INCOME TAX
1. Govt. notifies Sovereign Gold Bond Scheme 2021-22
Introduction
The Government has notified Sovereign Gold Bond Scheme 2021-22. The Sovereign Gold Bonds will be issued in 4 tranches from November 2021 to March 2022. They will be sold through Scheduled Commercial banks, designated Post Offices, Stock Holding Corporation of India Ltd. (SHCIL), the authorised stock exchanges, and Clearing Corporation of India Limited (CCIL) or any other entity as may be approved by RBI.
Eligibility
The Gold Bonds under this Scheme may be held by a Trust, HUFs, Charitable Institution, University or by a person resident in India, being an individual, in his capacity as such individual, or on behalf of minor child, or jointly with any other individual.Procedure for making application for subscription to Gold Bonds
1. Any person who is desirous of subscribing to the Gold Bonds shall apply to any Receiving office in Form ‘A‘ or in any other form as near as thereto, stating clearly the grams of gold, full name and address of the applicant/s.
2. Every application shall contain such documents and particulars as specified in the instructions contained in the Application Form.
3. Every application must be accompanied by the ‘PAN Number‘ issued by the Income Tax Department to Individuals and other entities.
4. On receipt of an application under sub paragraph (i), the Receiving office shall issue an acknowledgment receipt in Form ‘B‘, if all requirements of the application are fulfilled.
5.An incomplete application is liable to be rejected.
PM Cares for Children scheme
Introduction
The union government has issued guidelines for PM-Cares for children scheme, which will provide comprehensive support for children who have lost their parents due to Covid-19 pandemic.
Eligibility criteria
The eligibility criterion for the scheme will cover all children who have lost both parents or surviving parent or legal guardian/adoptive parents/single adoptive parent due to Covid-19 pandemic, starting from 11 March, 2020 the date on which WHO has declared and characterized Covid-19 as pandemic till December 2021, will be entitled to benefits under this scheme.
The Entitlements under the scheme include:
1. Support for Boarding and Lodging:
(a) Efforts will be made by the District Magistrate with the assistance of Child Welfare Committee (CWC) to explore the possibility of rehabilitating the child within her/his extended family, relatives, kith, or kin. (b) If the extended family, relatives, kith or kin of the child are not available/not willing/not found fit by CWC or the child (aged 4 -10 years or above) is not willing to live with them, the child should be placed in foster care, after due diligence as prescribed under the Juvenile Justice Act, 2015 and rules made thereof as amended from time to time.
(c) If the Foster family is not available/not willing /not found fit by CWC, or the child (aged 4 -10 years or above) is not willing to live with them, the child 1Beneficiary/ Beneficiaries means eligible child beneficiaries under the PM CARES for Children Scheme. 3 should be placed in age appropriate and gender appropriate Child Care Institution (CCI).
(d) Children more than 10 years old, not received by extended families or relatives or foster families or not willing to live with them or living in child care institutions after the demise of parents, may be enrolled in Netaji Subhash Chand Bose Awasiya Vidyalaya, Kasturba Gandhi Balika Vidyalaya, Eklavya Model Schools, Sainik School, Navodaya Vidyalaya, or any other residential school by the District Magistrate, subject to the respective scheme guidelines.
(e) It may be ensured that the siblings stay together, as far as possible.
(f) For non-institutional care, financial support at the prevailing rates prescribed under the Child Protection Services (CPS) Scheme shall be provided to Children (in account with guardian). For child in institutional care, a maintenance grant at the prevailing rates prescribed under the Child Protection Services (CPS) Scheme shall be given to Child Care Institutions. Any provision for subsistence support under the State scheme may also be provided additionally to the children.
2. Assistance for Pre-school and School Education
(a) For children below 6 years of age Identified beneficiaries will receive support and assistance from the Anganwadi services for supplementary nutrition, pre-school education/ ECCE, immunization, health referrals, and health check-up.
1. For children below 10 years of age
(i) Admission shall be provided in any nearest school as a day scholar i.e. Government/ Government aided School/ Kendriya Vidyalayas (KVs)/ Private Schools.
(ii) In Government Schools, two sets of free uniform and textbooks shall be provided, under Samagra Shiksha Abhiyan, as per the scheme guidelines.
(iii) In private schools, tuition fees shall be exempted under section 12(1)(c) of RTE Act.
(iv) Under circumstances where child is unable to receive above benefits, the fees, as per the RTE norms, will be given from the PM CARES for Children scheme. The Scheme will also pay for expenditure on uniform, textbooks, and notebooks. A matrix of such entitlements is detailed out in Annexure-1.
2. For children between 11-18 years of age
(i) If the child is living with the extended family, then admission in the nearest Government/ Government aided School/ Kendriya Vidyalayas (KVs)/ Private Schools as a day scholar may be ensured by the DM.
(ii) The child may be enrolled in Netaji Subhash Chand Bose Awasiya Vidyalaya/ Kasturba Gandhi Balika Vidyalaya/ Eklavya Model Schools/Sainik School/ Navodaya Vidyalaya/ or any other residential school, by the DM, subject to the respective scheme guidelines.
(iii) The DM may make alternative arrangements for accommodation of such children during vacations at CCIs or any appropriate place.
(iv) Under circumstances where child is unable to receive above benefits, the fees, as per the RTE norms, will be given from the PM CARES for Children scheme. The scheme will also pay for expenditure on uniform, textbooks, and notebooks. A matrix of such entitlements is detailed out in the detailed annexure.
3. Assistance for Higher Education:
(i) The child will be assisted in obtaining education loan for Professional courses /Higher Education in India
(ii) Under circumstances where beneficiary is unable to avail interest exemption from extant Central and State Government scheme, then the interest on the educational loan will be paid from PM CARES for Children Scheme.
(iii) As an alternative, scholarship as per the norms will be provided to the beneficiaries of the PM CARES for Children Scheme from the schemes of Ministry of Social Justice and Empowerment, Ministry of Tribal Affairs, Ministry of Minority Affairs, and Department of Higher Education. Beneficiaries will be assisted through National Scholarship portal for availing such entitlements. The scholarship awarded to the beneficiaries will be updated on the PM CARES for Children portal.
Health Insurance:
(i) All children will be enrolled as a beneficiary under Ayushman Bharat Scheme (PM-JAY) with a health insurance cover of Rs. 5 lakhs.(ii) It shall be ensured that the child identified under PM CARES for Children scheme receives benefits under PM JAY
(iii) The details of benefits available to children under the scheme are at Annexure.
Financial Support:
(i) The lump sum amount will be transferred directly in the post office account of beneficiaries upon opening and validation of the account of the beneficiaries. A pro-rata amount will be credited upfront in the account of each identified beneficiary such that the corpus for each beneficiary becomes Rs. 10 lakhs at the time of attaining 18 years of age.(ii) Children will receive monthly stipend once they attain 18 years of age, by investing the corpus of Rs 10 lakhs. The beneficiary will receive stipend till they attain 23 years of age.
(iii) They will receive an amount of Rs. 10 lakh on attaining 23 years of age.
Goods & Service Tax
1. Clarifications on GST rates and exemptions applicable on 11 services
The Central Board of Indirect Taxes and Customs has issued a fresh GST Circular under the CGST Act on 6th October 2021. It is CGST Circular number 164/20/2021, clarifying the taxability of 09 services under the GST law.
The GST Council gave these clarifications at the 45th GST Council meeting held on 17th September 2021. These have been summarised as follows-
(i) Cloud kitchens or central kitchen services
The definition of ‘restaurant service’ in the CGST (Rate) Notification 11/2017 covers food sold as takeaway, doorstep delivery, and room services. Accordingly, food that is cooked and supplied as takeaway or doorstep delivery which is prevalent in the current times will be chargeable at the same GST rates as any in-dine service.
Hence, food supplied by cloud kitchens and central kitchens attracts a GST rate of 5% without availing input tax credit on materials used for restaurant services.
(ii) Sale of ice cream by the ice cream parlours
The government has clarified that since ice cream parlours or outlets do not make ice cream to sell it, they do not provide ‘restaurant services’. Therefore, it takes the nature of goods and not services. Also, the nature remains the same even if a slight element of service is included in such a supply of ice cream. For instance, supplying ice cream adding few more ingredients such as chocolate sauce while serving the customer.
Accordingly, a GST rate of 18% becomes applicable on ice cream sold by parlours or outlets.
(iii) Services of coaching provided to students by the coaching institutions and NGOs under the “Scholarships for Students with Disabilities” scheme of the Central Government
Here, the government provides 100% aid or grant for the benefit of students in the form of tuition fees and expenditures. It is given to the coaching institutes and can be from the central or state government. Such services are entirely exempted from GST.
(iv) Services of a satellite launch by M/s New Space India Limited (NSIL)
Many representations were received to recognise the services provided by the NSIL to international customers as exports. The benefit of a refund of IGST paid would then be available to the company. The same is similar to services provided by M/s ANTRIX Corporation Ltd that was clarified in the IGST Circular number 2/1/2017.
If the recipient is located outside India, it takes the nature of service export under zero-rated supply and is thus eligible for a refund. However, if it is a domestic transaction, then the satellite launch service becomes taxable under GST.
(v) Charges paid at the toll plaza for overloaded vehicles
It is well known that services of toll for access to roads or bridges are exempt from GST. Riders and drivers need not pay GST while paying toll charges.
Additionally, representations were made to clarify whether the overloading charges paid at toll plazas are otherwise subject to GST. It has been established that no GST is leviable on such overload charges paid since they take the nature of a higher toll fee (2, 4, 6, 8, or 10 times the basic toll fare).
(vi) Vehicle renting by state transport undertakings and local authorities
The contention was whether renting vehicles by state transport undertaking or local authorities can be treated in the same manner as giving vehicles on hire to them. The CGST (Rate) Notification number 12/2017 exempts hiring services where passengers are more than 12.
However, an advance ruling gave a contrasting viewpoint that renting is taxable despite hiring exempt, referring to the case law of the erstwhile service tax. The GST Council clarified that both are exempted at the 45th GST Council meeting, irrespective of rights available to the state transport undertaking or local authorities.
(viii) Services of granting mining and mineral exploration rights
The next clarification also pertains to a contrasting stand maintained by the advance ruling giving rise to doubts among the taxpayers.
While the GST rate for mineral exploration and mining rights after 1st January 2019 is undisputable at 18%, the issue pertains to the period between 1st July 2017 to 31st December 2018.
The GST Council referred to a general GST rate fixed for services at 18%. There is no specific mention of this supply in the rate notifications. Hence, a GST rate of 18% applies to granting of mining and mineral exploration rights.
(vii) Admission to amusement parks with rides, etc.
The word ‘amusement park’ was defined in Central Tax (Rate) Notification number 11/2017. The same notification prescribed a GST rate of 18% on admission to amusement parks until 1st October 2021. In comparison, a 28% GST rate was chargeable on admission to race clubs, casinos or sporting events such as the Indian Premier League (IPL).
The GST Council clarified that the higher rate applies to admission into locations with casinos, race clubs, and IPL matches, even with other activities. 18% GST rate applies to admission into theme parks, amusement parks for games and rides if it’s in the exact location as the casino or race club upon a condition. The premise should not allow common access into the casino or race club. The clarification also applies to the period before 1st October 2021.
(ix) Contractual services by manufacturers to brand owners for the making alcoholic liquor for human consumption.
The manufacturing of alcoholic drinks for human consumption as job work is subject to 18% and not 5%. Accordingly, it is also clarified that alcoholic beverage is not food or food product.
In addition to this circular, GST Circular number 163/2021 was also issued on the same day. It covered clarifications for GST rates on frozen, dried fruits, the difference between coconut and copra, batteries in the UPS system, specified renewable energy projects, etc.
SEBI
1. Sebi extends deadline for investment advisers to conduct annual compliance audit
For the financial year ending March 31, 2021, the investment advisers (IA) are now required to conduct the annual compliance audit by December 31, 2021, and submit the adverse findings of the audit, if any, by January 31, 2022.
Further, the date for obtaining a certificate from an auditor has been extended till December 31, 2021.
2. Minimum percentage of trades carried out by mutual funds through RFQ platform
1. SEBI, vide circular SEBI/HO/IMD/DF3/CIR/P/2020/130 dated July 22, 2020, has mandated mutual funds to undertake at least 10% of their total secondary market trades in Corporate Bonds through RFQ platform of stock exchanges.
2. Based on the recommendations of Mutual Fund Advisory Committee (MFAC), in order to further increase the liquidity on exchange platforms, para 1(A)(i) of the aforementioned SEBI circular is modified as under:
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a) On monthly basis, Mutual Funds shall undertake minimum 25% of their total secondary market trades by value (excluding Inter Scheme Transfer trades) in Corporate Bonds by placing/seeking quotes through one-to-many mode on the Request for Quote (RFQ) platform of stock exchanges and
b. On monthly basis, Mutual Funds shall now undertake minimum 10% of their total secondary market trades by value (excluding Inter Scheme Transfer trades) in Commercial Papers by placing/seeking quotes through one-to-many mode on the Request for Quote (RFQ) platform of stock exchanges. The percentages as specified above shall be reckoned on the average of secondary trades by value in immediate preceding three months on rolling basis.
4. Mutual Funds are permitted to accept the Contract Note from the brokers for transactions carried out in One to One (OTO) and One to Many (OTM) modes of RFQ platform.
Applicability of the circular
1. This circular shall come into force with effect from December 1, 2021.
2. This circular is issued in exercise of the powers conferred under Section 11(1) of the Securities and Exchange Board of India Act 1992, read with the provision of Regulation 77 of SEBI (Mutual Funds) Regulation, 1996 to protect the interests of investors in securities and to promote the development of, and to regulate the securities market.
FEMA
As part of the Digital India initiative, the Prime Minister of India, on 2nd August 2021 launched e-RUPI Digital Platform. e-RUPI is a digital payments network that helps India in implementing a robust digital money transactional system and boosting the fintech sector of India.
This digital payment platform has been developed by the National Payments Corporation of India (NPCI) with the help of the Department of Financial Services, the Ministry of health and family welfare, and the national health authority. "e-RUPI will guarantee that the money is used for offering benefits and assistance".
This platform is a cashless and contactless tool that will be used for making digital payments. It is a QR code or SMS string-based e-voucher which will be delivered to the mobile of the users. The users will be able to redeem this voucher without any digital payment app, internet banking, or card.
The primary goal of e-RUPI is to reach and link 190 million unbanked individuals and bring them into the official financial system.
Key Highlights of e-RUPI
Alternate to money, the voucher can be issued & the beneficiary will be able to use the voucher for a specific purpose:
Real-Time:
This platform is real-time and paperless. Health, nutrition, education, etc departments will be able to take advantage of this platform. This voucher is recognized by the Reserve Bank of India.
Direct Fund Transfers:
Through this platform, direct fund transfers can be made to the service provider.
One Time Usage and Non-Transferable:
This voucher can use only one time and only the person for whom this voucher has been issued can use it & it cannot be transferred to another person.
General Benefits of e -RUPI
(a) e- RUPI vouchers can be redeemed in health treatment, education, or any other endeavours, this method is an alternative method of using cash for the transaction.
(b) It is also available for the private sector to make payments to employees.
(c) Transaction transparency is the main benefit of e-Rupi. e-RUPI transaction method is secure and maintains the details of the beneficiaries completely confidential, maintaining their privacy.
(d) beneficiaries get to redeem their voucher(s) without a card, digital payments app, or internet banking access, at the service provider.
(e) Contactless - Beneficiary should not carry a printout of the voucher.
(f) Easy redemption - 2 step redemption process.
(g) Safe and Secure - Beneficiary doesn't need to share personal details while redemption hence privacy is maintained.
(h) No digital or bank presence required - Consumer redeeming the voucher need not have a digital payment app or a bank account.
Procedure To Redeem e-RUPI Voucher
Step 1- Show and Scan the e-RUPI QR code or SMS
The beneficiary has to show the e-RUPI QR code or SMS at the service provider outlet, which has to be scanned.
Step 2- Verification through OTP
(a) Beneficiary will receive an OTP
(b) This OTP has to be shared with the service provider
(c) The service provider enters this OTP and proceeds with the transaction and will receive the payment.
The importance of e-RUPI
Government launching e- RUPI is considered a move in the right direction towards digitalization. It demonstrates that the administration is keen to accepting electronic payments in the form of vouchers. This new initiative is initially projected to encourage and speed up the adoption of technology-based payments, and subsequently shifting from cash dependence to digital currency.
Conclusion
One of the aspects of digitalization is that money can be transferred into accounts of crores of beneficiaries with a single click of a button. Earlier, it was only done through physical mode. Today the country is giving a new dimension to digital governance. e-RUPI voucher is going to play a huge role in making digital transactions, and Direct Benefit Transfer more effective.
Over the years, the Government has launched several programs for the beneficiaries in a targeted and leakproof manner, with limited intermediaries between the government and the beneficiary. The concept of electronic vouchers takes forward this vision of good governance. The e-RUPI facility is initially available for health services and will be extended to other segments. It can also be used for delivering services under schemes meant for providing drugs and nutritional support, drugs & diagnostics under schemes like Ayushman Bharat Pradhan Mantri Jan Arogya Yojana, fertilizer subsidies, etc.
Companies Act 2013
PRIVATE PLACEMENT
Private placement means, any offer or invitation to subscribe shares of the Company to a select group of persons other than by way of Public offer by the Company. Governing section 42 of the Companies Act, 2013 specifies the conditions to be satisfied for the private placement offer-cum-application.
A Private placement offer shall be made only to a select group of persons identified by the Board and be previously approved by the Shareholders of the Company by a Special resolution for each of the offers or invitations. The offer or invitation shall not be made to more than 200 persons in aggregate in a financial year. Any offer or invitation made to qualified institutional buyers or to employees of the Company under ESOP shall not be counted for the limit of 200 persons.
(i) Private Placement offer-cum-application letter shall be made in the form PAS-4 serially numbered and specifically addressed to the person to whom the offer is made and shall be sent to him either in writing or through electronic mode.
(ii) The Company shall maintain the record of all the offers made in Form PAS-5.
(iii)Every identified person willing to subscribe to the private placement shall apply in the application issued to him along with subscription money paid either by cheque or DD or any other banking channel and not by cash.
(iv) The Company shall allot the shares within 60 days from the date of receipt of application money.
(v) If the Company is not able to allot the shares within 60 days, it shall refund the application money within 15 days from the expiry of 60 days and if the company fails to refund the money within that 15 days, it shall repay the application money along with interest at the rate of 12 percent p.a from the expiry of 60th day.
(vi) The Company shall not utilize the monies raised through private placement unless allotment is made and return of allotment is filed with the registrar.
(vii) The monies received shall be kept in a separate bank account and shall be utilized only for adjustment against allotment of shares or for the refund of application money, if the company fails to allot it within 60 days.
(viii) A return of allotment shall be filed with the registrar in form PAS-3 within 15 days of allotment of shares along with a complete list of all the allottees, their full names, addresses, number of shares allotted and other such relevant information.
(ix) If a company defaults in filing the return as mentioned above, its promoters, directors shall be liable to a penalty for each default of Rs.1000 a day for each day during which the default continues upto a maximum of Rs.25 lakhs in total.
(x) No fresh offer or invitation under sec.42 shall be made by the Company unless the allotments have been completed for prior offers or invitations or it has been withdrawn or abandoned by the Company.
(xi) The Company shall not release any public advertisements or utilize any media, marketing or distribution channels or agents to inform about this issue under private placement.
(xii) When a company makes an offer or accepts monies in contravention of section 42, the company, its promoters and directors shall be liable for a penalty which may extend to the amount raised through the private placement or Rs, 2 Crores, whichever is lower, and the company shall also refund all monies with interest as specified above to subscribers within a period of thirty days of the order imposing the penalty.
(xiii) Any private placement issue not made in compliance of the provisions of 42(2) shall be deemed to be a public offer and all the provisions of this Act and the Securities Contracts (Regulation) Act, 1956 and the Securities and Exchange Board of India Act, 1992 shall be applicable as it applies to a public offer.
Taxation
Ice cream Parlours – Supplier of Goods or service? – Critical Analysis
The CBIC has recently issued CIRCULAR NO. 164/20/2021-GST dt 6.10.21. In this article we submit our critical analysis and legal submissions w.r.t. treating the supply of ice-creams by ice-cream parlours as a supply of goods.
Supply of restaurant service, other than at 'specified premises' is taxable at 5% [(Heading 9963)-sr. 7(ii) of CTR 11/2017] without the benefit of input tax credit [ITC].'Specified premises' means premises providing 'hotel accommodation' services having declared tariff of any unit of accommodation above Rs. 7,500 per unit per day or equivalent. [Para 4[(xxxvi) of the CTR Notfn. 11/2017].
Supply of restaurant service at 'specified premises', is taxable at 18% [sr. 7(vi) of CTR 11/2017] with benefit of ITC.
It needs to be noted that for restaurant service, other than at 'specified premises', tax rate of 5% is mandatory. In other words, such a restaurant cannot opt to pay GST at 18% and take benefit of ITC.
The discussion in this article is limited to the supply of ice cream by ice cream parlours.
As per CBIC, ice creams sold by a parlour or such stores need to pay 18% Goods and Services Tax (GST).
The Central Board of Indirect Taxes and Customs (CBIC) clarified on the issues, in two sets of circulars, raised by trade and industry on rates changes related to 21 goods and services, the decision of which was taken at the 45th GST Council meeting on September 17.
CBIC said that the ice cream parlours already manufactured ice cream and do not have the character of a restaurant.
"Ice-cream parlors do not engage in any form of cooking at any stage, whereas, restaurant service involves the aspect of cooking/preparing during the course of providing service," it said.
It clarified that their activity entails supply of ice cream as goods (a manufactured item) and not as a service, even if certain ingredients of service are present, adding this would attract GST at the rate of 18%. The CBIC also highlighted that services by cloud kitchens or central kitchens will fall under restaurant services.
Services provided by restaurants, cafes and similar eating facilities, including takeaway services, room services and door delivery of food comes under 'Restaurant service'. Accordingly, service by an entity, by way of cooking and supply of food, even if it is exclusively by way of takeaway or door delivery or through or from any restaurant, would be covered by restaurant service, it said.
The CBIC said services by cloud kitchens or central kitchens will attract 5% GST, without ITC (without input tax credit or ITC) benefit. With regard to fresh and dried fruits and nuts, the CBIC said fresh fruit and nuts would cover those which are meant to be supplied in the state as plucked. They continue to be fresh even if chilled. However, fruit and nuts do not qualify as fresh once frozen (cooked or otherwise), or intentionally dried to dehydrate including through sun drying, evaporation or freezing, for supply as dried fruits or nuts. At present, fresh nuts (almond, walnut, hazelnut, pistachio etc) are exempt from GST, while dried nuts under these headings attract 5 and 12 percent GST. Therefore, "exemption from GST to fresh fruits and nuts covers only such products which are not frozen or dried in any manner as stated above or otherwise processed," the CBIC said, adding that supply of dried fruits and nuts will attract five and 12% GST.
1. Whether cooking is essential to be considered as a "restaurant":
The circular has considered cooking/making of ice cream as an essential qualification for a "restaurant service". Para 4(xxxii) of the Explanation in CTR Notfn. 11/2017] explains, 'restaurant services' as follows:'Restaurant service' means supply, by way of or as part of any service, of goods, being food or any other article for human consumption or any drink, provided by a restaurant, eating joint including mess, canteen, whether for consumption on or away from the premises where such food or any other article for human consumption or drink is supplied.
As can be seen, the condition of "cooking/making" is nowhere mentioned in the said explanation. On the other hand, the emphasis seems to be on "supply by way of or as part of any service".
An ice cream parlour sells ice cream either in tubs, as supplied by the manufacturer or in scoops, cones or waffles. Of course, in any case, supply of pre-packed tubs is supply of goods because there is no element of service but for supply as scoops or in cones, waffles, there is always an element of service.
2. Advance Rulings on the issue, so far:
It would be interesting to see the views insome Advance Rulings:Supply of ice cream at outlets: Karnataka AR Authority has held that ice creams, chocolates, ice cream cakes and pizza cakes made as per the orders of the customers and served in IBACO outlets are covered under Heading 9963 and liable to tax at 5%. [Karnataka AR dated 21st Sep. 2019 in Hatsun Agro Product]. It seems that these outlets were factory owned, hence the aspect of cooking/making may not have been relevant to decide the rate of tax.
Resale of ice-cream by ice cream parlour-Telangana AR Authority has held that supply by an ice cream parlour of ice cream and ice cream allied products, milk shakes served in the parlour with or without adding ingredients like fruits or topping sauces according to the customer taste or requirements is 'restaurant service'. [Telangana AR dated 2nd Mar. 2020 in Sri Venkateshwara Agencies]. Thus, this AR Authority seems to hold the view that resale of already manufactured ice cream can also be a 'restaurant service'.
Resale of food & bakery products-Kerala AR Authority had been faced with a similar question i.e. whether resale of food & bakery products fall under 'restaurant services'. In the premises, tables were provided for customers who like to eat food items procured from the counter. The AR Authority held that a restaurant is a place of business where food is prepared in the premises and served based on the orders received from the customer hence such a resale was not considered as a 'restaurant service'. [Kerala AR dated 30th Sep. 2019 in Square One Homemade Treats].
Conclusion
Even though the circular speaks only about ice cream parlours, this clarification could become applicable from 1st July 2017 also for cake serving places or for that matter any such establishment, which supplies [even if some ingredients of service are present] already manufactured goods. Due to the circular, a new dimension gets added to 'restaurant service', i.e. necessity of cooking, making etc., which is not expressed in explicit terms either in the CTR Notfn. 11/2017 or the Explanatory Notes to Classification of Services. The Advance Ruling Authorities also are divided on the issue. The Service Tax Guide, 2012 also seems to be silent on this aspect of cooking etc. In any case, amendment of the notification could have been a better option rather than a clarification to consider this as supply of goods. An issue could also arise in case an ice cream parlour also supplies(serves) food article like say falooda by mixing all the ingredients on it's premises. Then, whether such an ice cream parlour would be said to be supplying goods (ice cream) as well as services (falooda etc.). In other words, whether this qualification regarding cooking/making shall be applicable qua entity or qua supply transaction. This issue also may arise and hence needs to be clarified.
TRENDING TOPIC
STOCK EXCHANGE
Stock traders can trade corporation stocks and other securities on a stock market. Only if a stock is listed on an exchange can it be purchased or sold. As a result, it serves as a meeting point for stock market participants. The Bombay Stock Exchange and the National Stock Exchange are India's two most important stock exchanges.
Some stock exchanges have listing criteria that include:
New York Stock Exchange (NYSE): To be listed on the NYSE, a firm must have issued at least 1.1 million shares of stock worth $40 million and earned at least $10 million in the previous three years.
NASDAQ Stock Exchange: To be listed on NASDAQ, a business must have issued at least 1.25 million shares of stock valued at at least $70 million and earned at least $11 million in the previous three years.
The London Stock Exchange's main market needs a minimum market capitalization of £700,000, three years of audited financial accounts, and a minimum public float of 10%. (25 percent )
Started in 1994, the National Stock Exchange (NSE) is the largest stock exchange in India in terms of total and average daily turnover for equity shares. Being a pioneer in technology, NSE has a fully-integrated business model to provide high-quality data and services to market participants and clients. It includes trading services, exchange listings, indices, market data feeds, clearing and settlement services, financial education offerings and technology solutions. NSE ensures that trading and clearing members and listed companies follow the rules and regulations of the exchange.
BSE - Bombay Stock Exchange was founded in 1875 and is Asia's first and fastest stock exchange, with a speed of 6 microseconds. It is also one of India's top exchange groups. BSE has aided the expansion of the Indian corporate sector by offering an effective capital-raising platform for the past 143 years. In 2017, BSE became India's first publicly traded stock exchange. The Indian Clearing Corporation Limited, a business unit of the BSE, operates as the central counterparty for all trade conducted on the BSE stock trading and provides great novation, enabling the settlement of all legitimate traders.
It has approximately 40,000 trade endpoints distributed over 400 locations, connected via 2918 Rental Connections and 1841 VSAT ports. BSE is an Autonomy Organization (SRO) that ensures transparency to all stakeholders and has an established monetary transmission technology that helps facilitate on-time transactions. It has ISO-certified systems for transaction processing, information technology, and enforcement, and its attributes help settlement processes backed by cutting-edge clearing and system devices.
A stock market index is a statistical measure which shows changes taking place in the stock market. To create an index, a few similar kinds of stocks are chosen from amongst the securities already listed on the exchange and grouped together.
The criteria of stock selection could be the type of industry, market capitalisation or the size of the company. The value of the stock market index is computed using values of the underlying stocks. Any change taking place in the underlying stock prices impact the overall value of the index. If the prices of most of the underlying securities rise, then the index will rise and vice-versa.
In this way, a stock index reflects overall market sentiment and direction of price movements of products in the financial, commodities or any other markets.
Some of the notable indices in India are as follows:
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1. Benchmark indices like NSE Nifty and BSE Sensex
2. Broad-based indices like Nifty 50 and BSE 100
3. Indices based on market capitalization like the BSE Smallcap and BSE Midcap
4. Sectoral indices like Nifty FMCG Index and CNX IT
Here is when the importance of assigning weights to stocks comes into play. Each stock in the index is assigned a particular weightage based on its market capitalization or price. The weight represents the extent of the impact that the stock’s price change has on the value of the index.
The two most commonly used stock market indices are as follows:
Market-cap weightage
Market capitalization refers to the total market value of the stock of a company. It is calculated by multiplying the total number of outstanding stocks floated by the company with the share price of a stock. It, therefore, considers both the price as well as the size of the stock. In an index which uses market-cap weightage, the stocks are assigned weightage based on their market capitalization as compared to the total market capitalization of the index.
Suppose a stock has a market capitalization of Rs. 50,000 whereas the underlying index has a total market-cap of Rs. 1,00,000. Thus, the weightage given to the stock will be 50%.
It is important to note that market capitalization of a stock changes every day with the fluctuation in its price. Due to this reason, weightage of the stock would change daily. But usually such a change is marginal in nature. Moreover, the companies with higher market-caps get more importance in this method.
In India, free-float market capitalization is used by most of the indices. Here, the total number of shares listed by a company is not used to compute market capitalization. Instead, use only the amount of shares available for trading publicly. Consequently, it gives a smaller number than the market capitalization.
Price weightage
In this method, the value of an index value is computed based on the stock price of a company rather than the market capitalization. Thus, the stocks which have higher prices receive greater weightages in the index as compared to the stocks which have lower prices. This method has been used in The Dow Jones Industrial Average in the US and the Nikkei 225 in Japan.
In our next article let us understand on how to invest in Stock exchange in India.