Liaison Office (LO) / Branch Office (BO) in India by Foreign Entities – Reporting to Income Tax Authorities

A.P. (DIR Series) Circular No. 55

November 26, 2012


All Authorised Dealers Category – I Banks

Madam / Sir,

Liaison Office (LO) / Branch Office (BO) in India by Foreign Entities – Reporting to Income Tax Authorities.

  1. Attention of Authorised Dealer Category – I banks is invited to A.P. (DIR Series) Circular No. 24 dated 30.12.2009 in terms of which LOs/BOs are required to furnish copy of the Annual Activity Certificate (AAC) to Director General of Income Tax (International Taxation), Drum Shaped Building, I.P. Estate, New Delhi 110002.
  2. It is clarified that copies of the AACs submitted to the DGIT (International Taxation) should be accompanied by audited financial statements including receipt and payment account.
  3. Further, at the time of renewal of permission of LOs by AD banks, they may note to endorse a copy of each such renewal to the office of the DGIT (international Taxation).
  4. AD Category – I banks may bring the contents of this circular to the notice of their constituents/customers concerned and ensure compliance.
  5. The directions contained in this circular have been issued under Sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and are without prejudice to permissions / approvals, if any, required under any other law.

Yours faithfully,

(Rudra  Narayan Kar)
Chief General Manager

Conditions of listing for issuers seeking listing on SME Exchange

In recognition of the need for making finance available to small and medium enterprises, SEBI has decided to encourage promotion of dedicated exchanges and/or dedicated platforms of the exchanges for listing and trading of securities issued by Small and Medium Enterprises (“SME”). Consequently, SEBI amended SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 (“SEBI (ICDR) Regulations”) by inserting a Chapter XA on “Issue of specified securities by small and medium enterprises”, through notification dated April 13, 2010. In continuation of the same and to facilitate listing of specified securities in the SME exchange, “Model Equity Listing Agreement” to be executed between the issuer and the Stock Exchange, to list/migrate the specified securities on SME Exchange, is specified through this circular.

  1. The full text of “Model Equity Listing Agreement – for SME Exchange” is given at Annexure A. This agreement shall be executed for listing of specified securities issued or migrated on SME exchange, in terms of Chapter XA of the SEBI (ICDR) Regulations.
  1. Certain relaxations are provided to the issuers whose securities are listed on SME exchange in comparison to the listing requirements in Main Board, which inter-alia include the following:

a. Companies listed on the SME exchange may send to their shareholders, a statement containing the salient features of all the documents, as prescribed in sub-clause (iv) of clause (b) of proviso to section 219 of the Companies Act, 1956, instead of sending a full Annual Report;

b. Periodical financial results may be submitted on “half yearly basis”, instead of “quarterly basis” and

c. SMEs need not publish their financial results, as required in the Main Board and can make it available on their website.

  1. The above listing conditions are specified in exercise of the powers conferred under Section 11 read with Section 11A of the Securities and Exchange Board of India Act, 1992.
  2. The Model SME Equity Listing agreement specified in the „Annexure A‟ shall come into force with immediate effect. 6. All Stock Exchanges are advised to:

(i) execute the Listing Agreement with the issuing companies in line with the Model Listing agreement specified in the Annexure, without limiting or diluting any of the requirements thereof;

(ii) make necessary and consequential amendments, if any , to their bye-laws for the implementation of the above decision;

(iii) disseminate the same on their website for easy access to the Issuers and investors; and

(iv) communicate to SEBI, the status of the implementation of the provisions of this circular in the Monthly Development Report.

SME Listing agreement

Tax Treatment of Goods sent to other States ubder Maharastra VAT


Trade Cir.No.-2T of 2010, Date: 11/01/2010

Sub: Tax Treatment of Goods sent to other States.

This office had issued above referred Trade Circulars explaining scope of section 6A of CST Act, 1956. In the Trade Circular dated 20th February 2007, a view had been taken that section 6A of CST Act, 1956 deals only with transactions between principal and agent and that it applies in those cases where the movement of goods is to the place of business of the dealer himself in another state or to his agent or his principal in another state. It was viewed that section 6A does not deal with transactions which are on a principal to principal basis. Hence, the non-sale transactions like job work which are transactions from principal to principal basis were viewed to be out of purview of section 6A of CST Act, 1956 and not retiring F Forms.

2. Thereafter, the Allahabad High Court delivered a Judgement dated 17th August, 2007 in the case of M/s Ambica Steels Ltd. V/s the State of Uttar Pradesh. The issue before the Court was whether the petitioner is required to submit the declaration in Form F in respect of the transaction of job work performed by it. The High Court decided that it would be necessary to furnish declarations in Form F in such instances. In view of this Judgement, it was decided to issue F Forms to the dealers in Maharashtra who received goods for job work or as goods return. This aspect has been elaborated in Trade Circular 5T of 2009 dated 29th January 2009.

3. The decision of Allahabad Hicdi Court in M/s Ambica Steels Ltd was challenged before the Hon’ble Supreme Court. In the brief order passed by the Hon’ble Supreme Court (24 VST 356) in this case, it is stated that the dealer agreed to produce the retired declarations. Hon’ble Supreme Court has not done away with the need of mandatory F Forms applicable to such transactions as job work which was outcome of the Allahabad High Court decision. In view of this, the decision of the Allahabad High Court in case of M/s. Ambica Steel Ltd. (12 VST 216) stands and following instructions are issued.

4. The Trade Circular 16T of 2007 dated 20th February 2007 and Trade Circular 5T of 2009 dated 29th January 2009 are hereby withdrawn. F forms are mandatory for all transactions of inter state transfers (not by way of sale) including job work and goods return. Declarations in Form F will be issued to the dealers to comply with this view.

5. This Circular cannot be made use of for legal interpretation of the provisions of law, as it is clarificatory in nature. If any member of the trade has any doubt, he may refer the matter to this office for further clarification.

6. You are requested to bring the contents of this circular to the notice of all the members of your Association.

Yours faithfully,

(Sanjay Bhatia) Commissioner of Sales Tax, Maharashtra State, Mumbai

Ref: 1. Trade Circular 16T of 2007 dated 20th February 2007. 2. Trade Circular 5T of 2009 dated 29th January 2009.