• INDIRECT TAXATION

SERVICE TAX

Service Tax Notification No. 8/2009-ST Dated 24.02.2009 -Service Tax on Taxable Services Reduced From 12 Percent To 10 Percent

Central government in exercise of the power conferred under section 93(1) of the Finance Act, 1994, exempts taxable services specified section 65(105) of the Act from so much of service tax, as is in excess of the rate of ten per cent of the value of taxable services.

Service Tax Circular No. 111/05/2009-ST Dated 24.02.2009 -Applicability of the provisions of the Export of Services Rules, 2005 in certain situations

CBEC issues instructions pertaining to applicability of the provisions of the Export of Services Rules, 2005 providing that the meaning of the term 'used outside India' has to be understood in the context of the characteristics of a particular category of service as mentioned in sub-rule (1) of rule 3. It provides that the law has to be harmoniously so as to avoid contradictions within legislation and at the same time illustrate on what would constitute service is provided from India and used outside India.

Service Tax Circular No. 109/03/2009-ST Dated 23.02.2009 Service tax on movie theatres-Query

It has been clarified that screening of a movie is not a taxable service except where the distributor leases out the theater and the theater owner get a fixed rent. In such case, the service provided by the theater owner would be categorized as 'Renting of immovable property for furtherance of business or commerce' and the theater owner would be liable to pay tax on the rent received from the distributor.

     CBEC CUSTOMS

CBEC Customs Circular No. 11/2009 Dated 25.02.2009- Duty Free Import Authorization (DFIA) Scheme

CBEC issues clarification pertaining to duty free imports while answering the query regarding who can avail the facility of rebate of duty paid on materials used in the manufacture of resultant product under Central Excise Rules, 2002 or Cenvat credit under CENVAT Credit Rules, 2004. consequently, in order to put matter beyond doubt notification No. 40/06-Cus dated 1.5.06 has been amended vide notification No.17/09-Cus dated 19.2.09 to incorporate the features of FTP 2007 and 2008.

CBEC Customs Circular No. 10/2009 Dated 25.02.2009- Certification of invoices for supply of goods from DTA to EOUs for claiming deemed export benefits

It has been clarified that scope of Supplies of goods manufactured in India from Domestic Tariff Area (DTA) to EOUs/STPs/EHTPs/BTPs regarded as 'deemed export' is consist of those goods which are covered under para 6.6.1 of HandBook of Procedure. Accordingly, Board issues instructions regarding Certification of invoices for supply of goods from DTA to EOU/STP/EHTP/BTP unit for claiming deemed export benefits.

CBEC Customs Circular No. 09/2009 Dated 23.02.2009 -Testing of samples of Hazardous wastes from the laboratories recognized under the Environment (Protection) Act, 1986

The Ministry of Environment and Forests that the State Pollution Control Boards (SPCBs) and Pollution Control Committees are required to coordinate with the Customs on regular basis for implementation of the provisions of Hazardous Waste (Management, Handling and Transboundary Movement) Rules 2008, especially relating to the import/export of hazardous wastes. Consequently, field formations can consider utilizing the services of these laboratories for getting the consignments of hazardous wastes and substances tested and seek assistance from SPCBs/PCCs in dealing with the import/export consignments of hazardous wastes as and when required.

       CBEC CUSTOM NON-TARIFF

CBEC Custom Non-Tariff Notification No. 21/2009-Customs(N.T.) Dated 25.02.2009-Determines rate of exchange of conversion effective from 1st March, 2009 relating to imported and export goods

CBEC determines  the rate of exchange of conversion of specified foreign currency into Indian currency or vice versa. The specified rate of exchange of conversion relating to imported and export goods shall come into effect from 1st March, 2009.

     CBEC EXCISE

CBEC Excise Circular No. 267/31/2008-CX-8 Dated 26.02.2009 -Levy of Cess on Sugar Manufactured out of Cess Paid Raw Material/ Input

In order to avoid double taxation as was contended by some field formations the Ministry of Public Distribution and Consumer Affairs has exempted the levy of cess on sugar under Section 3(1) of Sugar Cess Act, 1982, on any sugar "manufactured from such other sugar" on which cess, leviable under of Section 3(1) of the Act has been paid already.

• DIRECTORATE GENERAL OF FOREIGN TRADE

Policy Circular No. 64 (RE-2008)2004-2009 Dated 26.02.2009 Procedure for issuing Free Sale and Commerce Certificate

In order to facilitate simplified procedure for issuing Free Sale and Commerce Certificate, it has been decided that Purchase order is not required to be filed with application for Free Sale and Commerce Certificate and to develop a system covering all instruments / items approved earlier for issuing Free Sale and Commerce Certificate, without referring any subsequent application to Drug Controller General (I) (DCGI) again.

Public Notice No. 150/(RE-2008)/2004-2009 Dated 25.02.2009-Amendments to the Statement of Standard Input Output Norms (SION)

The Director General of Foreign Trade hereby makes the following amendments/ additions/deletions/corrections in the Handbook of Procedures, Vol.2, and 2004-2009, thereby amends statement of Standard Input Output Norms pertaining to Import of Stainless Steel Melting Scrap of known chemical composition contained in the Handbook of Procedures (Vol.2), 2004-2009.

• MINISTRY OF COMMERCE AND INDUSTRY

Industrial Policy and Promotion

Press Note No. 4 (2009 Series) Dated 25.02.2009 -Clarificatory guidelines on downstream investment by Indian Companies

The department of Industrial Policy and Promotion has issued clarification on guidelines on downstream investment by Indian Companies. The 'guiding principle' is that downstream investment by companies 'owned' or 'controlled' by non-resident entities would require to follow the same norms as a direct foreign investment. Press Note 2 of 2009 provides guideline for calculation of total foreign investment at every stage of investment, including downstream investment, enabling determination of total foreign investment in any/all Indian Companies.

Order No. SO532(E) Dated 23.02.2009 -Establishment of Development Council for Textile Industry

Central government in exercise of the power conferred under Industries (Development and Regulation) Act, 1951, establishes the Development Council for Textile Industry for a period of two years, which shall come into effect from date of notification i.e 23rd February, 2009. The said council is required to consider and make recommendations to the Central Government on matters concerning the scheduled textiles industry.

• SECURITIES AND EXCHANGE BOARD OF INDIA

Circular No. SEBI/CFD/DIL/DIP/ 34/2009/24/09 Dated 24.02.2009 -Amendments to SEBI (Disclosure and Investor Protection) Guidelines, 2000

Securities and Exchange Board of India has amended the SEBI (Disclosure and Investor Protection) Guidelines, 2000 , wherein it Amends provisions pertaining to Preferential Allotment, validity period of observations, timelines for completion of bonus issues etc . Consequently, the validity period of observations has been enhanced from the existing period of three months to twelve months and the timelines for completion of bonus issues is reduced to fifteen days where no shareholders' approval is required as per the Articles of Association of the issuer and where shareholders' approval is required the bonus issue shall be completed within sixty days from the date of the meeting of board of directors where-in bonus was announced subject to shareholders' approval.

Circular No. MRD/ DoP/SE/Cir- 03 /2009 Dated 20.02.2009- Direct Market Access - Clarification

SEBI issues clarifications regarding introduction of facility for Direct Market Access. Accordingly, it has been clarified that Institutional investors may use this facility through investment managers after due authorization and upon furnishing to the broker/ exchange suitable agreements/ undertakings between the institution and investment manager stating, inter alia, undertaking responsibility for all actions undertaken by its authorized investment manager.

The Broker-Client Agreement is required to furnish complete details of investment manager, inclusive of the details pertaining to its registration/ regulation in their relevant jurisdiction. The exchange/ brokers are required to make sure that proper audit trails are available to establish identity of the ultimate client.

• TELECOM REGULATORY AUTHORITY OF INDIA

Press Release No. 18/2009 Dated 25.02.2009 -TRAI releases recommendations on Media Ownership

TRAI has released the recommendations on Media Ownership as sought by the Ministry of Information and Broadcasting on the need for cross media and ownership restrictions in India for radio, broadcasting and print medias. The issues relating to Cross-media control/ ownership, Concentration of Control/ Ownership across Media, Limits on number of licenses by a single entity etc. have been dealt by it.