Clean Energy Cess Amendment

Clean Energy Cess (Amendment) Rules, 2010 – Amendment in rule 11 and substitution of Form - I

Notification No. 7/2010-Clean Energy Cess, dated 8-9-2010

In exercise of the powers conferred by section 84 of the Finance Act, 2010 (14 of 2010), the Central Government hereby makes the following rules to amend the Clean Energy Cess Rules, 2010,  namely:-

 

1.   (1) These rules may be called the Clean Energy Cess (Amendment) Rules, 2010.

      (2) They shall come into force on the date of their publication in the Official Gazette.

 

2.    In the Clean Energy Cess Rules, 2010,-

     (a) in rule 11,-

(i)             For the words, figures and letters “not later than 10^th day of the month in which the payment has been” the words, figures and letters  “not later than 10^th day of the second month, following the month in which removals were”  shall be substituted;

(ii)            after the proviso, the following illustration shall be inserted, namely:-

“Illustration.− Return for the month of July 2010 shall be due by the 10^th of September, 2010.”

 

     (b)  for Form-I, the following Form-I shall be substituted, namely:-

 

“FORM –I

Monthly Return for Removal of specified goods

(See rule 11)

 

 

 

 

	M	M		Y	Y	Y	Y

 

I.     (1) Registration Number :  

 

 

 (2) Name of the Producer  :

 (3) Full Address       :

 

 

II.    Details of Specified Goods removed and Cess payable

S.No.	Name of the mine along with address	CETSH NO.	Description of specified goods	Unit of quantity	Quantity of specified goods removed during the month (in MT)	Rate of cess per tonne (Rs. per tonne)	Notification availed	S.No. in  notification	Total cess payable as per billing (Rs.)
(1)	(2)	(3)	(4)	(5)	(6)	(7)	(8)	(9)	(10)

(This part is to be repeated for each CETSH and for each mine, in case a producer has obtained centralized registration)

III.   Details of payment:

Total  Cess paid     (Rs.)	Amount of Cess  adjusted during the month under Rule 6(3)	Source document	Cess Code	Challan No. (CIN)	Remarks
(1)	(2)	(3)	(4)	(5)	(6)

(Total Cess paid should include Cess payment made during the month through challan as well as excess payment adjusted from earlier month(s).)

IV.           Details of other Payments:

Payments	Amount paid in cash(Rs.)	Challan No. (CIN )			Source document
					No.	Date
Arrears of CESS  under rule 6
Other arrears
Interest payment under rule 6(4)
Other interest payments
*Miscellaneous  payments
Total

                       (*Miscellaneous payments include penalty, pre-deposit, redemption fine.)

V. (a) I hereby declare that the information given in this return is true, correct and complete in every respect and that I am authorized to sign on behalf of the assessee.

    (b) During the month a total amount of  Rs._____ was deposited vide TR-6 Challan (copies enclosed).

    (c)    During the month, invoices bearing S. No.____to ____were issued. (Mine-wise)          

 

(Name and Signature of the Assessee or Authorised signatory)

Place:   

Date :                                            

                                         

ACKNOWLEDGMENT

 

				M	M		Y	Y	Y	Y
Return of Specified Goods
	D	D		M	M		Y	Y	Y	Y
Return of Specified Goods

 

 

 

(Name and Signature of the Range Officer with Official Seal)

           

INSTRUCTIONS

1.             In case where a producer has obtained a centralized registration under Rule 3 of Clean Energy Cess Rules 2010 he should provide information in respect of table No. II and V (c) in respect of each Mine separately.

2.             In case more than one item is produced, additional row may be inserted in each table.

3.             8-Digit CETHS No. may be indicated without any decimal point.

4.             The details of the challans for duty payment should be mentioned in Table II. Separate challans should be used for pre-deposit of duty for the purpose of appellate remedy.

5.             In the sixth column of Table at serial number IV specify the Order-in-Original number and date relating to the payment of arrears of duty and of interest, the period for which the said interest has been paid. For other miscellaneous payments, mention the source document number and date.”

 

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Best Wishes

CA. V.M.V.SUBBA RAO
Chartered Accountant
Door No.24-2-1885,
I Floor, Flat No.5,
Siddivinayaka Residency, I Cross,
Central Avenue, MSR Nagar,
Magunta Layout,
Nellore-524 003
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India
Mobile:+91 - 0 9390221100
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e-Mail: vmvsr@rediffmail.com
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http://pdicai.org/MyPage/203038.aspx

Rupee Symbol Interpretation

Land Mark Ruling in Vodaphone - N C Hegde

the bombay high court's ruling in the vodafone case will have a significant impact on the structure of future cross-borders mergers and acquisitions (m&as), especially when a transfer of shares of a foreign company leads to an effective transfer of an indian business. the ruling by itself may have a limited impact due to the likelihood of an appeal to the apex court, given the stake involved, in which case the supreme court would have the final say. however, there is no getting away from the fact that the ruling will act as a boost for the tax department in its quest to tax other cross-border mergers where the facts are similar to those in the vodafone case. going forward, this may not have a very significant impact on a majority of cross-border mergers given that most investors would choose to use intermediary jurisdictions such as mauritius, cyprus and singapore, which offer treaty protection for capital gains in an indian tax context. further, the high court seems to have accepted that a transfer of a share of a foreign company would not be taxable but has gone ahead to hold the transfer as taxable by looking into the entire substance of the transaction. the decision could therefore bolster claims on the part of foreign investors in regard to the non-taxability of other global m&as where the transfer of shares of a foreign company involve transfer of assets other than indian assets or where there is a transfer of assets spanning many jurisdictions. in any case, the direct taxes code bill 2010 has a specific proposal wherein a transfer of foreign company shares will be liable to pay capital gains tax on the proportionate value of indian assets if the underlying assets include more than 50% of indian assets. thus, effective april 1, 2012, the intention is to bring overseas m&as under the tax net. as articulated by the mumbai high court, the position in many countries, including australia and china, currently leads to such overseas deals being taxed in those countries and therefore, going forward, foreign investors will have to factor the taxability while undertaking an acquisition that meets the metrics as stipulated in the direct taxes code bill. the ruling will act as a dampener for foreign investors. but as foreign investors have often stated, their main objection to the vodafone case was more because the stand of the tax department in this case was a departure from a widely understood legal position. once they are put on guard in terms of the impending legislation under the dtc, they will be smart enough to factor the liability and discharge it as well where a legitimate alternative is not available. of course, till such time the direct taxes code comes into play, there is bound to be some degree of turbulence as there are aspects like apportionment of consideration and jurisdiction in the ruling, which have been remitted back to the tax department. the writer is partner, deloitte haskins and sells. views are personal.

Time limit for filing ITR-V for assessment year 2009-10 extended

 

Press Release, dated 1-9-2010

1.The Central Board of Direct Taxes (CBDT) has decided to extend the time limit for filing ITR-V forms relating to income-tax returns for A.Y. 2009-10 filed electronically (without digital signature) on or after 1st April 2009. These ITR-V forms can now be filed up to 31st December 2010 or within a period of 120 days of uploading of the electronic return data, whichever is later.

2. The relaxation has been made since there are still returns relating to A.Y. 2009-10 for which the ITR-V forms have not been received at the Centralised Processing Centre (CPC), Bengaluru or have been received after 31st March 2010 or have been filed with the Assessing Officers. These taxpayers are being given a final opportunity to send ITR-V forms to the CPC by the dates mentioned in para 1 above.

3. The ITR-V forms should be sent by ordinary post or speed post to Post Bag No.1, Electronic City Post Office, Bengaluru:– 560100 (Karnataka).

DTC Bill 2010

DTC shall come into force on the 1st day of April, 2012

TAX AUDIT

88
. (1) Every person, who is required to keep and maintain books of account under
section 87 shall get his accounts for the financial year audited—
(
a) where the person is carrying on any profession, the gross receipts of the
profession exceed twenty-five lakh rupees in the financial year;
(
b) where the person is carrying on any business, the total turnover or gross
receipts, as the case may be, of the business exceed one crore rupees in the financial
year

ICAI TO SEEK POWER TO PUNISH AUDIT FIRMS WITH GOVT NOD

JOE C MATHEW & SIDHARTHA New Delhi, 24 August
The Institute of Chartered Accountants of India (ICAI) is likely to ask for powers to penalise errant audit firms, but only with prior approval from the government.
The ICAI Council, the apex decision-making body that met last week, was divided on the issue of the regulatory agency for auditors getting powers to penalise firms as well. Instead, it agreed that the powers be used only in special circumstances, said members present in the meeting. A panel constituted by the Council has been tasked with defining what can trigger ICAI intervention against afirm. "If we find that auditors from one firm are repeatedly engaged in offences or if the act of an auditor is really grave, ICAI should have powers to act against a firm," a member of the Council said.
Following the Satyam accounting fraud, ICAI had sought powers to cancel the registration of audit firms as well. At present, its jurisdiction covers individual auditors only. The move was also being seen as astep towards regulating foreign firms, most of which are operating in India through tieups with local firms.
Armed with the Council's approval, ICAI would approach the Ministry of Corporate Affairs to amend the Chartered Accountants Act, the institute's president Amarjit Chopra said. "It (regulation) will be done on acase-to-case basis after getting approvals from the ministry on each occasion," Chopra added.
Another ICAI Council member said that amendments to Schedule I and Scheduled II of the Act had been proposed. Once Parliament approves the changes, ICAI will have powers to send show cause notices, levy penalties and in cases of grave offences, cancel licences.
The ICAI move comes days after the Bombay High Court had ruled on August 13 that the Securities and Exchange Board of India (Sebi) could proceed with its enquiry against audit firm Price Waterhouse for its alleged role in the Satyam scam.
The court had observed that Sebi had the power to act in the interest of the shareholders of listed companies. However, it noted that actions against the professionals (chartered accountant in this case) could be taken only by the body that regulates that profession. The court's observation had triggered a debate as to whether Sebi could debar Price Waterhouse from working with listed companies, if proved guilty.
Currently, the disciplinary committee of ICAI holds individual chartered accountants responsible for any malpractices or discrepancy that happens during the audit work. ICAI has the powers to suspend the registration of such persons, if found guilty. However, the institute has no such powers to take similar actions against the audit firm.
POWER WITH A RIDER
ICAI is likely to seek powers to penalise errant audit firms, but not without prior approval from the government
The ICAI Council was divided on the issue of the regulatory agency for auditors getting powers to penalise firms
A panel constituted by the Council has been tasked with defining what can trigger ICAI intervention against a firm
At present, ICAI's jurisdiction covers individual auditors only
Armed with the Council's approval, ICAI would approach the Ministry of Corporate Affairs to amend the Chartered Accountants Act

Enhancing microfinance -K. V. RAMANAND

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Microfinance institutions need to be permitted to operate as a business or an industry with an objective to make profits and grow.

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Currently, over Rs 20,000 crore is channelled by private sector MFIs amongst around 28 million borrowers.

"Give a man a fish, you feed him for a day. Teach him how to fish, you feed him for a lifetime," goes the Chinese saying. Microfinance is hailed by many as the panacea to alter the social fabric of rural India.

The depressing levels of poverty, particularly in rural India, motivated policymakers (such as the RBI and the Registrar of Cooperative Societies) to embark on the Self-Help Group (SHG), bank linkage programme to channelise the much-needed capital to the remotest parts of the country with the hallowed twin objectives of social and economic uplift.

SIDBI and NABARD, leading Indian financial institutions, played a stellar role by lending directly. They also paved the way for extensive private sector participation in this industry by funding private sector players.

The emergence of the concept of microfinance and private sector institutions was primarily to supplement and enhance the outreach of the traditional banking sector through the length and breadth of the country.

The benign objective was to protect the poor from the usury they were subjected to from unorganised moneylenders. Microfinance industry operates on the fundamental concept of small loans disbursed amongst a group of close knit people and subtly leverages on social and peer pressure to ensure full and timely repayment.

This industry has an envious record of loan recovery (almost 97 per cent). More importantly, the sector also seems largely immune to the global financial turmoil as it tends to operate on a regional basis. Therefore, it is highly susceptible however, to the regional issues and trends.

Organised phenomenon

What started as a local initiative by a few dedicated individuals with a social/community objective to mobilise and channel local resources has become a parallel organised banking phenomenon.

The style under which the entities operate ranges from for profit corporate entities such as NBFCs (non-banking finance companies to Section 25 companies and societies and trusts. Even the spectrum of regulators is widespread and ranges from the RBI to the Registrar of Cooperatives.

For long, this sector depended on the traditional sources of borrowed capital. There were many restrictions on free access to capital.

Public deposits were not available based on the nature of the entity and sources were primarily from the community and grants. Priority sector norms enabled microfinance institutions (MFIs) access to bank funds. Currently, over Rs 20,000 crore is channelled by private sector MFIs amongst around 28 million borrowers.

Lately, this sector has attracted funds from global development financial institutions and, more importantly, the global private equity funds. Private equity players have invested approximately $300 million in this sector in about 25 transactions since 2006.

This availability of capital in turn saw many socially-oriented entrepreneurs launching MFIs of their own. In all, over 3000 MFIs operate currently in India. This led many to draw comparisons between the credit-card boom for the middle class and the poor man's credit mechanism, the microfinance industry.

Key concerns

This rapid growth has led to many concerns being raised, primarily around the usage of funds by the borrowers and the rates charged by the lenders. In many cases, the lending rates range from an effective 25 per cent per annum to 32 per cent per annum.

Concerns were raised by activists whether this mechanism was fuelling rural consumerism by encouraging "unnecessary" spending by making credit easily available.

Is the credit being used for "productive" purposes? Is the credit going for measures that alleviate the impoverished status of the borrowers or is it meeting their short term consumption requirements? Other serious considerations are with regard to the systems and processes at the lending institutions to monitor and control disbursements and collections.

The MFIs have a requirement to strengthen their internal process and corporate governance standards. This is mandated by the rapid growth of the industry and also the need to operate from discrete and remote locations.

Considering the widespread presence of operations, many a times in remote areas with minimal access to communication networks, there is serious inherent risk in operations. Technology, therefore, will be a great enabler and can play an important role in the stability and growth of this industry by minimising risks and also significantly reducing costs.

We believe that the microfinance industry is a path breaking tool in achieving the stated twin objectives. The best and the most effective way of reaching there is by a judicious mix of active private sector participation with a calibrated approach of support and regulation by the Government and its agencies.

MFIs need to be permitted to operate as a business or an industry with an objective to make profits and grow. The regulatory set-up should be focused on prevention of any frauds or scams considering the high growth this sector is witnessing. The long-term growth of this industry is ensured if the MFIs practise self-regulation and direct the funds for productive purposes at a healthy margin without just being focused on growing the business by maximising (not optimising) disbursals at the highest possible rates of interest.

Sharing of information about borrowers and their payment track record/defaults will go a long way in preventing sizeable write-offs. This will also prevent multiple borrowings by the same borrower from multiple entities. In some instances, the new borrowings were apparently to service the old ones.

Regulatory supervision

The Government and other regulators should enable the MFIs to operate in an unhindered manner but with a clear and strict oversight. There has been a lot of debate about the need to regulate the interest rates on microfinance loans. The best that the regulators can do is to encourage this sector that enables multiple players to enter and participate aggressively, thereby increasing competition and the enhancing the need for efficiencies to survive and grow.

In a very positive development, leading players in this industry have come forward to set up a Microfinance Institutions Network (Mfin) that will interact on behalf of the industry with the regulators to ensure sustainable growth of the industry. It hopes to enhance information sharing amongst the members about the regulations, operational benchmarks and also borrower profiles and, more importantly, act as a self-regulating initiative.

While corporate diktats suggest a full-blown stress on growth and profits, the nature of the industry and the target segment it caters to position the players uniquely with the need for socioeconomic consciousness. This is a challenge for the captains of the entities that operate in this segment. However, we can be certain of one thing here — like some of the events that transformed the country, like the IT revolution, the concept of microfinance is destined to make a significant difference to the populace.

(The author is Executive Director, Corporate Finance, KPMG)

Transformation in lease classification -MOHAN R. LAVI

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The proposed amendments consider a 'right-of-use' model where both lessees and lessors record assets and liabilities arising from lease contracts.

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Classification of leases into operating and financial leases has not been very ambiguous, with clear rules for sometime now. But this is proposed to be radically altered by the International Accounting Standards Board (IASB), considering its revised Exposure Draft on International Accounting Standard 17 — Accounting for Leases.

Normally, a finance lease is one where the lease term exceeds the life of the asset, there is a transfer of title at the end of the lease term, an option to purchase the asset is built into the agreement or the present value of lease payments exceed a substantial portion of the fair market value of the asset.

Operating lease has been negatively defined — that is, one that is not a finance lease. It has been estimated that $640 billion of lease commitments do not appear on the balance-sheets of companies (as they are classified as operating leases and expensed), resulting in unclear financial leverage and gearing ratios.

Lessee

The proposed amendments consider a 'right-of-use' accounting model where both lessees and lessors record assets and liabilities arising from lease contracts. The assets and liabilities are recorded at the present value of the lease payments. They are subsequently measured using a cost-based method.

A lessee has acquired a right to use the underlying asset, and it pays for that right with the lease payments. A lessee would record: an asset for its right to use the underlying asset (the right-of-use asset), and a liability to pay rentals (liability for lease payments). The right-of-use asset would originally be recorded at the present value of the lease payments. It would then be amortised over the life of the lease and tested for impairment. A lessee (under IFRS) could revalue its right-of-use assets. The right-of-use asset would be presented within the property, plant and equipment category on the balance-sheet but separately from assets that the lessee owns.

Lessor

The accounting would reflect the exposure of the lessor to the risks or benefits of the underlying asset. When the lease transfers significant risks or benefits of the underlying asset to the lessee, the lessor would apply the de-recognition approach. When the lessor retains exposure to significant risks or benefits of the underlying asset the lessor would apply the performance obligation approach. The de-recognition approach requires the lessor to take part of the underlying asset off its balance-sheet (derecognise it) and record a right to receive lease payments. It is possible that a lessor could record a gain on commencement of the lease under this approach.

The performance obligation approach requires the lessor to keep the underlying asset on its balance-sheet and to record a right to receive lease payments and a liability to permit the lessee to use the underlying asset (a lease liability).

The lessor records income over the expected life of the lease. Many lease contracts include variable features.

For example, leases often include options to renew or terminate the lease, contingent rentals (for example, rentals that vary depending on sales) or residual value guarantees.

The proposals would require lessees and lessors to determine the assets and liabilities on the basis of the longest possible lease term that is more likely than not to occur. Lessees would always include contingent rentals but lessors would only include contingent rentals that they can measure reliably.

Lessees and lessors must also include estimates of residual value guarantees. Including these items informs investors about expected cash flows. Current requirements generally exclude such items, making it more difficult for investors to estimate future cash flows.

The proposed amendments would entail a revision to Indian Accounting Standard 19 on Leases since both differ conceptually. The frequent issue of revised standards by the IASB is forcing the Institute of Chartered Accountants of India (ICAI) to keep pace.

The ICAI is mulling whether to move over to the brand-new IFRS- 9 (Part 1 of 4 of which is now out) or to go ahead with IAS 39 on Financial Instruments from next year. A standard on financial instruments being extremely important, it would probably be better to implement IAS 39 and assess the impact instead of going in for a half-baked IFRS-9. The only constant in the accounting world these days is change.

(The author is a Bangalore-based chartered accountant.)

Auditors owe a duty to all shareholders -Businessline

Court raps SEBI for not acting on Price Waterhouse petition.

Our Bureau

Mumbai, Aug 25

The SEBI Act (Section 11) has wide amplitude and empowers the regulator SEBI to take within its sweep a CA, if his activities are detrimental to the investors or the securities market, the Bombay High Court observed in its order on the Price Waterhouse vs SEBI case.

The order was made available on the Court's Web site on Wednesday.

The Court on August 13 had ruled that SEBI can regulate the securities market but cannot regulate the profession of Chartered Accountants. SEBI has the powers to issue show cause notices to CA firms and individual CAs.

High Court proceedings

Among the observations made by the High Court was that "by taking remedial and preventive measures in the interest of investors and for regulating the securities market, if any steps are taken by the SEBI, it can never be said that it is regulating the profession of the Chartered Accountants." SEBI was also empowered by law so far as listed Companies were concerned, said the Court order.

"The auditors on their part have been appointed by shareholders by majority and they owe a duty to all shareholders and are required to give a correct picture of the financial affairs of the company," observed the High Court.

The High Court also rapped SEBI for not acting on the petition given to it by PW which prompted the audit firm to move court. The High Court observed that, as a result, the question as to whether the SEBI has committed error in not passing any order on the application has become academic.

In sum, the Court said that a CA firm like PW by virtue of being auditors of Satyam which was at one point considered a blue chip company with a defining influence on the securities market can be said to be persons associated with the securities market within the meaning of the SEBI Act.

While SEBI had no powers to debar a CA firm or a CA from practising, it could safeguard investor interest by taking appropriate remedial steps including keeping a person (including a CA) at a safe distance from the securities market.

The PW petitions were rejected and their prayer for leave to appeal to Supreme Court was also rejected. SEBI has been directed not to undertake inquiry proceedings against PW for a period of four weeks so that the audit firm could file a special leave petition against this High Court order in the Supreme Court.

Satyam case

PW which had been issued a show cause notice by SEBI in the Satyam fraud, had sought direction from the High Court on whether SEBI has jurisdiction over CA firms and CAs in this matter as they were governed by ICAI.

SEBI had initiated proceedings against PW in the Satyam case under provisions of Section 11,11B and 11(4) of the SEBI Act against PW with respect to fabrication and falsification of accounts, non compliance with auditing standards and dissemination of misleading and spurious information.