Interest payable on delayed payment of service tax

The Ministry of Finance has notified vide notification no. 12/2014 dated 11th July 2014 the rates of interest payable on delayed payment of service tax to the government. Accordingly,


1. Delay Up to six months                                              

18 per cent. per annum

2. Delay More than six months and upto one year

18 % for the first 6 months of delay and 24 % for the delay beyond six months and up to one year

3. Delay More than one year                                      

     18 per cent. for the first six months of delay; 24 per cent. for the period beyond six months up to                  one year and 30 per cent. for any delay beyond one year.

This revised penal interest will be applicable from 1st October, 2014. 

Change in definition of Related Party

The Ministry of Corporate Affairs has vide its gazetted order dated 9th July 2014 amended the definition of related party as it appears in the Companies Act, 2013.

Section 2(76)(v) hitherto stated as follows;

(v) a public company in which a director or manager is a director OR holds along with his relatives, more than two per cent. of its paid-up share capital;

this has been changed to

(v) a public company in which a director or manager is a director AND holds along with his relatives, more than two per cent. of its paid-up share capital;

so what it implies is that the director or manager should fulfill both conditions i.e. directorship as well as shareholding in a public company to be considered as a related party.

Checklist for SBRT FDI applicants

The department of industrial policy & promotion, government of India has created a checklist of documents/ data required by investors flocking into the Single Brand Retail Trade (SBRT) in India. There are about 21 sets of documents/ information / data required and each in turn require multiple documentation to be processed. For eg. main application should be in 18 copies enclosing memorandum & articles of association and certificate of incorporation of the foreign investor, the Indian party and Indian JV partners. Copies of shareholders agreement/ technology transfer agreement/ trademark/ brand assignment agreement. Pre and post shareholding structure. There are some compliance documents in respect of FDI into NBFC sector,

The same set of documents can be used in NRI/ EOU/ Multi brand retail trade also.

The details of the requirements are given in this link, here

ODI limit restored for Indian companies

RBI has vide its notification dated 3rd July 2014 here restored the limits upto which Indian companies can make investments via Overseas Direct Investment or Wholly owned subsidiaries abroad. The limit which was 400% of the networth as on the last audited balance sheet date was brought down to 100% of the net worth vide RBI circular dated 14th August, 2013 here.

However RBI has decided that any financial commitment by the Indian party exceeding USD 1 billion in any financial year shall require the prior approval of the RBI even though the total financial commitment is within the aforesaid limits of 400% of net worth.

The operative part of the July 2014 circular reads as follows:

2. On a review, it has been decided to restore the limit of Overseas Direct Investments (ODI)/ Financial Commitment (FC) to be undertaken by an Indian Party under the automatic route to the limit prevailing, as per the extant FEMA provisions, prior to August 14, 2013. It has, however, been decided that any financial commitment exceeding USD 1 (one) billion (or its equivalent) in a financial year would require prior approval of the Reserve Bank even when the total FC of the Indian Party is within the eligible limit under the automatic route (i.e., within 400% of the net worth as per the last audited balance sheet).

Bank pay in slips - nightmare

All the bank pay in slips after the implementation of CBS have become a nightmare filling in. There are so many information asked for in a cramped small document with tiny boxes that it becomes a nightmare filling in the details. A few samples are given below

For eg. Indian bank pay in slip has hardly any space for writing the amount in words. It is very difficult to write the amount in words in that given space.

in ICICI Bank pay in slip for eg. the space given for writing the a/c no. in those tiny little boxes are too little. If somebody has a bold handwriting, he will find it difficult to fit into that space. Further the name given for writing the name of the a/c holder is too little.

Bank of India is marginally better but still a nightmare, because too much information is asked for. Its like a clutter where you don't know what to fill in.

The Bank of Maharashtra pay in slip is undoubtedly the best because it gives so much space for people to write in the details, but i suspect this pay in slip is before the CBS came into force, so have not checked their newer version of pay in slips.

In short, RBI has facilitated the core banking solutions for people but somewhere down the line bureacracy takes over and more information is asked for in a clutter with too little space for people to write the details in clear manner.

It is other matter that bankers nowadays do not bother to give acknowledgement on pay in slips, but that i leave for another blog. 

Rip Off by Indian Railways - 2nd Class A.C passengers cheated

Wife travelled by Indian Railways from Chennai to Bombay via 12164 Chennai Express on 5th July 2014 which arrived into Bombay on 6th July 2014. She was travelling on a 2 tier A.C. ticket. Right from the outset at Chennai itself there was a rip off by Indian Railways as the 2 tier A.C. compartment had only 20 seats against the normal 64 seats in any compartment. With the result that the 2 tier A.C. passengers were forced to sit in 3 tier A.C. seats. The compartment was a combination of 2 tier A.C. and 3 tier A.C. seats.

The TTE (travelling ticket examiner) did not bother to offer any explanation nor any apology for this fracas and they were told by the regular maintenance staff of the Indian railways that this is a regular practice by the Indian Railways wherein the 2 tier class A.C. passengers are forced to sit in the 3 tier A.C. On top of it the TTE also forced the passengers to pay the difference in fares owing to the recent hike in fares by the Indian Railways. Therefore the passengers were paying the normal 2 tier A.C. ticket fare and they were forced to travel in 3 tier A.C. berths.

There was no prior intimation via SMS or any other means by the IRCTC wherein the passengers should have been informed by the Indian railways of the change in their status.

If this is a regular practice going on, then surely it is a scam in the making or a full fledged scam with the connivance of the higher authorities.

People book 2 tier A.C. berths due to the relatively better comfort it provides in terms of the extra space available in the compartment, less no. of passengers using the toilets, the privacy provided by the curtains etc. When people travel for long duration such as this train which takes 24 hours to reach from Chennai to Bombay, they obviously would want to travel in better comfort for which they are paying a premium amount on the 2 tier A.C. berths.

The passengers who suffered thus should be refunded the difference in fares and compensated for the mental tension and trauma that was created due to this fracas by Indian Railways. 

Atrocious service by Spice Jet

Spice Jet service sucks!!

Recently I travelled by spice jet from madurai to bombay via flight no. SJ 275 on 2nd July 2014. 

This was a full fare one way ticket from Madurai to Bombay for which I had paid Rs.12,500/- Unfortunately I was not given a complimentary meal on the flight which took more than 3 hours.

Secondly, I had requested a window seat, at Madurai terminal when I was probably the first person to check in at the counter. Unfortunately I was given seat no. 13A which is a non reclining seat just ahead of the emergency exit door. I mean is this customer service or inhuman service. Airline customer service executives are not human at all - they probably don't like human beings which is why they give such atrocious service. Such inhuman callous service can be found only with the airlines. 

Thirdly, the check in baggage took a long time coming to the belt at Mumbai terminal. It was 30 minutes before I got my baggage. Overall experience with Spice Jet was - it Sucks!!  I am a regular traveller on Spice Jet but I guess I will have to avoid going by Spice Jet anymore.