Here we are with the Thirtieth successive issue of our monthly ‘Missive’. We trust you will enjoy reading this Missive, even while soaking in thecontents. We would very much appreciate your feedback which consistently helps us in improving and upgrading the contents.

1. MISSIVE
Volume XXX
October 2013

2. Index
Dear Patron
H
ere we are with the Thirtieth
successive issue of our monthly
‘Missive’.
We trust you will enjoy reading this
Missive, even while soaking in the
contents. We would very much
appreciate your feedback which
consistently helps us in improving
and upgrading the contents.
Thanks and regards,
Knowledge Management Team
Topics
Direct Tax
Transfer Pricing
Service Tax
Value Added Tax
Customs
FEMA
Company Law
Transactions that made
headlines
Page
No
1
3
4
6
6
8
10
11
Never hold your head high with
pride or ego, even the winner of a gold
medal gets his medal only when he
puts his head down!!!

3. DIRECT TAX
ANL SINGAPORE PTE. LTD V. DY. DIT (2013)
37 taxmann.com 131 (Mumbai-Trib)
VIKAS OBEROI V. DY. CIT (2013) 37
taxmann.com 46 (Mumbai - Trib.)
Business income of NR isn’t taxable if its
dependent agent is remunerated on ALP
basis and is charged to tax
Where share application money is
returned without any allotment of shares,
such refund cannot be classified as loan or
advance under section 2(22)(e), unless
mala fide intentions of assessee are
proved




Although the share application money is
one kind of advance given with the
intention to obtain the allotment of shares,
yet such advance is innately different from
the normal loan or advance specified in
2(22)(e);
In the instant case, the refund of the
amount was made for commercial reasons
and also in the best interests of the
prospective share applicants. Further, it
was self-explanatory that the assessee
being a 'beneficial shareholder', derived
no
benefit
whatsoever,
when
the
impugned 'share application money' was
finally returned without any allotment of
shares for commercial reasons;
Therefore, the share application money
might have been an advance but it was
not advance which was referred to in
section 2(22)(e). Such advances, when
returned without any allotment or part
allotment of shares to the applicants,
would not take a nature of the loan merely
because the same was repaid or returned
or refunded in the same year or later on
after keeping the money for some time
with the company;
As the original intention of payment of
share application money was towards the
allotment of shares of any kind, the same
couldn’t be deemed as 'loan or advance',
unless the mala fide intentions were proved
by the AO with evidence.
1
The Tribunal held in favour of the assessee as
under:



Income in respect of voyages which had
been considered as chargeable to tax in
India as per Article 7 of the India-Singapore
DTAA was the amount on which the
assessee paid commission, etc., to CMA,
which was its AE and also a dependent
agent
The receipt in the hands of the CMA had
been determined at ALP under due
process of law;
Where the AE also constitutes a PE and was
remunerated on ALP, then nothing further
was left to attribute to the PE. Thus, it was
held that income in respect of voyages
couldn’t be included in the hands of the
assessee
ITO, TDS V. KENDLE INDIA (P.) LTD (2013) 37
taxmann.com 140 (Delhi - Trib.)
Where assessee made remittance for
procurement of commercial information
for onward transmission to its principal,
remittance made was not for availing
technical services and did not amount to
royalty
In the instant case the assessee had entered
into a master clinical services agreement with
its principal 'BHAG' for clinical trials. Assessee
had arrangement with CSPL to provide
information on clinical trial test undertaken by
CTU of University of Kelmia, Sri Lanka. It applied
for issue of certificate for non-deduction of tax
on remittances made to CSPL which had no PE
in India. The AO held that remittance for

4. clinical services was in nature of royalty and
was liable to be taxed in India. On appeal, the
CIT (A) reversed the order of AO.
not provided in the law (Sandik Asia 280
ITR 643 (SC), not correct and should be
reconsidered)
The Tribunal held in favour of the assessee as
under:
The question before the Supreme Court was
whether interest is payable by the Revenue to
the assessee if the aggregate of installments of
Advance Tax/TDS paid exceeds the assessed
tax? The assessee relied upon Sandvik Asia


The services in question were services for
supply of information which assessee was
not using for any technical know-how but it
was working as a conduit for supply of this
information further to its principal;
Thus, the remittance made by the assessee
was not for availing of technical services
and did not amount to royalty and
therefore was not liable for withholding
taxes.
Protocol to India-Australia DTAA – ‘Force of
attraction’ concept removed; PE redefined
The protocol amending the agreement
between the Government of India and
Australia, signed on the December 16, 2011,
has been notified on September 20, 2013 and
is effective from April 2, 2013. Now Force of
attraction' concept is removed from Article
7(1) with insertion of new Article 7(1). As per
the new clause, the business profits of the
enterprise may be taxed in the other State but
only so much of them as are attributable to
that PE.
Threshold limit for establishing Service PE has
been increased to 183 days. Earlier treaty did
not provide for any threshold limit for
establishing construction PE. However, the
protocol provides for threshold limit of 183 days
and 90 days on use of substantial equipment
and on activities in connection with
exploration of natural resources.
CIT v. Gujarat Flouro Chemicals (SC) SLP
(C) No. 11406 of 2008 Order dt. 18th Sep’13
Section 244A: The department is not
obliged to pay interest on interest as that is
2
Limited vs. CIT 280 ITR 643 where it was held
that the assessee was entitled to be
compensated by the Revenue for delay in
paying to it the amounts admittedly due.
In Sandvik Asia 280 ITR 643 (SC) the Supreme
Court held that if the department delays
paying interest on the refunded amount, the
assessee is entitled to interest on interest.
Subsequently, in CIT vs. Gujarat Flouro
Chemicals, a view was expressed that Sandvik
Asia 280 ITR 643 (SC) did not lay down the
correct law and ought to be reconsidered. The
matter was referred to a larger Bench. HELD by
the larger Bench:
The judgment in Sandvik Asia 280 ITR 643 (SC)
has been misquoted and misinterpreted by the
assessees and also by the Revenue. Their view
that in Sandvik case this Court had directed
the Revenue to pay interest on the statutory
interest in case of delay in the payment and
that the Revenue is obliged to pay an interest
on interest in the event of its failure to refund
the interest payable within the statutory period
is not correct. In Sandvik Asia, the Court was
considering the issue whether an assessee who
is made to wait for refund of interest for
decades be compensated for the great
prejudice caused to it due to the delay in its
payment after the lapse of statutory period. In
the facts of that case, this Court came to the
conclusion that there was an inordinate delay
on the part of the Revenue in refunding
certain amount which included the statutory
interest and therefore, directed the Revenue
to pay compensation for the same but not an

5. interest on interest. S. 244A provides for interest
on refunds under various contingencies. It is
clarified that it is only that interest provided for
under the statute which may be claimed by
an assessee from the Revenue and no other
interest on such statutory interest.
Citicorp Finance (India) Ltd vs. ACIT (ITAT
Mumbai) ITA 8532/Mum/2011 dt. 13th
Sep’13
TDS Credit must be given even if TDS
Certificate is not available/ entry is not
shown in Form 26AS
The assessee claimed credit for TDS which was
denied by the AO on the ground that the
claim did not match the entries shown in Form
No. 26AS and that there was a discrepancy.
On appeal, the CIT(A) held that the assessee
would be entitiled to credit to the extent
shown in the computer system of the
department.
On further appeal by the assessee to the
Tribunal HELD:


The AO is not justified in denying credit for
TDS on the ground that the TDS is not
reflected in the computer generated Form
26AS. In Yashpal Sahwney 293 ITR 539 the
Bombay High Court has noted the difficulty
faced by taxpayers in the matter of credit
of TDS and held that even if the deductor
had not issued a TDS certificate, still the
claim of the assessee has to be considered
on the basis of the evidence produced for
deduction of tax at source.
The Revenue is empowered to recover tax
from the person responsible if he had not
deducted tax at source or after deducting
failed to deposit with Central Government.
The Delhi High Court has in Court On Its
Own Motion Vs. CIT 352 ITR 273 directed
the department to ensure that credit is
given to the assessee even where the
3

deductor had failed to upload the correct
details in Form 26AS on the basis of
evidence
produced
before
the
department.
Therefore, the department is required to
give credit for TDS once valid TDS
certificate had been produced or even
where the deductor had not issued TDS
certificates on the basis of evidence
produced
by
assessee
regarding
deduction of tax at source and on the
basis of indemnity bond.
TRANSFER PRICING
Vodafone India Service Private Limited
Recently the Bombay High Court (HC) in the
case of Vodafone India Service Private Limited
(taxpayer), dismissed the writ petition of the
taxpayer by ruling that the TPO had jurisdiction
to identify and determine arm’s length price of
transactions not referred to him by the AO nor
reported by the taxpayer in the Transfer Pricing
Accountant’s Report.
The taxpayer claimed that the TPO did not
have jurisdiction to determine ALP of
transactions relating to sale of call centre
business and assignment of call options and
thereafter filed a writ petition before the HC to
quash the transfer pricing adjustment of INR
8,500 crores (USD 1330 Million) made by the
TPO.
The HC held that the taxpayer has more than
one alternate remedy available under the
Indian Tax Law (ITL). Therefore, the remedy
provided by the statute should be availed of
and not by way of a writ petition to the HC.
The HC has purely decided on the jurisdiction
of the TPO and maintainability of the writ and

6. has not discussed on the merits of the transfer
pricing issues involved in the writ petition.
IJM (India) Infrastructure Ltd Vs ACIT [ITA
No 1814/Hyderabad/2012, A.Y 2008-09]
The Hyderabad Bench of the Income-tax
Appellate Tribunal (the Tribunal) in the case of
IJM (India) Infrastructure Ltd (taxpayer) has
held that transactions between the taxpayer
and its related parties having Permanent
Establishment in India are transactions
between two 'resident' entities and cannot be
termed as 'international transaction'. The
Tribunal also held that the transactions
between the taxpayer and its joint venture
with the group entity cannot be characterised
as international transactions.
Brief Facts
During the year the taxpayer secured
subcontracts form its domestic related parties
one being a PE in India and the other being a
joint venture. The taxpayer contended that the
PE has a place of business in India by virtue of
its registration under the provisions of the
companies Act and also the control and
management of its branch affairs are situated
in India. Further the joint venture was formed in
India and was assessed to tax in the status of
AOP.
The Tribunal accordingly held in favor of the
Assessee that no Transfer Pricing provisions
were applicable for the said year.
Tellabs India Private Ltd vs. ACIT (ITAT
Bangalore)
The Bangalore Income-tax Appellate Tribunal
in the case of Tellabs India Private Ltd
(Taxpayer) held that assignment of a contract
4
to the Taxpayer by an Associated Enterprise
(AE) is an international transaction to which
the transfer pricing provisions shall apply and
the consideration received should be
determined at Arm’s Length Price.
The taxpayers AE, a Denmark based Company
secured a contract which was to be
performed both outside (Off shore) and in
India (On shore). The onshore component of
the contract was thereafter assigned by the
AE to the taxpayer.
The assignment agreement between the AE
and the Taxpayer had all the ingredients of an
international transaction within the meaning of
tax law. Thus it was an agreement between
two or more AEs where one of the parties to
the transaction is a nonresident. The
transaction relates to provision of services or a
transaction that had a bearing on profits,
income, losses or assets. Therefore, the price
paid for such transaction had to be
determined in accordance with arm’s length
principles.
Press Release
Changes made in the Final Safe Harbour
Rules
A press release issued on 18th September 2013
by the Government of India finalized the Safe
Harbour Rules after considering comments of
various stake holders and making necessary
modifications to the draft rules which were
released on 14.08.2013.
SERVICE TAX
Amendment
Notification
in
Mega-Exemption

7. Notification no. 25/2012 has been amended
and following additional services are being
declared as exempted from service tax:
Any services provided by(i)
the National
Skill
Development
Corporation set up by the Government of
India;
(ii) a Sector Skill Council approved by the
National Skill Development Corporation;
(iii) an assessment agency approved by the
Sector Skill Council or the National Skill
Development Corporation;
(iv) a training partner approved by the
National Skill Development Corporation or the
Sector Skill Council
in relation to (a) the National Skill Development
Programme implemented by the National Skill
Development Corporation; or (b) a vocational
skill development course under the National
Skill Certification and Monetary Reward
Scheme;
or
(c) any
other
Scheme
implemented
by
the
National
Skill
Development Corporation.
Notification no. 13/2013-ST. Dated: 10.09.2013
Ad-hoc Exemption Order for taxable
services provided by the Hotel or
Restaurant in the flood affected State of
Uttarakhand
In order to provide support to ensure
sustenance for the local population in the
state of Uttarakhand, Central Government
exempts the following taxable service from the
whole of service tax provided to any person in
the State of Uttarakhand, namely:
i.
Services by way of renting of a room
in a hotel, inn, guest house, club, campsite or
other commercial place meant for residential
or lodging purposes;
5
ii.
Services provided in relation to serving
of food or beverages by a restaurant, eating
joint
or
mess.
Further, this exemption order shall be
applicable for the abovementioned taxable
services provided during the period 17th
September, 2013 to 31st March, 2014.
Exemption order 01/2013-ST. Dated: 17.09.2013
Central Excise
Amendment in Notification no. 12/2012,
dated 17.03.2012
In the said notification, wherein certain goods
were exempted from excise duty, entry no. 327
(goods specified in List 9 for the manufacture
of rotor blades for wind operated electricity
generators) has been amended to include
manufacture of intermediates, parts and subparts of rotor blades, for wind operated
electricity generators.
Notification no. 27/2013. Dated: 12.09.2013
Amendment in CENVAT Credit Rules
In rule 3 of the CENVAT Credit Rules, 2004, for
sub-rule (5A), the following sub-rule shall be
substituted“ (5A) (a) If the capital goods, on which
CENVAT credit has been taken, are removed
after being used, the manufacturer or provider
of output services shall pay an amount equal
to the CENVAT Credit taken on the said capital
goods reduced by the percentage points
calculated by straight line method as specified
below for each quarter of a year or part
thereof from the date of taking the CENVAT
Credit, namely:(i)
for computers and computer peripherals:
for each quarter in the first year @ 10%
for each quarter in the second year @ 8%

8. for each quarter in the third year @ 5%
for each quarter in the fourth and fifth year @
1%
Notification
II/VAT/2012/part
16.09.2013
(ii) for capital goods, other than computers
and computer peripherals @ 2.5% for each
quarter:
Provided that if the amount so calculated is
less than the amount equal to the duty
leviable on transaction value, the amount to
be paid shall be equal to the duty leviable on
transaction value.
(b) If the capital goods are cleared as waste
and scrap, the manufacturer shall pay an
amount equal to the duty leviable on
transaction value.”
Notification No. 12 /2013-CE (NT). Dated:
27.09.2013
Amnesty scheme
VALUE ADDED TAX
Information online in Form DP-1
Form DP-1 shall be submitted online by all the
dealers latest by 16/10/2013.
Notification No.F.3(352)/Policy/VAT/2013/751762. Dated: 09.09.2013
Withdrawal of privilege of VAT refund
The privilege of VAT refund has been
withdrawn in respect of the High Commission
of the Islamic Republic of Pakistan, New Delhi
for its official purchases as well as for personal
purchases of its diplomats, till further order.
Notification
No.F.5(54)/Policy-II/VAT/201213/769-781. Dated: 16.09.2013
Filing of stock statement
The date for filing of Stock Statement in Form
Stock-1 online for the stock available on 31st
March, 2013 has been extended to 5th
October 2013 for all the dealers.
6
No.F.7(433)/PolicyFile/782-794.
Dated:
Delhi
Tax
Compliance
Achievement
Scheme,2013 has been announced, under
which a person may make a declaration of
the tax dues to the designated authority on or
before the 31st day of January 2014 so as to
avoid obligations of interest and penalty.
Notification No.F.3(16) / Fin. (Rev-I) /2013- 14/
dsVI /786. Dated: 20.09.2013
CUSTOMS
Amendment in Notification No. 12/2012Customs dated 17.03.2012
The said notification, which states customs duty
rate on various items, has been amended so
as to include sugar beet seeds on which
customs duty will be payable at the rate of 5%.
Notification No. 43 /2013-Customs. Dated:
13.09.2013
Revision of customs duty rate on articles of
gold and silver jewellery and goldsmiths
and silversmiths ware
Import duty leviable on articles of jewellery
and parts thereof, of precious metal or of
metal clad with precious metal and articles of
goldsmiths’ or silversmiths’ wares and parts
thereof, of precious metal or of metal clad with
precious metal, falling under headings 7113
and 7114 respectively of the First Schedule to
the Customs Tariff Act, 1975 has been
increased from 10% to 15%.
Notification
17.09.2013
No.
44/2013-Customs.
Amendment Notification No.
Customs (N.T.), dated 3.08.2001
Dated:
36/2001-

9. Tariff value on the following goods has been
revised:
2
71 or 98
TABLE-1
S.
No.
Description
of goods
(1)
Chapter/
heading/
subheading/
tariff item
(2)
1
1511 10 00
2
1511 90 10
Crude Palm
Oil
RBD
Palm
Oil
Others
–
Palm Oil
Crude
Palmolein
RBD
Palmolein
Others
–
Palmolein
Crude
Soyabean
Oil
Brass Scrap
(all grades)
Poppy
seeds
3
1511 90 90
4
1511 10 00
5
1511 90 20
6
1511 90 90
7
1507 10 00
8
7404 00 22
9
1207 91 00
(3)
Tariff
value US $
(Per
Metric
Tonne)
(4)
809
862
836
966
Tariff value
(US
$
Per
Metric Tons )
(3)
(4)
1
080280
Areca nuts
1870 (i.e.
change) ”
no
3860
2556
Notification No. 102/2013-CUSTOMS (N. T.).
Dated: 30.09.2013
Recent Case Laws:
Description
goods
(1)
Chapter
/
heading
/
subheading
/
tariff
item
(2)
(3)
(4)
1
71 or 98
Gold, in any form,
in respect of which
the
benefit
of
entries at serial
number 321 and
323
of
the
Notification
No.
12/2012-Customs
436
per 10
grams
7
Descriptio
n of goods
(1)
Chapte
r/
headin
g/ subheadin
g/tariff
item
(2)
886
885
702
per
kilogr
am
TABLE-3
S.
No.
883
TABLE-2
S.
No
.
dated 17.03.2012 is
availed
Silver, in any form,
in respect of which
the
benefit
of
entries at serial
number 322 and
324
of
the
Notification
No.
12/2012-Customs
dated 17.03.2012 is
availed
of
Tariff
value
(US $)
Whether sales tax or service tax is
applicability on hire charges received on
transfer of right to use goods
Recently in the case of State of Andhra
Pradesh v/s RashtriyaIspat Nigam Limited.,
Honorable Supreme Court has observed that
when the effective control of the goods
remains in the hands of the transferor only,
despite of it being used by the transferee, then
hire charges received in lieu of the goods
used, is not leviable to sales tax.
Goods are merely given to the transferee for
specific use, but transferee cannot use them
as per his own will, which implies that the
effective control and possession remains in the

10. hands of the transferor only. Further, goods
being in the custody of the transferee do not
militate against possession.
The essential condition of section 5E of the
Andhra Pradesh general Sales Tax Act for levy
of sales tax involves transfer of right to use, but
here the right to use goods is not transferred
and hence sales tax is not leviable on hire
charges.
However, as per Section 66E of the Finance
Act, 1994, as amended declared Service
includes when there is transfer of goods by
way of hiring, leasing, licensing or in any such
manner without transfer of right to use such
goods. Hence service tax will be levied by
virtue of such transaction falling in the
declared service.
FEMA
A.P. (DIR Series) Circular No. 31 dated
September 4, 2013
External Commercial Borrowings (ECB)
from the foreign equity holder
On a review, subject to the conditions
prescribed in the circular, it has been decided
to permit eligible borrowers to avail of ECB
under the approval route from their foreign
equity holder company with minimum
average maturity of 7 years for general
corporate purposes.
A.P. (DIR Series) Circular No. 39 dated
September 6, 2013
Export and Import of Currency
As per Regulation (2) of Foreign Exchange
Management (Export and Import of Currency)
(Amendment) Regulations, 2009, notified vide
8
Notification No. FEMA 195/RB-2009 dated July
7, 2009, any person resident in India may take
outside India or having gone out of India on a
temporary visit, may bring into India (other
than to and from Nepal and Bhutan) currency
notes of Government of India and Reserve
Bank of India notes up to an amount not
exceeding Rs.7,500 per person.
As a measure of enhanced flexibility any
person resident in India, may take outside India
(other than to Nepal and Bhutan) currency
notes of Government of India and Reserve
Bank of India notes up to an amount not
exceeding Rs.10,000 (Rupees ten thousand
only) per person; and who had gone out of
India on a temporary visit, may bring into India
at the time of his return from any place outside
India (other than from Nepal and Bhutan),
currency notes of Government of India and
Reserve Bank of India notes up to an amount
not exceeding Rs.10,000 (Rupees ten thousand
only) per person.
A.P. (DIR Series) Circular No. 42 dated
September 12, 2013
Foreign Investment in India – Guidelines for
calculation of total foreign investment in
Indian companies, transfer of ownership
and control of Indian companies and
downstream
investment
by
Indian
companies
On a review of the policy, condition (d) in Para
6 (ii) of Annex to A.P. (DIR Series) Circular No.1
dated July 04, 2013, as regards downstream
investments by an Indian company which is
not owned and/or controlled by resident
entity/ties, has been amended.
The amendment is that now Downstream
investments through internal accruals are
permissible by an Indian company, subject to

11. the provisions of clause 6(i) and as also
elaborated in the Circular as against
Downstream investments through internal
accruals being permissible by an Indian
company engaged only in activity of investing
in the capital of another Indian company/ies,
subject to the provisions of the above circular.
A.P. (DIR Series) Circular No. 43 dated
September 13, 2013
Export of Goods and ServicesSimplification and Revision of Declaration
Form for Exports of Goods/Softwares
The existing form used for declaration of
exports of Goods/Softwares has been
simplified and a common form called “Export
Declaration Form” (EDF) has been devised to
declare all types of export of goods from NonEDI ports and a common “SOFTEX Form” to
declare single as well as bulk software exports.
The EDF will replace the existing GR/PP form
used for declaration of export of Goods. The
procedure relating to the exports of goods
through EDI ports will remain the same and SDF
form will be applicable as hitherto.
Under the revised procedure, the exporters will
have to declare all the export transactions,
including those less than US$25000, in the form
as applicable.
A.P. (DIR Series) Circular No. 44 dated
September 13, 2013
Foreign Direct Investment (FDI) in India –
Review of FDI policy – definition for control
and sector specific conditions
This circular defines the revised definition of the
term ‘Control’ as under:
'Control' shall include the right to appoint a
majority of the directors or to control the
9
management or policy decisions including by
virtue of their shareholding or management
rights or shareholders agreements or voting
agreements.
It also lists that the government of Himachal
Pradesh and Karnataka have given their
consent to implement the FDI policy on Multi
Brand Retail Trading in Himachal Pradesh and
Karnataka respectively.
Further, the extant policy on FDI caps and
routes for various sectors has since been
reviewed. Accordingly, in order to bring
uniformity in the sectoral classification position
for FDI as notified under the Consolidated FDI
Policy Circular with the FEMA Regulations,
Annex B of Schedule 1 to Notification No.
FEMA. 20/2000-RB dated 3rd May 2000, has
been suitably revised and the updated list is
given at the Annex.
A.P. (DIR Series) Circular No. 48 dated
September 18, 2013
External Commercial Borrowings (ECB)
Policy – Liberalisation of definition of
Infrastructure Sector
This Circular contains the expanded definition
for infrastructure sector for the purpose of
availing ECB.
A.P. (DIR Series) Circular No. 53 dated
September 24, 2013
Trade Credits for Import into India
As per the extant guidelines, AD Category - I
banks may approve availing of trade credit
not exceeding USD 20 million up to a maximum
period of five years (from the date of
shipment) for companies in the infrastructure
sector, subject to certain terms and conditions

12. stipulated therein. It is also stipulated that AD
Category - I banks are not permitted to issue
Letters
of
Credit/guarantees/Letter
of
Undertaking (LoU) /Letter of Comfort (LoC) in
favour of overseas supplier, bank and financial
institution for the extended period beyond
three years. No roll-over/extension is permitted
beyond the permissible period.
On a review, with immediate effect, it has
been decided to allow companies in all
sectors to avail of trade credit not exceeding
USD 20 million up to a maximum period of five
years for import of capital goods as classified
by Director General of Foreign Trade (DGFT). It
has also been decided to relax the ab-initio
contract period of 15 (fifteen) months for all
trade credits to 6 (six) months.
It has been decided, on a review, to
discontinue the facility of allowing eligible
borrowers to raise ECB at a higher all-in-cost to
refinance / reschedule an existing ECB
effective from October 01, 2013.
The scheme of refinance of existing ECB by
raising fresh ECB at lower all-in-cost, subject to
the condition that the outstanding maturity of
the original ECB is either maintained or
extended, will continue as hitherto under the
automatic route and approval route as the
case may be.
All other aspects of ECB policy shall remain
unchanged.
However, the AD Category - I banks are,
cannot issue Letters of credit/guarantees
/Letter of Undertaking (LoU) /Letter of Comfort
(LoC) in favour of overseas supplier, bank and
financial institution for the extended period
beyond three years.
COMPANY LAW
All other aspects of Trade Credit policy will
remain unchanged and should be complied
with.
The Central Government notified 98 provisions
of the Companies Act, 2013, effective from the
12th day of September, 2013.
A.P. (DIR Series) Circular No. 59 dated
September 30, 2013
External Commercial Borrowings (ECB)
Policy – Refinancing / Rescheduling of ECB
As per the extant guidelines, the eligible
borrowers desirous of refinancing an existing
ECB can raise fresh ECB at a higher all-in-cost /
reschedule an existing ECB at a higher all-incost under the approval route subject to the
condition that the enhanced all-in-cost does
not exceed the all-in-cost ceiling prescribed as
per extant guidelines.
10
Commencement
Notification
Companies Act, 2013
of
[Notification dated 12th September, 2013]
Clarification on the Notification dated
12.09.2013
[General Circular No.15/2013 dated 13th
September, 2013]
The Companies Act, 2013, has been notified in
the Gazette of India on 30th August, 2013,
after receiving the approval from the President
on 29th August, 2013. For inviting the
comments/ suggestions or objections from the
stakeholders or general public, a portion of the
Draft Rules on 16 Chapters were placed on the

13. MCA website on 9th September, 2013. Out of
16 Chapters, 13 Chapters requiring specifying
Forms will be soon uploaded on the website.
The stakeholders expressed their difficulties in
the proper implementation of some of the
provisions of the 98 sections of the Companies
Act, 2013 (the “said Act”) notified by the MCA
on 12th September, 2013 and in order to
ensure proper execution of the said Act, the
following four clarifications were given:
i) Sub-Section (68) of section 2:- Registrar of
Companies may register those Memorandums
and Articles of Association received till
11.09.2013 as per the definition clause of the
‘private company’ under the Companies Act,
1956, without referring to the definition of
‘private company’ under the “said Act”.
ii) Section 102:- All Companies which have
issued notices of general meeting on or after
12.09.2013, the statement to be annexed to
the notice shall comply with additional
requirements as prescribed in section 102 of
“the said Act”.
iii) Section 133:- Till the Standards of
Accounting or any addendum thereto are
prescribed by Central Government in
consultation and recommendation of the
National Financial Reporting Authority, the
existing Accounting Standards notified under
the Companies Act, 1956, shall continue to
apply.
iv) Section 180:- In respect of requirements of
special resolution under Section 180 of the
“said Act” as against ordinary resolution
required by the Companies Act, 1956, if notice
for any such general meeting was issued prior
to 12.09.2013, then such resolution may be
passed in accordance with the requirement of
the Companies Act, 1956.
11
Clarification on the Notification dated
12.09.2013
[General Circular No.16/2013 dated 18th
September, 2013]
In respect of the notification issued by MCA for
the implementation of the 98 Sections of the
Companies Act, 2013, on 12th September,
2013, it has been clarified by the Ministry that
the provisions of the Companies Act, 1956,
corresponding to the provisions of the
Companies Act, 2013, will not be effective
from 12th September, 2013, thereby, putting
an end to the confusion regarding the
application of the provisions of The Companies
Act, 1956.
Enforcement of Companies (Removal of
Difficulties) Order, 2013
[Order dated 20th September, 2013]
The Board of Company Law Administration has
been authorised to exercise all the powers of
the Tribunal under Sections 24, 58, and 59 with
respect to the second proviso to sub-section
(1) of Section 465 of the said Act, until the date
is notified by the Central Government under
sub-section (1) of section 434 of the
Companies Act, 2013, for transfer of all
matters, proceedings or cases to the Tribunal.
TRANSACTIONS
MADE HEADLINES


THAT
Indian private firms temporarily allowed
to go public overseas without the rider
of local listing
RBI tightens norms for companies
lending against gold

14. 





India Value Fund close to picking stake
in Trivitron Healthcare for up to $24M
Arisaig Partners ups stake in
McDonald’s franchisee Westlife to 6.9%
for $29M more
GMR divests 74% stake in highway unit
to IDFC for $35M
Penguin Random House acquires ABP
Group’s stake in Indian arm for $8.5M
Barclays to shut wealth management
services in 130 countries
Unitech's Gurgaon IT SEZ sale may be
delayed
12

15. Disclaimer: This publication is intended as a service
to clients and associates and to provide them with
details of the important Transaction updates. It has
been prepared for the general guidance on matters of
interest only, and does not constitute professional
advice. No person shall act upon the information
contained in this publication without obtaining
specific professional advice. Due care has been taken
while compiling the information, however, no
representation (express or implied) is given as to the
accuracy or completeness of the information
contained in this publication.
w
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