Latest Blogs from SBS and Company LLP

    External Commercial Borrowings (ECB) Policy – Liberalisation

    1. Liberal procedures for Oil Marketing Companies (OMCs):

    Under the existing policy, ECB can be raised under Track I and III for working capital purposes from direct and indirect equity holders or from a group company with a minimum average maturity of 5 years. It has been decided, in consultation with the Government of India, to liberalise the provisions and permit public sector OMCs to raise ECB for working capital purposes with minimum average maturity period of 3 or 5 years from all recognized lenders under the automatic route.

    Further, the individual limit of USD 750 million or equivalent and mandatory hedging requirements as per the ECB framework have also been waived for borrowings under this dispensation. However, OMCs should have a Board approved forex mark to market procedure and prudent risk management policy for ECBs referred above.

    The overall ceiling for such ECBs shall be USD 10 billion equivalent and the said facility will come into effect from the date of this Circular.

    For more details, refer Notification No. RBI/2018-2019/54, A.P. (DIR Series) Circular No. 10 dated 3rd October, 2018.

    Introduction:

    Foreign Investment in to India comprises of both direct foreign investment from non-residents and indirect investments through resident Indian entities having such direct foreign investment. Indirect Foreign Investment is often referred to as “Downstream Investment (DI)” under FEMA.

    MCA UPDATES RULES, CIRCULARS, NOTIFICATIONS AND ORDERS ISSUED  DURING THE MONTH OF OCTOBER, 2018 

    RULES

    No Rules were issued during the month.

    NOTIFICATIONS

    • Constitution of National Financial Reporting Authority (NFRA), Dt: 01.10.2018. 

    Vide the said Notification, the Central Government has appointed  the 1st October 2018 as the date of constitution of National Financial Reporting Authority (NFRA). 

    http://www.mca.gov.in/Ministry/pdf/ConstitutionNotificationNFRA_04102018.pdf 

    Section 45(1) of Income Tax Act, 1961 provides for taxability of profits or gains on transfer of Capital Asset in the year of transfer. The term ‘transfer’ inter-alia includes any transfer allowing the possessing of immovable property in part performance of contract referred to in 53A of Transfer of Property Act, 1882 (‘TOPA’).

    Sec 53A of TOPA protect the interest of the transferee in case where he as part of contract has performed his part either in full or part and any enjoying the possession of the property pending registration.

    Ambit of 29A of IBC – Decoding ArcelorMittal v Satish Kumar Gupta

    The recent judgment of the apex court in the case of ArcelorMittal India Private Limited vs Satish Kumar Gupta and Others has revealed the true ambit and intent of Section 29A of Insolvency and Bankruptcy Code, 2016 (IBC). Section 29A has been introduced with effect from 23.11.17 to restrict persons who are not eligible to become resolution applicants.