Subject: Review of the policy on Foreign Direct Investment- liberalization of the policy in Single-Brand Retail Trading.

1.0 Present Position:

Foreign Direct Investment (FDI), in retail trade, is prohibited except in single brand product retail trading, in which FDI, up to 51% is permitted, subject to conditions specified under paragraph 6.2.16.4 of ‘Circular 2 of 2011 – Consolidated FDI Policy’.

2.0 Revised Position:

The Government of India has reviewed the extant policy on FDI and decided that FDI, up to 100%, under the government approval route, would be permitted in Single-Brand Product Retail Trading, subject to specified conditions, as indicated in paragraph 3.0 below.

3.0 Accordingly, the following amendment is made in ‘Circular 2 of 2011- Consolidated FDI Policy’, dated 30.09.2011, issued by the Department of Industrial Policy & Promotion:

Paragraph 6.2.16.4 is substituted with the following:

6.2.16.4 Single Brand product retail trading 100% Government

(1) Foreign Investment in Single Brand product retail trading is aimed at attracting investments in production and marketing, improving the availability of such goods for the consumer, encouraging increased sourcing of goods from India, and enhancing competitiveness of Indian enterprises through access to global designs, technologies and management practices.

(2) FDI in Single Brand product retail trading would be subject to the following conditions:
(a) Products to be sold should be of a ‘Single Brand’ only.
(b) Products should be sold under the same brand internationally i.e. products should be sold under the same brand in one or more countries other than India.
(c) ‘Single Brand’ product-retail trading would cover only products which are branded during manufacturing.
(d) The foreign investor should be the owner of the brand.
(e) In respect of proposals involving FDI beyond 51%, mandatory sourcing of at least 30% of the value of products sold would have to be done from Indian ‘small industries/ village and cottage industries, artisans and craftsmen’. ‘Small industries’ would be defined as industries which have a total investment in plant & machinery not exceeding US $ 1.00 million. This valuation refers to the value at the time of installation, without providing for depreciation. Further, if at any point in time, this valuation is exceeded, the industry shall not qualify as a ‘small industry’ for this purpose. The compliance of this condition will be ensured through self-certification by the company, to be subsequently checked, by statutory auditors, from the duly certified accounts, which the company will be required to maintain.

(3) Application seeking permission of the Government for FDI in retail trade of ‘Single Brand’ products would be made to the Secretariat for Industrial Assistance (SIA) in the Department of Industrial Policy & Promotion. The application would specifically indicate the product/ product categories which are proposed to be sold under a ‘Single Brand’. Any addition to the product/ product categories to be sold under ‘Single Brand’ would require a fresh approval of the Government.

(4) Applications would be processed in the Department of Industrial Policy & Promotion, to determine whether the products proposed to be sold satisfy the notified guidelines, before being considered by the FIPB for Government approval.

4.0 The above decision will take immediate effect.

5.0 The above provisions will be incorporated in the next Circular on Consolidated FDI Policy to be issued on 31.3.2012.

Sd/-
(Anjali Prasad)
Joint Secretary to the Government of India

F. No. 137/120/2011 – Service Tax

Government of India Ministry of Finance Department of Revenue (Central Board of Excise & Customs)

New Delhi dated the 13th December 2011

ORDER NO. 2 /2011 – Service Tax

In exercise of the powers conferred by Rule 4(1A) of the Service Tax Rules 1994, Central Board of Excise and Customs hereby specifies the following documents that are required to be submitted by the person who has made an application for registration under Rule 4(1) of the Rules ibid:

(a) Copy of Permanent Account Number (PAN)

(b) Proof of Residence

(c) Constitution of the Applicant.

(d) Power of Attorney in respect of authorised person (s).

2. It is further stated that the above documents must be submitted to the concerned authority within a period of 15 days from the date of filing of the application for registration. Failure to do so would lead to rejection of the registration application.

3. It is also clarified that the time limit of seven days from date of receipt of application or intimation under Rule 4(5A), within which the registration is to be granted by the Superintendent of Central Excise or Service Tax, as referred to in Rule 4(5) shall be reckoned from the date the application for registration is complete in all respects.

(Deepankar Aron) Director (Service Tax)

 NSDL receives tax collection data as uploaded by the bank. NSDL is not authorized to carry out any changes in the data sent by the bank to TIN.

The fields that can be corrected by the Taxpayer through Bank are tabulated below:

Sl. No.              Type of Correction on Challan              Period for correction request (in days)

1                        PAN/TAN                                      Within 7 days from challan deposit date

2                        Assessment Year                          Within 7 days from challan deposit date

3                        Total Amount                                 Within 7 days from challan deposit date

4                        Major Head                                      Within 3 months from challan deposit date

5                        Minor Head                                      Within 3 months from challan deposit date

6                        Nature of Payment                         Within 3 months from challan deposit date

Note :

1.   Above correction mechanism is applicable only for physical challans with deposit date greater than equal to September 1,2011.

2.   Any correction request initiated by the taxpayer after the time limit specified above shall be rejected by Bank.

3.   For challans with challan deposit date from September 1, 2011 to September 30, 2011, the time limit for correction in TAN/PAN,       Assessment Year and Amount will be within 45 days from challan deposit date.
4.  The fields that can be corrected and the entity authorized to carry out corrections on challan with deposit date less than       September 1, 2011 are as below:

Sl. No.              Type of Correction on Challan              Performed By

1                        PAN/TAN                                                          Assessing Officer

2                        Assessment Year                                             Assessing Officer

3                        Major Head                                                       Assessing Officer /Bank

4                        Minor Head                                                       Assessing Officer

5                        Nature of Payment                                          Assessing Officer

6                        Total Amount                                                   Bank

7                        Name                                                                 Bank

Dear Sir/Madam,
Deregulation of Savings Bank Deposit Interest Rate
Please refer to our circular No.UBD.BPD.(PCB)CIR No.45/13.01.00/2010-11 dated May 3, 2011 enclosing a Directive UBD.BPD.DIR. No.3/13.01.00/2010-11 dated May 3, 2011 on interest rates on deposits.
2. As indicated in the Second Quarter Review of Monetary Policy announced on October 25, 2011, it has been decided to deregulate the savings bank deposit interest rate with immediate effect. Accordingly, banks are free to determine, with immediate effect, their savings bank deposit interest rate, subject to the following two conditions:
o First, each bank will have to offer a uniform interest rate on savings bank deposits up to Rs. 1 lakh, irrespective of the amount in the account within this limit.
o Second, for savings bank deposits over Rs.1 lakh, a bank may provide differential rates of interest, if it so chooses, subject to the condition that banks will not discriminate in the matter of interest paid on such deposits, between one deposit and another of similar amount, accepted on the same date, at any of its offices.
3. The above revised instructions would be applicable to savings bank deposits of resident Indians only.
4. Interest rate on Non-Resident (External) Accounts Scheme and Ordinary Non-Resident Deposit under savings account, which has been prescribed at 4 per cent per annum at present, will continue to be regulated until further review.
5. An amending directive UBD.BPD.DIR. No. 4 /13.01.000/2011-12 dated November 25, 2011 is enclosed.

Yours faithfully
(A.Udgata)
Chief General Manager-in-Charge
Encls: As above

ORDER NO. 1 /2011 – Service Tax

In exercise of the powers conferred by Rule 7(4) of the Service Tax Rules 1994 read with notification No. 48/2011-Service Tax dated 19th October 2011, Central Board of Excise and Customs hereby extends the date of submission of half yearly return for the period April 2011 to September 2011 from 25th October 2011 to 26th December 2011.

This is being done in view of the fact that the e-filing of service tax returns for all class of service tax assesses has been made mandatory for the first time vide notification no. 43/2011- Service Tax dated 25.8.11, as such leaving less time for the trade to adjust to the requirement of e-filing.

Director (Service Tax)
CBEC, New Delhi

Press Release : 2011-2012/455

Madam / Sir,

External Commercial Borrowings – Simplification of Procedure

Attention of Authorized Dealer Category-I (AD Category-I) banks is invited to the Foreign Exchange Management (Borrowing or lending in foreign exchange) Regulations, 2000, notified vide Notification No. FEMA 3/2000-RB dated May 3, 2000, amended from time to time and the A.P. (DIR Series) Circular No. 5 dated August 1, 2005, amended from time to time relating to the External Commercial Borrowings (ECB).

2. As per the extant ECB procedures, any request for change of the lender for an existing ECB is required to be referred by the Authorised Dealer Bank to the Reserve Bank for necessary approval.

3. As a measure of simplification of the existing procedures, it has been decided to delegate powers to the designated AD Category-I banks to approve the request from the ECB borrowers with respect to change in the recognized lender when the original lender is an international bank or a multilateral financial institution (such as IFC, ADB, CDC, etc.) or a regional financial institution or a Government owned development financial institution or an export credit agency or supplier of equipment and the new lender also belongs to any one of the above mentioned categories, subject to the Authorised Dealer ensuring the following conditions:-
(i) the new lender is a recognized lender as per the extant ECB norms;
(ii) there is no change in the other terms and conditions of the ECB; and
(iii) the ECB is in compliance with the extant guidelines.

4. However, changes in the recognized lender in case of foreign equity holder and foreign collaborator will continue to be examined by the Reserve Bank.

5. The changes in the recognized lender should be promptly reported to the Department of Statistics and Information Management, Reserve Bank of India in Form 83.

6. The above modifications to the ECB guidelines will come into force with immediate effect. All other aspects of the ECB policy, such as, USD 500 million limit per company per financial year under the automatic route, eligible borrower, end-use, all-in-cost ceiling, average maturity period, prepayment, refinancing of existing ECB and reporting arrangements shall remain unchanged.

7. AD Category -I banks may bring the contents of this circular to the notice of their constituents and customers concerned.
8. The directions contained in this circular have been issued under sections 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,
(Rashmi Fauzdar)
Chief General Manager

• Banks should issue tax deduction at source (TDS) certificates duly completed in all respects to the account holders and despatch it to their mailing address.
• In case of ATM/Internet based banking transactions, in the event of any monetary dispute involving the customer and the bank, the onus should be on the bank to prove the customer’s negligence or mistake. Customer must be compensated for the losses arising out of customers’ non-authorised transactions.
• Banks must not recover pre-payment charges in floating rate loans.
• The Reserve Bank/IBA would examine the issues pertaining to monetary compensation for mental harassment suffered by bank customers.
• To create awareness about the Banking Ombudsman Scheme, the Banking Ombudsmen will annually share with local media, information regarding complaints received and resolved, including important cases and awards given.

RBI Governor Subba Rao said that often, prevention was better than cure. In customer service area too, rendering good customer service was like ‘prevention’ and was better than the ‘cure’ which was the various grievances redressal mechanisms. He flagged various issues relating to banks’ customer service for the consideration of the participants. He asked whether customer service was a criterion in evaluating the performance of a branch level official or did levying of penalty on a bank reflected in any manner on the staff which caused the levy of penalty; do all banks have customer grievances redressal officer and at what level; were the most important terms and conditions (MITC) explained to the bank customers before they signed the documents; and whether the deviation from most important terms and conditions of a banking product transparent. He urged bankers to identify ten action points to further improve their customer service.

Generally, exporter has to make an application to the Chamber or any authorised agency for issuance of COOC, in the prescribed form, along with a copy of commercial invoice and other documents and pays the prescribed fees. On the basis and verification of the information provided in the application for COOC and the supporting documents with reference to the goods sought to be exported, the Chamber or the authorised agency issues a COOC. Now CBEC vide Circular No. 145/14/ 2011 – ST dated 19th August 2011 has clarified that in cases COOC has been issued with reference to national character of the goods upon examination of the origin of their composition, service tax is applicable on fees charged by chamber etc for issuance of COOC under “Technical Inspection and Certification Agency Service”.

Further the circular also clarify that Service Tax paid on ‘Technical Inspection and Certification’ of export goods is eligible for refund under Notification 17/2009-ST dated 7thJuly, 2009.