Exim Bank of India issues Line of Credit of USD 35.00 million to the Government of the Republic of Guinea

Export-Import Bank of India (Exim Bank) has entered into an Agreement dated September 9, 2015 with the Government of the Republic of Guinea for making available to the latter, a Government of India supported Line of Credit (LOC) of USD 35.00 million (USD Thirty Five million) for construction and up gradation of regional hospitals at Kankan and Nzerekore in Guinea

RBI/2016-17/175 A.P. (DIR Series) Circular No. 21

. The goods, machinery, equipment, and services including consultancy services from India for exports under this Agreement are those which are eligible for export under the Foreign Trade Policy of the Government of India and whose purchase may be agreed to be financed by the Exim Bank under this Agreement. Out of the total credit by Exim Bank under this Agreement, the goods and services including consultancy services of the value of at least 75% of the contract price shall be supplied by the seller from India and the remaining 25% goods and services may be procured by the seller for the purpose of the eligible contract from outside India.

2. The credit agreement under the LOC is effective from November 21, 2016 and the date of execution of agreement is September 9, 2015. Under the LOC, the last date for opening of Letter of Credit and Disbursement will be 48 months for Project Export Contracts from the schedule completion date(s) of contract(s) and 72 months for supply contracts, from the date of execution of the Agreement.

3. Shipments under the LOC will have to be declared on EDF/ SDF Forms as per instructions issued by the Reserve Bank from time to time.

4. No agency commission is payable under the above LOC. However, if required, the exporter may use his own resources or utilize balances in his Exchange Earners’ Foreign Currency Account for payment of commission in free foreign exchange. Authorised Dealer Category- l (AD Category-l) banks may allow such remittance after realization of full payment of contract value subject to compliance with the prevailing instructions for payment of agency commission.

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India Launches 1000 MW Rooftop Solar PV Scheme for Government Sector




As a step towards fulfilment of the Government of India’s target for installation of 40 GW rooftop solar power plants by the year 2022, Solar Energy Corporation of India (SECI) has issued a tender of 1000 MW(09/12/2016) capacity for development of grid-connected rooftop solar capacity for Central Government Ministries/Departments.

The 1000 MW tender, one of the largest globally, is a move to rapidly escalate rooftop solar capacity in the country.

SECI is the leading PSU in the rooftop solar segment, and has already commissioned over 54 MW capacity of rooftop solar projects under multiple government schemes.

The upcoming 1000 MW tender is especially targeted at utilising the numerous buildings of the Central Government Ministries/Departments. The highlight of this tender is its innovative ‘Achievement-Linked Incentives scheme’ wherein the incentives in terms of capital subsidy shall be provided on the basis of performance achieved by designated Ministries/departments against their committed targets in the given timespan.

In this scheme the Grid connected rooftop solar systems shall be installed with the financial assistance for MNRE in the form of Incentives. The power generated from the systems shall be used for meeting the captive requirement of the buildings and the surplus power, if any, shall be fed to the grid under the net-metering arrangement of the respective State.

Ministry of New & Renewable Energy (MNRE) has allocated 21 Ministries/ Departments to SECI interalia Ministry of Human Resource Development, Ministry of Finance, Ministry of Urban Development, Ministry of Parliamentary Affairs etc. The ministries have shown great enthusiasm and have assured their commitment with submission of “Green Energy Commitment Certificates” to MNRE for implementation of Grid Connected SPV power plants at the roof of their offices/other buildings etc., as part of their Clean energy initiatives and achieving National target of alleviating Global Warming. Various ministries/department have been sensitized by MNRE/SECI for implementation of Grid connected rooftop systems.

MNRE has also collated the demand of the various Ministries/departments for implementation of the systems. Based on the indicative list of sites provided by MNRE and various interested Ministries, SECI is carrying out a potential assessment which shall be provided to the solar PV developers (SPD).

The SPDs will be selected state-wise through national competitive bidding process and provision of one Rate / state shall be kept in the scheme. The 1000MW capacity will be distributed between CAPEX and RESCO modes of implementation in the ratio 30/70.

In this scheme, SECI in consultation with MNRE, is also introducing a Payment Security Mechanism which is apparently a first in the history of the rooftop programme, with the assurance of all rightful payments to the SPDs under RESCO model. SECI has also tied up with Financial institutes (FIs) Banks such as IREDA and SBI for disbursement of loans with Special Discount Packages to be offered by these institutions to the developers.

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The ECOWAS Trade Liberalisation Scheme (ETLS) is the main ECOWAS operational tool for promoting the West Africa region as a Free Trade Area. This lies in tandem with the one of the objectives of the community which is the establishment of a common market through : the liberalisation of trade by the abolition, among Member States, of customs duties levied on imports and exports, and the abolition among Member States, of non-tariff barriers…


The rules of origin which guide this concept are defined in the ECOWAS protocol A/P1/1/03 of 31st January 2003. It defines out originating products as follows:

  • Wholly produced goods; goods whose raw materials completely originate from the region.
  • Goods which are not wholly produced but their production requires the exclusive use of materials which are to be classified under a different tariff sub-heading from that of the product.
  • Goods which are not wholly produced but their production requires the use of materials which have received a value added of at least 30% of the ex-factory price of the finished goods.

It must be noted that goods manufactured in free zones or special economic schemes involving suspension or partial or total exemption of entrance fees do not qualify for originating products status.


  • Calculation of the proportion of 60% local content of products (b) to (i) cited in article 3, paragraph j of the ECOWAS Treaty:{∑ QLocal ⁄ ∑Q (Local + Foreign)} × 100 ≥ 60%
  • The criteria for change of tariff headings, which must be reflected in the first 4 digits of the HS code
  • The calculation of value-added which must be at least 30% of the ex-factory price minus taxes of the products (article 4, paragraph 2 of the mentioned protocol):
    VA⁄Ex-factory Price × 100 ≥ 30%
  • Valued Added (VA) is the total ex-factory price minus CIF Value (or taxes) of raw materials and consumables. Components determining ex-factory cost price include: Raw materials, consumables, packaging and other expenditure borne by the company. Please note: Salaries and wages must not be more than 20% of the ex-factory cost price. Works, supplies, and external services must not be more than 10% of the ex factory cost price and must be directly tied to production. Financial charges must not be more than 30% of the ex factory cost price.”


The procedures for approval consist of two processes: the Enterprise procedures and the National Approvals Committee procedures.

Enterprise Procedure: The enterprise sends its completed application form and all supporting documents to the ministry responsible for ETLS matters in the country concerned.

National Approvals Committee Procedure: The Ministry sends completed application forms to members of the National Approvals Committee (specially set up to scrutinize ETLS applications). The Committee holds a series of meetings and discussions to examine all ETLS applications brought before it at the time. Approvals or disapprovals are then recommended.

The report of the Committee recommending approvals and disapprovals is submitted to the responsible Ministry which sends the report and dossiers on the recommended approvals to the ECOWAS Commission.

The ECOWAS Commission reassesses the applications and if satisfied with the NACs approvals, sends out notification letters to all Member States informing them of the newly approved enterprises and products.

It is after the notification letters are sent out, that approved enterprises obtain the Certificates of Origin for their approved products from their responsible Ministries.




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 Revised Double Taxation Avoidance Agreement (DTAA) between India and Cyprus





A revised Agreement between India and Cyprus for the Avoidance of Double Taxation and the Prevention of Fiscal evasion (DTAA) with respect to taxes on income, along with its Protocol, was signed on 18th November, 2016 in Nicosia, which will replace the existing DTAA that was signed by two countries on 13th June 1994.

Both sides have now exchanged notifications intimating the completion of their respective internal procedures for the entry into force of the DTAA, with which the revised DTAA shall come into effect in India in the fiscal year beginning on or after 1st April, 2017. The revised DTAA will enable source based taxation of capital gains on shares, except in respect of investments made prior to 1st April, 2017. In addition, the DTAA will also bring into effect updated provisions as per international standards and in accordance with the consistent position of India.


In a separate development, the notification of Cyprus under Section 94A of the Income Tax Act, 1961, as a notified jurisdictional area for lack of effective exchange of information, has been rescinded with effect from 1.11.2013 [Notification No. 114/2016 dated 14.12.2016].


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Harvard Business School professor Clayton M. Christensen coined the term disruptive technology in his 1997 best-selling book, “The Innovator’s Dilemma” and described it as one that displaces an established technology and shakes up the industry or a ground-breaking product that creates a completely new industry.


“Cloud Computing” defined in the report of the US National institute of Standards & Technology (NIST) as “a model for enabling ubiquitous, convenient on-demand network access to a shared pool of configurable computing resources (e.g. networks, servers, storage, applications, and services) that can be rapidly provisioned and released with minimal management effort or service provider interaction” has all the markings of a disruptive technology.


Essentially there are three types of “CLOUD” . “Public Cloud”, is a cloud in which services and infrastructure are hosted off-site by a cloud provider, shared across their client base and accessed by these clients via public networks such as the internet. “Private Cloud”, on the other hand use pooled services and infrastructure stored and maintained on a private network – whether physical or virtual – accessible for only one client. The “Hybrid Cloud” allows a user to maximise their efficiencies; by utilising the public cloud for non-sensitive operations while using a private setup for sensitive or mission critical operations.


Further , the types of services provided through “cloud” are  Infrastructure as a Service (IaaS ), Platform as a Service (PaaS) and)  Software as a Service (SaaS) . IaaS refers to the delivery of virtualised computing resource as a service across a network connection.


-IaaS specifically deals with hardware or computing infrastructure delivered as a service. Offerings include virtualised server space, storage space, network connections and IP addresses. The resource is pulled from a pool of servers distributed across data centres under the provider’s control, the user is then granted access to this resource in order to build their own IT platforms.

-PaaS is an extension of IaaS and describes a category of cloud computing that provides developers with environments in which to build applications, over the internet. In addition to the fundamental computing resource supplied by the hardware in an IaaS offering, PaaS models also include the software and configuration (often known as the solution stack) required to create the platform on which clients can create their applications. PaaS provides a number of benefits to enterprises, including simplifying the development process for geographically split development teams.


-SaaS is arguably the most common of the cloud computing variations; it’s the term used to describe a software delivery model in which applications are hosted (usually by a provider) and made available to customers over a network connection. Microsoft, Google, Amazon Web Services, Flickr, Twitter, Facebook, etc are all popular examples of SaaS.


Entities providing “Online/ Cloud “based services would be legitimately concerned about jurisdictional issues under GST. Cloud computing suppliers as well as consumers will need to focus on the following issues .

-In what State is the cloud computing vendor located? In what State is the consumer and its server (s) located?

-Where are the vendor’s server(s) located? Are certain servers (or server space) “fixed” and dedicated for specific consumers?

-What type of cloud computing is being provided (computer or date service, server space, software applications)? Is there a primary component?

The Key issue which would emerge would be that of “nexus”(which is essentially about administrative control); does a cloud computing transaction have sufficient contacts with a State in order to allow the State to impose GST on the transaction? If a transaction occurs “in the cloud”, does the transaction have sufficient contacts with any State to allow the State to pull the cloud, and its users, down to earth (i.e. establish nexus)? In order to satisfy the “nexus’’ requirement, must a supplier own or use servers located in the State? Or is it sufficient that the supplier is licensing software to customers in the state and a portion of the software to customers in the State resides at least temporarily, on the customer’s computer located in the State?  States would be inclined to take a position that entities that derive revenue from within their respective territorial jurisdiction have a registration and intra-state tax obligation.


The signature characteristic of cloud computing is that it allows a consumer to simultaneously engage servers, storage and bandwidth on an “as needed” basis. The result is that the customer may be consuming services (computer and data services) and space, while  simultaneously purchasing applications and the right to access data (lease of server space).

From GST perspective, this web of interactions would present many assessment related issues which would require streamlined and consistent handling.



Further, under IGST where there would inevitably be competing conflicting revenue interest between States w.r.t. a supply being intra-state or inter-state, a moot point to be pondered upon is whether assignment of IGST administrative powers to sub-national jurisdictions will have a disruptive effect on the growth prospects of “disruptive technologies” or not; This is something for all the stake holders to ponder upon.



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Rationalization of revised  simplified procedure for fixation of brand rates of Drawback



In context to the requirement of original duty paying documents furnished with reference to the claim of drawback being endorsed (defaced) by the verifying officer with the extent of utilization for the brand rate application  CBEC  has decided to  rationalize the revised simplified procedure as follows( CIRCULAR NO:54/2016 ; 22/11/2016) –


  • The working sheet (submitted by applicant with brand rate fixation claim) showing the drawback amount, each document wise, in support of claim, shall bear –


  • a declaration signed by applicant “It is declared that the details in this working sheet are correct and original duty paid documents shown herein have been endorsed/defaced to the extent of utilization under this brand rate fixation claim”, and


  • a certificate from an independent Cost Accountant/Chartered Accountant “It is verified that the details in this working sheet are correct and that the original duty paid documents shown herein have been endorsed/defaced to the extent of utilization under this brand rate fixation claim by the applicant”; and


  • Applicant shall file self-attested copies of the duty paid documents (like bills of entry, invoice etc.) carrying their self­ endorsement/defacement to the extent of utilization under the brand rate fixation claim.


  1. Based on the above, –


  • in future applications made under the revised simplified brand rate scheme the requirement of submitting original duty paying documents for endorsing/defacement by verifying officer during post-facto checking stage shall be dispensed except to the extent of random cross-verification of not more than 5 per cent originals of the self-attested copies of the total duty paid documents. The random selection shall be based on dynamic and relevant risk parameters as indicated by the Commissioner;


  • with respect to existing applications under the revised simplified brand rate scheme where brand rate letter is not yet issued or where it has been issued but post-facto verification is pending, the applicant may choose either to-


  • continue with the extant procedures; or


  • have the requirement of submitting original duty paying documents dispensed (subject to random cross-verification of originals) provided they self-endorse/deface the duty paid documents to the extent of utilization under the brand rate fixation and resubmit the working sheet with the above cited declaration and certificate.



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National Industrial Corridor Development & Implementation Trust for integrated development of Industrial Corridors 



The Union Cabinet has given its approval for the expansion of the mandate of Delhi Mumbai Industrial Corridor Project Implementation Trust Fund (DMIC-PITF Trust) and its re-designation as National Industrial Corridor Development & Implementation Trust (NICDIT) for integrated development of Industrial Corridors with permission to utilize financial assistance already sanctioned and sanction of additional amount of Rs.1584 crore within extended period up to 31SI March, 2022.


There is an existing approval for expenditure of Rs. 18,500 crore, out of which the unspent balance yet to be released to DMIC-PITF will be utilised by NICDIT. A further sum of Rs. 1584 crore for project development activities of four additional corridors and NICDIT’s administrative expenses upto 31.03.2022 has been provided.


The five Industrial corridors presently cover the States, namely, Punjab, Haryana, Uttar Pradesh, Uttarakhand, Bihar, Jharkhand, West Bengal, Madhya Pradesh, Rajasthan, Gujarat, Maharashtra, Karnataka, Andhra Pradesh, Tamil Nadu.


NICDIT would be an apex body under the administrative control of DIPP for coordinated and unified development of all the industrial corridors in the country. It will channelize Gol funds as well as institutional funds while ensuring that the various corridors are properly planned and implemented keeping in view the broad national perspectives regarding industrial and city development, and will support project development activities, appraise, approve and sanction projects. It will coordinate all central efforts for the development of Industrial Corridor projects and will monitor their implementation.


DMICDC will function as a knowledge partner to NICDIT in respect of all the Industrial Corridors in addition to its present DMIC work, till Knowledge Partner(s) for other Industrial Corridors are in place.


An Apex Monitoring Authority under the chairpersonship of the Finance Minister will be constituted to periodically review the activities of NICDIT and progress of the projects. It will consist of Minister-in-charge of Ministry of Commerce & Industry, Minister of Railways, Minister of Road Transport & Highways, Minister of Shipping, Vice-Chairman of NITI Aayog and Chief Ministers of States concerned as Members.


The Board of Trustees of NICDIT will consist of (i) Chairperson – Secretary, DIPP, (ii) Secretary, Department of Expenditure, (iii) Secretary, Department of Economic Affairs, (iv) Secretary, Road Transport & Highways,  (v) Secretary, Shipping (vi) Chairman, Railway Board, (vii) CEO, NITI Aayog, and (viii) Member Secretary, who will act as full time CEO of NICDIT. CEO, DMICDC will also function as Member Secretary/ CEO of the NICDIT.


The formation of the NICDIT will enable development and implementation of Industrial Corridor Projects across India by bringing in holistic planning and development approach and sharing the learning from development of Industrial Corridors, which will enable innovation in areas such as planning, design development and funding of such projects. This will help enhance the share of manufacturing in the country, attract investment in manufacturing and service industry sectors, which will have a catalytic effect on up-gradation and development of skills of the workforce and generation of employment opportunities.


Details and progress of schemes already running:


(i) Delhi Mumbai Industrial Corridor (DMIC) is the first such Industrial Corridor, approved by the Union Cabinet in 2011 with a grant of Rs. 17,500 crore as Project Implementation Fund, and an additional corpus of Rs. 1000 Crore for Project Development activities, to be provided over a period of five years for seven industrial cities in Phase-I of the project, Government of Japan has committed US$ 4.5 billion investment in the first phase of DMIC project.




Construction work in four industrial cities/townships namely, Dholera Special Investment Region (DSIR) near Ahmedabad in Gujarat, Shendra- Bidkin Industrial Park near Aurangabad in Maharashtra, Integrated Industrial Township Project, Greater Noida in Uttar Pradesh and Integrated Industrial Township Vila-am Udyogpuri near Ujjain in Madhya Pradesh. Other Projects under DMIC are at different stages of project planning and development.


(ii) Chennai- Bengalutu Industrial Corridor (CBIC): As per initial master planning, three Nodes, namely, Tumkur (Karnataka), Krishnapatnam (Andhra Pradesh) and Ponneri (Tamil Nadu) have been identified for development.


(iii) Bengaluru Mumbai Economic Corridor (BMEC):- State Government of Karnataka has identified Dharwad Node for Development. The Government of Maharashtra has given in principle approval for Development of a node in Sangli or Solapur Districts.


(iv) Amritsar-Kolkata Industrial Corridor (AKIC) will use Eastern Dedicated Freight Corridor (EDFC) of Railways as the backbone and the highway system that exist on this route. It is planned in such a way that there would be Integrated Manufacturing Clusters (IMCs) in each of the Seven State namely Punjab, Haryana, Uttar Pradesh, Uttarakhand, Bihar, Jharkhand and West Bengal.


The BMEC and AKIC projects are at early stages of project development.


(v) Vizag Chennai Industrial Corridor (VCIC):- In compliance of the commitment made by the Central Government in the Andhra Pradesh Reorganization Act, 2014, it was decided by the Department of Economic Affairs, Government of India that Asian Development Bank (ADB) which had been getting a feasibility study done in r/o East Coast Economic Corridor (ECEC) will also take up the study of VCIC as Phase I of ECEC. ADB team has since submitted the final report regarding Conceptual Development Plan (CDP) of VCIC. The process of Master Planning of the four nodes namely, Vishakhapalnam, Machilipatnam, Donakonda and Srikalahasti-Yerpedu of Andhra Pradesh, as identified by ADB in their CDP commenced in March 2016 and is likely to be completed by March 2017.






To accelerate the growth in manufacturing and for ensuring scientifically planned urbanization, Government of India (Gol) has adopted the strategy of developing integrated Industrial Corridors in partnership with State Governments with focus on manufacturing. Five Corridors namely, Delhi Mumbai Industrial Corridor (DMIC), Chennai-Bengaluru Industrial Corridor (CBIC), Amritsar Kolkata Industrial Corridor (AKIG), Bengaluru- Mumbai Economic Corridor (BMEC) and Vizag-Chennai Industrial Corridor (VCIC) have been planned for development by Government of India.




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