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Hi All
“Economy is too late when you are at the bottom of your purse.” You don’t need to be a wise man to know this. Our purse seems to ‘bare’ it all what with the shooting inflation and falling rupee. It is the best and most reliable barometer of the economy. There is so much news about recession, gloom, austerity measures, job cuts, deficit etc. etc., that we consciously chose a bright ochre coloured procession of the kings of yore heading eastwards,
as if to reflect the current shift from the western economies. The streak of rainbow does carry hope for all of us, even as we celebrate the 10 day long Dussehra festival in India. This issue carries some important changes announced by RBI with respect to External Commercial Borrowings by corporates in keeping with the need of the hour.To read the earlier issues and articles Click Here

Sincerely
Lex Valorem Team
Stamp duty on increased authorized share capital optional in Delhi
Following a Delhi High Court judgment, stamp duty on “Increased Authorised Capital” has been made optional for companies in Delhi and accordingly e-Form 5 has been revised w.e.f. 25th September, 2011.
Time bound action by ROC
Companies (Amendment) Regulations, 2011, effective from 25th September, 2011, provides for time bound action (within 60 days of filing) by Registrar of Companies (ROC).
Filing by Defaulting Companies
Effective date for earlier Circular No.63/2011 enabling filing of certain forms by defaulting Companies has been shifted from 18th September, 2011 to 25th September, 2011
Term “debt” to be replaced with “ECB liability”
A new RBI Circular replaces the term ‘debt’ in the debt-equity ratio with ‘ECB liability’ w.r.t. ECB from foreign equity holders. It also contains specific guidelines on ECB under approval route.
ECB limit enhanced
As a boost to the infrastructure sector, RBI has enhanced the ECB limit to USD 750 million from the present limit of USD 500 million per financial year even while permitting such funds for payment of interest during construction. Specified service sector also would benefit with the increased limit of ECB from USD 100 million to USD 200 million.
Bridge Finance for infrastructure sector
Indian infrastructure companies are allowed to avail short term credit (including buyers’ / suppliers’ credit) in the nature of ‘Bridge Finance’ under the approval route to import capital goods subject to certain conditions.
Infrastructure companies can utilize ECB for repayment of rupee loan
End use of ECB has been liberalised w.r.t. Indian infrastructure companies. They can now utilize 25% of the fresh ECB towards refinancing of the rupee loan availed from the domestic banks subject to certain conditions, under the approval route.
All Industry Rates of Duty Drawback, 2011-12
Central Board of Excise and Customs (CBEC) has announced All Industry Rates of Duty Drawback for 2011-12 effective from 1st October, 2011 which factors items that were under the erstwhile DEPB scheme that is ending on 30th September, 2011. It has also issued clarifications on a number of issues spanning different products under the Duty Drawback Scheme.
Voluntary payment of customs duty pending final assessment
Customs duty can now be paid voluntarily by the importer or exporter pending finalization of provisional assessment.
CENVAT Returns revised
Central Value Added Tax Returns (CENVAT popularly known as Excise Returns) in Form E.R.1 and E.R.3 which were amended vide Notification dt.18th July, 2011 have been revised once again. This will be effective from 1st January, 2012 instead of 1st October, 2011.
E-filing
Central Excise Rules, 2002 and CENVAT Credit Rules, 2004 have been amended to provide for electronic filing of returns, statements, declarations etc. w.e.f. 1st October, 2011.
Services by legal professionals exempted
Service by legal professionals was expanded in scope for purposes of levy of service tax vide Finance Bill, 2011. Services provided by Arbitrators to business entities which were brought under the service tax ambit will now be exempted w.e.f. the date of gazette notification.
R & D cess exempt from Service tax
Service tax was exempt on Research & Development (R&D) cess payable on transfer of imported technology as well as on service rendered by a holder of intellectual property rights. Now this exemption is available only on fulfillment of certain conditions.
Note: The contents of this Newsletter are only a summary and has not dealt with any issue in detail. Any action taken or proposed to be taken must be in consultation with professionals and not merely based on the articles / news updates. Lex Valorem disclaims all liability on action taken without professional advice.

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