Central Government Notification
Legislation UpdatesRules & Regulations

On 6th July, 2022, Central Government passed Special Economic Zones (Second Amendment) Rules, 2022. It will be coming into force with immediate effect.

Rule 19A is inserted, which is as under, –

  • Key Amendment:

    The authority unit stores bullion as an asset for the purpose of issuance of ‘bullion’ spot delivery/depository receipts as per Rule 19. These units will now be deemed as International Financial Services Centre.

    These bullion stocks are traded in as ‘bullion’ exchange as per Section 4 of Securities Contracts (Regulation) Act, 1956.

  • Note:

    bullion” means precious metals including gold, silver or any other precious metal in the form of bars or unallocated gold, silver, or such other precious metals, as the Authority may consider relevant in this regard, relating to good delivery, quality, quantity, and any other aspect in relation to bullion trading, from time to time, vide Finance Ministry’s Notification F. NO. 3/7/2020-EM.


*Shubhi Srivastava, Editorial Assistant has reported this brief.

Legislation UpdatesNotifications

On 16th June, 2022, the Central Board of Direct Taxes (CBDT) has exempted TDS on lease rentals under Section 194-I of Income Tax Act, 1961 paid to Aircraft Leasing Units vide notification no. 65/2022/F. No. 275/30/2019-IT(B). This will come into force on July 1, 2022.Exemption is applicable on following conditions:

The Lessor must

  • furnish a statement-cum-declaration in Form No. 1 to the lessee giving details of previous years relevant to the ten consecutive assessment years for which the lessor opts for claiming deduction under sub-section (IA) read with section (2) of the section 80LA of the Income-tax Act; and
  • such statement-cum-declaration shall be furnished and verified in the manner specified in Form No.1, for each previous year relevant to the ten consecutive assessment years for which the lessor opts for claiming deduction under sub-section (IA) read with section (2) of the section 80LA of the Income-tax Act.

The Lessee must

  • not deduct tax on payment made or credited to lessor after the date of receipt of copy of statement-cum-declaration in Form No. 1 from the lessor; and
  • furnish the particulars of all the payments made to lessor on which tax has not been deducted in view of this notification in the statement of deduction of tax referred to in sub-section (3) of section 200 of the Income-tax Act read with rule 31A of the Income-tax Rules, 1962.

The above relaxation shall be available to the lessor during the said previous years relevant to the ten consecutive assessment years as declared by the lessor in form 1 which specifies “To be furnished by a unit engaged in the business of leasing of aircraft located in International Financial Services Centre to the Lessee”


*Shubhi Srivastava, Editorial Assistant has reported this brief.

Legal RoundUpWatch Now


Top Story of the Week


Aadhaar Card for Sex Workers| Supreme Court bats for sex workers’ right to dignity; directs UIDAI to issue Aadhaar Card without insisting on address proof 

The Supreme Court has upheld sex workers right to identity and issued detailed directions for their protection and upliftment. The directions ranged from prohibiting police actions against consenting sex workers, police and medical protections for sex workers being victim of sexual assault, holding media accountable for voyeurism on revealing identity of sex workers to directing UIDAI to issue Adhar Card for them without insisting on address proof. 

It was observed that  

“…basic protection of human decency and dignity extends to sex workers and their children, who, bearing the brunt of social stigma attached to their work, are removed to the fringes of the society, deprived of their right to live with dignity and opportunities to provide the same to their children.” 

Read here: https://www.scconline.com/blog/post/2022/05/26/aadhaar-sex-workers-without-address-proof-supreme-court-india-judgement-legal-news-updates-research-rights/  


Supreme Court


Insurance companies refusing claims on flimsy/technical grounds must stop! Don’t ask for documents that insured can’t produce 

Insurance companies refusing claims on flimsy/technical grounds must stop! This is what the Supreme Court observed while dealing with  a case where an Insurance Company had refused to settle an insurance claim on non-submission of the duplicate certified copy of certificate of registration of the stolen vehicle. The COurt held that while settling the claims, the insurance company should not be too technical and ask for the documents, which the insured is not in a position to produce due to circumstances beyond his control. 

The Court was dealing with a case where a truck was stolen when and the Court observed the appellant had produced the photocopy of certificate of registration and the registration particulars as provided by the RTO, solely on the ground that the original certificate of registration (which has been stolen) is not produced, non-settlement of claim can be said to be deficiency in service. Therefore, the appellant has been wrongly denied the insurance claim. 

Read here: https://www.scconline.com/blog/post/2022/05/23/insurance-claim-rejection-technical-ground-insurance-company-non-production-document-supreme-court-india-judgments-mr-shah-legal-reserach-updates-news/  

Hindu widow’s pre-existing right to maintenance automatically ripens into full ownership when she is in settled legal possession of the property 

Observing that a Hindu woman’s right to maintenance is not an empty formality, the Supreme Court has held that by virtue of Section 14(1) of the Hindu Succession Act, 1956, the Hindu widow’s limited interest gets automatically enlarged into an absolute right, when such property is possessed by her whether acquired before or after the commencement of 1956 Act in lieu of her right to maintenance. 

Where a Hindu widow is found to be in exclusive settled legal possession of the HUF property, that itself would create a presumption that such property was earmarked for realization of her pre-existing right of maintenance, more particularly when the surviving co-parcener did not earmark any alternative property for recognizing her pre-existing right of maintenance. 

Read here: https://www.scconline.com/blog/post/2022/05/25/hindu-woman-right-to-maintenance-settled-possession-absolute-ownership-section-14-hindu-succession-act-supreme-court-judgment-india-legal-research-updates-news/  

IGST on Ocean Freight for imports unconstitutional; Won’t create a level playing field but will drive Indian shipping lines out of business 

In the case where the constitutionality of two Central Government notifications related to IGST was under scanner, the Supreme Court has held that since the Indian importer is liable to pay IGST on the ‘composite supply’, comprising of supply of goods and supply of services of transportation, insurance, etc. in a CIF contract, a separate levy on the Indian importer for the ‘supply of services’ by the shipping line would be in violation of Section 8 of the CGST Act. 

The Court observed that, 

“If Indian shipping lines continue to be taxed and not their competitors, it would drive the Indian shipping lines out of business.” 

Read here: https://www.scconline.com/blog/post/2022/05/21/igst-ocean-freight-imports-unconstituional-indian-importers-shipping-lines-supreme-court-india-legal-research-updates-tax-law-news/  


High Courts


Kerala High Court| Right of Press to report truthfully and faithfully; Press shall NOT indulge in sensationalism

Stating that, though the Press has a duty to inform the public, the Division Bench of Devan Ramachandran and Sophy Thomas, JJ., observed that, it is the well-accepted thumb rule that the Press shall not indulge in sensationalism; or in speculating upon the guilt or otherwise of any accused or other individual; or to create an opinion about the comportment or character of a person involved in the Trial; and not to embellish, by impelling or sponsoring an opinion they seek. 

High Court also observed that,

“Press has a duty to inform the public, the publication of lurid details and other sensitive investigative inputs, which are within the sole jurisdiction of the courts to decide upon, certainly require to be put on a tight leash.” 

Read here: https://www.scconline.com/blog/post/2022/05/25/right-of-press-to-report-truthfully-and-faithfully-legal-news-legal-updates-law-kerala-highcourt/

Chhattisgarh High Court| Would pledge of ornaments kept for marriage of a daughter and use for self without knowledge of husband would amount to cruelty? 

In a matter pertaining to mental cruelty, the Division Bench of Kerala HC, expressed that, if a spouse by her own conduct, without caring about the future of the daughter, parts with ornaments which were meant for the marriage, it will be within the ambit of mental cruelty done by the wife. 

The Bench also added to its observation that, during the marriage ceremony in the Indian household, the presentation of the ornament is normally done for which the parents start the effort, from an early date. 

Read here: https://www.scconline.com/blog/post/2022/05/24/would-pledge-of-ornaments-kept-for-marriage-of-a-daughter-and-use-for-self-without-knowledge-of-husband-would-amount-to-cruelty-chhattisgarh-high-court-law-legal-news-legal-updates/ 

P&H High Court| Can an act of dissent be labeled as sedition? 

Expressing that, in a democratic set-up, there always would be voices of dissent and opinions against rules and protest against actions, P&H HC, observed that, some protests may have aggression but still an act of dissent would not be ordinarily labeled as sedition. 

Bench added to its observation that, to attract an offence such as Section 124-A IPC, there must be deliberate resistance and conscious defiance of authority with a conceived plan aimed to unsettle elected government. 

Read here: https://www.scconline.com/blog/post/2022/05/26/can-an-act-of-dissent-be-labelled-as-sedition-punjab-and-haryana-high-court-law-legal-news-legal-updates/ 

Delhi High Court| Once tenant starts paying rent, can he/she turn around and challenge title of landlord? 

In a matter with regard to the grant of leave to defend, Subramonium Prasad, J., expressed that, the tenant cannot merely make allegations that the landlord has other premises without producing some material to substantiate the same. 

High Court added to its observations that, it is a well-settled position that a tenant may take all kinds of pleas in its application for leave to defend but the Rent Controller has to ensure that the purpose of Chapter III of the Rent Control Act is not defeated by granting leave to defend in every frivolous plea raised by the tenant which may result in protracting the case. 

Read here: https://www.scconline.com/blog/post/2022/05/27/once-tenant-starts-paying-rent-can-he-she-turn-around-and-challenge-title-of-landlord-delhi-high-court-law-legalnews-legal-updates/ 


Legislations


Motor Vehicles (Third Party Insurance Base Premium and Liability) Rules, 2022 

On May 25, 2022, the Ministry of Road Transport and Highways, in consultation with the Insurance Regulatory and Development Authority of India, has published Motor Vehicles (Third Party Insurance Base Premium and Liability) Rules, 2022 in order to revise the base premium for third party insurance for unlimited liability. The rules shall come into force on 1st June, 2022. 

Read here: https://www.scconline.com/blog/post/2022/05/26/base-premium-for-third-party-insurance-for-unlimited-liability-revised-vide-motor-vehicles-third-party-insurance-base-premium-and-liability-rules-2022/  

IFSCA (Fund Management) Regulations, 2022 

The International Financial Services Centers Authority has revised the Application and Registration Fee under IFSCA (Fund Management) Regulations, 2022. 

Read here: https://www.scconline.com/blog/post/2022/05/23/fee-structure-under-ifsca-fund-management-regulations-2022-revised/  


New Releases 


 

Legislation UpdatesStatutes/Bills/Ordinances

President gave assent to the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 on 29-09-2020.

The Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020

The Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020 (Ord. 2 of 2020) was promulgated on the 31-03-2020 which, inter alia, relaxed certain provisions of the specified Acts relating to direct taxes, indirect taxes and prohibition of Benami property transactions. Further, certain notifications were also issued under the said Ordinance.

The said Act will provide for the extension of various time limits for completion or compliance of actions under the specified Acts and reduction in interest, waiver of penalty and prosecution for the delay in payment of certain taxes or levies during the specified period.

Amendments to Income-tax Act, 1961 will also be made:

  • Providing of tax incentive for Category-III Alternative Investment Funds located in the International Financial Services Centre (IFSC) to encourage relocation of foreign funds to the IFSC.
  • deferment of a new procedure of registration and approval of certain entities introduced through the Finance Act, 2020.
  • providing for the deduction for donation made to the Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund (PM CARES FUND) and exemption to its income,
  • Incorporation of Faceless Assessment Scheme, 2019 therein, empowering the Central Government to notify schemes for faceless processes under certain provisions by eliminating physical interface to the extent technologically feasible and to provide deduction or collection at source in respect of certain transactions at a three-fourths rate for the period from 14th May, 2020 to 31st March, 2021.
  • Amendment to the Direct Tax Vivad se Viswas Act, 2020 to extend the date for payment without additional amount to 31-12-2020 and to empower the Central Government to notify certain dates relating to filing of declaration and making of the payment.
  • Finance Act, 2020 is also proposed to be amended to clarify regarding capping of the surcharge at 15% on dividend income of the Foreign Portfolio Investor.
  • Central Government empowered to remove any difficulty up to a period of 2 years and provide for repeal and savings of the Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020.

Read the detailed Act, here: Taxation & Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020


Ministry of Law and Justice

Cabinet DecisionsLegislation Updates

The Union Cabinet approved for withdrawing of the International Financial Services Centres Authority, 2019 Bill which was introduced in the Rajya Sabha on 12thFebruary, 2019 and pending in the Rajya Sabha and introducing the International Financial Services Centres Authority Bill, 2019 in the Lok Sabha in the ensuing session of the Parliament.

Benefits

Currently, the banking, capital markets and insurance sectors in IFSC are regulated by multiple regulators i.e. RBI, SEBI and IRDAI. The dynamic nature of business in the IFSCs necessitates a high degree of inter-regulatory coordination.  It also requires clarifications and frequent amendments in the existing regulations governing financial activities in IFSCs.

The development of financial services and products in IFSCs would require focused and dedicated regulatory interventions.  Hence a need is felt for having a unified financial regulator for IFSCs in India to provide a world-class regulatory environment to financial market participants.

Further, this would also be essential from an ease of doing business perspective. The unified authority would also provide the much-needed impetus to further development of IFSC in India in-sync with the global best practices.

Background

The Union Cabinet in its meeting held on February 6, 2019, had approved the proposal for the establishment of a unified authority for regulating all financial services through the introduction of the International Financial Services Centres Authority Bill 2019 in the Parliament.  Subsequently, the International Financial Services Centres Authority Bill, 2019 was introduced in the Rajya Sabha on February 12, 2019, by the then Hon’ble Minister of State (Finance).

The Lok Sabha Secretariat has now conveyed that this is a Finance Bill under Article 117(1) of the Constitution and that it should be introduced in Lok Sabha accordingly with the recommendation of the President under Article 117(1) and 274(1) of the Constitution.


Ministry of Finance

[Press Release dt. 20-11-2019]

[Source: PIB]