Linking of SWIFT to the Core Banking System

Department of Economic Affairs has apprised that in pursuance to the announcement made in the Budget Speech 2018-19 (para75), a Steering Committee on Fintech related issues was constituted to consider various issues relating to development of Fintech space in India with a view to make Fintech related regulations more flexible and generate enhanced entrepreneurship in an area where India has distinctive comparative strengths vis-a-vis other emerging economies and to focus on how Fintech can be leveraged to enhance financial inclusion of MSMEs. The first meeting of committee was held on 10.3.2018.

Reserve Bank of India (RBI) has informed that it has reiterated its instructions regarding “Cyber Security Controls - SWIFT” and “Cyber Security Controls – frauds related to trade finance transactions – misuse of SWIFT”, and mandated banks to implement the prescribed measures for strengthening the SWIFT operating environment in banks within the stipulated deadlines.

These instructions aim to strengthen SWIFT-related operational controls and reinforce fraud prevention and detection frameworks in place in banks, with a view to avoid misuse of SWIFT.

Clarity on E-Way Bill

Government has received various representations from Association of Exporters as well as Corporate Bodies seeking clarity on e-way bill regarding movement of goods from dry-ports to sea ports and from SEZs within the zone. Some of the queries regarding applicability of e-way bill provisions are as below:

• Exemption for export consignments during custom bonded movement from one airport o another;
• Movement from SEZ/FTWZ (Free Trade Warehousing Zone) to port and vice versa;
• Parity in movement of export cargo with import cargo.

To clarify this issue the Central Goods and Services tax Rules, 2017 (CGST Rules) have been amended vide notification No. 12/2018-Central Tax dated 07.03.2018. As per sub-clauses (c) and (h) of sub-rule (14) of rule 138 of the CGST Rules, no e-way bill is required to be generated where the goods are being transported:

• from the customs port, airport, air cargo complex and land customs station to an inland container depot or a container freight station for clearance by Customs;
• under customs bond from an inland container depot or a container freight station to a customs port, airport, air cargo complex and land customs station, or from one customs station or customs port to another customs station or customs port;
• under customs supervision or under customs seal.

Rates of small savings schemes

The revised Rates of Interest on various Small Savings Schemes Including Saving Deposits, Public Provident Fund, Kisan Vikas Patra and Sukanya Samriddhi Accounts Scheme for the 4^th Quarter of financial year 2017-18 is as below:

Instrument	Rate of interest w.e.f. 01.01.2018 to 31.03.2018
Savings Deposit	4.0
1 Year Time Deposit	6.6
2 Year Time Deposit	6.7
3 Year Time Deposit	6.9
5 Year Time Deposit	7.4
5 Year Recurring Deposit	6.9
5 Year Senior Citizen Savings Scheme	8.3
5 Year Monthly Income Account	7.3
5 Year National Savings Certificate	7.6
Public Provident Fund Scheme	7.6
Kisan Vikas Patra	7.3 (will mature in 118 months)
Sukanya Samriddhi Account Scheme	8.1

Tribunal had no jurisdiction to decide penalty on merits by itself: Gujarat High Court

State of Gujarat v. Hitarth Corporation - [2018] 91 taxmann.com 115 (Gujarat) 

The department imposed the penalty on the assessee. The assessee filed an appeal before the Appellate Commissioner against the penalty order. The Appellate Commissioner dismissed the appeal of assessee on the ground that the assessee did not fulfil the requirement of pre-deposit. The assessee filed an appeal in the Tribunal and informed the Tribunal that the entire amount of tax, interest and pre-deposit had been deposited. The Tribunal deleted such penalty imposed by Assessing Authority. The revenue filed an appeal in the High Court. 

The High Court held that the Tribunal had no right to delete the penalty levied by department as the appeal was filed only for pre- deposit issue. Therefore, the impugned order passed by Tribunal was to be set aside.

'Vicco Vajradanti' tooth paste and powder are toiletries; taxable at rate of 12%: Madhya Pradesh High Court

State of M.P. v. Vicco Products (Bombay) - [2018] 91 taxmann.com 116 (Madhya Pradesh)

The assessee claimed that the products 'Vicco Vajradanti tooth paste and powder' and 'Vicco Turmeric cream' were drugs and medicines. Such products were covered under Entry No. 16 of Part IV of Schedule II of the Madhya Pradesh General Sales Tax Act, 1958 and were liable to tax at the rate of 4%. 

The department held that the products 'Vicco Vajradanti tooth paste and powder' were toiletries. Such products were covered under Entry No. 2 of Part III of Schedule II of the Act and were liable to tax at the rate of 12%. The product 'Vicco Turmeric cream' was ‘Cosmetics’. Such product was covered under Entry No. 21 of Part II of Schedule II of the Act and was liable to tax at the rate of 16%. The Single Judge of the High Court allowed the appeal in favour of assessee. The revenue filed an appeal in the High Court. 

The High Court held that product 'Vicco Vajradanti tooth paste and powder' were toiletries. Such product was covered under Entry No. 2 of Part III of Schedule II of Act and was taxable at the rate of 12%. The product 'Vicco Turmeric cream' was ‘Cosmetics’. Such product was covered under Entry No. 21 of Part II of Schedule II of the Act and was taxable at the rate of 16%. Therefore, the order passed by Single Bench was to be set aside

9,073 cases are under consideration in NCLT, including 1,630 cases of Merger and Amalgamation; 2,511 cases of insolvency and 4,932 cases under other sections of Companies Act

The Company Law Board (CLB) set up under Companies Act 1956 stands dissolved with the setting up of National Company Law Tribunal (NCLT). As on 12.03.2018, only one case under section 55(3) of the Companies Act, 2013 is pending before the NCLT.

A total of 9,073 cases are under consideration in NCLT as on 31.01.2018, including 1,630 cases of Merger and Amalgamation, 2,511 cases of insolvency and 4,932 cases under other sections of Companies Act.

All efforts are being taken to dispose off the cases as per the time limits laid down in the Companies Act, 2013 and the Insolvency and Bankruptcy Code, 2016. Systems and procedures including electronic/Information Technology systems are being used on extensive basis to ensure quick disposal of cases.

No reduction in approval of resolution plans after enactment of IBC (Amendment) Ordinance 2017

There is no reduction in submission of resolution plans after enactment of The Insolvency and Bankruptcy Code (Amendment) Ordinance, 2017. 8 (Eight) resolution plans have been approved by National Company Law Tribunal (NCLT) after coming into effect of Ordinance as compared to 5 (Five) resolution plans approved earlier.

The said Ordinance was promulgated on 23.11.2017 to amend Insolvency and Bankruptcy Code, 2016 (Code) in order to further strengthen the insolvency resolution process by prohibiting certain persons from submitting a resolution plan who, on account of their antecedents, may adversely impact the credibility of the processes under the Code and further to make provisions to specify certain additional requirements for submission and consideration of the resolution plan before its approval by committee of creditors. The Ordinance was replaced by The Insolvency and Bankruptcy Code (Amendment) Act, 2018 on 18.01.2018.