INDEX Direct Taxation Indirect Taxation Corporate and Other Laws

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2. INDEX • Direct Taxation • Indirect Taxation • Corporate and Other Laws • InternationalTrade and Finance • StatutoryDueDates for May 2012 TM Newsletter –May 2012

3. DIRECT TAXATION Index • Non-resident’s consortium to be taxed in India as AOP • A consortium formed by non-residents to bid for a turnkey project in India is liable to be taxed in India as a • Association of Persons (AOP), according to authority for advance ruling. The authority held that the consortium will be treated as AOP even if the members have divided the responsibility of business among themselves. • E-filing of Tax Return is must if annual income is more than Rs. 10 Lakh • An individual, if his total income during the financial year exceeds R10 lakh, shall be required to furnish the return of income electronically under digital signature or transmit the return electronically and, thereafter, submit the verification of the return in Form ITR-V. TM Newsletter – May 2012

4. INDIRECT TAXATION Index • 3 Indirect tax Ombudsmen appointed The Government has appointed three indirect tax ombudsmen. These ombudsmen will hear grievances on excise duty, custom duty and service tax issues from the general public and direct the concerned commissioners to address them.. These people have been appointed initially for two years which can be extended for one more year. The plan was to appoint seven ombudsmen all over the country. • . TM Newsletter – May 2012

5. CORPORATE AND OTHER LAWS Index • External Commercial Borrowings (ECB) - Liberalization In order to boost the liquidity requirement for infrastructure sector , RBI has further liberalized the norms relating to External Commercial Borrowing in the aforesaid sector vide A. P. (DIR Series) Circular No. 111 dated 20th April, 2012 & A. P. (DIR Series) Circular No. 112 dated 20th April, 2012. As per the existing norms, Indian Companies in the infrastructure sector are allowed to utilize 25% of the ECB raised for refinancing of the Rupee loan/s availed by them from the domestic banking system under the approval route. This limit of 25% has now been enhanced from to 40%, subject to the condition that at least 60% of the fresh ECB proposed to be raised should be utilized for fresh capital expenditure for infrastructure project(s). External Commercial Borrowing would now be allowed under the automatic route for the purpose of maintenance and operations of toll systems for roads and highways provided they form part of the original project. Borrowers of an existing ECB are now allowed to refinance/ reschedule it by raising fresh ECB with all-in-cost higher to the all-in cost of the existing raised ECB under the approval route with the condition that the higher all-in cost should not exceed the prescribed all-in cost in the ECB guidelines. TM Newsletter – May 2012

6. CORPORATE AND OTHER LAWS Index • External Commercial Borrowings (ECB) –for Civil Aviation Sector As per the existing guidelines, availing of ECB for working capital is not a permissible end use. But on a review of policy related to ECB it has been decided to allow ECB for working capital as a permissible end use for Civil Aviation sector under the approval route and subject to fulfillment of specified conditions. The overall ECB ceiling for entire civil aviation sector would be USD 1 billion and maximum permissible ECB that can be availed by an individual company would be USD 300 million. This limit can be utilized for working capital as well as refinancing of outstanding working capital loan(s) availed of from the domestic banking system. The said ECB will not allowed to be rolled over. • Revision of Interest Rates – PPF & SCSS RBI vide Notification no. 483 notified that the rate of interest on Public Provident Fund (PPF) and Senior Citizen Saving Scheme (SCSS) effective from 1st April 2012 on the basis of interest compounding/ payment built in schemes will be revised as follows: 5 year SCSS rate of interest is revised from 9%p.a. to 9.3%p.a. PPF Scheme rate of interest is revised from 8.6% p.a. to 8.8% p.a. TM Newsletter – May 2012

7. INTERNATIONAL TRDAE AND FINANCE Index • Cross border Investments and GAAR • Foreign institutional investors (FIIs), which are still in a quandary over the possible tax implications of General Anti Avoidance Rules (GAAR), have shot off another letter to the Finance Minister, urging him to exempt cross-border portfolio investments from the provisions of the proposed regulations and the indirect transfer rules to avoid major disruptions in the Indian market. • Exemption of cross-border portfolio investments would permit FIIs to continue to play their supportive role in the Indian economy uninterrupted, while also continuing to pay taxes in line with internationally accepted practice. Only practical solution to these issues is an unequivocal exemption for cross-border portfolio investments in Indian securities from both the GAAR and the indirect transfer rules. • If the tax uncertainties were not resolved quickly, FIIs could proceed to liquidate their India investments and such a disorderly dissolution of large positions held by these overseas investors could seriously disrupt the Indian markets TM Newsletter – May 2012

8. STATUTORY DUE DATES FOR MAY 2012 Index • Statutory Due Dates Calendar for May 2012 TM Newsletter – May 2012

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