Hi Folks
Wondering what this non-descript, octogenarian woman is doing on the banner of the 80th issue of a corporate newsletter? Don’t be fooled by her rustic looks. She has been lauded globally as a green-champion thanks to her tree-planting mission. While some of us rave and rant about the lack of something or the other,Thimmakka didn’t lament on her barrenness.
On the contrary, she and her husband planted over 400 banyan trees for the past 50 years in Hulikal, about 70 kms away from Bangalore and cared for them as their own children. No wonder she is fondly called Saalumarada Thimmakka after the row trees planted by her as a simple, yet effective answer to deforestation. She could not beget children but she found her life’s calling – nurturing hundreds of shade-giving banyan trees that have long, long lives. She didn’t get, but she didn’t stop giving !!
Earth Day (22nd April) has come and gone. Most of us espouse such causes by way of pledges, taglines, seminars, ‘don’t-print’ email messages, ‘shun-plastic’ drives, car-pooling schemes etc. – at best a few days in a year but true champions are like Thimmakka who do it in a sustained manner. We need to move from celebrating ‘Days’ to celebrating ‘sustainable living’ which calls for a fundamental shift in our thinking and living habits.
This issue of Lexspeak calls for a detailed reading – highlights of the several changes announced in the Foreign Trade Policy, 2009-14 have been listed together with relevant notifications. Amidst dipping GDP, focus on incentivizing export growth continues along with a push for the manufacturing sector.
To read the earlier issues and articles of Lexspeak Click Here


Lex Valorem Team

Amendments in Chapter 3 of FTP
Incremental Exports Incentivisation Scheme (IEIS) – Every IEC holder achieving incremental exports during the FY incentivized with duty credit scrip of 2% of the incremental growth under a new scheme.
Served From India Scheme (SFIS)
Entitlement pegged to Net Foreign Earned (NFE)
—  Service providers engaged in manufacturing activity can use their SFIS scrip for importing / domestic sourcing of capital goods including spares.
—  Import of motor cars, SUVs, vehicles etc., against SFIS scrip permitted by hotels, travel agents, tour transport operators and companies running golf resorts.
Status Holder Incentive Scrip (SHIS) – Manufacturing Group Company entitled to use SHIS even though it is not a status holder.
Other Duty Scrips
—  Duty Credit Scrips issued under Focus Market Schemes, Focus Product Scheme and Vishesh Krishi Gramin Udyog Yojana (VKGUY) can be used for payment of service tax. Also entitled to drawback benefits / CENVAT credit of the service tax.
—  Duty credit scrips can be used for payment of composition fee, application fee under FTP.
Amendments in Chapter 3 of FTP
Amendments in Chapter 4 of FTP
—  Antidumping duty and Safeguard duty exemption available for DFIA (Duty Free Import Authorization) only for actual users i.e before transferring DFIA.
—  Advance authorization facility not available for import / supply of “energy”.
Amendments in Chapter 3 of FTP
Amendments in Chapter 5 of FTP
Revised and harmonized procedure for EPCG Scheme notified
—  Uniform Block Period of 6years prescribed for fulfillment of Export Obligation (EO) under Zero Duty and 3% Duty EPCG Scheme.
—  Authorizations Issued after 17th April, 2013 to be governed by the amended FTP. Those issued between 1st September, 2004 to 17th April, 2013 to attract provisions of current FTP.
—  Refixation of EO upon conversion from CIF based to duty based EO no more available.
Revised and harmonized procedure for EPCG Scheme notified

—  Validity of Zero Duty EPCG Scheme extended from 9 months to 18 months from the date of issue.
Validity of Zero Duty EPCG Scheme
—  Customs Department has notified new / revised provisions for import of capital goods under the Zero Duty EPCG Scheme by retailers, Common Service Providers (CSP), Green Technology sector, Sick Companies, Agro units etc.
Customs Department has notified new revised provisions
Import of cars – Cars manufactured prior to 1st January, 1950 “free” for import by actual users with immediate effect. Until now they were under “restricted” category.
Import of cars
Re-credit of 4% SAD – Exporters allowed to utilize re-credited 4% (Special Additional Duty) SAD scrips till 30.09.2013 without any further extension.
Re credit of 4 percentage SAD
Service tax exemption – Scrip holders under Focus Market Scheme (FMS), Focus Product Scheme (FPS), Vishesh Krishi and Gram Udyog Yojana (Special Agriculture and Village Industry Scheme) entitled to Service Tax exemption.
Service tax exemption
Work from home – Employees of EOU, STP, EHTP and BTP can work from a place outside the unit, provided export of the ultimate product / service is from the bonded premises only.
Work from home
Due date for filing Service Tax Return (Form ST 3) for the period 1st October, 2012 to 31st March, 2013 is extended from 25th April, 2013 to 31st August, 2013.
Due date extended for Service Tax Return
Based upon certain High Court decisions and the attributes laid down by the Supreme Court as to what constitutes “transfer of right to use goods”, CBEC has clarified that since the possession and control remain in the hands of the service provider, services provided by way of erection of pandal or shamiana will attract service tax.
Service Tax on Pandal or Shamiana
Only electronically filed Part A of form 16 (TDS Certificate) downloaded from TRACES portal in the prescribed format with Unique Identification Number shall be treated as a valid certificate issued by the tax deductor to the tax deductee. This puts to rest attempts of several tax deductors to issue TDS certificates in their own format outside the government portal.

Part B of form 16 can be issued manually.

Authentication of TDS Certificate
The IT Department has notified under Section 92C of the Income Tax Act, 1961, that the arm’s length price for international or specified domestic transactions shall be 1% for wholesale trade and 3% for others for Assessment Year 2013-14. Accordingly any variation between the actual price and the ALP which is less than the notified percentage may not be accepted by the authorities.
Computation of Arm is Length Price
Any overseas entity having equity participation directly or indirectly shall not facilitate trading in financial products such as currencies, securities and commodities linked to Indian Rupee without prior approval of RBI.
Overseas Direct Investment
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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Amendments in Chapter 3 of FTP Service Tax on Pandal or Shamiana Due date extended for Income Tax Return Overseas Direct Investment