AAKR ASSOCIATES

Taxation & Accounting

Energy from Urban-Industrial-Agricultural Wastes

Energy from UrbanIndustrialAgricultural Wastes

The total established capacity of bioenergy in India remained as 9.8 GW as of July 2018. The biomass and cogeneration projects provide 9.5 GW and waste-to-energy (WtE) adds the rest. In order to enhance the efficiency, Ministry of New and Renewable Energy (MNRE) has authorised a program called “Energy from Urban, Industrial and Agricultural Waste/Residue†with amended terms and conditions from 2017-18 to 2019-20.

Waste to Energy projects are included in being setting-up for the generation of Energy from Urban, Industrial and Agricultural Waste and Residues like municipal solid wastes, vegetable, other market wastes, agricultural and industrial wastes & discharges.

Scope of the Programme

In the WtE programme, the Central Financial Assistance (CFA) provides financial support for setting up waste-based biogas or bio-CNG production plants, power generation plants and biomass gasifiers.

These incentives are in the form of capital subsidy and grants-in-aid in regards to the following:

  1. Mass Biogas production from the Industrial waste, Sewage Treatment Plants, Urban & Agricultural Waste and residues through
  2. Power generation or production of Bio-CNG or enriched Biogas from industrial waste, Sewage Treatment Plants, Urban & Agricultural Waste and residues.
  3. Installation of biomass gasifier-based projects in the industry for producing
  4. Marketing and promotional activities consist of R&D projects, Resources assessment, Innovative technology and performance evaluation

Objectives of the Programme

The MNRE has addressed the flaws that have shadowed the Bio-Segment with the following Objectives:

  1. To encourage setting up of projects for energy from urban, industrial and agricultural wastes; and captive power and thermal use through gasification in industries.
  2. To elevate Biomass Gasifier built power plants for generating electricity to meet the growing demand for captive and thermal power.
  3. To enable the lightning of the villages, water pumping and micro-enterprises .
  4. To build conducive conditions and environment, with the monetary and financial system,
  5. To create, establish and disseminate proper utilisation of wastes and residues for energy recovery.

Central Financial Assistance

Central Financial Assistance for different categories of projects is given below:

  • An Amount of 1 Crore is allotted for the Biogas Generation from the Urban waste or Agricultural Waste or Industrial wastes or Effluents or mix of these wastes that yield 12000 M3 Biogas per day. On the other hand, the maximum amount of Rs.10 crore per project is disbursed.
  • An Amount of Rs.2 Crore per MW is allotted from the CFA for setting-up a Biogas Generation Unit from the Urban waste at the already existing project and Rs.3 Crores for the New installation. On the other hand, the maximum amount of Rs.10 crore per project is disbursed.
  • An Amount of Rs.3 Crore per MW is allotted from the CFA for setting-up a Bio-CNG based Biogas Generation Unit from the Urban waste yielding 12000 M3 Biogas per day at the already existing project and Rs.4 Crores for the New installation. On the other hand, the maximum amount of Rs.10 crore per project is disbursed.
  • For the Biomass gasifier based Thermal and Electrical Industries:
    • 2,500 per kW with dual-fuel engines is applicable for the Biomass gasifier based Captive Power & thermal applications in industries
    • 15,000 per kW with 100% gas engines is provided for the Distributed/off-grid power for villages using biomass gasifier systems.
  • Rs.2 Lakhs per 300 KW is established for the Thermal
  • State Nodal Agencies provides an incentive in the form of service charge @ Rs.1% of the eligible CFA. The Maximum incentive maximum is up to Rs.5 lakhs per project in order to expedite the development of projects.
  • A sum of Rs.3 Lakhs per event or program is endorsed for structuring training courses, business meets, seminars/workshops and publicity/awareness on a case-to-case basis.

Implementation Arrangement

The scheme is implemented with the support of the following agencies:

  • StateNodal Agencies (SNA)
  • UrbanLocal Bodies/Municipal Corporations
  • Private or public sector enterprises or organisations
  • Energy Service Companies (ESCOs)
  • Waste to Energy project proposals aids for financial support, presented by the promoters to the Ministry through the financial institutions with all statutory clearances before commissioning the plant.
  • Gasifier projects proposals are directly tendered to the Ministry through SNA for pursuing financial support.

Release of Central Financial Assistance

Waste to Energy Projects:

  • On successful project completion, the entire compensation of CFA is disbursed to the promoters financial account in their prescribed bank.
  • No waste to Energy project is possible without acquiring the loan, as well no advance CFA is also applicable for any such projects.
  • The CFA is released on the successful commission of the project with:
    • Efficient continuous operation for 72 hours at minimum 80% of its rated capacity
    • And the successful running should be continuous for the next three months.

Biomass Gasifier:

  • Biomass Gasifier are self-financed projects that have the CFA released directly to the user through DBT.
  • The beneficiary is not a manufacturer and maybe a promoter or developer. No advance CFA is also applicable for any such projects.
  • The incentive to State Nodal Agencies is released at the time of settlement of the account of the
  • The loan after successful commissioning can be availed with the submission of all required documents of the project.
  • The CFA is released on the successful commission of the project with
    • Efficient continuous operation for 72 hours at minimum 60% of its rated capacity
    • And the successful running should be continuous for the next three months.

Monitoring Mechanism

  • The State Nodal Agencies concerned monitors the execution of the projects and provide guidance for its appropriate
  • SNA is liable for the periodic submission of the progress report to the MNRE.
  • MNRE assigns a Monitoring Committee with the representatives from MNRE, financial institution(s)/banks, Technical Institutions and State NodalAgencies to monitor the progress of implementation of the projects as well as their performance.
  • The final deciding authority is the MNRE, Government of India.

Documents to be submitted for Central Financial Assistance (CFA):

  1. Application in the prescribed format (Annexure-II) (Provide the link)
  2. Copy of Detailed ProjectReport, Commissioning Completion Report
  3. Layout of the plant and its associated subunits.
  4. Technical Specifications of the Digester/Compressor/BiogasEngine/Turbine.
  5. Progress report of the project with a tentative date of commissioning along with photographs.
  6. Copy of the Certificate of Incorporation.
  7. Assurance that there is no subsidy claimed from other institution and keeping the plant operational for a minimum period of 10 years on non-judicial stamp paper of Rs.100.
  8. Clearance certificate from State Pollution Control Board.
  9. Approval for layout plan of the Bio-CNG Plant from Petroleum and Explosives Safety Organization (PESO), Nagpur, if applicable.
  10. Performance report of Biogas/bio-CNG/power generation for 3 months
  11. Hourly data for 72 hours on continuous operation of Biogas/bio-CNG/power generation.
  12. Land Document translated in English.
  13. Raw Material Details Invoice/Agreement, if applicable.
  14. Agreement for sale of Bio-CNG, if applicable.
  15. PPA valid for at least 10 years, if applicable.
  16. Loan Sanction Letter(s) of Financial Institutions.
  17. Appraisal Note by Bank.

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Indian Software Product Registry (ISPR)

Indian Software Product Registry (ISPR)

To develop software products in India, a common platform was created in the year 2019. This is to bring all of the industries, both private sector and government together. This will make India, a worldwide hub for software product development. This is an important initiative method taken to support the Indian software product development industry.

The Indian Software Product Registry (ISPR) is the initial step, which is used for finding solutions for the problems that are related to the software industries and the small booming industries of software development.

Objectives of ISPR

Under this process, the primary stage is the Indian Software Product Registry (ISPR). This is a collaborative platform for all the National coordination centre which will be connected to all the activities and will be in the centre for all the processes that are taking place in the Indian Software product development environment. This policy mainly focuses on the promotion of software products in India.

This will create a strong platform for the software product companies which are aiming to develop India as one of the global software product hubs that are being developed with innovation and promoting technology with specialised skills.

Indian Software Company

To start an industry or company in India, the company must be registered under the Indian Companies Act, 1956 or the Companies Act, 2013 . In this case, the office of the company, or its institution and all of its body must be in India.

Indian Software Product Company (ISPC)

ISPC is referred to as an Indian company that owns 51% of its shares in India with Indian citizens, or it can hold its shares with any person who is an Indian origin. And that person should be involved in the development process, licensing, sales and services of all the software products in the registered company. And have the IP rights towards the software products that are developed in the company.

Implementation and Goal of ISPR

  • To promote the growth of Indian Software product companies leading to an increase in the Indian shares in the global market by the year 2025.
  • To provide a pathway for 10,000 start-up software product companies to grow in all the rural areas and cities of the Country. This will also increase the employment of 3.5 million people by 2025.
  • A talent pool is to be conducted for software product development industries by providing skill training for 10 lakhs IT professionals in India and also encouraging the school and college-going students. More than 10,000 talented professionals will be identified, who can provide leadership qualities.
  • To build a more innovative environment for developing software products along with marketing, testbeds, and leadership supports.
  • A national software product’s mission will be set up for those who are willing to participate in the implementation of software products. This mission will be conducted by the government, academia, and industries.

Platform for Software Products in India

Indian Software Product Registry is the process of creating a platform for the companies that are ready to process the discovery of the Indian Software Products. This will provide access to the Government e-Marketplace platform (GeM). https://gem.gov.in/


Platform for Software Products in India

This platform will make the government to easily identify the Indian companies and will make them a part of their process for buying.

The exchange on ISPR will give a clear view of the industry for some of the specific software product related interference like payments for the software companies. Credits will be given to R&D for encouraging the Software Indian companies to invest in research and development and improvement of Indian software product industries. This will also help the companies to provide tax and other incentives, and this will help in the development of the software industries.

Connecting Globally

The Software product development companies under ISPR will be asked to list all of their products, and these products will connect them with international buyers all over the world. It has a strong back support platform as the Indian government, which will gain a higher level of trust and authentication all over the world.

Start-up Companies

There are about 10,000 start-up companies in the software product developing companies. This will include 1000 different types of technologies all over the Country to develop the products.

India has one of the most fast-growing start-up ecosystems. India is the 3rd largest ecosystem for start-up companies in the world. Each day about 3 to 4 start-ups being launched.

The government of India has started a National policy on software products (NSP). This acknowledges the start-up companies and aims at developing a worldwide software product hub.

To encourage and promote the start-ups and their intellectual properties an entity is known as ‘Meity start-up Hub’ has been created https://meitystartuphub.in/

This is to innovate, connect with each other, collaborate and transform technology and integrate with each other Meity start-up Hub is used.

Registration Process


Registration process
  • With the necessary details filled-in, the company can get registered in ISPR.

Sign up Page

With ISPR, one can get to know about the different companies that are registered in ISPR.

  • They can get connected with the buyers globally
  • Can able to find the different types of software products that are being developed in India.
  • One can understand the statistics and the simple analytics behind software product development.

Contact details

  • Ministry of Electronics and Information Technology
  • Electronics Niketan, 6, CGO Complex, Lodhi Road,
  • New Delhi-110003
  • Phone: +91-11-24301955
  • Email: ispr@meity.gov.in

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Food Fortification Resource Centre

Food Fortification Resource Centre

Fortification is the process of addition of key minerals and vitamins like zinc, iron, iodine, Vitamins A and D to foods like oil, milk, rice, salt and wheat to improve its nutritional content. The Food Fortification Resource Centre (FFRC) is a Resource and Support Centre to promote large-scale fortification of food across India. It is a resource hub which provides information and inputs on standards and food safety, technology and processes, premix and equipment procurement and manufacture, quality assurance and quality control for the fortification of foods.

Role of FFRC

FFRC is a support centre that promotes the fortification of food in the country. It is a resource hub that shares information and inputs on the standards and food safety, equipment procurement, technology and processes, quality assurance and quality control for the fortification of food. It aims to motivate the food industry to adopt food fortification as a norm. The initiative helps to fight malnutrition through fortification of food.

Vision of FFRC

  • The portal serves as a platform for interaction between all the stakeholders like development partners, central ministries, fortification pre-mix makers, processors and food manufacturers.
  • It provides information related to the fortification of food like the latest technology, scientific evidence, national and international experience, government orders and circulars with the success stories of different states and the industry.

Mission of FFRC

The mission of FFRC is to address the deficiency in minerals and vitamins in the country. It aims to build a healthy nation. To achieve this, a strategy has been adopted by scaling up fortification in the safety net programs and is made available for all in the open market.

Purpose of Fortification of Food

Micronutrient malnutrition is a serious health risk. It is important to have nutritious food and a lack of balanced diet can cause health issues. Fortification of food helps address this problem. It helps with the diversification of diet and also helps in supplementation of food. India has a significant burden of micronutrient deficiencies which are caused by folic acid, iron, iodine and Vitamin A. It often leads to anaemia, night blindness and other birth defects. Fortification can help address this problem.

Objectives of FFRC

  • To address the deficiency of minerals and vitamins in the nation
  • Educate people about the benefits of fortified foods
  • Provide technical support to small scale manufacturers of food to enable them to produce fortified foods
  • Sensitise states about fortification of food and to promote them in the programs to curb micronutrient deficiencies
  • Build capacity and train for large scale fortification of food
  • Provide technical, financial and scientific support to promote large-scale fortification of food
  • Provide communication material for fortification

Benefits of Fortification

  1. Fortification is one of the safe methods of improving nutrition among people. It ensures that the food does not pose a health risk and is safe for consumption.
  2. Nutrients are added to staple foods which is an excellent method to improve the health of a large part of the population.
  3. It does not change the characteristics of the food in terms of aroma, texture or taste.
  4. It is a cost-effective method and needs no changes in the eating patterns of people.

Advantage for Retailers

  • Logo – All the fortified products have a logo (+F logo) which endorses fortification and quality of the product
  • Cost – Fortification cost is low and the products carry values
  • Health – An opportunity to promote health through which the business transaction can be improved

Food items covered under the program

  • Milk
  • Wheat flour
  • Rice
  • Edible oil
  • Double fortified salt

Procedure of Endorsement for Fortification and Use of +F Logo

To use the +F logo, the guidelines from FSSAI has to be followed. The Food Business Operators (FBOs) registration in the Food Licensing & Registration (FLR) portal.

Step-1:

Login to the Portal – https://foodlicensing.fssai.gov.in/index.aspx

Register or Login with the existing username

Step-2: Access “Click to Endorse Fortified Productsâ€

Step-3: FBO can access the License/Registration Certificate Number

Step-4: The list of commodities will be displayed. FBO has to enter the required details in this page

Step-5: Product details with Fortified logo will be provided as endorsed with license number.

On filing the submission of the self-compliance certificate, the endorsement certificate will be provided.

To feature the photo of the product in the FFRC website, FBOs should send the photo to the email: fortification@fssai.gov.in

The notification and the procedure can be accessed here:

Food_Fortification_Regulation_Procedure

fortified_logo
Fortified_logo from FFRC

Partners of FFRC

  • Ministry of Health and Family Welfare, Government of India
  • Department of Food and Public Distribution, Government of India
  • Tata Trusts
    • Working with industries and government bodies in the field of healthcare and nutrition
  • Global Alliance for Improved Nutrition (GAIN)
    • Swiss foundation with a vision of a world without malnutrition
  • PATH
    • PATH is an international health organisation which drives transformative innovation to save people across five platforms-vaccines, drugs, diagnostics, devices, and system and service innovations
  • World Bank Group
    • It is an international agency working in India since 1949 to end extreme poverty within a generation and to promote shared prosperity
  • Nutrition International
    • A global initiative working in India since 1988 with cutting-edge nutrition research
  • World Food Programme (WFP)
    • Part of United Nations and fighting hunger worldwide

The method of analysis of fortificants in food products can be accessed from below:

methods_analysis_food_fortification

Contact

Food Fortification Resource Centre.

  • Address: 4th Floor, FDA Bhawan, Near Bal Bhavan, Kotla Road.
  • Email: fortification@fssai.gov.in
  • Phone: 011-23235180

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GST on Renting of Motor Vehicle

GST on Renting of Motor Vehicle

The indirect tax implication on renting of motor vehicles service has always driven the attraction because of its complicated abatement/ exemption treatment in the erstwhile law. In recent years, renting of motor vehicle service (also more popularly known as rent-a-cab service) has increased in leaps and bounds. Now, even a common man is aware and are frequently using the cab service.

Under the current article, we would understand the GST provisions as applicable to renting of motor vehicle service.

Understanding GST on renting of motor vehicle services

GST rates on renting of motor vehicle services have been prescribed under notification no.11/2017-Central Tax (Rate) dated 28.06.2017, the same is explained hereinbelow:

Description of Service

GST rates

Conditions

Renting of a motor vehicle which is designed to carry passengers (wherein the cost of fuel is included from the service receiver)

CGST–2.5%

SGST–2.5%

Total–5%

Provided that credit of the input tax charged on goods and services used in supplying the services has not been taken.

 

However, an input tax credit of input services in the same line of business can be availed.

Or

CGST–6%

SGST–6%

Total–12%

NIL
Rental services of transport vehicle (with or without operators)

CGST–9%

SGST–9%

Total–18%

NIL

According to the above-referred notification, the motorcar service provider has the following two options, in terms of GST rates:

  1. To pay GST @5%, wherein, the input tax credit shall not be available (an input tax credit of only input service of the same business line can be availed); or
  2. To pay GST @12%, wherein, the input tax credit is available.

Reverse Charge Mechanism

Renting of motor vehicle services has been brought within the ambit of ‘Reverse Charge Mechanism ’ vide notification no. 22/2019 – Central Tax (Rate) dated 30th September 2019. The reverse charge mechanism under renting of motor vehicle service is effective from 1st October 2019.

S.No.15 to notification no. 22/2019–Central Tax (Rate) contains the provisions relating to reverse charge mechanism as applicable to renting of motor vehicle service, which is explained hereunder:

Description of service

Service Provider

Service Receiver

Service provided by way of ‘renting of a motor vehicle’ Any person other than body corporate paying CGST, i.e. central tax at the rate of 2.5% and availing input tax credit of only input service in the same line of business. Any body corporate (located in the taxable territory)

Reverse charge mechanism in case of renting of a motor vehicle applies to fulfilling the following criteria:

  • Service provided relates to ‘renting of a motor vehicle’;
  • Service is provided by any person other than body corporate;
  • Service provider has not availed any input tax credit other than input tax credit on input service in the same line of business; and
  • Service is received by a body corporate.

If all the above criteria are satisfied, the service receiver is liable to pay GST under reverse charge mechanism.

Similar reverse charge provisions are also covered under the state tax, i.e. SGST. Further, it should be noted that the word ‘Body Corporate’ has the same meaning as assigned to in section 2 (11) of the Companies Act, 2013.

Synopsis

The GST provisions as applicable to renting of a motor vehicle are summarised hereunder:

Service provider

Service Receiver Reverse charge mechanism

GST rates

Any person other than body corporate Body Corporate Applicable 5%
Body corporate (not availing any input tax credit) Body corporate Applicable 5%
Body corporate (not availing any input tax credit) Non-Body corporate Not Applicable 5%
Body corporate (availing input tax credit of input service of same business line) Any Not applicable 5%

It is interesting to note here that the service provider, as seen above, has the option to pay GST @12% by availing full input tax credit. However, practically, with the introduction of the reverse charge mechanism on renting of the motor vehicle, the service provider will no longer have the option to pay GST @12% by availing full input tax credit . The service provider, after reverse charge introduction, is left with only one option, i.e. to pay GST @5% without availing input tax credit.

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National Handloom Development Programme

National Handloom Development Programme (NHDP)

Handloom sector in India has a large potential to bring in more revenue and employment opportunities to the nation. To enhance and standardise the handloom industry , the Government of India has been launching several programmes and schemes. The National Handloom Development Programme (NHDP) is revised and implemented to follow create an integrated and holistic development of handlooms and welfare of the handloom weavers. The scheme at supporting the handloom weavers, Self Help Groups, NGOs and other handloom co-operative societies for the procurement of raw materials, technological upgradation and marketing of their handloom products.

Objective of the Programme

The programme is revised and implemented with the following objectives:

  • To improve the socio-economic status of the 43 Lakhs weavers and its allied workers in the country.
  • To generate more employment opportunities for the backward and minority people.
  • To enhance the production and meet the demand of the handloom products in the national and international markets.
  • To systemise and organise the handloom sector through proper supply chain management.
  • To bridge the gap in the sector and enable the supply chain management through infrastructure enhancement, innovative technologies and product development as per the market need.
  • To increase the compensation of the handloom products for the weavers.

Key components of the scheme

Block Level Cluster projects

 The cluster development methodology focuses on the formation of weavers’ groups as a formidable unit that can be self-viable. The cluster will be set up for handlooms. More than one cluster could be taken up depending upon need with respect to a number of handlooms. The Principles followed in the selection of cluster are emphasised accordingly with each cluster in the SLPC minutes.

  • Substantial financial assistance in the launch of new Clusters

The financial support for a new cluster is based upon the need and the demand, the dependency of the requirement, the managerial capacity of the Block Level Cluster Organisation. On the whole, the Government of India provides whopping financial support of Rs.2 crore per cluster.

  • General Awareness
  • BaselineSurvey – The baseline survey requires an official visit to every weaver of the cluster for organising the profile of the cluster in regards with the:
    • Number of active handlooms
    • Type of handlooms
    • Community-based number of weavers under the General or SC or ST or OBC or Minority etc. category
    • Type of yarn used, product range, Average weaver income etc.
  • Diagnostic Study – Diagnosis Study of the cluster is the first move towards implementing the action plan by identifying the assets and flaws, ecosystem that the cluster works in and the tactical steps needed for an effective output.

The key objective of the diagnosis is to comprehend and evaluate the current scenario under which the handlooms are working in the cluster in regards to the:

  • Analysis of business operations
  • Nature of production activity
  • Profiling of products
  • Patterns of production and
  • Existing market potential for it

Formation of consortiumThe Formation consortium formed by the stakeholder from the Self Help Groups (SHGs), Co-operative Societies, Master weavers, Private Entrepreneurs, NGOs etc.

The objective is to work allied with the weavers and tie up linkages with the connected organisations like:

  • Banks and Financial institutions
  • Market institutions and marketing experts
  • Marketers, legal experts, Government machineries, weavers etc.

Product Development – Product Development works with the principle of producing cost-effective, time-saving, innovative handloom products that stand tall in the market

  • Payment of Administrative cost to designated agency underHathkargha Samvardhan Sahayata

    • An Administrative cost should be paid to the designated agency (NHDC) for the transfer of funds through DBT in beneficiaries account towards the purchase of looms, dobby, jacquards etc. as per the guidelines of Hathkargha Samvardhan Sahayata (HSS).
    • The designated agency, i.e., NHDC etc. will be paid a service charge @1.25%-2% of the Government of India share on the lines of Yarn Supply Scheme.

Handloom Marketing Assistance

The objective of the handloom marketing assistance is to develop and promote the marketing channels in the domestic and export market by linking the two in a holistic and integrated manner. The handloom marketing assistance components will have the following sub-components:

  • Domestic Marketing Promotion

The sub-component Domestic Marketing Promotion covers all the marketing activities such as Organisation of expos, events, and craft melas. The registered users of the handloom mark can take part in the expos which are held in the 14 metropolitan cities in the country.

  • Marketing Infrastructure Development

The sub-component aims at establishing urban haats with the estimated area of 8000 Sq.Mts in all the cities to encourage the export of handloom products and display the samples and the finished products at one place. The Office of the Development Commissioner for Handlooms and the State Government allocates and shares the fund of Rs.3 Crores required for the establishment of urban haats.

  • Market Access Initiative

The sub-component work towards engaging the handloom workers in a traditionally known handloom cluster to expand the handloom products. The handloom weavers are also offered apprenticeship programs and trained to market their handloom products in the Fashion Design Council and build a marketing linkage for their products. The Central Government has allocated a total fund of Rs.1 Crore per cluster to implement the sub-component across the country.

  • Handloom Export Promotion

The sub-component aims at identifying and assisting the handloom societies and corporation to export their products through participation in the international trade fairs and take part in the buyer-seller meets.

Concessional Credit

The Component aims at providing credit facilities to the handloom weavers at concessional interest rates. The sub-component of the components are as follows:

  1. Interest Subsidy – The sub-component aims at offering subsidised loan at a reduced rate of 6% to the handloom weavers for the period of three years.
  2. Margin Money Assistance – Handloom weavers, self-help groups and joint liability groups are offered a quantum of Rs.10000 per weaver and leverage this amount for borrowing loans  from the banks.
  3. Credit Guarantee – The loans released by the banks to the handloom weavers are guaranteed by the Credit Guarantee Fund Trust for Medium and Small Enterprises (CGTMSE). The annual fee for the credit guarantee service is paid by the Government of India effective from the date of disbursement of loan from the bank for a duration of 3 years.
  4. Bunker facilitator – The Banks are authorised to engage Bunkar Facilitator for the collection and preliminary processing of loan application. These facilitators are keen about the completeness of the project, submission of an application to the bank branch and post-sanction monitoring till disbursement of the loan. The Government of India reimburses an incentive of 0.5% of the loan amount disbursed by the bank, subjected to a minimum of 200 and a maximum of Rs.2000 per loan for onward payment to the Bunkar Facilitator. 
  5. Handloom Census: Third-party handloom census and its data are concerning the following factors are carried out for obtaining the modernised data on handloom sector with the issuance of Identity Cards to handloom weavers and allied workers.
    • The number of handloom weavers
    • Number of handlooms
    • Number of handlooms engaged in commercial and domestic use etc.

Other Components of the Programme

The National Handloom Development Programme has other following components, and they are as follows:

  • Handloom Park
  • National Centre for Textile Design
  • R&D Projects
  • J&K Wool Development Project
  • Special Projects for the Special Category States
  • National Institutes of Open Schooling (NIOS)
  • Cluster Cell at Headquarters
  • Innovative Ideas
  • Publicity, Advertisement, Monitoring, Training & Evaluation of Scheme

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Customs Brokers Licensing Regulations

Customs Brokers Licensing Regulations

Any individual that acts as an agent for the importer-exporter for the use of transacting business shall acquire the licence with the National Academy of Customs, Indirect Taxes and Narcotics (NACIN). To regulate the licencing of customs brokers, the Government of India (GoI) introduced Customs Brokers Licensing Regulations (CBLR, 2018). The regulations are issued as per the Aadhar Act 2016, Companies Act 2013, Finance Act 1994 and CBDT Act 2017. The regulations shall be of any type of business, related to entry or departure of assignments, importing and exporting of goods at any Customs unit including audit. As per the regulations, no person shall conduct business as a customs broker unless carrying the licence issued as per the regulations. The following are the types of Customs brokers that need to acquire licence:

  • An importer or exporter conducting business at a Customs Station solely through his account
  • Any authorised employee conducting business on behalf of the company having a temporary pass or an identity card issued by the Deputy Commissioner of Customs or Assistant Commissioner of Customs
  • An agent hired for ancillary work to enter or clear one or more vessels or aircraft

Eligibility Criteria

  • Any individual, company, firm or association
  • Any applicant applying for a license to act as a Customs Broker in a Customs Station should meet the following conditions:
  • Should be a citizen of India
  • Should not have been ruled as insolvent
  • Should hold a valid Aadhaar and PAN card
  • Should not have been held under the Central Excise Act 1944, Finance Act 1994, CBDT Act 2017
  • Should not have been convicted for any criminal offence or any pending case(s)
  • The applicant should be graduated from a recognised university
  • Should hold a professional degree in Management, Accounting, Finance, CA, CS, MBA, LLM, ACMA or FCMA
  • However, if the applicant does not have any of the professional degrees mentioned above, as an alternative, the person shall have two years experience in transacting Customs Broker as a G-card holder.
  • The applicant should hold a certificate validating the financial feasibility issued by the Customs’ Principal Commissioner, Commissioner of Customs or a Scheduled Bank
  • Any retired Group A officer having an experience of five years

Examination for Acquiring the Customs Broker Licence

Any applicant applying for Customs broker licence shall appear for an online exam conducted by NACIN. The exam is conducted in the first and second quarter of each year. The exam contains both written and oral questions. If the applicant has cleared the exam as per Custom House Agents Licensing Regulation 1984, the Custom House Agents Licensing Regulation 2004 or the Customs Brokers Licensing Regulations 2013, the person is not required to re-appear for the exam.

The online written exam conducted by the NACIN shall be4 conducted in the first quarter of each year. After clearing the written exam, the applicant shall appear for an oral exam in the second quarter of each year. The results of the oral exam will be released in the month of July.

An attempt or cancellation for the written exam shall be considered as an attempt. The applicant shall have a total of six attempts to clear the exam.

The following are the type of questions that may appear for the exam:

  • Preparing various kinds of shipping bills, bills of entry, bills of export, and other documents related to clearance
  • Terms on arrival entry and clearance of vessels
  • Classification of tariff and duty charges
  • Determination of value of imported and export goods
  • Conversion of currency
  • Description of documents that are required to be filed along with the bills of entry, shipping bills and other clearance documents
  • Assessment procedure and payment of duty including a refund of duty paid
  • Procedure for examining the goods at Customs Stations
  • List of banned products on import and export
  • Bonding procedure and clearance from bond
  • Export promotion schemes including the Special Economic Zone scheme
  • List of offences under the Act
  • Procedure to appeal and revision applications under the Act
  • Process of filing the entry and shipping bills online through ICEGATE and Indian Customs Electronic Data Interchange System (ICES)

Fee for the Exam

The applicant who has cleared both written and oral exam shall pay a fee of Rs.5000. The fee should be paid within two months after the release of the results. The information about the payment should be informed to the authority in the Customs. If the applicant does not pay within the stipulated time, the concerned authority shall cancel granting the license.

Granting the Licence

Form B1: The licence for an individual shall be provided in Form B1 after paying the required fee amount within the stipulated time.

Form B2: The licence for a company or firm shall be provided in Form B2 after paying the required fee amount within the stipulated time.

If the company makes changes in Aadhaar or PAN, a fresh licence must be applied within sixty days. After acquiring the licence, the customs broker shall transact business using Form B1 and Form B2.

Validity of the Licence

The Form B1 and Form B2 is valid up to a period of ten years. To renew the licence the applicant shall apply within one month after the expiry of the licence. If delayed, the applicant shall be liable to pay a fine of Rs.2000 as a late fee.

Process of Acquiring a Customs Broker Licence

Step 1: Check the Eligibility Criteria

Step 2: Appear for the online examination conducted by the NACIN. If the applicant has already cleared the exam, the individual shall not re-appear for the exam

Step 3: Pay the required fee as mentioned in the regulations

Step 4: Upon approval, the licence will be provided in Form B1 and B2

Step 5: In case of any change in the company, the details should be submitted within 60 days

For setting up businesses abroad, click here

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Senior Citizen Welfare Fund

Senior Citizen Welfare Fund

The Senior Citizen Welfare Fund (SCWF) is a fund which provides financial support to the Below Poverty Line (BPL) category senior citizens. It was introduced by the Government of India to help senior citizens who do not have any means of livelihood. The SCWF was instituted by the Finance Act, 2015. It came into effect on 18.03.2016.

The government observed that a large corpus of funds was available in the various government savings schemes. The funds fall under the category of inoperative accounts. Over time, the funds are classified as ‘unclaimed deposits’. The need was felt to channelise the funds towards a useful purpose. At the same time, the need was felt to improve the lives of senior citizens. Thus, the government introduced the SCWF to address both the concerns. Unclaimed deposits invested with the government institutions would be transferred to the SCWF. The funds available with the SCWF would be used exclusively for helping senior citizens. The SCWF is an apex-level fund which is managed by the Central Government. Senior citizens can make use of the SCWF by availing of the various schemes launched under the fund.

The ‘Ministry of Social Justice and Empowerment’ (MSJ) is responsible for administering the SCWF. In 2017, the MSJ introduced a scheme known as Rashtriya Vayoshri Yojana to help senior citizens. The scheme was funded from the SCWF. On 04.12.2019, the MSJ announced the introduction of three additional schemes. The new schemes will be funded entirely from the SCWF.

Objectives of the SCWF

  • To ensure the financial security of senior citizens
  • To provide old-age pensions to senior citizens who do not have any other source of income
  • To enact rules specifying that particular long term savings instruments can be subscribed to only by senior citizens
  • To allow for the employment of senior citizens in income-generating activities
  • To develop schemes for promoting proper nutrition of senior citizens
  • To implement nutrition education programs for senior citizens
  • To implement affordable health care programs and mental health services for senior citizens
  • To formulate health insurance schemes for senior citizens
  • To provide suitable training and orientation to public health care workers to address the needs of senior citizens
  • To introduce schemes for promoting the welfare of elderly widows
  • To introduce schemes related to old age homes for senior citizens
  • To introduce schemes that are aimed at addressing the information needs of senior citizens
  • To introduce schemes for conducting research activity on ageing and age-related health problems

Eligible Investments

The following investments are available for making contributions to the SCWF:

Unclaimed deposits which are available with the above accounts will be transferred to the SCWF.

Procedure for Transfer of Funds

  • An inoperative account is a savings account which has not been operated for three years. In case the account is a deposit account, the three-year time-limit applies from the date of maturity. The terms of the account may provide that the account can be operated jointly by two or more persons. In such cases, the account is said to become inoperative only if none of the account-holders operates the account.
  • An account is allowed to remain as an inoperative account for a maximum of seven years. After the elapse of seven years, the account is declared as an ‘unclaimed deposit’. All unclaimed deposits should be transferred to the SCWF within one year. The one year mentioned should be calculated from the date on which the account is classified as ‘unclaimed deposit’.
  • Every year the Post Office, Public Provident Fund Authority and Employees’ Provident Fund Authority prepare a list of accounts that are classified as ‘unclaimed deposits’. The lists should be prepared before 30th September every year. The lists should also be published on the websites of the respective departments. The branch office in which the account holder is maintaining an account should publish a physical copy of the list. The list should be displayed prominently on the notice-board. The list should be printed in a font size which will permit reading from a distance of three feet.
  • Within sixty days of publishing the list, the department should contact the account holder. The communication should be made by sending a written notice. Apart from the notice, the department may also try to contact the account holder by e-mail and phone call. The list should remain on the notice-board and website of the department for at least sixty days.
  • The account holder is permitted to reclaim his deposit even after the funds have been transferred to the SCWF. The permission to reclaim the funds will remain with the account holder for twenty-five years. After twenty-five years the funds will undergo ‘escheatment’. Escheatment implies that the funds cannot be reclaimed by the account holder.

Budgetary Allocation

  • The Inter-Ministerial Committee (IMC) should provide a report of budgetary allocation to the Central Government. The report should be presented as part of the overall budget for the subsequent financial year (FY). The budgetary report is a description of how the government plans to use the money accumulated in the SCWF. The report is prospective and enumerates the plans of the government for the future utilisation of the SCWF.
  • Every year before 1st May, the IMC prepares an annual report. The report mentions how the funds in the SCWF were utilised in the previous FY. The annual report should contain the following details:
    • The activities that are undertaken by the IMC towards improving the quality of life of senior citizens
    • The schemes approved for funding from the SCWF
    • The major decisions of the IMC and the financial impact of the decisions
    • The schemes pending for approval with the IMC
    • Details of the amounts deposited into the SCWF
    • Details of the amounts withdrawn from the SCWF
  • Both of the reports should be submitted for the perusal of the Lok Sabha and Rajya Sabha.

Additional Schemes

On 04.12.2019, the MSJ introduced the following additional schemes under the SCWF:

  • Programme for the usage of Electric Golf Carts at airports
  • Longitudinal Ageing Study In India Scheme
  • Senior Citizens Health Insurance Scheme

To know more about senior citizen welfare schemes, click here .

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Amendment of Articles of Association

Amendment of Articles of Association

A company can change its articles of association by calling a meeting of the shareholders and passing a resolution. A company can amend the articles for any reason that involves improvement of the business prospects. A company may wish to amend the articles to diversify its business or enhance the scope of its existing business.

The articles of association are the regulations which govern a company’s internal affairs. The articles govern the company’s management structure and hierarchy. The articles also provide a framework for implementing the objectives of the company. The objectives of a company can be found in the memorandum of association . A company’s business should be conducted according to the articles. The articles establish a contract between the company and the members. The contract governs the rights and obligations of the members.

All companies are permitted to amend the articles by fulfilling the applicable legal requirements. The Ministry of Corporate Affairs governs the procedure for amendment of the articles.

Conditions

The following conditions should be followed by a company which is altering the articles of association:

  • The alteration should not introduce any terms which are inconsistent with the objectives of the company.
  • The alteration should not contravene or contradict the terms of the memorandum.
  • The alteration should be consistent with the Companies Act, 2013 and other applicable laws.
  • The alteration should be for the benefit of the company as a whole.
  • The alteration should not introduce any terms which are disadvantageous to a minority of the shareholders.
  • A company may be under litigation relating to the terms of the articles. In such cases, the alteration should be made under the guidance of the court.
  • The alteration should not be made retrospectively. The effective date appointed for the modification should not be before the date of passing a special resolution.
  • The alteration should not change the paid-up value of the shares.
  • The alteration should not change the company’s liabilities towards lenders.
  • The alteration should not remove any person from membership in the company.
  • The alteration should not cancel the voting rights available to the shareholders.
  • The alteration should not prevent shareholders from attending meetings.
  • The alteration should not introduce benefits to persons who are not members of the company.
  • The alteration should not be used as a method to enter into an agreement with persons who are not members of the company.

Procedure to Amend Articles of Association

  • A board meeting should be held. The notice inviting the directors to attend the meeting should state the agendas. The notice should be given to the directors at least seven days before the meeting. The agendas should be the following:

    • To discuss and approve the purpose for which the articles are amended.
    • To recommend the shareholders to approve the purpose for which the articles are amended.
    • To discuss and approve the amendments that are introduced in the articles
    • To recommend the shareholders to approve the amendments that are introduced in the articles
    • To finalise the date, time and place for the shareholders’ meeting
    • To discuss and approve the ‘explanatory note’ which explains the purpose of the shareholders’ meeting
    • To authorise the company’s secretary to forward the explanatory note and the notice for the meeting to the shareholders
  • The notice for the meeting and the explanatory note should be sent to every shareholder twenty-one days before the meeting.
  • A list of creditors, debenture holders and other lenders to the company should be compiled. The list should mention the name of the lender and the amount due. The date on which the credit facility was availed should also be mentioned. If a particular debt is in dispute, the fact should be disclosed. The list should be laid before the shareholders. The minutes of the meeting should record the fact that the shareholders perused the list. A shareholder may make any remarks regarding the list. The remarks should be recorded in the minutes .
  • An affidavit should be drafted stating that the alteration does affect the amount repayable towards any of the lenders. The affidavit should be signed by the company’s secretary and at least two directors of the company. It should also be signed by the managing director. The affidavit should be laid before the shareholders. The minutes of the meeting should record the fact that the shareholders perused the affidavit. A shareholder may make any observations regarding the affidavit. The observations should be recorded in the minutes.
  • The format which a company should follow for the articles depends on the type of company. Unlimited companies and guarantee companies having share capital need not follow any particular format. A company incorporated with share capital should draft the articles as per Table F. A guarantee company should draft the articles as per Table H. Table F and Table H form part of Schedule I of the Companies Act, 2013.
  • The shareholders attending the meeting should pass a special resolution approving the alteration of the articles.
  • A shareholder attending the meeting may observe that a particular lender is adversely affected by the alteration. In such cases, a copy of the minutes together with the altered articles should be forwarded to the concerned lender within fifteen days.

Filing Requirements

  • Within thirty days of the meeting, the company should file form MGT-14 with the Ministry of Corporate Affairs (MCA). The purpose of filing form MGT-14 is to record that the company has passed a special resolution for altering the articles. Before filing the form, the applicant should register with the MCA.
  • The format of form MGT-14 is given below for reference: Form MGT-14
  • A copy of the resolution passed by the shareholders and a copy of the amended articles should be attached to the form. The board should certify both the copies.
  • In case the articles are amended for the purpose of converting a public company into a private company or vice versa, the following additional requirements will apply:
    • The company should apply to the regional director of the MCA for permission to change the type of company. The application should be made in form RD-1.
    • The company should file form INC-27 with the MCA. The purpose of form INC-27 is to inform the MCA that the type of company is changed.
    • The company should file form INC-28 with the MCA. The purpose of form INC-28 is to inform the MCA that the regional director has approved the change.

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GST Relief for ITeS

GST Relief for ITeS

Information Technology enabled Services (ITeS) are services which involve back office and remote maintenance operations. These services also include call centres and data processing centres. The taxability of a particular ITeS under GST depends upon whether or not it is an intermediary service. If the ITeS is intermediate service , it is taxable at the rate of eighteen per cent. An intermediary service provider acts as an agent between the buyer and the seller. Intermediary services are taxable in India even if the service is consumed abroad.

On 04.12.2019, the Central Board of Indirect Taxes and Customs (CBIC), through circular no.127/46/2019 issued a clarification regarding ITeS. The effect of the circular is that certain ITeS are no longer to be considered as intermediary services. Thus, the ITeS covered by the circular will not attract GST.

Intermediary Services- Taxability Under GST

An intermediary service refers to making a ‘facilitatory arrangement’ for the supply of goods or services. A facilitatory arrangement is an activity that results in supply from the client to the customers of the client. Intermediary services do not include making a supply in the assessee’s own name. Thus, the supplier of the goods cannot be treated as an intermediary. Intermediary services rendered to clients outside India also fall within the scope of GST levy. The intermediary service will be taxable even when the buyer and seller are located outside India. Intermediary services supplied to international customers are not classified as export. Thus, GST is payable on intermediary services provided to clients outside India.

Services Covered

The circular covers the following services:

  • Support services for pre-delivery, delivery and postdelivery of supply
  • Support services for order placement, delivery and logistical support
  • Support services for obtaining Government clearances
  • Support services for transportation of goods
  • Post-sales support services

Classification of ITeS

Before the issue of the circular, the taxability of the specified services depended upon the circumstances of the assessee. The circumstances are:

  • Scenario I: The assessee supplies the ITeS under the assessee’s name to clients. In this scenario, the assessee is the supplier and cannot be treated as an intermediary. Thus, ITeS do not attract GST. This scenario applies even when the assessee provides services to the customers. When this scenario applies, the assessee can treat the ITeS supplied as an export. Thus, the assessee can claim the benefit of zero-rated supply available for exports.
  • Scenario II: The assessee supplies the ITeS by acting as an agent between the buyer and the seller. In this scenario, the assessee is not the supplier. Thus, the assessee should be considered as an intermediary. Thus, ITeS attract GST. When this scenario applies, the assessee is not allowed to consider the ITeS supplied as an export. Thus, the assessee cannot claim the benefit of zero-rated supply available for exports.
  • Scenario III: The assessee supplies the ITeS under both of the circumstances mentioned in the above scenarios. In such cases, the Jurisdictional Officer (JO) will decide whether the ITeS are taxable. The JO will arrive at a decision based on the facts and circumstances of each case.

Impact of the Circular

Until 03.12.2019, the specified services were classified as intermediary services, and thus attracted GST. On 04.12.2019, the CBIC issued a circular stating that the three-scenario classification mentioned is no longer applicable. Thus, the specified services are not taxable. The circular of the CBIC is given below for reference:ITES circular

To know more about GST, click here .

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Solid Waste Management Rules

Solid Waste Management Rules

The Government of India (GoI) published the Solid Waste Management Rules in the Gazette of India to curb the ever-increasing quantity of waste. The rules were issued through notification number G.S.R 451 under part II, Section 3, sub-section (i). The Solid Waste Management Rules was published through the Ministry of Environment, Forest and Climate Change. The rules include duties and responsibilities of State, Central, Industries and individuals, instructions to set up waste processing and treatment facilities and timeframe.

The Solid Waste Management Rules shall apply to the following:

  • All urban local body
  • Urban Agglomerations
  • Notified industrial townships
  • Areas that are under the control of:
  • Indian Railways
  • Airports
  • Airbases
  • Ports and Harbours
  • Defence establishments
  • Special Economic Zones
  • State and Central government organisations
  • Pilgrim Areas
  • Historical and religious places

Duties of Enterprises

Duties of manufacturers or brand owners producing Disposable products, sanitary napkins and diapers

  • All manufacturers or brand owners that are involved in producing disposable products such as tin, glass, plastics packaging should provide financial assistance to the local authorities to establish a waste management system.
  • Brand owners shall set up a system to collect back the non-biodegradable products that are sold in the market
  • Manufactures and brand owners can invest in research to recycle the materials collected back from the market
  • All the manufactures and brand owners should create a platform to educate the buyers to dispose of the materials appropriately

Duties of Industrial Units

The following are the duties of industrial units that are located within one hundred kilometres of:

  • Refused derived fuel and
  • Waste to energy plants that are based in solid waste

The industries shall make sufficient arrangements with six months to replace at least five per cent of the refused derived fuel

Duties to set up solid waste processing and treatment facility

  • The land for setting up the waste processing and treatment facilities shall be provided by the department in-charge for land allocation
  • The technical guidelines should be designed by the operator in the facility. The technical guidelines shall be issued by the Pollution Board of India through the Ministry of Urban Development
  • The operator should attain all the necessary approvals from the State Pollution Board
  • The operator is responsible for the accurate and solid waste management system to ensure a safe environment

Solid Waste Management in the Hill Areas

  • Constructing landfills on the hills should be prevented. An enclosed location shall be set up to collect waste. The land to collect waste shall be created in the plain areas within 25 kilometres near the hill.
  • The power to curb littering wastes on the streets at tourist attraction places the rules shall be framed by the local body
  • The local body can arrange the necessary requirements for solid waste management

Criteria for Waste to Energy Process

  • Any non-recyclable waste more than 1500 K/cal/kg having calorific value shall be utilised for generating energy, refuse-derived fuel or to feedstock. It shall not be disposed of in the landfills.
  • Wastes having high calorific value can be used for processing cement or thermal power plants.
  • Agencies, local bodies or operator of a facility proposes to establish a waste to energy plant which can process more than five tones per day should submit an application to the in Form-I in the State Pollution Control Board.
  • After examing the application, the State Pollution Control Board shall provide detail to set up within 60 days.

Click here to know about, E-Waste Management

Features of Solid Waste Management

  • Integration of waste system should be done by the State Government, Self Help Groups or groups authorised by the government.
  • Restaurants and hotels shall be responsible for segregating biodegradable waste. It should also create necessary measures to ensure that food is used for bio-methanation or composting.
  • All gated communities, resident welfare or market associations shall establish necessary measures to segregate bio-degradable waste
  • Industrial estates, Industrial parks and SEZ s shall allot five plots for recovery and recycling facility
  • The sources of waste shall be utilised to recover, reuse and recycle.
  • Horticulture waste garden should be removed as per the directions of local authority

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