Saturday, 22 October 2011

Revenue Dept extends service tax return filing deadline to track defaulters

Already burdened with an estimated Rs 49,000 crore annual loss on account of the recent cut in customs and excise duties in petrol and diesel, the Revenue Department has extended the last date for filing online service tax returns by two months till December 26, in an effort to put a lid on rising percentage of service tax evasion cases.

According to Finance Ministry sources, assessees were supposed to file their service tax returns online by October 25, however the two-month extension has been given as the department wants to pinpoint the exact number of tax evaders and track down the profile of these defaulters.

“Of the total 15 lakh registered service tax payers, currently only six lakh are filing their returns. The issue is that who are these nine lakh defaulters, who have gone missing? This was the reason why we made filing of service tax returns online from this financial year mandatory,” a senior Government official said.

Till 2004, there was no exemption limit for service tax payers in the country, however now there is a one time service tax exemption limit of `10 lakh in a financial year.

The Revenue Department has also developed a software named Automation of Central Excise and Service Tax (ACES) for electronic filing of returns, through which it can track documents of the defaulters. Till last year, the service tax collection process was done manually, which was prone to several loopholes and allowed tax evaders to get away.

Finance Ministry sources said that the two-month period will not only give time to the Revenue Department to track defaulters, it will also allow assessees with more time to file their returns, especially as the online system has been introduced for the first time and a large number of people are not accustomed to it.

In June this year, the Government, while increasing prices of diesel, domestic LPG and kerosene, removed the 5 per cent Customs duty on crude oil, brought down the import duty on petrol and diesel from 7.5 per cent to 2.5 per cent and reduced the excise duty on diesel by `2.60 to `2 per litre.

It was estimated that this move would lead to an estimated annual loss of `49,000 crore to the Government during the current financial year. In addition to this, the service tax collection target for this year has been upwardly revised from the original `82,000 crore to `90,000 crore.

Amid this scenario, the department took the decision of making filing of service tax returns online, and also extending its deadline.

Friday, 21 October 2011

Asia Emerges As Battlefield For Tech Cos

When Google Inc unveiled its latest version of Android, the operating platform powering 50 percent of the global smartphone market, it picked Hong Kong as the destination to show off the new software on Wednesday.

The event in Hong Kong, where a population of 7 million has a mobile penetration of 200 percent, highlights Asia's importance as a market Google is keen to win in its high stakes war with Apple Inc.

In the process, the search giant is deepening ties with Asian electronics powerhouse Samsung Electronics, the largest Android seller, which is also set to overtake Apple as the world's biggest smartphone vendor in the third quarter.

"The Asian market is very important. Especially some of the countries are really emerging with smartphones and we are very excited about the opportunity," Won-pyo Hong, executive vice president for Samsung's global product strategy, said on the sidelines at the All Things D technology conference in Hong Kong.

The three-day event hosts senior executives from Google, Microsoft, Yahoo, Alibaba Group, Sony Corp, Twitter and other companies.

South Korea's Samsung, cross-town rival LG Electronics Inc and Taiwan's HTC Corp are already leading the Android charge, with some of these vendors also supporting Microsoft's software.

Samsung's Galaxy Nexus, which sports both the Samsung and Google logos, will be the first device running the new Android system named 'Ice Cream Sandwich', aimed to unify the software used in tablets and smartphones.

The release comes after Apple began sales of the iPhone 4S, which boasts a voice-recognition technology dubbed 'Siri'.

"This will be our strategic product for the year-end holiday season, as (Apple's) iPhone 4S just came into the market," said JK Shin, president and head of Samsung's mobile communications business. The product will be launched in November.

Asia-Pacific, already bustling with smartphone users, will drive further growth in feature phones and smartphones over the next few years, while European and U.S. markets stagnate, analysts say.

Microsoft said on Thursday it will launch Mango-powered handsets from mobile makers including Nokia Oyj, Samsung and HTC over the next few weeks.

"As the price comes down, emerging markets do become a huge opportunity, but also the existing markets in western Europe and the U.S., because as the price point comes down, more people will get into the smartphone market," Andrew Lees, president of Microsoft's Windows phone division, told Reuters in an interview on Thursday.

Android software, which Google licenses free to manufacturers, is the most popular smartphone software globally, ranking ahead of Apple's iOS as well as software by Microsoft and Research in Motion Ltd.

Android runs on 190 million devices, up from 135 million in mid-July. As of the second quarter of this year, shipments of iPhones totalled around 129 million units, while that of iPads totalled 29 million, IDC figures show.

Smartphones now create 25 percent of all phone market volumes, and the majority of the profits.

Jerry Yang, Yahoo's co-founder highlighted Asia as a "very important and growing" consumption market for Yahoo.

"Southeast Asia and India, in the next three years, there will be 100 million users coming online," Yang said, pointing to the proliferation of $50 feature phones.

Apple Bets On China
This week, Apple's Chief Executive Tim Cook highlighted Greater China as its next big growth opportunity, saying "the sky's the limit there", even as the company missed street estimates for profit for the first time in 10 years.

Cook told analysts that Greater China -- mainland China, Hong Kong and Taiwan -- was becoming an all-important region for Apple as it has "become No. 2 on our list of top revenue countries very, very quickly." Revenue from the region increased four-fold to $4.5 billion during the quarter.

China and India, the largest and fastest growing mobile markets, with about 1.8 billion mobile phone subscribers, still have a smartphone penetration rate of less than 5 percent and this is where the top players are likely to boost investments and jostle to stitch deals with telco operators.

"For 2011 and 2012 we expect Apple to build a viable mid-range smartphone business and to pressure Android vendors with a reliance on the mid-range, while heavily pressurising others such as RIM," analysts at Nomura said last week in a report on the global mobile phone industry.

Apple lags rivals in smartphone markets, such as India and China, where buyers mostly choose handsets based on prices unlike the trend in matured markets.

Huawei Technologies and smaller rival ZTE Corp Ltd, are also aggressively muscling in on mobile devices.

This month, Apple launched its first store in Hong Kong, which joined its five other China stores as those with the highest traffic and among its highest revenue stores in the world.


Wednesday, 19 October 2011

3 Ways To Budget Your Expenses This Diwali

Happy Dipawali

  1. Make a List

    This one simple step will give you an overall picture of what your expenses will most likely be this month. Include items such as:
    1. Gift & shopping expenses This is probably going to be one of your 3 major expenses. Make a specific list such as Rs. 1000 on dry fruits & mithai to Mr. X, Rs. 1,500 on saris to Mrs. Y, clothes, jewellery & other gifts for your parents, in-laws and spouse; crackers and presents for your children; personal gifts for your cousins and so on.

      Also remember, good family memories often make for better gifts than presents which once used can be forgotten.
    2. Salaries & bakshish Try and be as detailed as memory allows - include the postman you’ve never seen before, courier agents, the milkman, the newspaperwala, the maid / servant, the building watchmen, and whoever else you think will ring the doorbell
    3. Family gatherings Estimate approximately how much you are likely to spend on dinners & lunches, whether for a party at home or an outing to a nice restaurant
    4. Decorating / renovating the house Whether it is a paint job, or new furniture, or renovating the bathroom or kitchen, this can often be a time of large expense on the home. This will of course be a family financial decision, so make a note of what the likely estimate is.
    5. Vacation time If you are planning a vacation, you should ideally book your rail / flight tickets as much in advance as possible.
    This exercise will help you decide what items to put a ceiling on, and you will see if the overall expense is too high and therefore what items can be removed altogether or substituted for less expense ones. You can also club items and buy them wholesale, availing discounts where possible.
  2. Don’t Swipe At Will. Track your Expenses.
    There are 2 ways to use this rule.
    1. The automatic reflex when out for Diwali shopping is to carry your credit / debit card, and swipe for whatever items are purchased, without checking each one and often without checking the bill either. Don’t do this! If possible, make a trip to the ATM first. Withdraw the amount you are willing to spend on a single shopping trip. That way, while you are shopping, you will automatically know you have used up the budget when you run out of cash in your wallet / bag! A strict rule, and one that works.

      You should of course always keep your cards handy in this situation to avoid any potential inconvenience, but if you do use them, keep track of what you are spending on.

      This rule works for some people, but not for others. It depends on your predisposition towards shopping. If you don’t always enjoy it, and are more of a ‘make a list, stick to the list’ sort of person, this will work for you. If not, then option b of this rule will work.
    2. Use your credit / debit card judiciously, and track your expenses on your bank statement to see what has been spent and what’s left to be bought.

      This is a slightly tricky one, as expenses can get away from you sometimes, especially if you are not following a list. Try and stick to using only one card, preferably one with a bank account that you have online immediate access to. When you get home from your shopping trip, you will be able to log in and check what your actual expenses have been, and compare with what your budgeted expenses were. If the first shopping trip gives you a bit of a rude shock, you’ll be more careful when you next step out.

      At the end of the month, you’ll have a record of all your expenses on a single bank statement, which hopefully does not run into too many pages!
  3. Avoid the Last Minute Rush

    Last but not least - remember that haste makes waste. Money can be saved if you plan your expenses in advance. Make a maximum of 3 shopping trips, take a list with you each time, tick items off the list one by one, and if possible, plan your driving / travelling route as well so you save time and fuel. Try and finish your Diwali shopping and gift wrapping one week before Diwali.

To sum it up, festivals are a time of celebration, family and joy. So enjoy yourself, spend time with your loved ones, and remember to manage your expenses!

Tuesday, 18 October 2011

SFIO to have Powers to Prosecute Cos

Bill to ensure transparency & accountability of corporates; to be cleared by Cabinet before Diwali

The Serious Fraud Investigation Office (SFIO) will have powers to investigate and prosecute corporate entities under the Companies Bill, 2011, expected to be cleared by the Union Cabinet before Diwali.
The bill also envisages rotation of company auditors for higher accountability, corporate social responsibility, a more effective regulation of related party transactions and stricter provisions to prevent siphoning of funds through subsidiary and associate companies.
The government expects the bill to modernise, reform and clean up the corporate sector. After the 2G spectrum, KG basin and CWG scams, there has been a growing public demand for tougher regulations of the corporate sector.
The SFIO set up by a Cabinet resolution in 2003, is bereft of powers to check or pre-empt corporate irregularities. The bill seeks to provide teeth to SFIO as per recommendations of a Parliamentary Standing Committee which scrutinised the legislation.
SFIO will be headed by a director, who will have a multi-disciplinary team of experts to assist him. It will have the powers to probe companies suspected of frauds. SFIO’s report filed in a court for framing of charges will be equivalent to a police report under the Code of Criminal Procedure, 1973. It shall have powers to arrest persons for suspected fraud. SFIO will also be able to coordinate with other investigating agencies such as CBI or Enforcement Directorate.
The Companies Bill, 2011, will replace the Companies Act, 1956. A comprehensive revision of the existing law became necessary following changes in various aspects of corporate governance in India and abroad. The 1956 law had been amended more than two dozen times and the government felt it was best to replace it by formulating a bill which factored in changes that would modernise corporate regulation.
The draft bill, according to an official, sought to address almost all concerns raised by the Parliamentary Standing Committee on Finance, to which the earlier version, Companies Bill, 2009, was referred to after its introduction in the Lok Sabha on August 3, 2009, soon after Manmohan Singh was sworn in as Prime Minister for the second consecutive term.
The bill will ensure companies will make more disclosures, induct independent directors for better governance and have provisions for various board committees such as audit, nomination and remuneration and a panel on stakeholders’ relationship.
The bill seeks to define ‘fraud’, and also outlines the punishment to go with each category of fraud. It also makes out a case for setting up a National Company Law Tribunal with its appellate body. The provisions have been brought in tandem with laws of Sebi, RBI and other regulators.
Reforming Corp Sector
bill to modernise, reform and clean up the corporate sector

director, who will have a multi-disciplinary team of experts to assist him

Monday, 17 October 2011

Global stocks, euro fall; gold gains on Europe worries

Asian stocks extended losses, partly dragged lower by a plunge in Hong Kong shares, and the euro fell on Monday on deepening concerns that the euro zone's debt crisis will dampen global growth.
Worries that a weakening economy will hurt industrial demand hit commodities such as copper, which extended losses for a fourth session in a row after its worst quarter in nearly three years, and oil, which slid more than $1 earlier in the session.
Gold rose as investors abandoned riskier commodities, commodity-linked currencies and equities in favour of the safety of the precious metal and the dollar.
MSCI's broadest index of Asia Pacific shares outside Japan fell 3 percent, slipping closer to a 16-month low hit late in September , while Japan 's Nikkei fell 2 percent.
Hong Kong 's Hang Seng Index slumped more than 4 percent in early trade to its lowest since May 2009, with financials and developers hit hard on fears of the potential impact of a property market correction.
"The October-December quarter begins today, so there is hope for domestic fund buying," said Fujio Ando, senior managing director at Chibagin Asset Management in Tokyo.
"But right now the market's focus is Greece's problems and how Europe will address the situation, as well as U.S. data this week that will show us more about the economy."
Among the first set of clues to help gauge direction for the global economy in the fourth quarter is the U.S. Institute of Supply Management index, a component of the broader Purchasing Managers index that is reported separately, due later on Monday.
As global stocks posted their worst quarter in nearly three years in July-September, and with mainland Chinese markets closed all week for national holidays, traders said volatility might rise with some funds seeking to capitalise on bearish sentiment in thin volume.
The euro fell to its lowest level in more than eight months at $1.3322 in early Asia trade as a government draft budget figures on Sunday showed Greece would miss a deficit target set just months ago in a massive bailout package.
Adding to the concerns over Greece, the German finance minister was quoted as ruling out a higher German contribution to the euro zone's rescue fund than approved by parliament last week.
Euro zone finance ministers meeting later were expected to put pressure on Greece to implement agreed structural reforms and also discuss options for leveraging the European Financial Stability Facility (EFSF), the currency bloc's bailout fund, to increase its financial firepower.
In commodity markets, Brent crude oil was down 1.04 percent to $101.69 a barrel, while U.S. crude fell 1.36 percent to $78.12.
Gold extended gains, rising 0.6 percent to $1,632.30 an ounce, after ending the third quarter up 8 percent for its biggest quarterly gain of this year. Those quarterly gains came despite a steep drop from a record above $1,920 an ounce in September .
Some equity market players are seeing buying potential in the recent sell-off, saying any positive news could turn around the market after this week, when volume is expected to be thin during Asian trading hours due to the Chinese holidays.
"There is progress in Greece and the EFSF is still making progress -- they are making baby steps which is positive," said Todd Martin , Asia Equity Strategist at Societe Generale.
"There are signs value players are buying into the market. Several catalysts could turn the market around," he said.
While global markets have priced in a U.S. double-dip recession, global contagion should be contained as long as Europe makes orderly progress on its problems, he said.
A fall in oil prices and a dip in long-term interest rates would be positive in spurring demand long-term.
U.S. benchmark 10-year Treasury notes remained steady at 1.91 percent in Asia on Monday, after falling 10 basis points on Friday.
(Additional reporting by Lisa Twaronite; Editing by Alex Richardson)

Sunday, 16 October 2011

Apex court suggests fine in cheque bounce cases

New Delhi, Oct 15 (IANS) The Supreme Court has suggested that the Negotiable Instruments Act, 1881, could be amended so that a convict in a cheque bounce case is made to pay a fine from which the complainant can be paid a compensation.
'One other solution is a further amendment to the act so that in all cases where there is a conviction, there should be a consequential levy of fine of an amount sufficient to cover the cheque amount and interest thereon, at a fixed rate of 9 percent per annum, followed by award of such sum as compensation from the fine amount,' said the apex court bench of Justice R.V. Raveendran (since retired) and Justice R.M. Lodha in a recent judgment.
Speaking for the bench Justice Raveendran said: 'This would lead to uniformity in decisions, avoid multiplicity of proceedings (one for enforcing civil liability and another for enforcing criminal liability) and achieve the object of Chapter XVII of the act, which is to increase the credibility of the instrument.'
'This is, however, a matter for the Law Commission of India to consider,' the judgment said.
The judges said that the act 'strongly leant towards grant of reimbursement of the loss by way of compensation'.
'The courts should, unless there are special circumstances, in all cases of conviction, uniformly exercise the power to levy fine up to twice the cheque amount (keeping in view the cheque amount and the simple interest thereon at 9 percent per annum as the reasonable quantum of loss) and direct payment of such amount as compensation'.
The apex court said that the compensation by way of restitution on account of dishonour of the cheque should be 'practical and realistic'.
'Uniformity and consistency in deciding similar cases by different courts not only increase the credibility of cheque as a negotiable instrument, but also the credibility of courts of justice,' the judgment said.
'In same type of cheque dishonour cases, after convicting the accused, if some courts grant compensation and if some other courts do not grant compensation, the inconsistency, though perfectly acceptable in the eye of law, will give rise to certain amount of uncertainty in the minds of litigants about the functioning of courts,' the judgment said.
Citizens will not be able to arrange or regulate their affairs in a proper manner, as they will not know whether they should simultaneously file a civil suit or not.
The problem is aggravated since in spite of provisions for concluding such cases within six months from the date of the filing of the complaint, these seldom reach finality before three-four years, the judgment said.
These cases give rise to complications where civil suits have not been filed within three years on account of the pendency of the criminal cases.
'While it is not the duty of criminal courts to ensure that successful complainants get the cheque amount also, it is their duty to have uniformity and consistency, with other courts dealing with similar cases,' the judgment underlined.
The court said this while dismissing an appeal challenging the Kerala High Court's verdict that the trial court verdict of imposing fine and awarding compensation could not co-exist.

Friday, 14 October 2011


BS REPORTER New Delhi, 13 October
The Cabinet today cleared two amendment Bills paving the way for banks to recover loans from errant borrowers. The move would also help the financial institutions to reduce their non-performing assets and release funds for home, retail or corporate credit needs.
The Bills to amend the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (Sarfaesi) Act and Recovery of Debts due to Banks and Financial Institutions (RDBF) Act were listed in the Budget for 2011-12 as one of the financial sector reforms that the government would carry out this fiscal.
The Sarfaesi Act, 2002, allows banks and financial institutions to auction properties of borrowers if they fail to repay their loans. It also envisaged to securitise and reconstruct the financial assets through two special purpose vehicles — Securitisation Company (SCO) and Reconstruction Company (RCO).
The RDBF Act, 1993 envisaged summary procedure for ascertainment of dues.
Although the two acts helped banks bring down bad debts, there were certain procedural issues faced by banks. These amendments proposed to simplify these procedures.
For instance, if a borrower had objection to a foreclosure, then the bank had to respond within seven days. If the banks did not respond within seven days, borrowers could go to court and get a stay order. The time limit, now, has been extended to 15 days.
There were also certain powers of chief metropolitan magistrates and district magistrates relating to issuing orders on recovery, but they were not non-delegable. These powers were sought to be delegated to the additional metropolitan magistrate and additional district magistrate as well.
“The proposed amendments would enable banks to improve their operational efficiency, deploy more funds for credit disbursement to retail investors, home loan borrowers, without fearing for recovery, thus bringing about equity,” said Information and Broadcasting Minister Ambika Soni.
According to RBI data, net NPAs of scheduled banks (excluding regional rural banks) declined to 1.1 per cent of advances in 2009-10, from 7.6 per cent in 1998-99.
The proposed amendments would enable banks to improve their operational efficiency
I&B Minister

Thursday, 13 October 2011

2% interest subsidy for export credit

To cover rupee-denominated credit for SMEs, others.
To cushion the global slowdown’s impact on exporters, the Reserve Bank on Tuesday announced a two per cent interest subsidy on rupee export credit for handicrafts, handlooms, carpets and small and medium enterprises (SMEs).
Exporters in these segments would be eligible for the interest subvention to be available up to March 31, 2012, the RBI said.
Banks may reduce the interest rate for export credit according to the base rate system by the amount of subvention available, subject to a minimum rate of seven per cent. Banks must ensure the the scheme’s benefits are passed on completely to the eligible exporters. The subvention will provide some relief to exporters suffering from a demand slowdown. They are also facing the adverse effects of an interest rate rise of 200-250 basis points in the past 14 months. Rising input costs due to rupee depreciation and high commodity prices have also hurt.
An Allahabad Bank executive said to begin with, the RBI had extended the subsidy benefit to only four sectors. But, looking at the widespread effects of weak demand, industry bodies may seek coverage of more sectors.
In 2010-11, the interest subsidy benefit on rupee export credit was extended to leather, jute, engineering goods and textiles. The decision to help exporters was announced on a day when the high-level Board of Trade (BoT) met in New Delhi to review the situation arising out of renewed worries over the US economy and the debt crisis in Europe.
The BoT, headed by commerce and industry minister Anand Sharma and comprised of well-known industrialists, discussed issues such as currency volatility, availability of dollar credit and high credit cost.
Although India’s exports grew 54 per cent in he April-August, the time ahead is seen full of challenges.
“I am apprehensive about the rollout of the next seven months. I hope we should be able to achieve $280 billion exports this fiscal,” minister of state for commerce and industry Jyotiraditya Scindia said.
Exporters’ body FIEO welcomed the interest subsidy but sought more. “We were expecting three per cent and also for sectors like textiles, gems and jewellery and engineering," it said in a statement.

Wednesday, 12 October 2011

PM accepts Maira report, no FDI cap

Prime Minister Manmohan Singh on Monday accepted the Maira committee’s recommendations and decided the Competition Commission of India (CCI) would scrutinise all mergers and acquisitions (M&As) in the domestic pharmaceutical sector. The ministries of commerce & industry and health had expressed reservations over the recommendations.
Committee head and Planning Commission member Arun Maira, finance minister Pranab Mukherjee, health minister Ghulam Nabi Azad, commerce and industry minister Anand Sharma and Planning Commission deputy chairman Montek Singh Ahluwalia met the Prime Minister to discuss the matter on Monday. “The PM has accepted our recommendations and the new system will be in place within six months,” Maira told Business Standard.
The relaxation of the threshold limits that invite CCI scrutiny in pharma M&As was one of the key recommendations. Under the existing law, only M&As that involve target companies with a turnover of above Rs 750 crore and assets worth more than Rs 250 crore need to be vetted by the CCI.
According to Maira, CCI will be asked to set up a standing advisory committee to look into pharma M&As. The CCI would be strengthened to look at pharma mergers to ensure the concerns of all stakeholders are addressed, he said.
As an interim measure, Foreign Direct Investment Promotion Board (FIPB) will be asked to clear all brownfield pharma M&A proposals for six months as the CCI will take time to equip itself to handle the job. Currently, FDI in the sector happens through the automatic route. Under the current system, 100 per cent FDI is allowed in the sector.
“India will continue to allow FDI without any limits (100 per cent) under the automatic route for greenfield investments in the pharma sector. This will facilitate the addition of manufacturing capacities, technology acquisition and development,” a press note from the commerce & industry ministry said.
The note said in the case of brownfield investments in the sector, FDI would be allowed through FIPB for six months. “Thereafter, the requisite oversight will be done by the CCI entirely, in accordance with the competition laws of the country,” the note said.
The PM’s nod came despite strong opposition by several members in the committee to continuing 100 per cent FDI under the automatic route.
Members representing the ministries of commerce and health wanted a distinction between greenfield and brownfield M&As in the pharma space. While they were not against 100 per cent FDI in new greenfield projects, they wanted it limited to strict FIPB scrutiny in the case of takeovers of existing Indian drug companies and facilities.

Tuesday, 11 October 2011

PM says sees economy growing at near 8 pct in 2011/12

NEW DELHI (Reuters) - The Indian economy will achieve near 8 percent growth in the current financial year despite the global slowdown, while lowering inflation remains a challenge in the short term, Prime Minister Manmohan Singh said in a statement on Tuesday.
"Despite the global slowdown, we will still achieve a growth rate of close to 8 percent this year," the statement said.
India's headline inflation accelerated in August to 9.78 percent, its highest in over a year, and is a major concern for the central government and Reserve Bank of India (RBI).
Economists expect the central bank, which has raised rates 12 times since March 2010, to increase interest rates one more time in 2011 to fight persistently high inflation.
That move could come as early as Oct. 25, when the RBI meets to review its monetary policy.
India's September headline inflation data is due on Friday.
(Reporting by Manoj Kumar; editing by Malini Menon)

Monday, 10 October 2011

Irda asks insurers to follow uniform pricing

Market-linked policy holders set to gain more units.
Amid the ongoing controversy surrounding net asset value (NAV)-guaranteed products, the Insurance Regulatory and Development Authority (Irda) is standardising the method of calculating NAV under the unit-linked plans of life insurance companies.
According to one circular issued by Irda, the life insurers will have to follow a single uniform pricing methodology for calculating NAV and update it every day. Insurers followed different pricing methodologies, based on appropriation (units purchased) and expropriation (units sold), where they charged an additional amount that inflated NAV. The current guidelines mandate insurers to remove the appropriation and expropriation.

Changes applicable from October 1
Single-unit pricing method for all NAVs
Have to create a separate fund for every new Ulip filing
Outline detailed investment policy under each funds
New funds should not be a minor modification of an existing fund

Ideally, if a person invests Rs 1,100 at NAV of Rs 10, he should get 110 units of Rs 10 each. However, in some cases NAV was inflated to, say, Rs 11.
To balance this, the insurers reduced the number of units to 100. Under the new system, a policyholder will get 110 units and there will be no change in NAV.
“It’s a simpler method of calculation and removes the additional load on policy holders, which means they will get higher number of units,” an actuary with a private life insurance company said.
The life insurance companies have started implementing the new process from October 1. The guidelines assume importance given Irda’s ongoing scrutiny of the highest NAV-guaranteed products, which currently account 20 per cent of Ulip sales. Controversy surfaced last month, when Irda informally sounded out its discomfort about the highest NAV-guaranteed products, on the grounds of perceived “systemic risk” associated with the way the funds were managed. Such products are said to give more emphasis on debt instruments and run the risk of heavy sell-off in equities in case of a stock market fall.
The insurance regulator has also introduced more stringent guidelines for the fund approval process under the unit-linked plans, which is aimed at ensuring higher disclosure and transparency from insurance companies. Insurers will now have to create a separate fund, segregated fund, and outline a detailed investment policy under each fund, subject to which the products will be approved by Irda.
In other words, they will have to maintain a separate fund for each Ulip and the fund will be exclusively used to invest according to the requirement of the product. Also, insurers will have to assign a separate bank account for each segregated fund, along with a unique code associated with it, so that each fund can be identified.
Earlier, insurers were allowed to have two-three generic funds like Life Fund, Ulip Fund and Equity Fund. Investments pertaining to all policies and schemes were channelised from these set of funds only.
“The appointed actuary shall, as a part of the product filing, confirm that the investment policy fully complies with Irda regulations. Every purchase, sale of investment, income of investment shall be identified with reference to the particular segregated fund and accounted for,” Irda said in the circular.
“This will also allow the regulator to keep a close vigil on the nature of investment under particular schemes,” an Irda official said.
Similarly, the chief actuary and the chief investment officer will have to certify that the proposed “new scheme or fund” offered by the insurer is “not a minor modification” of an existing fund.
“There are a number of instances where insurers have launched relatively same schemes with slight modifications under new names. This confuses the customer and, hence, should not be encouraged,” the Irda official said.

Saturday, 8 October 2011

Thought Of the day

Love is the most important factor in life. If you pray to God 
with intense love and devotion, your prayers will certainly be answered. Such is the power of love. Devoid of love, nothing 
can be achieved even in this mundane world. Love is God, live
in love! The whole world becomes a vacuum without love. 
That Love alone assumes a form. Realise this truth. There is no power greater than humanness in this world. In God’s creation, everything is reaction, reflection and resound. Divinity is omnipresent. Cultivate Divine Love so that you can realize the omnipresent divinity within your own self.

Friday, 7 October 2011

Kapil Sibal launches tablet computer

New Delhi, Oct 5 (ANI): Union Communications and Information Technology Minister Kapil Sibal launched 'Akash' (a 35 dollar tablet) here on Wednesday.
Addressing the gathering on the occasion, an extremely delighted Sibal said with the launch of Akash, India demonstrates to the world that it has not faltered in its resolve to secure the future of the children.
"There are some moments in history, which will be milestones recognized by future generations. This is one such moment. Today, we see the beginning of dram realised. A dream in which every student in every corner of the country will have access to technology that defines the 21st century. Today, we reach for the sky and achieve what others said was impossible. Today, we demonstrate to the world that we will not falter in our resolve to secure our future for our children. Today we celebrate 'Akash' and ponder over it and understand for ourselves what it means for our educational system and for our children," said Sibal.
"But let me not limit the achievements of this great enterprise to only our children. Akash ultimately is a device, it is a low cost device, which will enable the children of the world to access information. Let me send out a message not to just our children, but the children around the world. This is not just for us," he added.
A tablet computer, or simply tablet, is a complete mobile computer, larger than a mobile phone or personal digital assistant, integrated into a flat touch screen and primarily operated by touching the screen.
It often uses an onscreen virtual keyboard, a passive stylus pen, or a digital pen, rather than a physical keyboard. (ANI)

Thursday, 6 October 2011


The Empowered Committee of State Finance Ministers will meet on October 14, the first since it returned from aEurope trip last month to study the Goods and Services Tax (GST) model there and how it can be implemented in India.
The learning from the fourcountry tour tops the agenda of the meeting, while the GST structure, the compensation package on account of the Central Sales Tax phase-out, and the information technology platform will also be discussed.
The implementation of the indirect taxation system has been stuck following opposition from some states. The Centre was expecting states opposing GST might soften their stance after seeing how GST works in other countries. But now there are indications that the 10-day tour of France, Spain, Luxembourg and Belgium might have reaffirmed the states’ beliefs about their demands on GST.
Some finance ministers have come home convinced that if countries in Europe can have multiple rates for GST so can India. For some others, the European structure cannot be compared with India.
After seeing how GST works in Europe, Empowered Committee Chairman and Bihar Deputy Chief Minister Sushil Modi has arrived at a conclusion that a rate band instead of fixed and uniform rates of taxes should be adopted in India on the lines of Europe to provide flexibility to states.
European countries have kept the standard rate at 15 per cent and there is a band ranging between 15 and 25 per cent.
Also, there is a reduced rate of five per cent. They also have an exemption threshold.
For Madhya Pradesh Finance Minister Raghavji, who has strongly opposed all the GST models suggested by the Centre from the beginning, the trip was an eye-opener. He says he realised the federal structure in Europe is much different from ours and a cash economy like India cannot adopt GST in the form suggested by the Centre.
A finance ministry official, however, said states had conveniently learnt from Europe whatever suited them, but when it came to various other things, like a dispute resolution panel with binding decisions, they felt India was different and could not copy these things.
During the tour, the ministers had met Spain’s secretary general for finance, the French minister for foreign trade, Belgium’s deputy prime minister and minister of finance, the OECD deputy secretary general, and secretary of the Eu
The implementation of the indirect taxation system has been stuck following opposition from.

Wednesday, 5 October 2011

Waiver of stamp duty for Form 5- for companies registered in New Delhi

The Ministry of Corporate Affairs has in exercise of the powers conferred under Section 642(1) read with Section 610B of the Companies Act, 1956 have amended the Companies (Central Government’s) General Rules and Forms 1956 to substitute the Form No 5 which is filed for Notice of consolidation, division, etc. or increase in share capital or increase in number of members.
The highlight of the amendment is as follows:

·         The increase in authorized share capital of any company which is registered in New Delhi would not attract any  payment of stamp duty.
·         The above is pursuant to the order of the Hon’ble High Court of New Delhi passed in the matter of S E Investments Limited Vs Union of India and Others [ W.P.
           (c) 2393/2010 and CM Appl. 4794/2011] whereby it was held that there is no provision in the Delhi Stamp Act for payment of stamp duly on “increase in authorized

·         The above rules are effective from 25 September 2011.

Even MCA has mentioned on its website in FAQ section related to e-payment od stamp duty that ” The Hon’ble High Court of Delhi at New Delhi has held in the matter of S E Investments Limited Vs Union of India and Others [W.P. (c) 2393/2010 and CM Appl.4794/2011] that there is no provision in the Delhi Stamp Act for payment of stamp duty on “increased authorised capital”. Payment of stamp duty for increase of authorised capital being paid with filing of eForm No.5 with respect to State of National Capital Territory of Delhi is made optional.”

source :

Tuesday, 4 October 2011

Auditors Spared of Matching XML A/Cs With Original Papers

Auditors and company secretaries will not be required to certify that filing of accounts under a new electronic format match the original balance sheet, relieving finance professionals from a burdensome compliance in the first year of this new reporting mode. All listed companies and certain unlisted ones are required to file their financial statements for the year ended 31 March 2011 using the Extensible Business Reporting Language (XBRL) format. Moreover, finance professionals, including chartered accountants, have to certify that the audited balance sheet of a company and the XBRL-converted documents match. But for this year only authentication by a practicing CA/CS/CWA will be required and MCA will issue a circular by this week, Avinash K Shrivastava, joint secretary, ministry of corporate affairs, told ET. Thus, these experts just need to authenticate that the data is accounted for and they don't have to validate the converted XBRL document. A government official, however, said there was no significant difference between authentication and certification as both need digital signatures of registered accountants but as the term authentication was more acceptable to companies the ministry decided to go forward with it. XBRL is a global standard for exchanging business information. Under this format, companies report their financial statements using XBRL syntax as an .xml file instead of uploading their balance sheets in .doc or .pdf format. However, Indian companies have some apprehensions about this new mode as they fear that there would be differences in the standard reported balance sheet and the one accepted by the XBRL format. The certification process would have been cumbersome and confusing as several terms would have to be reclassified by the accountants. This would have increased our costs significantly as well as led to a lot of loss in data, an official of a service-based firm told ET. According to experts, this is primarily because in XBRL-enabled filing of financial statements, financial terms may be differently defined than in a standard balance sheet, resulting in a lot of aggregation and desegregation of figures.In the US, XBRL was introduced five years ago, but the process of certification started only this year. India, too, should adopt a gradual process of business reform, a reputed accountant told ET. Ministry officials rubbished the argument. There is no question of any sort of data being lost as at the end of the day it's just reclassification. The net profit after and before tax would still be the same. Such issues are just being highlighted by some with vested interests, the official added. The ministry is doing everything to pacify all stakeholders while ensuring that XBRL as a forward-looking reporting standard gets adopted as smoothly as possible, Shrivastava said. Most accountants ET spoke to said that for this year the ministry didn't allow companies to define their own accounting elements and definitions in their statements under XBRL, something they call 'extensions'. Senior MCA officials dispute this. The issue of extensions is being considered throughout the world as allowing companies to classify their own elements beats the very purpose of a standard reporting format and such a practice can lead to bypassing various important overheads in a balance sheet, one official said on condition of anonymity. Banks, insurers and NBFCs have been exempted from XBRL filing for 2010-11.

Monday, 3 October 2011

I-T dept doesn't know what to do with money from Kejriwal fans

While Team Anna spokesperson Arvind Kejriwal is attending a meditation course at Sohna in Haryana, income tax department officials are losing their peace of mind over more worldly affairs involving their former colleague.
Kejriwal’s supporters have bombarded income tax offices with cheques and demand drafts, offering to pay his tax dues.
The I-T department had recently sent a letter to the former Indian Revenue Service (IRS) officer, asking him to clear dues of Rs 9.27 lakh, as he had violated certain bond conditions. While Kejriwal denied the claim, as a mark of protest several of his followers volunteered to collect the funds and pay on his behalf.
An official in the department said all kinds of people had been writing to them and sending money, with the amounts starting around Rs 1,000. The amount received so far is significantly less than Rs 9.27 lakh and the department has not been able to figure out what to do with the letters, cheques and demand drafts pouring in.
The dues comprise paid study leave salary of Rs 3.5 lakh for two years, interest on the amount, and an office loan taken to buy a computer several years ago. Kejriwal could not be reached for a comment as he was in the last leg of a 10-day ‘vipassana’ retreat.
However, his colleagues Business Standard spoke to said they received calls from a few people who had reached the income tax office to pay his dues, but they were not aware a large number of people were sending money to the department.
“A lot of people have contacted us too, saying they want to contribute and pay the dues. We have not decided anything on that,” said one of them.
They said Kejriwal had made his position clear that he did not violate any bond conditions and since then there had been no further communication from the government.
Kejriwal had gone on study leave from November 2000 to October 2002. As per rules, he was required to work for the government for a period of at least three years after returning from the leave.
While Kejriwal said he joined back in November 2002 and resigned in February 2006, the finance ministry said he went on ‘extra ordinary leave’ (EOL) without pay from November 2003 to October 2005 and that period did not count as regular service.
The I-T department had considered Kejriwal’s appeal to waive the dues and had referred it to the department of personnel and training, which turned it down saying it violated bond conditions. The department has not yet accepted his resignation and wants him to pay the amount so that a ‘no dues’ certificate could be issued.

Saturday, 1 October 2011

CBEC Cancel Its Instruction on Service Tax !

CBEC has withdrawn its own instruction F No. 275/7/2010-CX-8A, dated 30-6-2010, wherein the Board had communicated its view that services tax on a taxable service received in India, when provided by a non-resident/person located outside India, would be applicable on reverse charge basis with effect from 1-1-2005, and that the ratio of judgment in Indian National Shipowners Association (INSA) v. Union of India [2009] 18 STT 212 (Bom.) would not apply to such cases

INSTRUCTION [F. NO. 276/8/2009-CX-8A], DATED 26-9-2011
Kind attention is invited to instruction F No. 275/7/2010-CX-8A, dated 30-6-2010, wherein the Board had communicated its view that services tax on a taxable service received in India, when provided by a non-resident/person located outside India, would be applicable on reverse charge basis with effect from 1-1-2005, and that the ratio of judgment in Indian National Shipowners Association (INSA) v. Union of India [2009] 18 STT 212 (Bom.) would not apply to such cases. Further, direction was issued to field formations to defend the levy of service tax on such services for the period on or after 1-1-2005, as post INSA judgment, it has been held by the High Courts/Tribunal in a large number of cases, applying ratio thereof, that service tax on such services is leviable only w.e.f. 18-4-2006. However, the appeals filed by the department before the Hon’ble Supreme Court, for defending the levy of service tax on such services w.e.f. 1-1-2005, have been dismissed recently (subsequent to the issuance of said instruction dated 30-6-2010) in the following cases.
  •   (i)  SLP (C) No. 29539 of 2010 in CCE v. Bhandari Hosiery Exports Ltd.
  • (ii)  SLP (C) No. 18160 of 2010 in CST v. Unitech Ltd.
  • (iii)  SLP (C) No. 34208/09 of 2010 in UOI v. S R Batliboi & Co.
  • (iv)  SLP (C) No. 328/332 of 2011 in UOI v. Ernst & Young
  • (v)  SLP (C) Nos. 25687-25688/2011 in CCE v. Needle Industries
  • (vi)  SLP (C) Nos. 25689-25690/2011 in UOI v. SKM Engg. Products
Further, Review Petition No. 1686 of 2011 filed in the case of Bhandari Hosiery has also been dismissed by the Hon’ble Supreme Court vide order dated 18-8-2011.
2. In view of the aforementioned judgments of the Hon’ble Supreme Court, the service tax liability on any taxable service provided by a non-resident or a person located outside India, to a recipient in India, would arise w.e.f. 18-4-2006, i.e., the date of enactment of section 66A of the Finance Act, 1994. The Board has accepted this position. Accordingly, the instruction F No. 275/7/2010-CX-8A, dated 30-6-2010 stands rescinded.
3. Appropriate action may please be taken accordingly in the pending disputes