence (DGCEI), the criminal complaint for prosecuting a person should be filed only after obtaining the sanction of Principal Director General/ Director General, CEI. 

5.3 An order conveying sanction for prosecution shall be issued by the sanctioning authority and forwarded to the Commissionerate concerned for taking appropriate action for expeditious filing of the complaint. 

6. Procedure for sanction of prosecution 
6.1 Prosecution proposal should be forwarded to the Chief Commissioner / Principal Chief Commissioner or Director General / Principal Director General of DGCEI ( in respect of cases booked by DGCEI) after the case has been carefully examined by the Commissioner/ Principal Commissioner or Additional Director General /Principal Additional Director General of DGCEI who has adjudicated the case. In all cases of arrest, examination of the case to ascertain fitness for prosecution shall be necessarily carried out. 

6.2 Prosecution should not be launched in cases of technical nature, or where the additional claim of duty/tax is based totally on a difference of opinion regarding interpretation of law. Before launching any prosecution, it is necessary that the department should have evidence to prove that the person, company or individual had guilty knowledge of the offence, or had fraudulent intention to commit the offence, or in any manner possessed mens rea (guilty mind) which would indicate his guilt. It follows, therefore, that in the case of public limited companies, prosecution should not be launched indiscriminately against all the Directors of the company but it should be restricted to only against persons who were in charge of day-to-day operations of the factory and have taken active part in committing the duty/taxevasion or had connived at it. 

6.3 Prosecution should not be filed merely because a demand has been confirmed in the adjudication proceedings particularly in cases of technical nature or where interpretation of law is involved. One of the important considerations for deciding whether prosecution should be launched is the availability of adequate evidence. The standard of proof required in a criminal prosecution is higher as the case has to be established beyond reasonable doubt whereas the adjudication proceedings are decided on the basis of preponderance of probability. Therefore, even cases where demand is confirmed in adjudication proceedings, evidence collected should be weighed so as to likely meet the test of being beyond reasonable doubt for recommending prosecution. Decision should be taken on case-to-case basis considering various factors, such as, nature and gravity of offence, quantum of duty/tax evaded or Cenvat credit wrongly availed and the nature as well as quality of evidence collected.

 6.4 Decision on prosecution should be normally taken immediately on completion of the adjudication proceedings. However, Hon’ble Supreme Court of India in the case of Radheshyam Kejriwal [2011(266)ELT 294 (SC)] has interalia, observed the following :- “(i) adjudication proceedings and criminal proceedings can be launched simultaneously; (ii) decision in adjudication proceedings is not necessary before initiating criminal prosecution; (iii) adjudication proceedings and criminal proceedings are independent in nature to each other and (iv) the findings against the person facing prosecution in the adjudication proceedings is not binding on the proceeding for criminal prosecution.” Therefore, prosecution may even be launched before the adjudication of the case, especially where offence involved is grave, qualitative evidences are available and it is also apprehended that party may delay completion of adjudication proceedings. 

6.5 Principal Commissioner/Commissioner or ADG (Adjudication) acting as adjudicating authority should indicate at the time of passing the adjudication order itself whether he considers the case to be fit for prosecution so that it can be further processed and sent to Principal Chief Commissioner/ Chief Commissioner or Principal Director General/ Director General of DGCEI, as the case may be, for sanction of prosecution. Where at the time of adjudication proceedings no view has been taken on prosecution by the Adjudicating Authority then the adjudication wing shall re-submit the file within 15 days from the date of issue of adjudication order to the Adjudicating Authority to take view of prosecution. Where, prosecution is proposed before the adjudication of the case, Commissioner/Principal Commissioner or Principal Additional Director General/Additional Director General, DGCEI who supervised the investigation shall record the reason for the same and forward the proposal to the sanctioning authority. The adjudicating authority shall also be informed of the decision to forward the proposal so that there is no need for him to examine the case at the time of passing of adjudication order from the perspective of prosecution. Principal Chief Commissioner/ Chief Commissioner or Principal Director General/ Director General of DGCEI may on his own motion also, taking into consideration the seriousness of an offence, examine whether the case is fit for sanction of prosecution irrespective of whether the adjudicating authority has recommended prosecution. 

6.6 In respect of cases investigated by DGCEI, the adjudicating authority would intimate the decision taken regarding fitness of the case for prosecution to the Principal Additional Director General/ Additional Director General of the Zonal Unit or Headquarters concerned, where the case was investigated and show cause notice issued. The officers of unit of Directorate General of Central Excise Intelligence concerned would prepare an investigation report for the purpose of launching prosecution, within one month of the date of receipt of the decision of the adjudicating authority and would send the same to the Director General, CEI for taking decision on sanction of prosecution. The format of investigation report is annexed as Annexure-I to this Circular.

6.7 In respect of cases not investigated by DGCEI, where the Principal Commissioner/Commissioner who has adjudicated the case is satisfied that prosecution should be launched, an investigation report for the purpose of launching prosecution should be carefully prepared within one month of the date of issuance of the adjudication order . Investigation report should be signed by an Assistant/Deputy Commissioner, endorsed by the jurisdictional Principle Commissioner/Commissioner and sent to the Principal Chief/ Chief Commissioner for taking a decision on sanction for launching prosecution. The format of investigation report is annexed as Annexure-I to this circular. A criminal complaint in a court of law should be, filed by the jurisdictional Commissionerate only after the sanction of the Principal Chief / Chief Commissioner or Principal Director General/Director General of DGCEI has been obtained. 

6.8 Principal Commissioner/Commissioner or Additional Director General (Adjudication) shall submit a report by 10th of every month to the Principal Chief /Chief Commissioner or the Principal Director General/ Director General of CEI, who is the sanctioning authority for prosecution, conveying whether a view on launching prosecution has been taken in respect of adjudication orders issued during the preceding month. 

6.9 Once the sanction for prosecution has been obtained, criminal complaint in the court of law should be filed as early as possible by an officer of the jurisdictional Commissionerate authorized by the Commissioner. 

6.10 It has been reported that delays in the Court proceedings are often due to non-availability of the records required to be produced before the Magistrate or due to delay in drafting of the complaint, listing of the exhibits etc. It shall be the responsibility of the officer who has been authorized to file complaint, to take charge of all documents, statements and other exhibits that would be required to be produced before a Court. The list of exhibits etc. should be finalized in consultation with the Public Prosecutor at the time of drafting of the complaint. No time should be lost in ensuring that all exhibits are kept in safe custody. Where a complaint has not been filed even after a lapse of three months from the receipt of sanction for prosecution, the reason for delay shall be brought to the notice of the Principal Chief/ Chief Commissioner or the Principal Director General or Director General of DGCEI by the Principal Commissioner/ Commissioner in charge of the Commissionerate responsible for filing of the complaint.  

7.1 Prosecution, once launched, should be vigorously followed. The Principal Commissioner/Commissioner of Central Excise/Service Tax should monitor cases of prosecution at monthly intervals and take the corrective action wherever necessary to ensure that the progress of prosecution is satisfactory. In DGCEI, an Additional/ Joint Director in each zonal unit and DGCEI (Hqrs) shall supervise the prosecution related work. For keeping a track of prosecution cases, a prosecution register in the format enclosed as Annexure-II to this Circular should be maintained in the Prosecution Cell of each Commissionerate. The register shall be updated regularly and inspected by the Principal Commissioner/Commissioner at least once in every quarter of a financial year. 

7.2 For keeping a track of prosecution cases, a prosecution register in the format enclosed as Annexure-III to this Circular should be maintained in the Zonal Units of DGCEI and DGCEI (Hqrs.) pertaining to cases investigated by them.

8.1 Principal Commissioner/Commissioner responsible for the conduct of prosecution or Principal Additional Director General or Additional Director General of DGCEI (in respect of cases booked by DGCEI), should study the judgement of the Court and, where it appears that the accused person have been let off with lighter punishment than what is envisaged in the Act or has been acquitted despite the evidence being strong, appeal should be considered against the order. Sanction for appeal in such cases shall be accorded by Principal Chief/ Chief Commissioner or Principal Director General/ Director General of DGCEI. 

9. Publication of names of persons convicted: 
9.1 Section 9B of the Central Excise Act, 1944 also made applicable to Service Tax vide section 83 of the Finance Act,1994 grants power to publish name, place of business etc. of the person convicted under the Act by a Court of Law. The power is being exercised very sparingly by the Courts. It is directed that in deserving cases, the department should make a prayer to the Court to invoke this section in respect of all persons who are convicted under the Act. 

10.1 Procedure for withdrawal of sanction-order of prosecution 
10.1.1 In cases where prosecution has been sanctioned but complaint has not been filed and new facts or evidences have come to light necessitating review of the sanction for prosecution, the Commissionerate or the DGCEI unit concerned should immediately bring the same to the notice of the sanctioning authority. After considering the new facts and evidences, the sanctioning authority namely Principal Chief/ Chief Commissioner or Principal Director General or Director General of DGCEI, if satisfied, may recommend to the Board (Member of the policy wing concerned) that the sanction for prosecution be withdrawn. 

10.2 Procedure for withdrawal of Complaint already filed for prosecution 
10.2.1 In cases where the complaint has already been filed complaint may be withdrawn as per Circular No. 998/5/2015-CX dated 28.02.2015 which provides that where on identical allegation a noticee has been exonerated in the quasi-judicial proceedings and such order has attained finality, Principal Chief Commissioner/ Chief Commissioner or the Principal Director General/ Director General of DGCEI shall give direction to the concerned Commissionerate to file an application through Public Prosecutor requesting the Court to allow withdrawal of the Prosecution in accordance with law. 

1.11. Transitional Provisions 
11.1 All cases where sanction for prosecution is accorded after the issue of this circular shall be dealt in accordance with the provisions of this circular irrespective of the date of the offence. Cases where prosecution has been sanctioned but no complaint has been filed before the magistrate shall also be reviewed by the prosecution sanctioning authority in light of the provisions of this circular. 

1.12. Compounding of offences 
12.1 Section 9A(2) of the Central Excise Act, 1944 also made applicable to Service Tax vide section 83 of the Finance Act,1994 provides for compounding of offences by the Principal Chief/ Chief Commissioner on payment of compounding amount. Circular no. 54/2005-Cus dt 30-12-2005 and Circular no 862/20/2007-CX-8 dated 27-12-2007 on the subject of compounding of offences may be referred in this regard which inter alia provides that all persons against whom prosecution is initiated or contemplated should be informed in writing, the offer of compounding. 

1.13. Inspection of prosecution work by the Directorate of Performance Management: 
13.1 Director General, Directorate of Performance Management and Chief Commissioners, who are required to inspect the Commissionerates, should specifically check whether instruction contained in this Circular are being followed scrupulously and to ensure that reasons for pendency and non-compliance of pending prosecution cases are looked into during field inspections apart from recording of statistical data. 

14. The field formations may suitably be informed. Receipt of this Circular may please be acknowledged. Hindi version will follow.
Income tax new pilot project for scrutiny assessment

Income tax new pilot project for scrutiny assessment

The Income Tax department will roll out next week its 'pilot' project to conduct scrutiny assessment in an e-environment when they begin sending queries through email to 500 "select" taxpayers without calling them to its offices. 

The department had recently said it would launch a 'pilot' project in this regard and the first set of e-communications will be emailed to 100 chosen people each in Delhi, Mumbai, Bengaluru, Ahmedabad and Chennai regions. 

"The department has sought the willingness of select taxpayers to conduct their scrutiny proceedings through email after the CBDT recently asked for the immediate roll out of the project. The response has been enthusiastic and the emails will be sent from the next week," a senior I-T official said. 

The Central Board of Direct Taxes, the apex policy-making body of the tax department, had recently asked the department to "initiate the concept of using email for corresponding with taxpayers and sending through emails the questionnaire, notice etc. at the time of scrutiny proceedings and getting responses from them." 

"This would eliminate the necessity of visiting the Income Tax offices by the taxpayers, particularly in smaller cases, involving limited issues and where taxpayer is able to provide details required by the Assessing Officer (AO) without necessitating his physical presence," the order in this regard had said. 

CBDT Chairperson Anita Kapur, in a recent interview to PTI, had said that the "first-of-it's kind initiative" is aimed at making life easy for taxpayers. 

"We have been thinking how can we make life easier for taxpayers especially for those who are in the middle and the slightly higher tax bracket. So, now we are thinking of allowing that when a notice is issued in an assessment or scrutiny case, the taxpayer can send the department an e-response," she had said. 

The official added these 'pilot' project scrutiny assessments will be completed in the stipulated time frame and a record-sheet of one-to-one communications will be sent to the CBDT by the end of this year so that it can be implemented on a nation-wide basis from 2016-17 financial year. 

"Taxpayers whose cases land up in the scrutiny net by the virtue of a number of flag indicators like unexplained credit card transactions or unusual capital gains made will be covered under this pilot project. It may require that the taxpayer being sent emails will have to meet the AO at least once before their case is processed finally," the official said. 

The taxman will choose the assesses for this project through the email that has been mentioned by them in their Income Tax Return (ITR). 

The CBDT boss had earlier said the purpose of introducing the system was to reduce the interface between the taxpayer and the AO. 

"The taxpayer can send documents over email, scan them, upload them and it's over. It (email-based scrutiny session session) should be over and should not go beyond that. This is the way we are trying to address the issues of compliance and limiting the interface between the taxman and the taxpayer. This will be a sea change in our tax administration," Kapur had said. 

Tax experts say the initiative will also ensure privacy of a taxpayers' communication with his AO and the tax department. 

The CBDT chief had said she was aware of instances where the taxpayers complained that the AO raised numerous queries upon meeting the assessees despite their earlier order sheets having mention of only a few queries. 

"This (sending emails) is one way of giving both the taxpayer and the AO a good opportunity to solve their things without any problem. It has also been mentioned in our earlier instructions to the field that the questionnaire sent to the taxpayer in scrutiny cases should be focused and specific so that the person knows what is he being enquired about," Kapur had said.
Service tax exempted on Jan Dhan Yojana and Yoga

Service tax exempted on Jan Dhan Yojana and Yoga

Government exempted service tax on Pradhan Mantri Jan Dhan Yojana and Yoga. Service tax department issued a notification no. 20/2015 dated 21 October 2015 regarding exemption on jan dhan yojana and yoga. 

In exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby makes the following further amendments in the notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 25/2012-Service Tax, dated the 20th June, 2012, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 467 (E), dated the 20th June, 2012, namely:-

1. In the said notification,-
(i) in the opening paragraph, in entry 29, for clause (g), the following clauses shall be substituted,
namely-

(g) business facilitator or a business correspondent to a banking company with respect to a Basic
Savings Bank Deposit Account covered by Pradhan Mantri Jan Dhan Yojana in the banking
company’s rural area branch, by way of account opening, cash deposits, cash withdrawals, obtaining
e-life certificate, Aadhar seeding;

(ga) any person as an intermediary to a business facilitator or a business correspondent with respect to services mentioned in clause (g);

(gb) business facilitator or a business correspondent to an insurance company in a rural area; or

(ii) in paragraph 2,-
(a) after clause (g), the following clause shall be inserted, namely :-

(ga) Basic Savings Bank Deposit Account means a Basic Savings Bank Deposit Account opened
under the guidelines issued by Reserve Bank of India relating thereto;

(b) in clause (k), in sub-clause (ii), for the words religion or spirituality, the words religion,
spirituality or yoga shall be substituted.

[F. No. 354/101/2015 -TRU]
(Santosh Kumar Mishra)
Under Secretary to the Government of India
Nationwide strike of Bank's employees on December 2-Union

Nationwide strike of Bank's employees on December 2-Union

Bank employees will observe a country-wide strike on December 2, a leading union said today.
All-India Bank Employees Association (AIBEA) General Secretary C H Venkatchalam said the strike call is to press for addressing issues like de-linking associate banks from SBI and extending compassionate appointments as per government guidelines.

Separately, the State Sector Bank Employees Association (SSBEA) has also given a call for strike on two days (December 1 and 2) in SBI’s associate banks, its Chairman Mahesh Mishra said.
SSBEA may go for an indefinite strike in associate banks to be followed by indefinite stir by AIBEA in all banks by end of December if their demands are not conceded by then, Mishra warned.

The other demands include increase in quantum of staff housing loans, recruitment of sub-staff and part-time employees and not imposing SBI service conditions and career progression in associate banks.

Venkatchalam said starting from October 26, there will be a series of agitations leading to the strike in early December.

“Instead of coming forward to negotiate with SSBEA and our unions, recently SBI management sent a fiat to all associate banks instructing them to implement SBI Career progression policy.
“This means the SBI management does not care for bilateralism or believe in discussions with the unions,” he added.
Last date of filing form DP-1 in Delhi further extended to 23.11.2015

Last date of filing form DP-1 in Delhi further extended to 23.11.2015

Delhi Government has further extended last date of filing form DP-1 VAT return form to 23 November 2015.Department of Trade and Taxes issued a notification no. 929 dated 21 October 2015.

In partial modification of Notification NO.F.3(352)/PolicyN AT/2o.13/818-829 dated 30./0.9/20.15 regarding submission of information online in Form DP-1, I, Sanjeev Khirwar, Commissioner, Value Added Tax, Government of National Capital Territory of Delhi, in exercise of the powers conferred on me by sub-section(1) read with subsection (2) and (3) of section 70. and sub-section (2) of section 59 of Delhi Value Added Tax Act, 20.0.4,notify that the Form DP-1 shall be submitted online by all the dealers latest by 23/11/2015. The form shall be filed by dealers registered upto 30./0.9/20.15.

Rest of the contents of the above said Notifications shall remain the same
All about Gold Monetisation Scheme 2015

All about Gold Monetisation Scheme 2015

In exercise of the powers conferred on the Reserve Bank of India (RBI) under Section 35 A of the Banking Regulation Act, 1949 and in pursuance of the Central Government notification issued vide Office Memorandum F.No.20/6/2015-FT dated September 15, 2015 regarding “Gold Monetization Scheme (GMS)”, the RBI being satisfied that it is in the public interest, so to do, hereby issues this Direction to all Scheduled Commercial Banks (excluding Regional Rural Banks).


CHAPTER – I 
PRELIMINARY
1.1 Objective
GMS, which modifies the existing ‘Gold Deposit Scheme’ (GDS) and ‘Gold Metal Loan Scheme (GML), is intended to mobilise gold held by households and institutions of the country and facilitate its use for productive purposes, and in the long run, to reduce country’s reliance on the import of gold.

1.2. Short title and commencement

i. This Direction shall be called the Reserve Bank of India (Gold Monetization Scheme) Direction, 2015.

ii. All Scheduled Commercial Banks excluding RRBs will be eligible to implement the Scheme.

iii. The banks intending to participate in the Scheme should formulate a comprehensive policy with approval of the board to implement it.

1.3 Definitions
In this Direction, unless the context otherwise requires, the following terms shall bear the meanings assigned to them below:

i. Collection and Purity Testing Centre (CPTC) - The collection and assaying centres certified by the Bureau of Indian Standards (BIS) and notified by the Central Government for the purpose of handling gold deposited and redeemed under GMS.

ii. Designated bank – All Scheduled Commercial Banks (excluding RRBs) that decide to implement the Scheme.

iii. Gold Deposit Account – An account opened with a designated bank under the Scheme and denominated in grams of gold.

iv. Medium and Long Term Government Deposit (MLTGD) - The deposit of gold made under the GMS with a designated bank in the account of the Central Government for a medium term period of 5-7 years or a long term period of 12-15 years or for such period as may be decided from time to time by the Central Government.

v. Nominated bank – A Scheduled Commercial Bank authorized by RBI to import gold in terms of RBI circular A.P.(DIR Series) Circular No.79 dated February 18, 2015

vi. Refiners – The refineries accredited by the National Accreditation Board for Testing and Calibration Laboratories(NABL) and notified by the Central Government for the purpose of handling gold deposited and redeemed under GMS.

vii. Scheme - Gold Monetization Scheme, 2015 which includes Revamped Gold Deposit Scheme (R-GDS) and Revamped Gold Metal Loan Scheme (R-GML).

viii. Short Term Bank Deposit (STBD) - The deposit of gold made under the GMS with a designated bank for a short term period of 1-3 years.


Chapter II
Revamped Gold Deposit Scheme (R-GDS)
2.1 Basic features
2.1.1 General
i. This scheme will replace the existing Gold Deposit Scheme, 1999. However, the deposits outstanding under the Gold Deposit Scheme will be allowed to run till maturity unless these are withdrawn by the depositors prematurely as per existing instructions.

ii. All designated banks will be eligible to implement the scheme.

iii. The principal and interest of the deposit under the scheme shall be denominated in gold.

iv. Persons eligible to make a deposit - Resident Indians (Individuals, HUFs, Trusts including Mutual Funds/Exchange Traded Funds registered under SEBI (Mutual Fund) Regulations and Companies) can make deposits under the scheme. Joint deposits of two or more eligible depositors are also allowed under the scheme and the deposit in such case shall be credited to the joint deposit account opened in the name of such depositors. The existing rules regarding joint operation of bank deposit accounts including nominations will be applicable to these gold deposits.

v. All deposits under the scheme shall be made at the CPTC. However, at their discretion, banks may accept the deposit of gold at the designated branches, especially from the larger depositors.

vi. Interest on deposits under the scheme will start accruing from the date of conversion of gold deposited into tradable gold bars after refinement or 30 days after the receipt of gold at the CPTC or the bank’s designated branch, as the case may be, whichever is earlier.

vii. During the period commencing from the date of receipt of gold by the CPTC or the designated branch, as the case may be, to the date on which interest starts accruing in the deposit, the gold accepted by the CPTC or the designated branch of the bank shall be treated as an item in safe custody held by the designated bank.

viii. On the day the gold deposited under the scheme starts accruing interest, the designated banks shall translate the gold liabilities and assets in Indian Rupees by crossing the London AM fixing for Gold / USD rate with the Rupee-US Dollar reference rate announced by RBI on that day. The prevalent custom duty for import of gold will be added to the above value to arrive at the final value of gold. This approach will also be followed for valuation of gold at any subsequent valuation dates and for the conversion of gold into Indian Rupees under the Scheme.

ix. Reporting – The designated banks need to submit a monthly report on GMS to the RBI in the prescribed format.

2.1.2 Acceptance of deposits
i. The minimum deposit at any one time shall be raw gold (bars, coins, jewellery excluding stones and other metals) equivalent to 30 grams of gold of 995 fineness. There is no maximum limit for deposit under the scheme. All transactions under the scheme with the designated bank shall be in gold of 995 fineness.

ii. All gold deposits under the scheme, whether tendered at the CPTC or the designated branches, shall be assayed at CPTC:

Provided that the designated banks are free not to subject the standard good delivery gold accepted directly at branches to fire assaying at the CPTC.

2.2 Types of deposits
There shall be two different gold deposit schemes as under:

2.2.1 Short Term Bank Deposit (STBD)
i. All provisions of para 2.1 above shall apply to this deposit.

ii. The deposit will be made with the designated banks for a short term period of 1-3 years (with a roll over in multiples of one year) and will be treated as their on-balance sheet liability.

iii. The deposit will attract CRR and SLR requirements as per applicable instructions of RBI from the date of credit of the amount to the deposit account. However, the stock of gold held by banks in their books will be an eligible asset for meeting the SLR requirement in terms of RBI Master Circular - Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) dated 1 July 2015.

iv. The designated banks may, at their discretion, allow whole or part premature withdrawal of the deposit subject to such minimum lock-in period and penalties, if any, as may be determined by them.

v. The designated banks are free to fix the interest rates on these deposits. The interest shall be credited in the deposit accounts on the respective due dates and will be withdrawable periodically or at maturity as per the terms of the deposit.

vi. Redemption of principal and interest at maturity will, at the option of the depositor be either in Indian Rupee equivalent of the deposited gold and accrued interest based on the price of gold prevailing at the time of redemption, or in gold. The option in this regard shall be made in writing by the depositor at the time of making the deposit and shall be irrevocable:

vii. Provided that any premature redemption shall be in Indian Rupee equivalent or gold at the discretion of the designated bank.

2.2.2 Medium and Long Term Government Deposit (MLTGD)
i. All provisions of guidelines at para 2.1 above will apply to this deposit.

ii. The deposit under this category will be accepted by the designated banks on behalf of the Central Government. The receipts issued by the CPTC and the deposit certificate issued by the designated banks shall state this clearly.

iii. This deposit will not be reflected in the balance sheet of the designated banks.  It will be the liability of Central Government and the designated banks will hold this gold deposit on behalf of Central Government until it is transferred to such person as may be determined by the Central Government.

iv. The deposit can be made for a medium term period of 5-7 years or a long term period of 12-15 years or for such period as may be decided from time to time by the Central Government. The designated banks may allow whole or part premature withdrawal of the deposit subject to such minimum lock-in period and penalties, if any, as determined by the Central Government.

v. Redemption of the deposit including interest accrued will be only in Indian Rupee equivalent of the value of the gold and accumulated interest as per the price of gold prevailing at the time of redemption.

vi. The gold received under MLTGD will be auctioned by the agencies notified by Government and the sale proceeds will be credited to Government’s account held with RBI.

vii. Reserve Bank of India will maintain the Gold Deposit Accounts denominated in gold in the name of the designated banks that will in turn hold sub-accounts of individual depositors.

viii. The details of auctioning and the accounting procedure will be notified by Government of India.

2.3 Opening of gold deposit accounts
The opening of gold deposit accounts shall be subject to the same rules with regard to customer identification as are applicable to any other deposit account. Depositors who do not already have any other account with the designated bank, shall open a gold deposit account with the designated banks with zero balance at any time prior to tendering gold at the CPTC after complying with KYC norms as prescribed by Reserve Bank of India.

The designated banks will credit the STBD or MLTGD, as the case may be, with the amount of 995 fineness gold as indicated in the advice received from CPTC, after 30 days of receipt of gold at the CPTC, regardless of whether the depositor submits the receipt for issuance of the deposit certificate or not.

2.4 Collection and Purity Testing Centres
i. The Central Government will notify a list of BIS certified CPTCs under the Scheme.

ii. The designated banks will be free to select and authorize the CPTCs out of the list notified by the Central Government for handling gold as their agents based on their assessment of the credit worthiness of these centres. (Please see paragraph 2.6 for tripartite agreement among banks, refineries and CPTCs).

iii. Each designated bank authorizing a CPTC to collect deposit of gold on its behalf shall ensure that its name is included in the list of such banks displayed by the CPTC.

iv. The schedule of fees charged by the CPTCs shall be displayed at a prominent place at the centre.

v. Before tendering the raw gold to a CPTC, the depositor shall indicate the name of the designated bank with whom he would like to place the deposit..

vi. After assaying the gold, the CPTC will issue a receipt signed by authorised signatories of the centre showing the standard gold of 995 fineness on behalf of the designated bank indicated by the depositor. Simultaneously, the CPTC will also send an advice to the designated bank regarding the acceptance of deposit.

vii. The 995 fineness equivalent amount of gold as determined by the CPTC will be final and any difference in quantity or quality found after issuance of the receipt by the CPTC including at the level of the refinery due to refinement or any other reason shall be settled among the three parties viz., the CPTC, the refiner and the designated bank in accordance with the terms of the tripartite agreement.

viii. The depositor shall produce the receipt showing the 995 fineness equivalent amount of gold issued by the CPTC to the designated bank branch, either in person or through post.

ix. On submission of the deposit receipt by the depositor, the designated bank shall issue the final deposit certificate on the same day or 30 days after the date of the tendering of gold at the CPTC, whichever is later.

x. The assaying process at the CPTC is described in Annex-1.

2.5 Transfer of gold to the Refiners
i. The designated banks will be free to select the refiners based on their assessment regarding the credibility of these entities.

ii. The CPTCs will transfer the gold to the refiners as per the terms and conditions set out in the tripartite agreement.

iii. The refined gold may, at the option of the designated bank, be kept in the vaults maintained by the refiners or at the branch itself.

iv. For the services provided by the refiners, the designated banks will pay a fee as decided mutually.

v. The refiners shall not collect any charge from the depositor.

2.6 Tripartite agreement between the designated banks, refiners and CPTCs
i. Every designated bank shall enter into a legally binding tripartite agreement with the refiners and CPTCs with whom they tie up under the Scheme.

ii. The agreement shall clearly lay down the details regarding payment of fees, services to be provided, standards of service, the details of the arrangement regarding movement of gold and rights and obligations of all the three parties in connection with the operation of the Scheme.

2.7 Utilization of gold mobilized under GMS
2.7.1 Gold accepted under STBD
Without prejudice to the generality of the uses of the gold mobilised under the STBD, the designated banks may

i. sell the gold to MMTC for minting India Gold Coins (IGC), to jewellers and to other designated banks participating in GMS; or

ii. lend the gold under the GML scheme to MMTC for minting India Gold Coins (IGC) and to jewellers.

2.7.2 Gold accepted under MLTGD
i. Gold deposited under MLTGD will be auctioned by MMTC or any other agency authorized by the Central Government and the sale proceeds credited to the Central Government’s account with RBI.

ii. The entities participating in the auction may include RBI, MMTC, banks and any other entities notified by the Central Government in this regard.

iii. Gold purchased by designated bank under the auction may be utilized by them for any purposes indicated at para 2.7.1 above.

2.8 Risk management
i. The designated banks are allowed to access the International Exchanges, London Bullion Market Association or make use of Over-the-counter contracts to hedge exposures to bullion prices subject to the guidelines issued by RBI.

ii. The designated banks should put in place suitable risk management mechanisms including appropriate limits to manage the risk arising from gold price movements in respect of their net exposure to gold.

2.9 Oversight over the CPTCs and Refineries
i. The Central Government, in consultation with BIS, NABL, RBI and IBA, may put in place appropriate supervisory mechanism over the CPTCs and the refiners so as to ensure observance of the standards set out for these centres by Government (BIS and NABL).

ii. The Central Government may take appropriate action including levy of penalties against the non-compliant CPTCs and refiners.

iii. The Central Government may also put in place appropriate grievance redress mechanism regarding any depositor’s complaints against the CPTCs.

iv. The complaints against the designated banks regarding any discrepancy in issuance of receipts and deposit certificates, redemption of deposits, payment of interest will be handled first by the bank’s grievance redress process and then by the Banking Ombudsman of RBI.


Chapter III
GMS - linked Gold Metal Loan (GML) Scheme
3.1.1 General
i. The gold mobilized under STBD may be provided to the jewellers as GML. The designated banks can also purchase the gold auctioned under MLTGD and extend GML to the jewellers.

ii. The jewellers will receive the physical delivery of gold either from the refiners or from the designated bank, depending on the place where the refined gold is stored.

iii. The existing Gold (Metal) Loan (GML) Scheme operated by nominated banks in terms of paragraph 2.3.12 of the RBI Master Circular on Loans and Advances dated July 1, 2015 will continue in parallel with GMS-linked GML scheme. All prudential guidelines for the existing GML Scheme as prescribed in the Master Circular as amended from time to time will also be applicable to the new Scheme.

iv. The designated banks other than the nominated banks shall be eligible to import gold only for redemption of the gold deposits mobilised under the STBD.

3.1.2 Interest to be charged
The designated banks are free to determine the interest rate to be charged on GMS-linked GML.

3.1.3 Tenor
The tenor of GMS-linked GML will be the same as under the extant GML scheme.
Rajinder Kumar
Chief General Manager
________________________________________
Annex 1
Assaying process at the CPTCs
I. The fees to be charged by a CPTC shall be informed to the customer before doing the XRF test.
II. There will be a BIS certified protocol of operations and processes at all stages of purity verification and deposit of gold which are as under:

i. XRF machine-test and weighing of all articles shall be done in the presence of the customer and will be recorded by CCTV Camera.

ii. After XRF test, the customer will be given the option to disagree with the preliminary test or withdraw the tendered gold or he will give his consent for melting and fire assay test.

iii. On receipt of the customer consent, the gold ornaments will be cleaned of its dirt, studs, meena etc. and thereafter, the purity of the tendered gold will be ascertained through a fire assay test in the presence of the customer.

iv. In case the customer agrees with the result of the fire assay test, he will exercise his option to deposit the gold with the bank and in that case the fee charged by the centre will be paid by the bank. However, in case of any disagreement with the fire assay result, the customer will be given the option to take back the melted gold after paying a nominal fee to the centre.

v. In case the customer exercises the option to deposit the gold, he will be provided a certificate by the CPTC certifying the weight of the gold tendered in equivalence of 995 fineness of gold.

vi. On receipt of this certificate from the customer, the bank will credit the equivalent quantity of Standard gold of 995 fineness in to the depositor’s account.

vii. Simultaneously, the CPTC has also to inform the bank about the details of the deposit made by the customer.
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