The Supreme Court upheld the order which had said that only chartered or cost accountants will be eligible to audit and certify sales tax returns. A bench comprising Justice HK Sema and Justice Markenday Katju dismissed the petitions filed by the Sales Tax Practitioners Association of Maharashtra and the Bar Council of Maharashtra. It upheld Bombay High Court order which had
said that only chartered accountants or cost accountants would be eligible to certify sales tax returns.
The high court while upholding an amendment to Maharashtra Value Added Tax Act had observed that “the objective is to facilitate prevention of evasion of tax.” The Act makes it mandatory for traders- with annual sales of over Rs. 40 lakh – to file sales tax returns verified only by chartered or cost accountants.

As per the prevailing trade practices, indigenous produced crude oil is purchased at international prices by the refineries. However, hedging of price risk on domestic purchases of crude oil is not permitted. In order to enable domestic crude oil refining companies to hedge their risk exposures, it has been decided to permit them to hedge their commodity price risk on domestic purchase of crude oil and sale of petroleum products on the basis of underlying contracts linked to international prices on overseas exchanges / markets. The hedging will be allowed strictly on the basis of underlying
contracts.

Companies will soon need to disclose the nature and extent of risks arising from the financial instruments they hold and the steps taken to manage such risks. In a step which is likely to give shareholders a clearer picture of the health of the company they own, accounting regulator Institute of
Chartered Accountants of India has approved a new accounting standard on disclosure of all sorts of financial instruments. It would also keep investors abreast of the steps taken by the companies to guard against potential financial losses.

In a major step to avoid any hardship to nearly 200 Indian firms listed on European bourses due to ‘differences’ in Indian and EU accounting norms, the government has announced its decision to adopt
international accounting norms.

The International Accounting Standards Board (IASB) and US Financial Accounting Standards
Board (FASB) has published consultative documents that seek public comment on two of the eight
phases of their joint project to develop an improved conceptual framework. The objective of the project is to develop an improved conceptual framework that provides a sound foundation for developing future accounting standards.

In a move that will help stock market investors and brokers use their margin funds efficiently, the
Securities & Exchange Board of India has approved cross-margining across cash and derivatives
segments. What it means is that if an investor is buying a stock in which he already has a short position in the futures segment, he will not have to pay margin twice over.

stocks. They can operate as sub-Listed foreign companies with an asset base of not less than $2 billion and a profitability record, and foreign individuals with a minimum net worth of $50 million can now trade in local accounts, where FIIs registered in India manage the investments. The changes introduced by capital market regulator Sebi would also enable more overseas entities to invest as sub-accounts of FIIs, foreign portfolio managers take exposure to collective investment schemes like art funds, and FIIs to issue participatory notes (PNs) to entities like some hedge funds. PNs are derivative instruments issued by FIIs to overseas investors who have no access to the Indian market.

The Securities Appellate Tribunal has set aside SEBI’s disgorgement order on Karvy Stock Broking Ltd. in the IPO allotment case. This is in line with SAT’s November 2007 order setting aside the same
disgorgement order on nine other entities, including National Securities Depositories Ltd.

SEBI said in a statement that the board, in a meeting held, decided to enhance the minimum net worth requirement for registration as portfolio manager from the existing Rs. 50 lakh to Rs. 2 crore. It has been decided to give effect to the requirement of maintaining continuous net worth separately for
portfolio management activities.

RBI has enhanced the present period of realization and repatriation to India of the amount representing the full export value of goods or software exported, from Six Months to Twelve
Months from the date of export, subject to review after one year. The provisions in regard to period of
realization and repatriation to India of the full export value of goods or software exported by a unit situated in Special Economic Zone (SEZ) as well as exports made to warehouses established outside India with the permission of Reserve Bank remain unchanged.

Indian companies are required to report the details of receipt of the amount of consideration for issue of shares/convertible debentures in Annex II, together with a copy/ies of the FIRC/s evidencing the receipt of the remittance along with the KYC report on the non-resident investor in Annex III, through an AD Category – 1 bank, not later than 30 days from the date of receipt of the amount of
consideration. The report would be acknowledged by the Regional Office concerned, which would allot a Unique Identification Number (UIN) for the amount reported. The details of the issue of shares / convertible debentures should, henceforth, be reported in the revised form FC-GPR (Annex I). While forwarding form FC-GPR to the Regional Office concerned, the AD Category 1 bank should ensure that the UIN is correctly indicated in the form. It is also clarified that the annual report of all investments which is to be filed in Part B of the revised form FC-GPR, which is hitherto to be
submitted by June 30 every year, would now have to be submitted by July 31 every year.

The Supreme Court has said that ‘non-profit’ foreign educational institutions having branch offices in
India can claim tax exemption only if they impart education in India. The ‘non-profit’ tag of such institutions has to be tested against India activities and not the calculation of income over expenditure to decide whether they are qualified to be such organization for tax exemption, the apex court said in a ruling. The bench decided that “If the applicant wants exemption under Section 10(23C)(vi) (Income Tax Act, 1961) it has to impart education in India and only then it would be entitled to claim initial approval under that section.”

India inked a Double Taxation Avoidance Agreement (DTAA) with the Grand Duchy of Luxembourg. The treaty will help in the avoidance of double taxation and in prevention
of fiscal evasion with respect to taxes on income and on capital besides stimulating the flow of capital, technology and personnel between the two countries.

Donations to trusts cannot be treated as business expenditure, a tax tribunal has ruled. The Income Tax Appellate Tribunal gave this ruling in a case pertaining to an advocate from Indore who claimed tax benefit on donation made to a charitable trust with instructions to use the money for buying books for the court library.

Companies can treat expenditure incurred on participation in exhibitions as business expense and
claim tax benefits, the Income Tax Appellate Tribunal has said in a recent decision pertaining to the
Indian subsidiary of Austrian auto component maker Styler Daimler Puch.

In a bid to prevent any financial irregularities and make the Non-Banking Financial Companies
(NBFCs) safer, the Reserve Bank of India asked non-deposit taking NBFCs to raise the minimum capital to risk-weighted assets ratio (CRAR) from 10% now to 12% with immediate effect and further to 15% with effect from April 1, 2009.

Under the extent ECB guidelines, borrowers in the services sector are not eligible to avail ECB under the Automatic Route. It has been decided, in consultation with the Govt. of India, to allow entities in the service sector viz. hotels, hospitals and software companies to avail ECB up to USD 100 million, per financial year, for the purpose of import of capital goods under the Approval Route. All other aspects of ECB policy shall remain unchanged.It is also clarified that the existing guidelines on trade credit, allowing companies including those in the services sector, to avail trade credit up to 20 million
per import transaction, for a period less than 3 years, for import of capital goods, shall continue.

At present, borrowers proposing to avail ECB up to USD 20 million for Rupee expenditure for permissible end-uses require prior approval of the Reserve Bank under the Approval Route. It has been decided that, henceforth,

• borrowers in infrastructure sector may avail ECB up to USD 100 million for Rupee expenditure for permissible end-uses under the Approval Route.
• In the case of other borrowers, the existing limit of USE 20 million for Rupee expenditure for permissible end-uses under the Approval Route has been enhanced to USD 50 million.

payments and cash manage-HSBC is a leading provider of financial services to small, medium-sized and middle-market enterprises. The Group has over 50,000 such customers in India, including proprietors, partnerships, clubs and associations, incorporated businesses and publicly quoted companies. Commercial Banking provides a full range of banking services to these customers including multi-currency business accounts, payment, trade services, factoring and a range of borrowing solutions. In India, Commercial Banking has a presence in 47 branches covering 26 key cities and for the convenience of our customers, a multi channel service including Internet and phone banking.

At HSBC, it is our constant endeavor to reach out and be of service to various customer groups. The business community is an important customer group for us not only in India but across the globe. In order to do so, we give utmost importance to our relationships with professionals like you who aid and advise business firms on various financial matters that play a vital role in planning future. We at HSBC believe in working very closely with professional to help us to provide greater value to business banking customers. Your insight on client’s financial requirements helps us to tailor our products and services to the customer’s need. Our research and understanding of the SME sector in India says that they require fast-track approvals, sound advise, competitive rates and knowledgeable personnel who will guide them on suitable banking solutions. We are committed to providing superior banking services to help you save time and cost for your SME customers. Our 150 – year presence in India and relationship with over 2.5 million business customers worldwide allows us to enjoy the advantages of deep rooted knowledge of local markets and international practices. This has led to development of our products and services, which are attuned to the unique financial needs
of the Indian businesses. We look forward to an opportunity in providing banking support to build
your client’s business. In addition, we expect advice and guidance from you in providing banking service to the SME sector. It would be my pleasure to interact with you at the ongoing Direct Taxes
Workshop at India International Centre.

The Finance Ministry, Government of India as well as Reserve Bank of India have been following a policy aggressively working on containing money supply (M3 ) through increasing CRR, increasing rates of fixed deposits as well as REPO rates whereby clearly signaling an upward journey of interest rates. This policy has been adopted to contain inflationary pressure. These policies measures have
not yielded positive results and inflation is mounting due to increase in international prices of commodities as well as profiteering, hoarding and monopolistic and restrictive trade practices being adopted by a certain section with deep pockets and ulterior motive of making money at any cost. The successive increase in rate of interest has severely impacted the growth rate prospects in industry as well as in the services sector. The housing sector, the real estate sector and the infrastructure sector will get the hit most. A substantial interest rate is a must for propelling growth. The Government of United States has reduced the federal interest rate by more than 60% bringing it down to 2% per annum, with a view to arrest the recessionary tendency. The Govt. of India needs to take a lesson. A lower interest rate regime will also ensure better sentiments and prospects for the capital market,
thereby further fueling channelization of resources for the growth of industry and business. The inflationary tendency, has a positive side. The Govt. must ensure that out of the increase in commodity prices, the resultant benefit must reach substantially to the poor agriculturist. It is he who and the others being part of the peasant community, who are actually helping grow most of the commodities. It this happens the poor man of this country can be helped the most. The Govt. needs to act strongly against restrictive trade practices and stop the lip services by openly threatening certain business houses. The threats are being viewed by the public as an attempt to increase corruption and fleece a part of the booty from the profiteers. India is set to move to double digit growth leading to overall economic development of the poorest of poor. The Govt. needs to courageously ensure adequate money supply and resources at a very reasonable cost. A substantial reduction in the interest cost and increased money supply through reduction of CRR and SLR are a must.

We need to plan to get rid of the onslaught of oil rampage by a united action internationally forcing oil producing countries to come under a regulation of reasonable prices. G7 countries, Brazil, India and China need to act together and force OPEC nations through persuasion and pressure to reduce the prices to a reasonable level. America should be convinced to take a lead in spite of their own interest arising out of large US oil reserve.