Notes-7 - Notes on Clauses - Swachh Bharat Cess - Finance Bill, 2015

Swachh Bharat Cess Clause 117 of the Bill seeks to insert a new Chapter VI so as to levy a cess to be called the Swachh Bharat Cess, as service tax on all or any of the taxable services for the purposes of the Union for financing and promoting Swachh Bharat initiatives and any other purpose relating thereto. Clauses 118 to 142 of the Bill seeks to insert a new Chapter VII in the Finance Bill, 2015 which deals with the Public Debt Management Agency. The said Chapter proposes-- (a) to empower the Central Government to establish an Agency called Public Debt Management Agency with a view to minimising the cost of raising and servicing public debt over the long-term within an acceptable level of risk at all times under the general superintendence of the Central Government; (b) to provide that the general superintendence, direction and management of the affairs and business of the Agency shall vest in the Board which shall consist of such number of executive and nominee Members as may be notified by the Central Government; (c) to specify the functions of the Agency which shall include- (i) collecting and publishing information about public debt, including borrowing by the Central Government otherwise than under this Chapter; (ii) purchasing, re-issuing and trading in Government securities; and (iii) carrying out such other transactions as may be required for management of public debt; (d) to provide that the Central Government shall entrust the Agency with the issue of Government securities; (e) to provide that the Agency shall be responsible for making the payment to holders of Government securities in accordance with the terms of such Government securities; (f) to empower the Central Government to issue directions to the Agency from time to time; and (g) to exempt the Agency from payment of taxes. Clauses 143 to 150 of the Bill seek to insert a new Chapter VIII relating to Senior Citizens Welfare Fund. Clause 143 of the Bill provides for the extent and commencement of the said Chapter. Clause 144 of the Bill defines certain terms and expressions. Clause 145 of the Bill provides for the establishment of a Fund known as the Senior Citizens Welfare Fund . Clause 146 of the Bill provides for the constitution of a Committee for administration of the said Fund. Clause 147 of the Bill deals with the payment of claims in respect of the unclaimed amount. Clause 148 of the Bill relates to publication of information with respect to the unclaimed amount by the Institutions. Clause 149 of the Bill provides that if no request is made with respect to such unclaimed amount within a period of twenty-five years, the same escheat to the Central Government. Clause 150 of the Bill deals with accounts and audit of the Fund. Clause 151 of the Bill empowers the Central Government to make rules and laying of the same before both Houses of Parliament. Clauses 152 to 153 of the Bill deal with power of the Central Government to exempt in certain cases and power of the Central Government to issue an order for removing the difficulties with respect to the implementation of the said chapter. Clause 154 of the Bill seeks to amend certain provisions of the Reserve Bank of India Act, 1934. It is proposed to amend section 17 of the said Act so as to insert a proviso providing that the Reserve Bank may exercise the functions specified in clauses (e) and (f) of sub-section (11) of said section, if the Central Government issues a notification under sub-section (2) of section 21 of the said Act entrusting the Bank with the functions of the managing public debt and issuing managing bonds and debentures of the Central Government. Clauses 155 to 157 of the Bill seeks to make further amendments in sections 21, 45U and 45W of the Reserve Bank of India Act, 1934. Clause 158 of the Bill seeks to amend certain provisions of the Forward Contracts (Regulation) Act, 1952. It is proposed to amend the said Act so as to insert a new section 28A which relates to saving of recognised associations. Clause 159 of the Bill seeks to insert a new section 29A which relating to repeal of the Forward Contracts (Regulation) Act and saving of certain provisions. It is also proposed to insert a new section 29B which relates to transfer and vesting of undertaking of the Commission with the Securities and Exchange Board of India. The said amendments are consequential in the light of insertion of the new Chapter Public Debt Management Agency . Clause 160 of the Bill seeks to amend certain provisions of the Securities Contracts (Regulation) Act, 1956. It is proposed to amend section 2 of the said Act so as to amend certain definitions and to insert new definitions like goods , commodity derivative , non-transferrable specific delivery contract , specific delivery contract , etc., in the said section. Clause 161 of the Bill seeks to amend section 18-A of the securities contracts (Regulation) Act, 1952 relating to contracts in derivatives so as to empower the central Government to notify such contracts in derivatives. Clause 162 of the Bill seeks to insert a new section 30A which relates to special provisions in respect of commodity derivatives. These amendments relate to the Securities Contracts (Regulation) Act, 1956 providing for merger of the Forward Market Commission and the Securities Exchange Board of India and are consequential in view of new Chapter VII Public Management Agency . Clause 163 seeks to amend the Second Schedule to the Finance (No. 2) Act, 1998, so as to increase the rates of additional duty of customs and additional duty of excise on motor spirit commonly known as petrol from rupees two per litre to rupees eight per litre. Clause 164 seeks to amend the Second Schedule to the Finance Act, 1999, so as to increase the rates of additional duty of customs and additional duty of excise on high speed diesel oil from rupees two per litre to rupees eight per litre. Clause 165 of the Bill seeks to amend certain provisions of the Foreign Exchange and Management Act, 1999. It is proposed to amend section 6 of the Act so as to provide that the Central Government may, in consultation with the Reserve Bank, prescribe any class or classes of capital account transactions, not involving debt instruments, which are permissible; the limit up to which foreign exchange shall be admissible for such transactions; and any conditions which may be placed on such transactions. It is further proposed to insert a new sub-section (7) in the said section which provides that the term debt instruments shall mean such instruments as may be determined by the Central Government in consultation with the Reserve Bank. Clauses 166 and 170 of the Bill seek to amend sections 18, 34, 46 and 47 of the Foreign Exchange and Management Act, 1999. The said amendments are consequential to the Part VII providing for the amendments to the Prevention of Money laundering Act, 2002. Clause 171 of the Bill seeks to amend sub-section (1) of section 2 of the Prevention of Money-laundering Act, 2002 (2002 Act) relating to definitions. Sub-clause (i) seeks to insert in clause (u), after the words, or the value of any such property , the words or where such property is taken or held outside the country, then the property equivalent in value held within the country . Subclause (ii) seeks to substitute in clause (y), the words thirty lakh rupees by one crore rupees . Clause 172 of the Bill seeks to amend the second proviso to sub-section (1) of section 5 of the 2002 Act so as to substitute the reference of clause (b) with the reference of first proviso and the said amendment is clarificatory in nature. Clause 173 of the Bill seeks to amend section 8 of the 2002 Act relating to Adjudication. Sub-clause (i) seeks to substitute the words Adjudicating Authority occurring in clause (b) of subsection (3) of said section with the words Special Court . Subclause (ii) seeks to amend section 8 of the Act by inserting subsection (8) so as to provide for restoring confiscated property, on the directions of Special Court, to claimants with legitimate legal interest who may have suffered a quantified loss as a result of the offences of money laundering. Clause 174 of the Bill seeks to amend section 20 of the 2002 Act. This clause seeks to amend sub-section (5) of the said section so as to substitute the words the Court or the Adjudicating Authority as the case may be , with the words Special Court . Sub-clause (ii) seeks to make modifications in sub-section (6) wherein reference to Special Court has been made instead of Court and to insert the expression receipt of in sub-section (6) to clearly specify the date from which the period of 90 days for which Enforcement Directorate can withhold release of property or record under section 20, shall be counted. Clause 175 of the Bill seeks to amend section 21 of the 2002 Act. Sub-section (5) of section 21 deals with the order of confiscation under sub-section (5) or sub section (7) of section 8, but does not deal with cases where the order of release is made by the Special Court under sub-section (6) of section 8 or under section 58B or order of confiscation under sub-section (2A) of section 60. Thus, sub-clause (i) seeks to substitute or release under sub-section (5) or sub-section (6) or sub-section (7) of section 8 or section 58B or sub-section (2A) of section 60 for under sub-section (5) or sub-section (7) of section 8 . Sub-clause (ii) seeks to substitute the words Adjudicating Authority with the word Court and seeks to insert the expression receipt of in sub-section (6) to clearly specify the date from which period of 90 days for which Enforcement Directorate can withhold release of property or record under section 21 shall be counted. Clause 176 of the Bill seeks to amend section 60 of the 2002 Act relating to attachment, seizure and confiscation, etc., of property in a contracting State or India. The power of confiscation vests with Special Court and not the Adjudicating Authority as mentioned in sub-section (2A) of section 60. Thus, this clause seeks to substitute the words Adjudicating Authority with the Special Court . Clause 177 of the Bill seeks to amend the Schedule to the 2002 Act. It seeks to insert section 132 of the Customs Act, 1962 as predicate offence in paragraph 1 to Part B. Clause 178 of the Bill seeks to amend section 4 of the fiscal responsibility and Budget Management Act, 2003 so as to enhance the period specified in the said section from 2015 to 2018. Clause 179 of the Bill seeks to omit section 95 of the Finance (No. 2) Act, 2004 with effect from such date as the Central Government may, by notification in the Official Gazette, appoint. Clause 180 of the Bill seeks to insert a new clause (5AA) in section 97 of the 2004 Act. It is also proposed to provide that taxable securities transaction shall also include sale of unlisted units of a business trust by any holder of such units which were acquired in consideration of a transfer referred to in clause (xvii) of section 47 of the Income-tax Act, 1961 under an offer for sale to the public included in an initial offer and where such units are subsequently listed on a recognised stock exchange. Clause 181 of the Bill seeks to amend the Table given under section 98 of the 2004 Act which specifies the rates at which the securities transaction tax shall be charged to provide for securities transaction tax at the rate of 0.2 per cent. to be payable by the seller on sale of unlisted units of a business trust under an initial offer. Clause 182 of the Bill seeks to amend section 100 of the 2004 Act to provide that- (a) the lead merchant banker appointed by the business trust in respect of an initial offer shall collect the securities transaction tax from every person who enters into a taxable securities transaction referred to in sub-clause (ab) of clause (13) of section 97 at the rate specified in section 98; and (b) the securities transaction tax collected during any calendar month from every person who enters into a taxable securities transaction referred to in sub-clause (ab) of clause (13) of section 97 at the rate specified in section 98 shall be paid by every recognised stock exchange or the lead merchant banker in the case of an initial offer to the credit of the Central Government by the seventh day of the month immediately following the said calendar month. Clause 183 of the Bill seeks to amend section 101 of the 2004 Act to provide that every stock exchange or the lead merchant banker in the case of an initial offer shall, within the prescribed time after the end of each financial year, prepare and deliver or cause to be delivered to the Assessing Officer or to any other authority or agency authorised by the Board on this behalf, a return in such form and setting forth such particular as may be prescribed, in respect of all taxable securities transaction entered into during such financial year in that stock exchang e. These amendments will take effect from 1st June, 2015. Clause 184 seeks to amend the Seventh Schedule to the Finance Act, 2005 so as to omit the sub-heading 2202 10 and the entries relating thereto. Clause 185 of the Bill seeks to amend certain provisions of the Government Securities Act, 2006. It is proposed to amend the said Act so as to insert a new section 34A relating to power of the Bank transitioned to the Public Debt Management Agency. Clause 186 of the Bill seeks to insert a new section 35A which relates to repeal of the 2006 Act on the date notified by the Central Government and saving of certain provisions. The said amendments are consequential in view of insertion of the new Chapter Public Debt Management Agency . Clause 187 of the Bill seeks to omit section 140 of the Finance Act, 2007so as to withdraw levy of Secondary and Higher Education Cess on taxable services with effect from such date as the Central Government may, by notification in the Official Gazette, appoint. Clause 188 of the Bill seeks to amend the Tenth Schedule to the Finance Act, 2010, so as to increase the rate of Clean Energy Cess on coal, lignite and peat from Rs. 100 per tonne to Rs. 300 per tonne .