Saturday, August 31, 2013

Service Tax :- Due Date extended from 31.08.2013 to 10.09.2013

Friends 
                    Central Board of Excise & Customs department has issued an Order No: 4/2013- Service Tax dated 30-08-2013 regarding extension of due date for submission of Service Tax Return for the period 01.10.2012 to 31.03.2013.  Now online utility along with offline excel based utility is freely available as www.aces.gov.in for submission of Service Tax return for period mentioned above.  This order has been issued due to avoid congestion and inconvenience in the last minute, all assesses are hereby advised to start e-filling Service Tax Return immediately and not to wait till the last date. 


F.No.137/99/2011-Service Tax
Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise & Customs
***
New Delhi, dated the 30th August, 2013
Order No: 4/2013-Service Tax

            In exercise of the powers conferred by sub-rule(4) of rule 7 of the Service Tax Rules, 1994, the Central Board of Excise & Customs hereby extends the date of submission of the  Form ST-3  for the period from 1st October 2012 to 31st March 2013, from 31st August, 2013 to  10th September, 2013.
            The circumstances of a special nature, which have given rise to this extension of time, are as follows:  
            “ Difficulties have been faced by  assesses in uploading the offline utilities”.
 Himani Bhayana
Under Secretary (Service Tax)
Central Board of Excise and Customs


To
All Chief Commissioners of Central Excise / Customs and Central Excise
Directors General of Service Tax /Central Excise Intelligence /Audit/Systems All Commissioners of Central Excise/ Customs and Central Excise
All Commissioners of Service Tax
All Commissioners LTU
All Additional Directors General Systems

Friday, August 30, 2013

TRACES :- View Deduction Detail of Deductee

Friends,  PAN wise deduction detail of Deductees can be viewed after login at www.tdscpc.gov.in.   In the other word,  TAN holder can View Tax Credit of their deductees with the help of  his PAN.   Path or location at TRACES is given in below picture -1 after login at www.tdscpc.gov.in. 

Picture -1
Just enter PAN of deductee and statement detail as required in picture -2 and check tds detail of deductee. 
Picture -2
With the help of above link, TAN holder can satisfy his deductee regarding deduction of TDS and deposit of TDS in his PAN.   It is alternate provision of 26AS.  26AS can be checked by deductee and above detail can be checked by Deductor after login TAN. 

Wednesday, August 28, 2013

e-TDS :- View Default Summary at TRACES

Friends,

                    As the defaults has been generated by Income Tax Department for the Financial Year 2012-13 regarding late submission of TDS returns or  late payments of TDS/TCS etc.  There is no detail of defaults in Notice issued by department.   It has also mentioned in notice that detail of defaults are available at www.tdscpc.gov.in.   Complete path of detailed default along with screen shoot of the "view default summary " is given below :-

Path  at tdscpc.gov.in = Login > Defaults > View Default Summary > F.Y. > Quarter  and press go button. 


Now, on pressing  quarter next screen will require detail of one challan and three unique  Pan Numbers along with TDS amount.  After that default file will be available under download link. 

Monday, August 26, 2013

TRACES :- Identification of Valid PAN or Amount combination during TAN Registration

Friends,  I have done so many TAN Registration at www.tdscpc.gov.in, but was not aware about criteria of valid PAN  during TAN Registration at TRACES.   The following screen is really helpful for those who want to register their TAN at www.tdscpc.gov.in (TRACES).   Green color shows the valid PAN numbers during TAN Registration.   Check below screen before any TAN Registration at TRACES :-


Service Tax :- Supoort, Service Desk, Toll Free Number

Friends  Central Board of Excise and Customs Department has provided Email address, Service Desk and Toll Free Number to resolve the problems of their customers related to Service Tax matters.  Toll Free Number , Email Address and Service  Desk link for the same is given below :-

In case of any difficulty in accessing the ACES Application or in using the ST-3 offline utility, the assessees can seek help of the ACES Service Desk by sending e-mail to aces.servicedesk@icegate.gov.in or calling up national toll-free number 1800 425 4251. In general, the Service Desk functions on any working day from Monday to Friday between 9 AM and 7 PM & on Saturdays between 9 AM to 2.30 PM. In order to assist assessees in filing their ST-3 returns in time, in the month of August, 2013, the ACES Service Desk will function from 9 AM to 7 PM on all Saturdays and also on the last Sunday (25-8-2013).

Sunday, August 25, 2013

Service Tax :- Online ST-3 for the period October, 2012 to March, 2013.

Friends    Earlier only offline excel utility was available for submission of service tax return for the period,  now Central Board of Excise and Taxation has also provided facility to submit online Service Tax ST-3 return form for the period 10/12 to 03/13.  Some important guideline for submission of online return is given below :-
  1. The online version of the Service Tax return (ST-3) for the period October'12 to March'13 is now available for e-filing in ACES. Assessees can also use the offline utility by downloading the latest version from http://acesdownload.nic.in/ or from 'DOWNLOADS' Section of ACES website. Assessees whose ST 3 returns for the period October'12 to March'13 for "Banking and other Financial services" got rejected are requested to use the latest version of ST 3, either online or off-line to file their return. The last date of e-filing of ST 3 for the period October, 2012 to March, 2013 is 31st August, 2013. To avoid congestion and inconvenience on the last date assessees are advised to start e-filing the returns immediately and not to wait till the end of the month.

  2. New user-friendly features in the Oct, 2012 -March, 2013 ST-3 Return :
    A. Previously, the assessees were able to view the filed returns using the option, 'View Original ST3'. This facility has been enhanced with a new feature by displaying in the return, the list of error codes (with corresponding error messages). This will help the assessees to know about the errors so that they can exercise the option of filing Revised return by rectifying the errors. This facility will be made available shortly and the exact date will be intimated on ACES website. 

    B. As soon as the return uploaded by the assessee is accepted or rejected by the system, a system-generated message will be e-mailed to the assessee. The assessee can rectify the errors and file the corrected return. 

e-TDS :- Return processed for Form 26AS or not.

Friends,    After submission of e-tds or e-tcs return, it is general requirement to know that your return has been processed for Form AS or not.   As per past practice, status of statement can be checked at www.tin-nsdl.com, but now in new returns NSDL display your return is under process at TRACES.   

How do you know Status of statement at TRACES ?
                Just login your TAN at www.tdscpc.gov.in or TRACES and you may check statement status or status of return under link  Statement/Payments as shown in below picture :-


There are three options to check the status of return/statement  as shown below :-
  1. Search Option 1.>Financial Year wise status can be checked. 
  2. Search Option 2.>Token Number wise status can be checked
  3. Search Option 3.>Date of filing in Financial Year wise status can be checked. 
Where is return status processed for Form 26AS ?
      Yes,  status processed statement for Form 26AS is available under Search Option 3.   There is mandatory  column named Statement Status for selecting different options contains Processed for 26AS. 

Saturday, August 24, 2013

Service Tax :- Circular No. 170 / 5 /2013-ST


Circular No.  170/5 /2013 - ST
F. No. B1/19/2013-TRU (Pt)
Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise and Customs
Tax Research Unit
*****
New Delhi, dated the 8th August, 2013
To,

Chief Commissioners of Central Excise and Customs (All),
Director General (Service Tax), Director General (Systems),
Director General (Central Excise Intelligence), Director General (Audit),
Commissioners of Service Tax (All), Commissioners of Central Excise (All), Commissioners of Central Excise and Customs (All)
Madam/Sir,
Subject: The Service Tax Voluntary Compliance Encouragement Scheme - clarifications regarding.
            The Service Tax Voluntary Compliance Encouragement Scheme (VCES) has come into effect from 10.5.2013. Some of the issues raised with reference to the Scheme have been clarified by the Board vide circular No. 169/4/2013-ST, dated 13.5.2013.  Subsequently, references have been received by the Board seeking further clarifications as regards the scope and applicability of the Scheme.
2.         The issues have been examined and clarifications thereto are as follows:
S No.
Issues
Clarification
1
Whether the communications, wherein department has sought information of roving nature from potential taxpayer regarding their business activities without seeking any documents from such person or calling for his presence, while quoting the authority of section 14 of the Central Excise Act, 1944, would attract the provision of section 106 (2) (a)?


Attention is invited to clarification issued at S. No. 4 of the circular No. 169/4/2013–ST, dated 13.5.2013, as regards the scope of section 106 (2) (a) of the Finance Act, 2013, wherein it has been clarified that the provision of section 106 (2)(a)(iii) shall be attracted only in such cases where accounts, documents or other evidence are requisitioned by the authorized officer from the declarant under the authority of a statutoryprovision.
A communication of the nature as mentioned in the previous column would not attract the provision of section 106 (2)(a) even though the authority of section 14 of the Central Excise Act may have been quoted therein.

2
An assessee has two units at two different locations, say Mumbai and Ahmedabad. Both are separately registered.  The Mumbai unit has received a Show Cause Notice for non-payment of tax on a revenue stream but the Ahmedabad unit has not.  Whether the Ahmedabad unit is eligible for VCES?
Two separate service tax registrations are two distinct assessees for the purposes of service tax levy. Therefore, eligibility for availing of the Scheme is to be determined accordingly. The unit that has not been issued a show cause notice shall be eligible to make a declaration under the Scheme.
3
Whether a declaration can be made under the Scheme in respect of CENVAT credit wrongly utilized for payment of service tax?
Any service tax that has been paid utilizing the irregular credit, amounts to non-payment of service tax. Therefore such service tax amount is covered under the definition of “tax dues”.
4
Whether a party, against whom an inquiry, investigation or audit has been initiated after 1.3.2013 (the cutoff date) can make a declaration under the Scheme?
Yes. There is no bar from filing of declaration in such cases.
5
There was a default and a Show Cause Notice was issued for the period prior to the period covered by the Scheme, i.e. before Oct 2007. Whether declaration can be filed for default on the same issue for the subsequent period?
In the context of the Scheme, the relevant period is from Oct 2007 to Dec 2012. Therefore, the 2ndproviso to section 106 (1) shall be attracted only in such cases where a show cause notice or order of determination has been issued for the period from Oct 2007 to Dec 2012. Accordingly, issuance of a show cause notice or order of determination for any period prior to Oct 2007, on an issue, would not make a person ineligible to make a declaration under the Scheme on the same issue for the period covered by the Scheme.    Therefore, declaration can be made under VCES.
6
In a case where the assessee has been audited and an audit para has been issued, whether the assessee can declare liability on an issue which is not a part of the audit para, under the VCES 2013?
Yes, declarant can declare the “tax dues” concerning an issue which is not a part of the auditpara.
7
Whether a person, who has paid service tax for a particular period but failed to file return, can take the benefit of VCES Scheme so as to avoid payment of penalty for non- filing of return?
Under VCES a declaration can be made only in respect of “tax dues”. A case where no tax is pending, but return has not been filed, does not come under the ambit of the Scheme. However, rule 7C of the Service Tax Rules provides for waiver of penalty in deserving cases where return has not been filed and, in such cases, the assessee may seek relief under rule 7C.
8
A person has made part payment of his ‘tax dues’ on any issue before the scheme was notified and makes the declaration under VCES for the remaining part of the tax dues. Will he be entitled to the benefit of non-payment of interest/penalty on the tax dues paid by him outside the VCES, i.e., (amount paid prior to VCES)?
No. The immunity from interest and penalty is only for “tax dues” declared under VCES.
If any “tax dues” have been paid prior to the enactment of the scheme, any liability of interest or penalty thereon shall be adjudicated as per the provisions of Chapter V of the Finance Act, 1994 and paid accordingly.
9
Whether an assessee, who, during a part of the period covered by the Scheme, is in dispute on an issue with the department under an erstwhile provision of law, can declare his liability under the amended provisions, while continuing to litigate the outstanding liability under the erstwhile provision on the issue?
In terms of the second proviso to section 106 (1), where a notice or order of determination has been issued to a person in respect of any issue, no declaration shall be made by such person  in respect of “tax dues” on the same issue for subsequent period. Therefore, if an issue is being litigated for a part of the period covered by the Scheme, i.e., Oct, 2007 to Dec 2012, no declaration can be filed under VCES in terms of the said proviso on the same issue for the subsequent period.
10
Whether upon filing a declaration a declarant realizes that the declaration filed by him was incorrect by mistake? Can he file an amended declaration?
The declarant is expected to declare his tax dues correctly. In case the mistake is discovered suo-moto by the declarant himself, he may approach the designated authority, who, after taking into account the overall facts of the case may allow amendments to be made in the declaration, provided that the amended declaration is furnished by declarant before the cut off date for filing of declaration, i.e., 31.12.2013.
11
What is the consequence if the designated authority does not issue an acknowledgement within seven working days of filing of declaration? Whether the declarant can start making payment of the tax dues even if acknowledgement is not issued?
Department would ensure that the acknowledgement is issued in seven working days from the date of filing of the declaration.  It may however be noted that payment of tax dues under the Scheme is not linked to the issuance of an acknowledgement. The declarant can pay tax dues even before the acknowledgement is issued by the department.
12
Whether declarant will be given an opportunity to be heard and explain his cases before the rejection of a declaration under section 106(2) by the designated authority?
Yes. In terms of  section 106 (2) of the Finance Act, 2013, the designated authority shall, by an order, and for reasons to be recorded in writing, reject a declaration if any inquiry/investigation or audit was pending against the declarant as on the cutoff date, i.e., 1.3.2013.  An order under this section shall be passed following the principles of natural justice.
To allay any apprehension of undue delays and uncertainty, it is clarified that the designated authority, if he has reasons to believe that the declaration is covered by section 106 (2), shall give a notice of intention to reject the declaration within 30 days of the date of filing of the declaration stating the reasons for the intention to reject the declaration. For declarations already filed, the said period of 30 days would apply from the date of this circular.
The declarant shall be given an opportunity to be heard before any order is passed by the designated authority.          
13
What is the appeal mechanism against the order of the designated authority whereby he rejects the declaration under section 106 (2) of the Finance Act, 2013?
The Scheme does not have a statutory provision for filing of appeal against the order for rejection of declaration under section 106 (2) by the designated authority.
14
A declarant pays a certain amount under the Scheme and subsequently his declaration is rejected. Would the amount so paid by him be adjusted against his liability that may be determined by the department?
The amount so paid can be adjusted against the liability that is determined by the department.
15
Section 111 prescribes that where the Commissioner of Central Excise has reasons to believe that the declaration made by the declarant was ‘substantiallyfalse’, he may serve a notice on the declarant in respect of such declaration. However, what constitutes a ‘substantially false’ declaration has not been specified.
The Commissioner would, in the overall facts of the case, taking into account the reasons he has to believe, take a judicious view as to whether a declaration is ‘substantially false’. It is not feasible to define the term “substantially false” in precise terms.  The proceeding under section 111 would be initiated in accordance with the principles of natural justice.
To illustrate, a declarant has declared his “tax dues” as Rs 25 lakh. However, Commissioner has specific information that declaration has been made only for part liability, and the actual “tax dues”   areRs 50 lakh. This declaration would fall in the category of “substantially false”.
This example is only illustrative.
16
What is the consequence if a declarant fails to pay atleast 50% of declared amount of tax dues by the 31st Dec 2013?
One of the conditions of the Scheme [section 107 (3)] is that the declarant shall pay atleast an amount equal to 50% of the declared tax dues under the Scheme, on or before the 31.12.2013. Therefore, if the declarant fails to pay atleast 50% of the declared tax dues by 31st Dec, 2013, he would not be eligible to avail of the benefit of the scheme.
17
Whether the CENVAT credit is admissible on the inputs/input services used for provision of output service in respect of which declaration has been made under VCES for payment of any tax liability outside the VCES?
The VCES Rules 2013 prescribe that CENVAT credit cannot be utilized for payment of “tax dues” under the Scheme. Accordingly the “tax dues” under the Scheme shall be paid in cash.
The admissibility of CENVAT credit on any inputs and input services used for provision of output service in respect of which declaration has been made shall continue to be governed by the provisions of the Cenvat Credit Rules, 2004.
18
(a)  Whether the tax dues amount paid under VCES would be eligible as CENVAT credit to the recipient of service under a supplementary invoice?
(b) Whether cenvat credit would be admissible to the person who pays tax dues under VCES as service recipient under reverse charge mechanism?
Rule 6(2) of the Service Tax Voluntary Compliance Encouragement Rules, 2013, prescribes that CENVAT credit cannot be utilized for payment of “tax dues” under the Scheme. Except this condition, all issues relating to admissibility of CENVAT credit are to be determined in terms of the provisions of the Cenvat Credit Rules.
As regards admissibility of CENVAT credit in situations covered under part (a) and (b), attention is invited to rule 9(1)(bb) and 9(1)(e)  respectively of the Cenvat Credit Rules.
19
In terms of section 106 (2)(b), if a declaration made by a person against whom an audit has been initiated and where such audit is pending, then the designated authority shall by an order and for reasons to be recorded in writing, reject such declaration. As the audit process may involve several stages, it may be indicated as to what event would constitute,-
(i) initiation of audit; and
(ii) culmination of audit.
Initiation of audit: For the purposes of VCES, the date of the visit of auditors to the unit of the taxpayer would be taken as the date of initiation of audit. A register is maintained of all visits for audit purposes.
Culmination of audit: The audit process may culminate in any of the following manner.-
(i)    Closure of audit file if no discrepancy is found in audit;
(ii) Closure of audit para by the Monitoring Committee Meeting (MCM);
(iii)  Approval of audit para by MCM and payment of amount involved therein by the party in terms of the provisions of the Finance Act, 1994;
(iv)  Approval of audit para by MCM, and issuance of SCN, if party does not agree to the paraso raised.
The audit culminates at a point when the auditparas raised are settled in any manner as stated above.
The pendency of audit as on 1.3.2013 means an audit that has been initiated before 1.3.2013 but has not culminated as on 1.3.2013.
3. Trade Notice/Public Notice may be issued to the field formations and tax payers.
Please acknowledge receipt of this Circular.
Hindi version follows.
Yours sincerely,
(S. Jayaprahasam)
Technical Officer, TRU
Tel: 011-2309 2037


Thursday, August 22, 2013

Income Tax :- Notification No. 64 dated 19.08.2013

GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF REVENUE
[CENTRAL BOARD OF DIRECT TAXES]

Notification

New Delhi, the 19th day of August, 2013
INCOME-TAX

              S.O. 2493(E).– In exercise of the powers conferred by clause (48) of Section 10 read with Section 295 of the Income-tax Act, 1961 (43 of 1961), the Central Government, having regard to the national interest, hereby notifies for the purposes of the said clause, the National Iranian Oil Company, as the foreign company and the Memorandum of Understanding entered between the Government of India in the Ministry of Petroleum and Natural Gas and the Central Bank of Iran on the 20th day of January, 2013, as the agreement subject to the condition that the said foreign company shall not engage in any activity in India , other than the receipt of income under the agreement aforesaid.

2. This notification shall be deemed to have come into effect from the 20th day of January,  2013.

[Notification No. 64/2013/ F.No.142/22/2013-TPL]


(ASHISH KUMAR)
Director to the Government of India

Monday, August 19, 2013

TRACES :- Solution of Tan Registration Problem

Friends,   I want to share my experience at www.tdscpc.gov.in during new TAN registration as new user on account of deductor.  I have tried many times for TAN registration as a new deductor at www.tdscpc.gov.in , but fail in registration.   Earlier I had also registered successfully too many TAN's at www.tdscpc.gov.in.  But a particular TAN number was creating problem in registration.   No doubt that i had entered correct data for TAN registration like  Tan number, BSR code, challan serial no, challan amount, three pan numbers, tds deposited against pan in annexure.   

                Finally, i got success in TAN registration and found my mistake for registration.   The mistake was related to "Total Tax deposited as per deductor-Annexure" which can be seen in below picture.   In below picture, Total Challan Amount and Total Income Tax Deducted at Source are Rs. 38413.00 and Total Tax deposited as per Deductor- Annexure is Zero (0).   It means data uploaded in TDS return is not correct,  there are two columns in annexure regarding entry of TDS amount  one is TDS deducted and second is TDS deposited.   By mistake TDS deposited was entered as zero for all deductees which is required in TAN Registration at www.tdscpc.gov.in. 


              
                  I was placing TDS amount against Pan Number in TAN registration which i have deducted from deductee whereas zero amount should be placed in TDS deposited column.   Wrong data of wrong return can be viewed as under :-
                 As per our view, FVU may be control such type of error, there may be alert during validation that TDS deposited as per deductee must be equal to or greater than TDS deducted from deductee. 

Saturday, August 17, 2013

e-TDS :- New RPU 3.6 with latest FVU 3.9 and FVU 2.135

Friends,   NSDL has launched new e-tds/e-tcs RPU named RPU 3.6 with FVU 3.9 and FVU 2.135.   This RPU 3.6 is mandatory w.e.f. 01.09.2013.  Some fields in 24Q4, 27Q etc. have been  changed.


Key feature of FVU version 3.9


-Change in validation of quarterly TDS/TCS statements are as below:

  1. Book entry flag should not be provided in the challan details for nil challan\nil transfer voucher for all the financial years.
  2. In the salary details (Form 24Q Q4 – Annexure II), if PAN provided is invalid (i.e. PANNOTAVBL, PANAPPLIED & PANINVALID), then the flag in the column “Whether tax deducted at higher rate” mandatorily needs to be “Yes” for TDS statements pertaining to FY 2013-14 onwards.
  3. Mandatory to mention at deductee details “Country of Residence of the deductee” in TDS statement (Form no. 27Q only – Regular and Correction) pertaining to FY 2013-14 onwards.
-Change in name of the field of as below:

  1. In the deductee details (Form 27Q – Annexure I), name of the field “Country to which Remittance made” has been changed to “Country of Residence of the Deductee”.
  2. In the deductee details (Form 24Q – Annexure I), name of the field “Taxable amount of which tax deducted” has been changed to “Amount paid/Credited”.
-FVU version 3.8 and 3.9 are applicable upto August 31, 2013. Further, FVU version 3.9 would be mandatory from September 01, 2013.

Key features 2.135
-Change in validation of quarterly TDS/TCS statement wherein “Book entry flag” should not be provided in the challan details in case of nil challan\nil transfer voucher.

-Change in name of the field of as below:

  1. In the deductee details (Form 27Q – Annexure I), name of the field “Country to which Remittance made” has been changed to “Country of Residence of the Deductee”.

  2. In the deductee details (Form 24Q – Annexure I), name of the field “Taxable amount of which tax deducted” has been changed to “Amount paid/Credited”.

-FVU Version 2.134 and 2.135 are applicable upto August 31, 2013. Further, FVU Version 2.135 would be mandatory from September 01, 2013.




Key features of RPU 3.6

-Change in name of column in quarterly TDS/TCS statement as below:

  1. In the deductee details (Form 27Q – Annexure I), name of the column “Country to which Remittance made” has been changed to “Country of Residence of the Deductee”.

  2. In the deductee details (Form 24Q – Annexure I), name of column “Taxable amount of which tax deducted” has been changed to “Amount paid/Credited”.

-Mandatory to quote “Country of residence of the deductee” in Form no. 27Q. Applicable for quarterly TDS/TCS statements (regular and correction) pertaining to FY 2013-14 onwards.

-Preparation of correction statement pertaining to FY 2013-14 enabled.

-Incorporation of latest FVU Version 3.9 and 2.135.



Wednesday, August 14, 2013

Tax Free Bonds :- Secured, Redeemable, Non-convertible

NOTIFICATION NO. 61/2013, DATED 8-8-2013


S.O. 2424(E) – In exercise of the powers conferred by item (h) of sub-clause (iv) of clause (15) of section 10 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby authorises the entities mentioned in column (2) of the following Table, to issue, during the financial year 2013-14, tax-free, secured, redeemable, non-convertible bonds, aggregating to amounts mentioned in column (3) of the said table, subject to the conditions, namely; -

Eligibility. 

1. The following shall be eligible to subscribe to the bonds:— 

(a) Retail Individual Investors (RIIs); 

(b) Qualified Institutional Buyers (QIBs); 

(c) Corporates.- (including statutory corporations), trusts, partnership firms, limited liability partnerships, Co-operative banks, regional rural banks and other legal entities, subject to compliance with their respective applicable legislations; and 

(d) High Networth Individuals (HNIs). 

Tenure of bonds. 

2. The tenure of the bonds shall be ten, fifteen or twenty years. 

Permanent Account Number. 

3. It shall be mandatory for the subscribers to furnish their Permanent Account Number to the issuer. 

Rate of interest. 

4. (1) There shall be a ceiling on the coupon rates based on the reference Government security (G-sec) rate. 

(2) The reference G-sec rate shall be the average of the base yield of G-sec for equivalent maturity reported by Fixed Income Money Market and Derivative Association of India (FIMMDA) on a daily basis (working day) prevailing for two weeks ending on Friday immediately preceding the filing of the final prospectus with the Exchange or Registrar of Companies (ROC) in case of public issue and the issue opening date in case of private placement. 

(3) The ceiling coupon rate for AAA rated issuers shall be the reference G-sec rate less 55 basis points in case of RIIs and reference G-sec rate less 80 basis points in case of other investor segments referred to at (b), (c) and (d) of paragraph 1 above. 

(4) In case the rating of the issuer entity is AA+, the ceiling rate shall be 10 basis points above the ceiling rate for AAA rated entities as given in clause (3). 

(5) In case the rating of the issuer entity is AA or AA-, the ceiling rate shall be 20 basis points above the ceiling rate for AAA rated entities as given in clause(3). 

(6) These ceiling rates shall apply for annual payment of interest and in case the schedule of interest payment is altered to semi-annual, the interest rates shall be reduced by 15 basis points. 

(7) The higher rate of interest, applicable to RIIs, shall not be available in case the bonds are transferred by RIIs to non retail investors. 

Issue expense and brokerage. 

5. (1) In the case of private placement, the total issue expense shall not exceed 0.25 per cent of the issue size and in case of public issue it shall not exceed 0.65 per cent of the issue size. 

(2) The issue expense would include all expenses relating to the issue like brokerage, advertisement, printing, registration etc. 

Public issue. 

6. (1) At least 70 per cent of the aggregate amount of bonds issued by each entity shall be raised through public issue and the same shall not be applicable in case of entities where the aggregate amount of bonds as per column (3) of the table is less than rupees five hundred crore. 

(2) 40 per cent of such public issue shall be earmarked for RIIs. 

Private placement. 

7. (1) While adopting the private placement route to issue the bonds, each entity shall adopt the book building approach except for those mentioned in sub-paragraph (2) except as per regulation II of the Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations 2008, wherein bids shall be sought on the coupon rate subject to a ceiling specified by the entity and the allotment shall be made at the price bid. 

(2) The issuers shall earmark suitable amounts within their private placement allocation for placing with Sovereign Wealth Funds, Pension and Gratuity Funds without the requirement of book building procedure: 

Provided that in the event of any non-response, the issuers shall be free to offer the un-subscribed amount through book building route under private placement in domestic market. 

(3) The bonds shall be paid for and issued at a premium but with a fixed coupon so that the instrument can be traded under a single International Securities Identification Number (ISIN) and the yield shall be worked out based on the price quoted and then allotment shall be done for the best price (lowest yield). 

(4) The ceiling rate of the interest shall either be equal to or lower than the rate mentioned in paragraph 4 above. 

(5) While calling for bids, there shall be no limit on the number of arrangers who can bid for the issue. 

Repayment of bonds. 

8. (1) The issuer entity shall submit a financing plan to the Ministry of Finance to demonstrate its ability to repay the borrowed funds once the repayment becomes due. 

(2) The financing plan referred in sub-paragraph (1) shall be submitted to the Infra-Finance Section, Infrastructure Division, Department of Economic Affairs, Ministry of Finance, within three months of closure of the issue, duly supported by a resolution of the respective entity’s Board of Directors. 

Selection of merchant bankers. 

9. (1) The merchant bankers shall be selected through competitive bidding process with transparent pre-qualification criteria and the final selection shall be based on evaluation of financial bids. 

(2) The benefit under section 10 of the Income-tax Act, 1961 (43 of 1961) shall be admissible only if the holder of such bonds register his name and the holding with the entity. 

(3) The issue shall be made in compliance with the public issue requirements specified in the Companies Act, 1956 (1 of 1956) and Securities and Exchange Board of India (Issue and Listing ofDebt Securities) Regulations, 2008 including inter alia, the filing of a prospectus with the Registrar of Companies, as applicable.



TABLE
Sl. No.
Entities
Allocated amount of bonds (Rs. in Crore)
(1)
(2)
(3)
1
Cochin Ship Yard Limited(CSL)
250
2
Ennore Port Limited (EPL)
500
3
Airport Authority of India Limited(AAI)
500
4
Indian Infrastructure Finance Company Limited (IIFCL)
10,000
5
Indian Renewable Energy Development Agency Limited (IREDA)
1000
6
Housing and Urban Development Corporation Limited (HUDCO)
5000
7
Rural Electrification Corporation Limited(REC)
5000
8
National Housing Bank (NHB)
3000
9
Power Finance Corporation Limited (PFC)
5000
10
Indian Railway Finance Corporation Limited (IRFC)
10,000
11
National Highways Authority of India (NHAI)
5000
12
NHPC Limited (formerly known as National Hydroelectric Power Corporation Ltd.)
1000
13
NTPC Limited (formerly known as National Thermal Power Corporation)
1750

Explanation.—For the purposes of this notification,— 

(1) Qualified Institutional Buyers shall have the same meaning as assigned to them in the Securities and Exchange Board of India (Disclosure and Investor Protection) Guidelines, 2000. 

(2) Retail individual Investors means those individual investors, Hindu Undivided Family (through Karta ), and Non-Resident Indians (NRIs), on repatriation as well as non-repatriation basis, applying for upto rupees ten lakh in each issue and individual investors investing more than rupees ten lakh shall be classified as High Networth Individuals. 

(3) The bonds issued to NRIs shall be subject to the provisions of Notification No. FEMA 4/2000-RB dated 3rd May, 2000 and Notification No. FEMA 20/2000-RB dated 3rd May, 2000, issued under clause (b) of sub-section (3) of section 6 and section 47 of the Foreign Exchange Management Act, 1999 (42 of 1999), as amended from time to time. 

(4) The credit rating referred to in paragraph 4 of this notification shall mean the credit rating, as assigned by a credit rating agency which is approved by the Securities and Exchange Board of India as well as the Reserve Bank of India and where an entity has been rated differently, by more than one rating agency, the lower of the two ratings shall be considered.


[F.NO.178/37/2013-(ITA-I)]

SURABHI SHARMA, Under Secy.

Intense Debate Comments

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