Investment by unincorporated entities barred under FDI rules; only incorporated or registered foreign entities may invest.
An unincorporated entity shall not be permitted to make fresh investments under the FDI Scheme, including the Automatic Route; only an entity incorporated or registered under the laws of its host country is eligible to invest as per the amended Foreign Exchange Management Regulations, with Authorised Dealers required to inform constituents of the change.

Self assessment scheme extended on pilot basis to Bangalore Air Cargo Complex for accelerated import/export clearance.
Extension of the self assessment scheme for accelerated clearance of import/export cargo on a pilot basis to Bangalore Air Cargo Complex. Paragraph 7 of the earlier circular is substituted to list operative locations as Sahar, Mumbai; Bangalore Air Cargo Complex; ICD Tughlakabad, New Delhi; and Chennai Sea Customs, for both import and export.

Taxability of software maintenance clarified: maintenance of computer software is not subject to service tax under existing exemptions.
Maintenance of installed computer software constitutes repair of an intangible program, falls within the exemption for maintenance or repair of computer systems under Notification No. 20/2003-ST, and services relating to computer software by consulting engineers are exempt under Notification No. 4/99-ST, therefore maintenance of software is not chargeable to service tax.

Duty drawback calculation: include duty on customary wastage then deduct duties on sold recoverable waste under Rule 3(2)(d).
Duty drawback must reflect duty incidence on all raw materials consumed, including reasonable wastage; if recoverable waste is sold, the average duties on the waste so sold shall be deducted under the proviso to Rule 3(2)(d). Practically, compute duty on the full input quantity (excluding CVD claimed as Cenvat), apportion to the input consumed per export unit, compute duties on sale value of recoverable waste per unit, and deduct that amount to fix the brand rate of drawback.

FII investment permissions: FIIs may trade securities and derivatives subject to ownership limits, allocation rules and reporting.
SEBI registered FIIs and approved sub accounts may invest in equities, convertible debentures, mutual fund units, dated Government securities, Treasury Bills and exchange traded derivatives under PIS, using a Foreign Currency Account and/or a Special Non Resident Rupee Account; transactions are permitted on exchange at market prices or off market at SEBI/RBI approved prices, subject to tax compliance, ownership ceilings (10% per FII/sub account, 5% per foreign corporate/individual within aggregate caps), a 70:30 equity debt allocation guideline, prohibition on short selling, adherence to SEBI position limits for derivatives, margin requirements, and daily reporting to RBI.

Foreign exchange remittance resumed for World Cup sponsors after prior restriction withdrawn, authorised dealers may process applications.
The RBI, following the Delhi High Court's disposal of a writ petition as infructuous, has withdrawn its prior instruction requiring prior clearance for remittance of foreign exchange in connection with the World Cup and has authorised dealers to dispose of pending applications relating to the event subject to usual compliance conditions; contractual disputes between parties remain for the parties to resolve and dealers should inform their constituents.

Classification of software protection locks: treated as hardware when standalone, as software when imported together as a set.
Where a protection lock is imported separately or as a distinct hardware item (pre programmed without accompanying software, or unprogrammed), it is treated as computer hardware and classifiable accordingly. When the protection lock is imported together with the software on media as a set clearly intended to be used together, the combined import is classified as software by applying the General Interpretative Rule treating the set as a whole.

Tariff classification of thermal imaging devices under infrared instrumentation heading alters customs classification and regulatory treatment.
The Tariff Conference concluded the thermal camera does not function as a conventional camera and excluded CTH 90.06; because the device operates by infrared radiation and serves as an analytical measurement tool, it is most appropriately classified under CTH 9027.50.90, a recommendation accepted by the Board.

Customs classification clarified: high-capacity disk arrays treated as storage units under the tariff, standardising assessment practice.
A Tariff Conference concluded that high-capacity disk arrays used in Storage Area Networks have storage as their principal function and recommended classification under CTH 84717090 as a "Storage Unit," a recommendation the Board accepted and directed field formations to finalise pending assessments accordingly.

Recoverable arrears of excise duty: invoke statutory recovery measures and treat unpaid removals as deemed cleared until paid.
Where excise duty and interest on monthly removals remain unpaid beyond the due date, such amounts become recoverable arrears of revenue after one month and enforcement action under Section 11 of the Central Excise Act and Section 142 of the Customs Act should be taken; specific provision in rule 8(4) authorises application of Section 11 for dues assessed under rule 6. These sums must be recorded as realizable arrears and may be recovered without issuing a show cause notice. No reversal of CENVAT credit against a consignee is required while the consignee's transaction is bonafide. Field officers must maintain registers to monitor defaults and ensure regular divisional review.

Service tax exemptions under Section 93 transferred to TRU from CX-4 by board circular.
Work concerning Service Tax exemptions under Section 93 of the Finance Act 1994 is reallocated from the CX-4 Section to the Tax Research Unit (TRU); the Board references an earlier circular and requests acknowledgement of receipt.

RFC account routing: resident and returning NRI insurance proceeds may be credited to RFC (Domestic) Account under forex rules.
Resident beneficiaries receiving insurance claim, maturity or surrender proceeds in foreign currency may open and credit those proceeds to a Resident Foreign Currency (RFC) (Domestic) Account. Non-Resident Indian policy holders may, on becoming residents, credit foreign-currency proceeds from India-issued policies to the RFC Account they open on becoming residents. Authorised Dealers must inform their constituents. Directions are issued under Sections 10(4) and 11(1) of the Foreign Exchange Management Act.

Line of Credit for export financing permits Exim Bank backed capital goods shipments to Iran subject to FEMA compliance and documentation.
Exim Bank's Line of Credit to designated Iranian banks is available to finance exports of eligible capital goods and related services; Individual Letters of Agreement must be concluded by the terminal date, shipments must be declared on GR/SDF forms, and no agency commission is payable. Authorised Dealers must notify exporters and advise them to obtain full details from Exim Bank; the directions are issued under Sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999.

Waiver requirement for advance import remittances must be obtained from Ministry of Finance when no international bank guarantee exists.
Public sector companies and Central/State Government departments or undertakings unable to obtain an international bank guarantee against an advance payment must obtain a specific waiver from the Ministry of Finance before making advance remittances exceeding the prescribed threshold; Authorised Dealers must notify affected constituents. The directions are issued under the regulatory powers of the Foreign Exchange Management Act.

Special currency basket valuation updated under foreign exchange regulations, affecting deferred payments protocols and authorised dealer obligations.
The Reserve Bank notified Authorised Dealers that, after a change on 18 November 2003, the rupee value of the special currency basket is fixed at Rs.57.5082 effective 21 November 2003, and directed Authorised Dealers to notify their constituents; the directions are issued under provisions of the foreign exchange law.

Dematerialisation reporting requirement relaxed; depositories must amend rules, notify participants and report implementation status to regulator.
Depository Participants are relieved of the obligation to furnish weekly information to SEBI on processing of dematerialisation applications because the depositories hold the requisite data; depositories must amend bye-laws, notify DPs, publish the change on their websites and report implementation status to SEBI.

Hedging of Overseas Direct Investments permitted: residents may use forward and option contracts subject to verification and delivery/rollover.
Resident entities with overseas direct investments may hedge exchange risk via forward and option contracts with Authorised Dealers for equity and loan exposures, subject to verification of exposure and provided contracts are completed by delivery or rolled over on the due date; if a hedge becomes naked owing to a decline in market value it may continue to original maturity, and roll-overs are permitted only up to the market value on the due date.

Two-way fungibility of ADRs/GDRs: custodians must file revised monthly reports to regulators by the prescribed deadline.
Custodians must use the amended monthly report format for two-way fungibility of ADRs/GDRs, reflecting revisions to columns 10 and 12, and submit transactions up to the last Friday of the month in both hard and electronic form to SEBI/RBI by the 10th of the following month; the revision is effective from the December 2003 report and the annexed schedule specifies required disclosure fields including sectoral cap status, issuance and redemption progressives, shares deposited for fungibility, outstanding ADR/GDRs, gross value of deposited shares, and unsold conversion shares.

Compliance certificate requirement: not needed where a company employs a whole time Company Secretary, per departmental clarification.
A company not required under law to employ a whole time secretary but which has voluntarily employed a full time Company Secretary is not obliged to obtain a compliance certificate from a Company Secretary in practice; therefore a company employing a whole time Company Secretary need not procure a separate compliance certificate for filing with the Registrar and attaching to the Board's report.

Licence validity extension for natural rubber imports allows affected licences to be revalidated and mandates ALC review for deleted inputs.
Licences permitting duty free import of natural rubber, issued on or after 20 February 1999 and earlier revalidated to 31 December 2003, are further extended to 31 March 2004. Applicants whose self declared licences had natural rubber deleted but given adhoc norms must apply to ALC HQ by 31 December 2003; ALC will decide within 15 days. Resulting licences permit import/procurement of natural rubber until 31 March 2004 for expired licences or until the original licence expiry for others.