MEMO - MEMORANDUM REGARDING DELEGATED LEGISLATION - Finance Bill, 2016

MEMORANDUM REGARDING DELEGATED LEGISLATION Clause 43 of the Bill seeks to insert a new section 80-IBA in the Income-tax Act relating to deductions in respect of profits and gains from housing projects. Sub-section (2) of the proposed section provides that for the purposes of sub-section (1) of the said section, a housing project shall fulfil the conditions specified therein. Clause (a) of sub-section (2) of the said section provides that a housing project shall be that project which is approved by the competent authority after the 1st day of June, 2016, but on or before the 31st day of March, 2019, in accordance with such guidelines as may be prescribed; Clause 47 of the Bill seeks to amend section 92D of the Income-tax Act relating to maintenance and keeping of information and document by persons entering into an international transaction or specified domestic transaction. The proposed amendment seeks to provide that any person, being a constituent entity of an international group, shall also keep and maintain such information and document in respect of an international group as may be prescribed. Clause 49 of the Bill seeks to insert a new section 115BA in the Income-tax Act relating to tax as income of certain domestic companies. Sub-section (2) of the proposed section provides that for the purposes of subsection (1), while computing the total income of the company, the depreciation under section 32 is determined in the manner as may be prescribed. Subsection (4) of the proposed section further seeks to provide that the option by the person referred to in subsection (1) shall be exercised in the prescribed manner on or before the due date specified under sub-section (1) of section 139 for furnishing the return of income for the relevant previous year. Clause 56 of the Bill seeks to amend section115QA of the Income-tax Act relating to tax on distributed income to shareholders. The proposed amendment seeks to provide that the expression distributed income means the consideration paid by the company on buy-back shares as reduced by the amount, which was received by the company for issue of such shares shall be determined in the manner as may be prescribed. Clause 85 of the Bill seeks to amend section 206AA of the Income-tax Act relating to requirement to furnish Permanent Account Number. The proposed amendment seeks to provide that the provisions of sub-section (7) shall not apply to a non-resident, not being a company, or to a foreign company, in respect of payment of interest on long-term bonds as referred to in section 194LC and any other payment subject to such conditions as may be prescribed. Clause 86 of the Bill seeks to amend section 206C of the Income-tax Act relating to profits and gains from the business of trading in alcoholic liquor, forest produce, scrap, etc. The proposed amendment seeks to insert a proviso in sub-section (1D) of said section so as to provide that nothing contained in the said sub-section, in relation to sale of any goods (other than bullion and jewellery) or providing services, shall apply to a class of buyers who fulfils such conditions as may be prescribed. Clause 97 of the Bill seeks to insert a new section 270AA in the Income-tax Act relating to immunity from imposition of penalty. The proposed amendment seeks to provide that to claim immunity from imposition of penalty under section 270A of the Income-tax Act and immunity from initiation of proceedings under section 276C of said Act, the assessee has to make an application to the Assessing Officer within one month from the end of the month in which the order referred to in clause (a) of sub-section (1) has been received and shall be made in such from and verified in such manner as may be prescribed. Clause 110 of the Bill seeks to insert a new section 286 in the Income-tax Act relating to furnishing of reports in respect of international group. Sub-section (1) of the proposed section seeks to provide that every constituent entity resident in India, shall, if it is constituent of an international group, the parent entity of which is not resident in India, notify the prescribed income-tax authority in the form and manner, as may be prescribed, whether it is the alternate reporting entity of the international group or the details of the parent entity or the alternate reporting entity, if any, of the international group, and the country or territory of which the said entities are resident, on or before the due date as may be prescribed. Sub-section (2) of the proposed section further seeks to provide that every parent entity or the alternate reporting entity, resident in India, shall, for every reporting accounting year, in respect of the international group of which it is a constituent, furnish a report, to the prescribed authority on or before the due date specified under sub-section (1) of section 139, for furnishing the return of income for the relevant accounting year, in the form and manner as may be prescribed. Sub-section (8) of the proposed section also seeks to provide that the provisions of the said section shall not apply in respect of an international group for an accounting year, if the total consolidated group revenue, as reflected in the consolidated financial statement for the accounting year preceding such accounting year does not exceed the amount, as may be prescribed. Sub-section (9) of the proposed section also seeks to provide that the provisions of the said section shall be applied in accordance with such conditions, as may be prescribed. Indirect-tax Clause 118 of the Bill seeks to insert a proviso in sub-section (1) of section 47 of the Customs Act so as to empower the Central Government to permit certain class of importers, specified by notification in the Official Gazette, to make deferred payment of duty or any charges, in the manner provided by rules. The said Clause also seeks to amend sub-section (2) of said section. Clause (b) thereof, empowers the Central Government to specify by rules the due date for making deferred payment of duty. Clause 119 of the Bill seeks to renumber section 51 of the Customs Act as sub-section (1) thereof and to insert a proviso in sub-section (1) so as to empower the Central Government to permit certain class of exporters, specified by notification in the Official Gazette, to make deferred payment of duty or any charges in the manner provided by rules. The said clause also seeks to insert sub-section (2) therein to empower the Central Government to specify, by rules, the due date for making deferred payment of export duty. It also empowers the Central Government to fix, by notification in the Official Gazette, the rate of interest not below five per cent. and not exceeding thirty-six per cent. per annum. Clause 120 of the Bill seeks to substitute a new section for section 53 of the Customs Act. The proposed new section 53 seeks to empower the Board to make regulations to provide for conditions subject to which the proper officer may allow the goods and the conveyance to transit without payment of duty. Clause 121 of the Bill seeks to substitute a new section for section 57 of the Customs Act. The proposed new section seeks to empower the Board to make regulations to provide for conditions subject to which the Principal Commissioner of Customs or Commissioner of Customs may licence a public warehouse wherein dutiable goods may be deposited. Clause 122 of the Bill seeks to substitute new sections 58,58A and 58B for section 58 of the Customs Act. The proposed section 58 seeks to empower the Board to make regulations to provide for conditions subject to which the Principal Commissioner of Customs or Commissioner of Customs may licence a private warehouse in which dutiable goods imported by or on behalf of the licensee may be deposited. The proposed section 58A seeks to empower the Board to make regulations to provide for conditions subject to which the Principal Commissioner of Customs or Commissioner of Customs may licence a special warehouse wherein dutiable goods may be deposited. Clause 123 of the Bill seeks to substitute a new section for section 59 of the Customs Act. Sub-section (3) of the proposed section 59 seeks to empower the Board to make regulations to provide for furnishing of security by the importer. Clause 124 of the Bill seeks to substitute a new section for section 60 of the Customs Act. Sub-section (2) of the proposed section 60 seeks to empower the Board to make regulations to provide for the manner in which goods may be deposited in a warehouse pursuant to an order made by the proper officer permitting removal of goods from customs station for the purpose of deposit in a warehouse. Clause 134 of the Bill seeks to insert a new section 73A in the Customs Act. Sub-section (2) of the proposed section 73A seeks to empower the Board to make regulations to provide for the responsibilities of the person who has been granted licence under section 57 or section 58 or section 58A, who has the custody of the warehoused goods. Clause 148 of the Bill seeks to renumber the existing provision of section 67A of the Finance Act,1994 as sub-section (1) thereof and to insert a new sub-section (2) therein. The proposed sub-section (2) seeks to empower the Board to make regulations to provide for the time or the point in time with respect to the rate of service tax. Clause 171 of the Bill seeks to provide that in respect of matters relating to equalisation levy, the appeal to be filed by the assessee before the Commisssioner of Income-tax shall be in such form and verified in such manner as may be prescribed and shall be accompanied by a fee of one thousand rupees. Clause 209 of the Bill seeks to insert a new Chapter XI to provide for the Indirect Tax Dispute Resolution Scheme, 2016. Sub-section (1) of section 211 of the Scheme seeks to empower the Central Government to make rules to provide for the form and the manner in which a person may make declaration to the designated authority on or before the 31st day of December, 2016. Sub-section (2) of said section seeks to empower the Central Government to make rules to provide for the form and the manner in which the designated authority shall acknowledge the declaration. Sub-section (4) of said section seeks to empower the Central Government to make rules to provide for the form in which the designated authority shall pass an order of discharge of dues. Clause 215 of the Bill provides for rule making power of the Central Government under the Indirect Tax Dispute Resolution Scheme, 2016. Clause (d) of sub-section (2) of section 215 provides for residuary power to make rules to the Central Government under the said Scheme. 2. The matters in respect of which rules or regulations may be made or notifications may be issued in accordance with the provisions of the Bill are matters of procedure and detail and it is not practicable to provide for them in the Bill. 3. The delegation of legislative power is, therefore, of a normal character.