• Ministry of Finance

CBDT

Circular No. 02/2012 Dated 22.05.2012 Explanatory Notes to the Provisions of Finance Act, 2011

The Finance Act, 2011 as passed by the Parliament, received the assent of the President on the 8th day of April, 2011 and has been enacted as Act No. 08 of 2011. The CBDT has issued the circular explaining the substance of the provisions of the Act relating to direct taxes.

Notification No. 19/2012 Dated 24.05.2012 Amendment to the Agreement for Avoidance of Double Taxation and Prevention of Fiscal Evasion between the Government of the Republic of India and the Government of Japan

Central Govt has modified the Double Taxation Agreement between the Government of the Republic of India and the Government of Japan to omit 'International business unit of Japan Finance Corporation' from sub-clause(ii) of clause (a) of paragraph 4 of Article 11 and substitute therein "Japan Bank for International Cooperation".

Notification No. 18/2012 Dated 23.05.2012 Income-tax (6th Amendment) Rules, 2012 - w.e.f 1st day of April, 2012

CBDT has modified the Income-tax Rules, 1962 to bring in the new rule relating to Other method of determination of arm's length price. The amended provisions shall come into force on the 1st day of April, 2012 and shall apply to Assessment year 2012-13 and subsequent years.

CBEC Excise

Circular No. 966/09/ 2012-CX Dated 18.05.2012 Clarification regarding classification of Structural Components of Boiler and Admissibility of CENVAT Credit on these Structural Components

CBEC has reiterated that in terms of the Rule 2(k) of the CENVAT Credit Rules, 2004, while CENVAT Credit is available in respect of parts of Boiler, the same is not admissible in respect of the structural components used for laying of foundation or making of structures for support of capital goods/ Boiler. The above clarification is in conformity with the views expressed in the judgments of the Hon'ble Supreme Court/ different benches of the CESTAT.

• RESERVE BANK OF INDIA

RBI A.P. DIR (Series)

Circular No. 129 Dated 21.05.2012 Risk Management and Inter Bank Dealings

In view of the recent developments in the foreign exchange market, it has been decided that the current NOOPL of the banks as applicable to the positions involving Rupee as one of the currencies shall not include the positions undertaken in the Currency Futures/Options segment in the exchanges. Also, the positions in the exchanges (both Futures and Options) cannot be netted/offset by undertaking positions in the OTC market and vice-versa. The positions initiated in the exchanges shall be liquidated/closed in the exchanges only.

• Securities and Exchange Board of India

Derivatives

Circular No. CIR/DNPD/2/2012 Dated 23.05.2012 Revised Position Limits for Trading Member (Banks) in Exchange Traded USD:INR derivative contracts

In view of the revised norms released by the 'Risk Management and Inter-bank dealings', SEBI has revised the position limits applicable for USD:INR derivatives contracts saying that Gross open positions of the bank across all contracts (both futures and options contracts) not to exceed 15% of the total open interest or USD 100 million whichever is lower".

Press Release No. 62/2012 Dated 21.05.2012 SEBI notifies SEBI (Alternative Investment Funds) Regulations 2012

SEBI has notified the SEBI (Alternative Investment Funds) Regulations, 2012 providing that whether operating as Private Equity Funds, Real Estate Funds, Hedge Funds, etc. must register with SEBI under the AIF Regulations. Further the said regulations extend to unregulated funds with a view to systemic stability, increasing market efficiency, encouraging formation of new capital and consumer protection.

SMD

Circular No. CIR/EFD/1/2012 Dated 25.05.2012 Amendment to Circular No.EFD/ED/Cir.-01/2007 dated 20th April 2007 providing framework for passing of consent orders

In order to provide more clarity on its scope and applicability SEBI has decided to modify the framework for passing of consent orders and for considering requests for composition of offences. Accordingly, it has been decided that SEBI shall not settle the specified defaults provided therein and provide a list of the norms applicable henceforth.

•  Ministry of Corporate Affairs

Notification Dated 28.05.2012 Companies (Director Identification Number) Amendment Rules 2012 w.e.f. 29.05.2012

MCA has released the Companies (Director Identification Number) Amendment Rules 2012 to modify the Form No. DIN 1 and Form DIN 4 provided under Companies (Director Identification Number) Rules, 2006

General Circular No. 10/2012 Dated 21.05.2012 Guidelines for declaring a financial Institution as Public Financial Institution under section 4A of the Companies Act, 1956

Ministry of Corporate Affairs has after giving due consideration decided that any Financial Institution applying for declaration as PFI shall fulfill the criteria specified therein. However, it has been further clarified that in the case of Central Public Sector Undertakings/State Public Sector Undertakings, no restriction shall apply with respect to financing specific sector(s) and net-worth as stated in para 2(c) and (d) above respectively.