Author: CS SURBHI SAXENA

About Surbhi Saxena edits the daily Current Affairs News. The author is qualified member of The Institute of Company Secretaries of India (ICSI).

Prime Minister launches digital payment solution e-RUPI

Prime Minister Shri Narendra Modi launched digital payment solution e-RUPI, a person and purpose specific digital payment solution, today via video conference. e-RUPI is a cashless and contactless instrument for digital payment.

Addressing the event, the Prime Minister said that the eRUPI voucher is going to play a huge role in making DBT more effective in digital transactions in the country and  will give a new dimension to digital governance. This will help everyone in targeted, transparent and leakage free delivery. He said e-RUPI is a symbol of how India is progressing by connecting people’s lives with technology. He also expressed happiness that this futuristic reform initiative has come at a time when the country is celebrating the Amrit Mahotsav on the  75th anniversary of independence.

He said in addition to the government, if any organization wants to help someone in their treatment, education or for any other work, then they will be able to give an eRUPI voucher instead of cash. This will ensure that the money given by him is used for the work for which the amount was given.

The Prime Minister said eRUPI is person as well as purpose specific. eRUPI will ensure that the money is being used for the purpose for which any help or any benefit is being provided.

The Prime Minister recalled that there was a time when technology was considered a domain of the rich people and there was no scope for technology in a poor country like India. He remembered when this government took technology as a mission, it was questioned by the political leaders and certain types of experts.  He added that today the country has also denied the thinking of those people, and has proved them wrong. Today the thinking of the country is different, it is new. Today we are seeing technology as a tool to help the poor, a tool for their progress.

The Prime Minister noted how technology is bringing in transparency and integrity in transections and creating new opportunities and making them available to the poor. He mentioned that for reaching today’s unique product, foundation was prepared over the years by creating the JAM system which connected mobile and Aadhaar. Benefits of JAM took some time to be visible to people and we saw how we could help the needy during the lockdown period while other countries were struggling to help their people, said the Prime Minister. He noted that in India, more than seventeen and half lakh crore rupees have been transferred directly to the accounts of the people via Direct Benefit Transfer. More than three hundred schemes are using DBT. 90 crore Indian are being benefited in some way or the other through in areas like LPG, ration, medical treatment, scholarship, pension or wage disbursal. 1 lakh 35 thousand crore rupees have directly been transferred to farmers under PM Kisan Samman Nidhi, 85 thousand crore rupees for government purchase of wheat were also disbursed in this manner. “The biggest benefit of this all is that 1 lakh 78 thousand crore rupees were prevented from going to the wrong hands, ” he added.

The Prime Minister noted that development of digital transactions in India has empowered the poor and deprived, small businesses, farmers and tribal population.  This can be felt in the record of 300 crore UPI transactions in the month of July amounting to  6 lakh crore rupees.

The Prime Minister said India is proving to the world that we are second to none in adopting technology and adapting to it. When it comes to innovations, use of technology in service delivery, he said that India has the ability to give global leadership alongside major countries of the world.

The Prime Minister said the world is recognizing the impact of the work done in the last 6-7 years for digital infrastructure and digital transactions in the country. Especially in India, a huge base of fintech has been created which is not present even in developed countries, he added.

RBI increases personal loan limit to other banks director’s without board approval to Rs 5 crore

As per RBI notification, 

Please refer to paragraphs 2.2.1.2, 2.2.1.4 and paragraph 2.2.1.5 of Master Circular on Loans and Advances – Statutory and Other Restrictions dated July 01, 2015.

 On a review, it has been decided that:

  1. i) For personal loans granted to any director of other banks, the threshold of Rupees twenty-five lakh, as mentioned in para 2.2.1.2, stands revised to Rupees five crore.
  2. ii) Paragraph 2.2.1.4 has been revised as under –

Unless sanctioned by the Board of Directors/Management Committee, banks should not grant loans and advances aggregating Rupees five crore and above to –

(a) any relative other than spouse (spouse as specified in para 2.2.1.3 above) and minor / dependent children of their own Chairmen/Managing Directors or other Directors;

(b) any relative other than spouse (spouse as specified in para 2.2.1.3 above) and minor / dependent children of the Chairman/Managing Director or other directors of other banks*;

(c) any firm in which any of the relatives other than spouse (spouse as specified in para 2.2.1.3 above) and minor / dependent children as mentioned in (a) & (b) above is interested as a partner or guarantor; and

(d) any company in which any of the relatives other than spouse (spouse as specified in para 2.2.1.3 above) and minor / dependent children as mentioned in (a) & (b) above is interested as a major shareholder or as a director or as a guarantor or is in control.

Provided that a relative of a director shall also be deemed to be interested in a company, being the subsidiary or holding company, if he/she is a major shareholder or is in control of the respective holding or subsidiary company.

*including directors of Scheduled Co-operative Banks, directors of subsidiaries/trustees of mutual funds/venture capital funds.

iii) Paragraph 2.2.1.5 has been revised as under –

The proposals for credit facilities of an amount less than Rupees twenty-five lakh or Rupees five crores (as the case may be) to these borrowers may be sanctioned by the appropriate authority in the financing bank under powers vested in such authority, but the matter should be reported to the Board.

Explanation : For the purpose of this circular:

  1. i) The term “personal loan” shall have the meaning assigned to it in the circular DBR.No.BP.BC.99/08.13.100/2017-18 dated January 04, 2018 on XBRL Returns – Harmonization of Banking Statistics.
  2. ii) The term “major shareholder” shall mean a person holding 10% or more of the paid-up share capital or five crore rupees in paid-up shares, whichever is less.

iii) The term “control” shall include the right to appoint majority of the directors or to control the management or policy decisions exercisable by a person or persons acting individually or in concert, directly or indirectly, including by virtue of their shareholding or management rights or shareholders agreements or voting agreements or in another manner.

IBBI amends the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016

The Insolvency and Bankruptcy Board of India (IBBI) notified the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) (Second Amendment) Regulations, 2016 on 14th July, 2021.

The amendment regulations enhance the discipline, transparency, and accountability in corporate insolvency proceedings:

  1. A corporate debtor (CD) may have changed its name or registered office address prior to commencement of insolvency. The stakeholders may find it difficult to relate to the new name or registered office address and consequently fail to participate in the CIRP. The amendment requires an insolvency professional (IP) conducting CIRP to disclose all former names and registered office address(es) so changed in the two years preceding the commencement of insolvency along with the current name and registered office address of the CD, in all its communications and records.
  2. The interim resolution professional (IRP) or resolution professional (RP) may appoint any professional, including registered valuers, to assist him in discharge of his duties in conduct of the CIRP. The amendment provides that the IRP/RP may appoint a professional, other than registered valuers, if he is of the opinion that the services of such professional are required and such services are not available with the CD. Such appointments shall be made on an arm’s length basis following an objective and transparent process. The invoice for fee shall be raised in the name of the professional and be paid into his bank account.
  3. The RP is duty bound to find out if a CD has been subject to avoidance transactions, namely, preferential transactions, undervalued transactions, extortionate credit transactions, fraudulent trading and wrongful trading, and file applications with the Adjudicating Authority seeking appropriate relief. This not only claws back the value lost in such transactions increasing the possibility of reorganization of the CD through a resolution plan, but also disincentives such transactions preventing stress to the CD. For effective monitoring, the amendment requires the RP to file Form CIRP 8 on the electronic platform of the Board, intimating details of his opinion and determination in respect of avoidance transactions. The IBBI has specified the format of CIRP 8 through a Circular issued yesterday. This Form needs to be filed in respect of every CIRP ongoing or commencing on or after 14th July, 2021.

 The amended regulations are effective from 14th July, 2021. These are available at http://www.mca.gov.in and www.ibbi.gov.in.

 

Auction for Sale (Re-issue) of (i) ‘4.26% GS 2023’,(ii) ‘6.10% GS 2031’ and (iii) ‘6.76% GS 2061’

The Government of India (GoI) has announced the Sale (re-issue) of

(i) ‘4.26% Government Security, 2023’ for a notified amount of Rs 3,000 crore (nominal) through price based auction using uniform price method (ii) ‘6.10% Government Security, 2031’ for a notified amount of Rs 14,000 crore (nominal) through price based auction using uniform price method; and (iii) ‘6.76% Government Security 2061’ for a notified amount of Rs 9,000 crore (nominal) through price based auction using multiple price method. GoI will have the option to retain additional subscription up to Rs 6,000 crore against above security/securities. The auctions will be conducted by the Reserve Bank of India, Mumbai Office, Fort, Mumbai on Friday i.e. July 23, 2021.

Up to 5% of the notified amount of the sale of the Securities will be allotted to eligible individuals and Institutions as per the Scheme for Non-Competitive Bidding Facility in the Auction of Government Securities.

Both competitive and non-competitive bids for the auction should be submitted in electronic format on the Reserve Bank of India Core Banking Solution (E-Kuber) system on July 23, 2021. The non-competitive bids should be submitted between 10.30 a.m. and 11.00 a.m. and the competitive bids should be submitted between 10.30 a.m. and 11.30 a.m.

The result of the auctions will be announced on July 23, 2021 (Friday) and payment by successful bidders will be on July 26, 2021 (Monday).

The Securities will be eligible for “When Issued” trading in accordance with the guidelines on ‘When Issued transactions in Central Government Securities’ issued by the Reserve Bank of India vide circular No. RBI/2018-19/25 dated July 24, 2018 as amended from time to time.

 

Government launches “Bad Bank” for stressed assets as a measure to clean up bank books

The Government has launched a Bad Bank with all the regulatory approvals in place. This was stated by Minister of State for Finance Dr Bhagwat Kisanrao Karad in a written reply to a question in the Lok Sabha today.

The Finance Minister Smt. Nirmala Sitharaman, in her speech on the Budget for the financial year 2021-22, had made the following announcement:

“The high level of provisioning by public sector banks of their stressed assets calls for measures to clean up the bank books. An Asset Reconstruction Company Limited and Asset Management Company would be set up to consolidate and take over the existing stressed debt and then manage and dispose of the assets to Alternate Investment Funds and other potential investors for eventual value realization.”

The Minister stated that Indian Banks’ Association (IBA) has apprised with regard to incorporation of the National Asset Reconstruction Company Limited (NARCL) that NARCL has been registered with the Registrar of Companies on 7.7.2021.

The Reserve Bank of India, being the regulator of Asset Reconstruction Companies (ARCs), has already prescribed a regulatory framework for the functioning of ARCs and there are well-laid norms for transfer of stressed assets by banks and non-banking finance companies to ARCs. Identification of non-performing assets by an ARC is an ongoing process, the Minister stated.

 

Union Cabinet approves Memorandum of Understanding (MoU) between India and Russian Federation

The Union Cabinet chaired by the Prime Minister Shri Narendra Modi has approved the Memorandum of Understanding (MoU) between the Ministry of Steel of the Republic of India and the Ministry of Energy of the Russian Federation on cooperation regarding coking Coal, which is used for Steel making.

The MoU shall benefit the entire steel sector by reducing their input cost.  This may lead to reduction in cost of steel in the country and promote equity and inclusiveness. The MoU will provide an institutional mechanism for co-operation in the coking coal sector between India and Russia. The objective of the MoU is to strengthen cooperation between the Govt. of India and Govt of Russia in the steel sector.  The activities involved in the cooperation are aimed at diversifying the source of coking coal.

 

Union Cabinet approves Memorandum of Understanding (MoU) between India and Kingdom of Denmark

The Union Cabinet chaired by the Prime Minister Shri Narendra Modi has approved the Memorandum of Understanding (MoU) between the Ministry of Health & Family Welfare of the Government of the Republic of India and the Ministry of Health of the Kingdom of Denmark on Cooperation in the field of Health and Medicine. The bilateral Memorandum of Understanding will encourage cooperation between the Ministry of Health and Family Welfare of the Republic of India and the Ministry of Health of the Kingdom of Denmark through joint initiatives and technology development in the health sector. It will strengthen bilateral ties between India and Denmark. This will facilitate in improving the public health status of the people of both the countries.

Cabinet approves continuation of Rebate of State and Central taxes and Levies (RoSCTL) on Export of Apparel/ Garments and Made-ups till 31st March 2024

The Union Cabinet chaired by the Prime Minister, Shri Narendra Modi ji has given its approval for continuation of Rebate of State and Central taxes and Levies (RoSCTL) with the same rates as notified by Ministry of Textiles vide Notification dated 8th march 2019, on exports of Apparel/Garments (Chapters-61 & 62) and Made-ups (Chapter-63) in exclusion from Remission of Duties and Taxes on Exported Products (RoDTEP) scheme for these chapters. The scheme will continue till 31st March 2024.

The other Textiles products (excluding Chapters-61, 62 & 63) which are not covered under the RoSCTL shall be eligible to avail the benefits, under RoDTEP along with other products as finalised by Department of Commerce from the dates which shall be notified in this regard. 

Continuation of RoSCTL for Apparel/Garments and Made-ups is expected to make these products globally competitive by rebating all embedded taxes/levies which are currently not being rebated under any other mechanism. It will ensure a stable and predictable policy regime and provide a level playing field to Indian textiles exporters. Further, it will promote startups and entrepreneurs to export and ensure creation of lakhs of jobs.

Tax Refund for Exported Products

It is a globally accepted principle that taxes and duties should not be exported, to enable a level playing field in the international market for the exporters. In addition, to import duties and GST which are generally refunded, there are various other taxes/duties that are levied by Central, State and Local Government which are not refunded to the exporters.  These taxes and levies get embedded in the price of the ultimate product being exported. Such embedded taxes and levies increase the price of Indian Apparel and Made-ups and make it difficult for them to compete in the international market.

Some of the cess, duties for which taxes and levies are not refunded and are part of embedded taxes directly and indirectly, are as follows:-

  1. Central & state taxes, duties & cesses on fuel used for transportation of goods, generation of power and for the farm sector.
  2. Mandi Tax
  3. Duty on electricity charges at all levels of the production chain
  4. Stamp duty
  5. GST paid on input such as pesticides, fertilizers, etc.
  6. GST paid on purchases from unregistered dealers, etc.
  7. Cess on coal or any other products.

Realizing the importance of refund of embedded taxes, cesses and duties, the Ministry of Textiles first launched a scheme by the name of Rebate of State Levies (ROSL) in 2016. In this scheme the exporters of apparel, garment and made-ups were refunded embedded taxes and levies through the budget of the Ministry of Textiles. In 2019, the Ministry of Textiles notified a new scheme by the name Rebate of State and Central Taxes and Levies (RoSCTL). Under this scheme, the exporters are issued a Duty Credit Scrip for the value of embedded taxes and levies contained in the exported product. Exporters can use this scrip to pay basic Customs duty for the import of equipment, machinery or any other input.

Just one year after the launch of RoSCTL the pandemic set in and it has been felt that there is a need to provide some stable policy regime for the exporters.  In the textiles industry, buyers place long term orders and exporters have to chalk out their activities well in advance, it is important that the policy regime regarding export for these products should be stable. Keeping in view the same, the Ministry of Textiles has decided to continue the scheme of RoSCTLupto 31st March, 2024 independently as a separate scheme.

Cabinet increases Dearness Allowance of Central Government Employees/ Pensioners to 28%

The Cabinet Committee chaired by the Hon’ble Prime Minister Shri Narendra Modi today has approved increase the Dearness Allowance to Central Government employees and Dearness Relief to pensioners with effect from 01.07.2021 to 28% representing an increase of 11% over the existing rate of 17% of the Basic Pay/Pension.

In view of the unprecedented situation which arose due to the COVID-19 pandemic, three additional instalments of Dearness Allowance (DA) to Central Government employees and Dearness Relief (DR) to pensioners, which were due from 01.01.2020, 01.07.2020 and 01.01.2021, had been frozen.

Now, the Government has decided to increase the Dearness Allowance to Central Government employees and Dearness Relief to pensioners with effect from 01.07.2021 to 28% representing an increase of 11% over the existing rate of 17% of the Basic Pay/Pension.  The increase reflects the additional instalments arising on 01.01.2020, 01.07.2020 and 01.01.2021.  The rate of Dearness Allowance/Dearness Relief for the period 01.01.2020 to 30.06.2021 shall remain at 17%.

About 8000 cases involving fake ITC of over Rs. 35000 crore in FY 2020-21booked by CGST Zones and Directorate General of GST Intelligence

Misuse of the beneficial provision of Input Tax Credit (ITC) under GST regime is the most common modus of evasion under the GST Law. The field formations of the Central Board of Indirect taxes and Customs (CBIC) have been regularly detecting such cases from very beginning of the GST regime. During the financial year 2020-21 the CGST zones and the Directorate General of GST Intelligence (DGGI)have booked about 8000 cases involving fake ITC of over Rs. 35000 crore. During the financial year 426 persons including 14 professionals such as CAs, Lawyers and masterminds, beneficiaries, directors etc were arrested. 

CBIC officers are using latest IT tools, digital evidence and also collecting information from other government departments to catch the fraudsters. Along with legislative and procedural changes in the law, the nationwide drive has contributed to better compliance and revenue collection. During the drive, cases of fake ITC availment against some well-known companies were also booked.

Some of the notable cases booked recently include a case by DGGI Nagpur Zonal Unit against three firms involved in passing on fraudulent Input Tax Credit (ITC) to the tune of Rs. 214 crore and claiming refund of accumulated ITC in fraudulent manner. These firms had submitted fake rental agreements and fake electricity bills and they existed only on paper without any business activities having taken place from their registered place of business. These firms were showing exports of a common product i.e. smoking mixtures for pipes and cigarettes attracting GST @ 28 % and Compensation Cess @ 290 %.

In another instance, DGGI Chandigarh Zonal Unit booked and apprehended a mastermind, who was operating fake firms for passing on illegal ITC to the tune of 115 crore. On information that fictitious/bogus firms were used to pass inadmissible ITC to various iron and steel units based in Himachal Pradesh, Punjab and Haryana, searches were conducted at multiple premises in Himachal Pradesh (Baddi) and Punjab where incriminating evidences in the form of laptop containing incriminating e-mails, pen drives, mobile phones evidencing fraudulent transactions were resumed. Similarly a case of fraudulent ITC was also booked by DGGI SuratZonal Unit in which non – existent firms were found to be engaged in supply of invoices and passing on illegal ITC to the tune of Rs. 300 crore.

CGST Jaipur Zone, detected a case involving multiple fake firms for availment/passing on fraudulent ITC of Rs. more than 100 crore in which three persons were arrested. In another case of ITC fraud, CGST Delhi Zone busted a network of 23 entities involved in creation of fake invoices worth Rs. 551 crore and passing on fraudulent ITC worth Rs. 91 crore. These fake entities were issuing invoices of bituminous mixtures, base metals, furniture and doors. Three key persons involved in this fake invoice racket have been arrested. In another instance, CGST Ahmedabad Zone booked a case of ITC fraud of Rs. 38 crore against thirteen fake entities which were created to pass on fraudulent ITC by way of issuing bogus invoices of iron and steel.

The enforcement drive against the fake invoice fraudsters and other GST evaders is likely to intensify with an objective to catch and book unscrupulous elements engaged in illegal activities to defraud the government exchequer.

Apart from cases of fake ITC the DGGI and other CGST formations have also detected GST evasion involving misclassification, undervaluation and clandestine supplies of goods and services.

 

Clarification by Ministry of Finance regarding holding of competitive exam of PSBs in local languages by IBPS

This is with reference to the news report published in certain section of media regarding the advertisement given by Institute of Banking Personnel Selection(IBPS) for holding an examination for recruitment in the clerical cadre of Public Sector Banks (PSBs)  only in two languages i.e. English and Hindi, despite the fact that 22 languages were recognized by the Constitution of India. The news report cites a statement made by the UnionFinance Minister in 2019 when she had assured of holding banking exams in local languages.

In the above context, it may be clarified that the Finance Minister’s statement referred to above was made in the context of Regional Rural Banks (RRBs) only. With a view to provide a level playing field to the local youths for availing employment opportunities, the Government in 2019 decided that for recruitment of Office Assistant and Officer Scale I in RRBs , examination will be held in 13 regional languages including Konakani and Kannada, besides Hindi and English. Since then, examination for these recruitments are being conducted in regional languages also.

In order to look into the demand for holding examination for clerical cadre in Public Sector Banks (PSBs) in local/regional languages, a Committee has been constituted to look into the matter in its entirety. The Committee will give its recommendations within 15 days. The ongoing process of holding the examination initiated by IBPS will be kept on hold until the recommendations of the Committee are made available. 

BHIM- UPI launched in Bhutan

Union Minister of Finance & Corporate Affairs Smt. Nirmala Sitharaman, along with her counterpart, the Hon’ble Finance Minister of Bhutan, Mr Lyonpo Namgay Tshering, jointly launched BHIM–UPI in Bhutan today afternoon in a virtual ceremony. The function was also attended by the Minister of State (Finance) Dr. Bhagwat Kishanrao Karad, the Governor of the Royal Monetary Authority of Bhutan Mr Dasho Penjore, Secretary, Department of Financial Services, Shri Debasish Panda, the Ambassador of India to Bhutan, Ms Ruchira Kamboj, the Ambassador of Bhutan to India General V. Namgyel, and the MD & CEO of NPCI Shri Dilip Asbe.

While speaking on the occasion, Smt. Sitharaman said that the services have started in Bhutan under India’s neighbourhood first policy and India is proud of our achievement and feel pleasure in sharing it with our valued neighbour. The Finance Minister said that BHIM UPI is one of the brightest spot and an achievement for digital transactions in India during the time of COVID-19 pandemic with more than 100 million UPI QRs have been created in last 5 years and BHIM UPI in 2020-21 has processed 22 billion transactions worth value Rs 41 lakh crore.

The Finance Minister of Bhutan, Mr Lyonpo Namgay Tshering, thanked and appreciated the Government of India for the launch of BHIM-UPI services in Bhutan and added that the bond between the two countries has become stronger each passing day.

This launch fulfils the commitment made by the two countries during the Hon’ble Prime Minister of India’s State visit to Bhutan in 2019. Following that visit, India and Bhutan have already enabled interoperability in acceptance of Rupay cards in each other’s countries in two phases – acceptance of Rupay cards issued in India at Bhutan based terminals in the first phase, and vice versa in the second phase.

With today’s launch of BHIM-UPI in Bhutan, the payment infrastructures of the two countries are seamlessly connected and will benefit a large number of tourists and businessmen from India who travel to Bhutan each year. This will enhance the ease of living and ease of travelling through cashless transactions at the touch of a button. As a part of the launch, Smt. Nirmala Sitharaman also made a Live transaction using BHIM-UPI to purchase an organic product from a Bhutanese OGOP outlet, which sells fresh farm produce made organically by local communities in Bhutan.

Bhutan is the first country to adopt UPI standards for its QR deployment, and the first country in our immediate neighbourhood to accept mobile based payments through the BHIM App.

IFSCA issued Framework for Setting up and operating International Trade Finance Services platform

The International Financial Services Centres Authority (IFSCA) has been set up vide IFSCA Act, 2019 to develop and regulate the financial products, financial services and financial institutions in the International Financial Services Centres (IFSCs). Towards this end, IFSCA has issued a framework for Setting up and operating the International Trade Finance Services Platform (‘ITFS’) for providing Trade Finance Services at International Financial   Services Centres (‘IFSCs’).

The framework will enable Exporters and Importers to avail various types of trade finance facilities at competitive terms, for their international trade transactions through a dedicated electronic platform viz, ITFS. This will help in their ability to convert their trade receivables into liquid funds and to obtain short term funding.

This framework will provide an opportunity to the participants to avail trade finance facilities for trade transactions such as Export Invoice Trade Financing, Reverse Trade Financing, Bill discounting under Letter of Credit, Supply Chain Finance for Exporters, Export Credit (Packing Credit), Insurance/ Credit Guarantee, Factoring and any other eligible product, on the ITFS platform.

The complete text of the Circular is available on the IFSC website at https://ifsca.gov.in/Circular. 

Shri Rao Inderjit Singh appointed as Union Minister of State in Ministry of Corporate Affairs

Shri Rao Inderjit Singh took charge as Union Minister of State in the Ministry Corporate Affairs (MCA), here today. Before taking charge as Union Minister of State for MCA, Shri Singh already held the position of Union Minister of State (Independent Charges) for the Ministry of Statistics and Programme Implementation as also for the Ministry of Planning.

Shri Singh is a Member of Parliament (MP) from Gurgaon constituency in Haryana in the 17th Lok Sabha. He is currently serving his 5th term as an MP.  Active in public service for over 4 decades, Shri Singh was earlier a Member of Legislative Council (MLA) from Jatusana Vidhan Sabha in Haryana and served as Minister in state Government of Haryana.                        

Shri Singh has done graduation and LL.B from Delhi University. Shri Singh, an advocate and agriculturist by profession, is 71 years old and is also an active political and social worker. Shri Singh is a descendent of Rao Tula Ram, Freedom Fighter of India’s 1st War of Independence in 1857.

RBI published Sovereign Gold Bond Scheme 2021-22–Series-IV- Issue price

In terms of Government of India Notification No.4(5)-B(W&M)/2021 dated May 12, 2021, Sovereign Gold Bonds 2021-22 (Series IV) will be opened for the period July 12-16, 2021 with Settlement date July 20, 2021. The issue price of the Bond during the subscription period shall be Rs 4,807 (Rupees Four thousand eight hundred seven only) – per gram, as also published by RBI in their Press Release dated 9th July, 2021.      

The Government of India in consultation with the Reserve Bank of India has decided to allow discount of Rs 50 (Rupees Fifty only) per gram from the issue price to those investors who apply online and the payment is made through digital mode. For such investors the issue price of Gold Bond will be Rs 4,757 (Rupees Four thousand seven hundred fifty seven only) per gram of gold.  

India-UK hold 1st Financial Market dialogue

India and the United Kingdom (UK) held the inaugural meeting of the India-UK Financial Markets Dialogue (‘the Dialogue’) virtually late evening yesterday. The Dialogue was established at the 10th Economic and Financial Dialogue (EFD) in October 2020 to deepen bilateral ties in the financial sector.

The Dialogue was led by senior officials from the Indian side by the Ministry of Finance and from UK, Her Majesty’s Treasury, with participation from Indian and UK independent regulatory agencies, including the Reserve Bank of India, the Securities and Exchange Board of India, International Financial Services Centre Authority, Insurance Regulatory and Development Authority of India, the Bank of England, and the Financial Conduct Authority.

Discussions during the Dialogue were focused on four themes:

  1. GIFT (Gujarat International Finance Tec-City) City, India’s flagship international financial centre,
  2. banking and payments,
  3. insurance, and
  4. capital markets

Following the government-to-government discussion on these issues, private sector partners were invited to the discussion. The City of London Corporation’s Capital Markets Working Group presented their work on the Indian corporate bond market, and the India-UK Financial Partnership presented their recommendations on the UK-India financial services relationship, particularly on development of GIFT City as global services hub.

As two services driven economies, both sides agreed that there is significant scope for strengthening the financial services cooperation between India and the UK. They also concurred to continue to engage bilaterally on these areas in the coming months, in the run up to the next EFD and the beginning of negotiations for a future India-UK FTA, both expected to take place later this year.

Online filing of application for Authorised Economic Operators (AEO T2 and AEO T3) launched

Central Board of Indirect Taxes & Customs (CBIC) Chairman Shri M. Ajit Kumar here today inaugurated the online filing of Authorised Economic Operators (AEO) T2 and T3 applications. The AEO web application is accessible at URL www.aeoindia.gov.in. The new version (V 2.0) of the web application is designed to ensure continuous real-time and digital monitoring of physically filed AEO T2 and AEO T3 applications for timely intervention and expedience.

The AEO application processing for AEO T1 on the web-based portal www.aeoindia.gov.in has been functional since December 2018. To take this endeavour for digitisation forward, in line with the government’s Digital India initiative, the CBIC Board has launched a new version (V2.0) for on-boarding of AEO T2 and AEO T3 applicants for online filing, real-time monitoring, and digital certification. For further details, refer to CBIC Circular No. 13/2021-Customs dated 01.07.2021.

New Ministry of Cooperation created to strengthen cooperative movement

In a historic move, the Government of India has created a separate new ministry, “Ministry of Co-operation ” for realizing the vision of ‘Sahkar se Samriddhi’. The ministry will provide a separate administrative, legal, and policy framework for strengthening the cooperative movement in the country.

The Central Government signaling a commitment to a community-based developmental partnership created the Ministry of Cooperatives. The creation of the Ministry also fulfills the budget announcement made by the Finance Ministry. The Ministry will help in deepening the co-operatives as a true people-based movement reaching up to the grassroots.

What are Cooperatives?

A cooperative is an association of persons united voluntarily to meet their common, economic, social, and cultural needs through jointly owned and democratically controlled enterprises.

The Cooperative movement is based on seven basic principles of voluntary and open membership, democratic members control, members economic participation, autonomy and independence, education, training and information, cooperation among cooperatives, and concern for the community. Further, cooperatives aim to provide goods and services and prevent the exploitation of weaker members of society and protect the rights of both consumers and producers.

Multi-State Cooperatives (MSCS)

The Ministry of Co-operatives aims at the development of Multi-State Cooperatives. The Ministry will work to streamline the process for ease of doing business for cooperatives and enable the development of Multi-State Cooperatives (MSCS).

At present the Multi-State Cooperative Societies Act, 2002 consolidates and amend the law relating to co-operative societies, to facilitate the voluntary formation and democratic functioning of co-operatives.

Cooperative-based economic development

The cooperative movement started in India as a result of economic distress caused to peasants during the latter part of the 19th century. The real cooperative movement, however, began with the passing of the Co-operative Credit Societies Act of 1904. The purpose of the cooperative movement was to strengthen the cooperative societies, their functioning and improve social and economic standards.

In India, cooperative societies have been helping in the economic upliftment of societies. Each member of the cooperative works together for its development. Cooperative-based economic activities help members carry out self-help operations, agriculturist communities, arrange for the marketing of the agricultural produce, etc. Further, they also help in the overall development of society.

Gross GST revenue collection in June’ 2021 is of ₹ 92,849 crore

The gross GST revenue collected in the month of June’ 2021 is₹92,849 crore of which CGST is ₹16,424 crore, SGST is ₹20,397, IGST is ₹49,079 crore (including ₹25,762 crore collected on import of goods) and Cess is ₹6,949 crore (including ₹809 crore collected on import of goods).The above figure includes GST collection from domestic transactions between 5thJune to 5th July 2021 since taxpayers were given various relief measures in the form of waiver/reduction in interest on delayed return filing for 15 days for the return filing month June’21 for the taxpayers with the aggregate turnover upto Rs. 5 crore in the wake of covid pandemic second wave.

During this month the government has settled ₹ 19,286 crore to CGST and ₹ 16,939 crore to SGST from IGST as regular settlement. The revenues for the month of June 2021 are 2% higher than the GST revenues in the same month last year.

GST collection after posting above Rs. 1 lakh crore mark for eight months in a row, the collection in June 2021 dropped below Rs. 1 lakh crore. The GST collection for June 2021 is related to the business transactions made during May’2021. During May’2021, most of the States/UTs were under either complete or partial lock down due to COVID. The e-way bill data for the month of May 2021 shows that during the month, 3.99 crore e-way bills were generated as compared to 5.88 crore in the month of April 2021, down by more than 30%.

However, with reduction in caseload and easing of lockdowns, the e-way bills generated during June 2021 is 5.5 crore which indicates recovery of trade and business. The daily average generation of e-way bill for the first two weeks of April 2021 was 20 lakh, which came down to 16 lakh in last week of April 2021 and further to 12 lakh in the two weeks between 9th to 22nd May. Thereafter, the average generation of e-way bills has been increasing and has reached again to 20 lakh level since the week beginning 20th June. Therefore, it is expected that while the GST revenues have dipped during the month of June, the revenues will see an increase again from July 2021 onwards.

CBDT grants further relaxation in e- filing of 15CA/15CB Income Tax Forms

As per the Income-tax Act, 1961, there is a requirement to furnish Form 15CA/15CB electronically. Presently, taxpayers upload the Form 15CA, along with the Chartered Accountant Certificate in Form 15CB, wherever applicable, on the e-filing portal, before submitting the copy to the authorised dealer for any foreign remittance.

In view of the difficulties reported by taxpayers in electronic filing of Income Tax Forms 15CA/15CB on the portal www.incometax.gov.in, it had earlier been decided by CBDT that taxpayers could submit Forms 15CA/15CB in manual format to the authorized dealer till 30th June, 2021.

It has now been decided to extend the aforesaid date to 15th July, 2021. In view thereof, taxpayers can now submit the said Forms in manual format to the authorized dealers till 15th July, 2021. Authorized dealers are advised to accept such Forms till 15th July, 2021 for the purpose of foreign remittances. A facility will be provided on the new e-filing portal to upload these forms at a later date for the purpose of generation of the Document Identification Number.

GOI announces auction for Sale (Re-issue) of (i) ‘4.26% GS 2023’,(ii) ‘New 10 year GS, 2031’ and (iii) ‘6.76% GS 2061’

The Government of India (GoI) has announced the Sale (Issue / re-issue) of

(i) ‘4.26% Government Security, 2023’ for a notified amount of Rs 3,000 crore (nominal) through price based auction, (ii) ‘New Government Security, 2031’ for a notified amount of Rs 14,000 crore (nominal) through yield based auction, and (iii) ‘6.76% Government Security 2061’ for a notified amount of Rs 9,000 crore (nominal) through price based auction. GoI will have the option to retain additional subscription up to Rs 6,000 crore against above security/securities. The auctions will be conducted by the Reserve Bank of India, Mumbai Office, Fort, Mumbai on July 09, 2021 (Friday) using uniform price method for 4.26% GS 2023, New GS 2031 and multiple price method for 6.76% GS 2061.

Up to 5% of the notified amount of the sale of the Securities will be allotted to eligible individuals and Institutions as per the Scheme for Non-Competitive Bidding Facility in the Auction of Government Securities.

Both competitive and non-competitive bids for the auction should be submitted in electronic format on the Reserve Bank of India Core Banking Solution (E-Kuber) system on July 09, 2021. The non-competitive bids should be submitted between 10.30 a.m. and 11.00 a.m. and the competitive bids should be submitted between 10.30 a.m. and 11.30 a.m.

The result of the auctions will be announced on July 09, 2021 (Friday) and payment by successful bidders will be on July 12, 2021 (Monday).

The Securities will be eligible for “When Issued” trading in accordance with the guidelines on ‘When Issued transactions in Central Government Securities’ issued by the Reserve Bank of India vide circular No. RBI/2018-19/25 dated July 24, 2018 as amended from time to time.

Retail and Wholesale trades to be included as MSMEs: Govt Announces

Minister of MSME and Road Transport and Highways Shri Nitin Gadkari today announced revised guidelines for MSMEs with inclusion of Retail and Wholesale trades as MSMEs. In a Tweet he said under the leadership of PM Shri Narendra Modi Ji, we are committed to strengthening MSME and making them engines for economic growth. Shri Gadkari said the revised guidelines will benefit 2.5 Crore Retail and Wholesale Traders. He said Retail and wholesale trade were left out of the ambit of MSME, now under the revised guidelines, retail and wholesale trade will also get benefit of priority sector lending under RBI guidelines. With the revised guidelines the Retail and wholesale trades will now be allowed to register on Udyam Registration Portal.

India becomes part of OECD/G20 Inclusive Framework tax deal

Majority of the members OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting(including India)adopted yesterday a high-level statement containing an outline of a consensus solution to address the tax challenges arising from the digitalisation of the economy.

The proposed solution consists of two components- Pillar One which is about reallocation of additional share of profit to the market jurisdictions and Pillar Two consisting of minimum tax and subject to tax rules.

Some significant issues including share of profit allocation and scope of subject to tax rules, remain open and need to be addressed. Further, the technical details of the proposal will be worked out in the coming months and a consensus agreement is expected by October.

The principles underlying the solution vindicates India’s stand for a greater share of profits for the markets, consideration of demand side factors in profit allocation, the need to seriously address the issue of cross border profit shifting and need for tax rule to stop treaty shopping.

India is in favour of a consensus solution which is simple to implement and simple to comply. At the same time, the solution should result in allocation of meaningful and sustainable revenue to market jurisdictions, particularly for developing and emerging economies. India will continue to be constructively engaged in reaching a consensus based ready to implement solution with Pillar one and Pillar two as a package by October and contribute positively for the advancement of the international tax agenda.

 

Financial Stability Report, July 2021 released by RBI: Highlights

The Reserve Bank released the 23rd issue of the Financial Stability Report (FSR), which reflects the collective assessment of the Sub-Committee of the Financial Stability and Development Council (FSDC) on risks to financial stability and the resilience of the financial system in the context of contemporaneous issues relating to development and regulation of the financial sector.

Key Highlights:

  • Sustained policy support, benign financial conditions and the gathering momentum of vaccination are nurturing an uneven global recovery.
  • Policy support has helped in shoring up financial positions of banks, containing non-performing loans and maintaining solvency and liquidity globally.
  • On the domestic front, the ferocity of the second wave of COVID-19 has dented economic activity, but monetary, regulatory and fiscal policy measures have helped curtail the solvency risk of financial entities, stabilise markets, and maintain financial stability.
  • The capital to risk-weighted assets ratio (CRAR) of scheduled commercial banks (SCBs) increased to 16.03 per cent and the provisioning coverage ratio (PCR) stood at 68.86 per cent in March 2021.
  • Macro stress tests indicate that the gross non-performing asset (GNPA) ratio of SCBs may increase from 7.48 per cent in March 2021 to 9.80 per cent by March 2022 under the baseline scenario; and to 11.22 per cent under a severe stress scenario, although SCBs have sufficient capital, both at the aggregate and individual level, even under stress.
  • Going forward, as banks respond to credit demand in a recovering economy, they will need to reinforce their capital and liquidity positions to fortify themselves against potential balance sheet stress.

Acquisition of SB Energy Holding Limited by Adani Green Energy Limited gets CCI approval

The Competition Commission of India (CCI) approved the acquisition of SB Energy Holding Limited (“Target”)  by Adani Green Energy Limited (“Acquirer”) under Section 31(1) of the Competition Act, 2002. The Proposed Combination envisages the acquisition of the entire (i.e., 100%) shareholding of the Target by the Acquirer from the Target’s existing shareholders.

The Acquirer is engaged in the business of power generation through renewable energy. The Acquirer is part of the Adani group, which is an Indian multinational conglomerate comprising six publicly traded companies. In India, the Acquirer and its subsidiaries are engaged in the business of power generation inter alia through (i) solar energy, (ii) wind energy and (iii) hybrid energy.

The Target, through various special purpose vehicles (“SPVs”) is engaged in generation, supply and sale of electricity and energy produced from renewable sources. The Target is the ultimate holding company for SPVs formed in India that focus on developing renewable energy projects.

Detailed order of the CCI will follow.

Merger of Tech Data Corporation with SYNNEX Corporation gets CCI approval

The Competition Commission of India (CCI) approves the merger of Tech Data Corporation (Tech Data) with SYNNEX Corporation (SYNNEX) under Section 31(1) of the Competition Act, 2002. The Proposed Combination is a merger within the meaning of Section 5(c) of the Competition Act, 2002. It will be effected through the following steps:

Merger of Sub I with and into Tiger Parent, with Tiger Parent being the surviving entity;

Merger of Tiger Parent with and into Sub II, with Sub II being the surviving entity and remaining as a direct wholly owned subsidiary of SYNNEX; and

Upon steps (i) and (ii) of the transaction coming into effect, and in consideration of the shares of common stock of Tiger Parent held by Tiger Holdings, SYNNEX will issue approximately 45% shares of its common stock (carrying proportionate voting rights) to Tiger Holdings.

SYNNEX, founded in 1980, is a corporation formed in accordance with the laws of the State of Delaware, U.S.A. It is headquartered in Fremont, California and listed on the New York Stock Exchange. SYNNEX provides technology products and solutions for information technology (IT) systems to resellers and retail customers.

Apollo Management L.P. is a limited partnership formed in accordance with the laws of the State of Delaware, U.S.A. As described in the Notice, investment funds managed by affiliates of Apollo Management, L.P. (collectively referred to as Apollo) invest in companies and debt issued by companies involved in various businesses throughout the world.

Tiger Parent is a corporation formed in accordance with the laws of the State of Delaware, U.S.A. Tiger Parent is currently the holding company of Tech Data. Tiger Holdings is the sole member and holder of all issued and outstanding shares of common stock of Tiger. Tiger Parent and Tiger Holdings are controlled by investment funds managed by affiliates of Apollo.

Detailed order of the CCI will follow.

World Intellectual Property Organization Bars Delhi-based Firm ‘Om Soft Solutions’ from Illegally Using Brand Name “Khadi”

The World Intellectual Property Organization (WIPO), a specialized agency of the United Nations for brand protection across the world, has ordered a Delhi-based firm against using a domain name www.urbankhadi.com, which illegally uses the  brand name “Khadi”.  The Administrative Panel of WIPO’s Arbitration and Mediation Center has ruled that the firm “Om Soft Solutions”, owned by one Harsh Gaba, had registered and used the domain name www.urbankhadi.com in “bad faith” and to gain benefit from the goodwill of Khadi.

The panel’s order came on a petition of Khadi and Village Industries Commission (KVIC) against “Om Soft Solutions” which was indulging in the business of garments by misusing the brand name “Khadi”. The panel lent credence to KVIC’s contentions that “it was a systematic attempt by Mr Harsh Gaba to derive unfair advantage, wrongful commercial gains and to mislead the public into believing that www.urbankhadi.com is an associate of Khadi India.” “It is evident that the respondent can have no legitimate interest in the disputed domain name…nobody would use the word “Khadi” unless seeking to create an impression of an association with Khadi,” the panel noted.

“….the evidence submitted by the complainant (KVIC) leads to the presumption that the disputed domain name www.urbankhadi.com was registered and used by the respondent in bad faith….the panel orders that the disputed domain name be transferred to the complainant, i.e. KVIC,” the panel ruled.

The panel categorically rejected the arguments of “Om Soft Solutions” that the word “Khadi” enjoyed no protection and that nobody had an exclusive right to use the name “Khadi”. “…. the complainant (KVIC) is the owner of several KHADI trademark registrations. The complainant is also the owner of trademarks “Khadi” and “Khadi India”…the disputed domain name www.urbankhadi.com includes the trademark of KVIC and is confusingly similar or identical to the trademarks of the complainant (KVIC),” the panel observed.

KVIC Chairman, Shri Vinai Kumar Saxena said the WIPO’s order will bolster Khadi’s fight against violation of its brand name not only in India but also globally.He said KVIC will take all measures to protect the identity and global popularity of Khadi. He said KVIC has registered the trademark “Khadi” in several countries to prevent any misuse of the brand name “Khadi” as it has a direct bearing on the livelihood of our artisans.

KVIC in the last few years has acted tough against such violators. So far KVIC has issued legal notices to over 1000 private firms including Fabindia for misusing its brand name and selling products under the name of Khadi. KVIC has sought damages to the tune of Rs 500 crore from Fabindia which is pending before the Mumbai High Court.

Click here to see WIPO Decision 

Government of India monthly review of accounts for the May 2021 published

The Monthly Account of the Union Government of India upto the month of May 2021 has been consolidated and reports published. The highlights are given below:-

The Government of India has received Rs.3,54,787 crore (17.95% of corresponding BE 21-22 of Total Receipts) for May 2021 comprising Rs. 2,33,565 crore Tax Revenue (Net to Centre),  Rs. 1,16,412 crore of Non Tax Revenue and Rs.4,810 crore of Non Debt Capital Receipts. Non Debt Capital Receipts consist of Recovery of Loans Rs 815 crore and Disinvestment Proceeds of Rs 3,995 crore.

Rs.78,349 crore has been transferred to State Governments as Devolution of Share of Taxes by Government of India upto this period which is Rs. 13,728 crore lower than the previous year. Total Expenditure incurred by Government of India is Rs.4,77,961 crore (13.72% of corresponding BE 21-22), out of which Rs.4,15,000 crore  is on Revenue Account and Rs.62,961 crore is on Capital Account. Out of the Total Revenue Expenditure, Rs.88,573 crore is on account of Interest Payments and Rs.62,664 crore is on account of Major Subsidies.

Additional Corpus of Rupees 1.5 crore under Emergency Credit Line Guarantee Scheme gets Cabinet approval

The Cabinet has approved additional funding up to Rs. 1,50,000 crore under Emergency Credit Line Guarantee Scheme (ECLGS). It is a continuing scheme. The Scheme would be applicable to all eligible loans sanctioned under Guaranteed Emergency Credit Line (GECL)till 30.09.2021, or till an amount of rupees four lakh fifty thousand crore is sanctioned under the GECL, whichever is earlier. 

lt is a continuing scheme and recently, on account of the disruptions caused by the second wave of COVID 19 pandemic to businesses across various sectors of the economy, Government has further enlarged the scope of ECLGS. The enhancement is expected to provide much needed relief to various sectors of the economy by incentivizing lending institutions to provide additional credit of up to Rs. 1.5 lakh crore at low cost, thereby enabling business enterprises to meet their operational liabilities and continue their businesses. Besides supporting MSMEs to continue functioning during the current unprecedented situation, the Scheme is also expected to have a positive impact on the economy and support its revival.

The resurgence of COVID-19 pandemic in India in recent weeks and the associated containment measures adopted at local/regional levels have created new uncertainties and impacted the nascent economic revival that was taking shape. In this environment the most vulnerable category of borrowers are individual borrowers, small businesses and MSMEs, for which, ECLGS, as a targeted policy response was introduced by Gol. The design of ECGLS provides flexibility to quickly respond to emerging needs, as has been evidenced by the introduction of ECLGS 2.0, 3.0 and 4.0 as well as changes announced on 30.05.2021, all of which were within available headroom of Rs 3 lakh crore. Currently, about Rs. 2.6 lakh crore of loans have been sanctioned under ECLGS. A further uptick is expected due to changes announced recently, extension of limit of one time restructuring to Rs. 50 crore by RBI on 04.06.2021 and the continuing adverse impact of COVID on businesses.