Education cess scope clarified: not leviable on goods made before levy and not on duty free clearances.
Education Cess is a new levy on the aggregate of excise and customs duties actually levied and collected by the Department of Revenue, and therefore is not payable where goods were manufactured before the levy, where clearances are fully exempt or made without payment under specified procedures, or where imported goods are not specified in the First Schedule to the Central Excise Tariff Act; only duties both levied and collected by the Department of Revenue are counted and certain customs duties are excluded.

Withdrawal of export prohibition to Libya permits exports subject to Schedule II licensing and existing conditionality.
Amendment to the Handbook of Procedures provides that, unless otherwise specified, imports and exports are valid to or from any country while maintaining a prohibition on arms and related material with Iraq; all trade remains subject to conditionality, licensing or permission requirements under Schedule II of ITC (HS). Appendix-31, listing items prohibited for export to Libya, is withdrawn.

Investors' Education Protection Fund compliance extension: deposits made by the specified cutoff deemed compliant and shielded from penalty.
Companies that deposited the requisite unpaid and unclaimed amounts referred to in Section 205C into the Investors' Education Protection Fund on or before the specified cutoff shall be deemed to have satisfied the compliance objective of the earlier circular and shall not be subject to penal proceedings for delays up to that cutoff; Regional Directors and Registrars of Companies are directed to initiate action only where compliance was not made by the cutoff, including cases with issued show cause notices.

Import certificate end-use end-user requirement amended; specified note treated as deleted by DGFT under policy powers.
The Director General of Foreign Trade amends revised Appendix 16-A to treat as deleted the Note Before (NB) under the heading "Import Certificate to be accompanied with end-use cum end-user certificate (to be filled when the import is by a third party)." The amendment is made under powers conferred by the Export and Import Policy and the Handbook of Procedures and is issued in the public interest.

Supplementary DEPB claims processed under specified application procedure with form, declaration and expedited processing timeline.
Supplementary DEPB claims require submission of the prescribed Annexure A form in two copies with IEC and branch details, FOB export value, computation of additional DEPB entitlement and original DEPB file particulars, accompanied by application fee evidence and supporting documents. Applicants may file additional manual applications at designated counters in addition to normal filings, and the office will process and issue supplementary DEPBs within an expedited processing period. The form includes declarations on accuracy, exclusivity of claim, export proceeds realisation, repayment liability with interest, and signatory authorization.

Transferability of DEPBs: missing proof of realisation yields non-transferable credits, late-cut cases returned for deficiency.
Where exporters apply for transferable DEPB without furnishing proof of date of realisation on the bank certificate, the office will issue non-transferable DEPBs without raising deficiencies, except that applications necessitating a late cut will be returned with deficiencies and processed only after compliance. Exporters must hold a Registration-Cum-Membership Certificate from the Export Promotion Council relevant to their main line of business to avail DEPBs and related benefits; applications lacking appropriate council registration will not be entertained after the compliance cutoff.

Moratorium on bank accounts forces ECS payments to be issued by warrants omitting affected bank account details.
A government-imposed moratorium on Global Trust Bank requires that registrars, share transfer agents and issuers pay dividends, interest and other cash benefits by warrants omitting GTB account details where investors furnished only GTB ECS information; alternate bank details, if provided, should be printed. This temporary administrative exemption from prior circulars applies only to investors who supplied GTB account details for ECS, and stock exchanges and depositories are to instruct listed companies and agents accordingly.

Import restriction on penicillin and 6 APA: advance licences subject to a short capped export obligation and a pause on new licences.
Export obligation for Advance Licences allowing import of Penicillin (and salts) or 6 APA under the Duty Exemption Scheme is limited to three months from clearance of the first import consignment; the licensing authority must endorse the Advance Licence accordingly and no extensions of the export obligation period are permitted. Additionally, issuance of new Advance Licences for 6 APA is suspended for thirty days from the Public Notice.

Computerised EDI processing of export shipping bills at ICD Whitefield mandates registration, prescribed declarations, electronic examination and "Let Export" ordering.
Computerised processing of specified export Shipping Bills at ICD/CFS Whitefield operates under the Customs EDI system from 02.08.2004 with mandatory registration of exporters/CHAs and bank accounts, submission of prescribed declarations and supporting documents at a Service Centre, checklist confirmation, and system driven generation of Shipping Bill numbers valid for fifteen days. Physical entry and examination are permitted on the checklist and Annexure C; SEO and Examining Officer record examination electronically; Appraiser/Superintendent issues electronic "Let Export" order which triggers printing and distribution of Shipping Bills. Scheme specific processing (DEPB/DEEC/EPCG/EOU/Drawback) requires licence/book registration and follows specialized assessment and payment rules within EDI.

Key Information Memorandum: mandatory standardised disclosure for mutual fund schemes with annual update and adoption deadline.
SEBI mandates a standardised Key Information Memorandum template for all mutual fund schemes, requiring adoption by mutual funds no later than September 30, 2004 and annual updates by April 30 each financial year. The KIM must disclose core scheme particulars (investment objective, asset allocation, risk profile, NAV treatment, loads, expenses, tax treatment, performance presentation, contact details), direct investors to the Offer Document for full details, and state that SEBI has not approved the accuracy of the KIM; the measure is issued under Regulation 77 of the SEBI (Mutual Funds) Regulations, 1996.

Exemption choice for textiles: manufacturers may claim exemption or pay optional duty if records maintained or credit reversed.
Manufacturers may avail either the optional duty route or the full exemption independently but must keep separate books for goods cleared under each. Pre-budget inputs on which credit was not taken may be cleared duty free; where credit was taken, the manufacturer must either pay duty under the optional route or reverse credit to claim exemption. Persons registered under the former job-work provision are treated as manufacturers for transition; if credit is not reversed the trader may pay duty and clear goods from his or the job-worker's premises for domestic sale or ARE-1 export, with duty liability on the trader.

Revocation of DEPB rate suspension prospective from 12 July 2004; regional DGFT offices must implement accordingly.
Clarification that the revocation of DEPB rates suspended for notified products in the Engineering Product Group (suspension originally by Public Notice No. 54 as amended by No. 56) is prospective in effect, operative from 12.07.2004, and that all regional DGFT offices are to take action accordingly.

Actual user condition: DFRC not permitted for inputs subject to prior import condition to preserve import controls.
Clarifies that DFRCs, as a post export replenishment mechanism, will not be issued for inputs subject to a prior import condition because permitting DFRC for such inputs would defeat the purpose of the prior import requirement; a clause amendment is to be made to resolve the inconsistency introduced by an inadvertent addition.

Additional customs duty on imported computers imposed to counterbalance excise; specified parts and converters exempted.
An additional duty of customs has been imposed on imported CPUs and complete computer sets to counter balance excise on inputs; customs value for the levy is to be determined under the applicable valuation provision. Most parts of automatic data processing machines are exempt from customs duty, except populated printed circuit boards, motherboards, and specified ink cartridges which remain dutiable; static converters for computers are exempt while converters for other machines and telecommunication apparatus remain dutiable. Notifications issued give effect to these changes.

Export obligation monitoring: customs must coordinate with trade authorities before altering valuation or discharge certifications under EPCG.
Customs must accept EO Discharge Certificates issued by DGFT for EPCG bond/BG redemption unless specific valuation or EO doubts arise; in such cases the jurisdictional Commissioner shall refer the issue to the Board for coordination with DGFT rather than taking unilateral adjudicative action, because CIF valuation and the quantum of export obligation are linked and require simultaneous adjustment. Commissioners must follow DOR Circular No.24/2002 and issue standing orders and public notices to field formations and trade.

Membership card valuation: allows limited net worth recognition with time based haircut and liquidity safeguards for exchanges.
SEBI permits membership card value to be included in a member's net worth as a non cash capital component if measured by the latest auction/sale price and reduced by a time based haircut; cards without an auction/sale in the past 12 months are ineligible. Recognised card value cannot be used as exchange deposited capital for intra day trading, exposure limits, or margins. Exchanges must maintain cash and liquid assets equal to at least half the aggregate recognised card value, amend bye laws, notify members, publish the change, and report implementation to SEBI.

Employee stock option regulation: amendments require fair value disclosure, merchant banker oversight, and revised market price rules.
SEBI amended ESOS/ESPS Guidelines to require fair value disclosure of employee compensation and impact on profits and EPS, expand Directors' Report and IPO disclosures for options in the three years before IPO, change the market price definition to the latest closing price prior to the Board meeting (highest volume exchange where multiple listings exist), require merchant banker appointment for scheme implementation, treat trust administered schemes as company administered for accounting, and impose ratification and restrictions on pre IPO scheme grants and modifications.

Education cess requires temporary booking under Receipt Awaiting Transfer until new heads of account are opened.
Education cess applies to duties on excisable goods, specified import duties and to services upon enactment of the Finance (No.2) Bill, 2004. Pending creation of new Heads of Account by the CGA, cess receipts are to be temporarily booked under "Receipt Awaiting Transfer" within Major Heads 0037 and 0038 using reduced accounting codes 00370034 and 00380086, and transferred to the new Heads when opened. Commissioners should inform assessees of this accounting arrangement; separate instructions on service tax accounting will follow.

Education cess on excise and imports requires temporary 'Receipt Awaiting Transfer' accounting until new heads are opened.
An Education Cess applies to aggregate excise and import duties (excluding specified safeguard, countervailing and anti dumping duties) and to services when enacted; excise and import levy effective 8 7 2004. Pending new Heads of Account, collections should be provisionally recorded under "Receipt Awaiting Transfer" within Major Heads 0037/0038 using accounting codes 00370034 and 00380086 and later transferred to the new heads.

Import restrictions on penicillins suspend new advance licence issuance and bar export obligation extensions for permitted imports.
No Advance Licence shall be issued for thirty days for import of Penicillins and its salts. Where imports are permitted under the Advance Licensing Scheme, the Export Obligation period is restricted to three months from clearance of the first consignment and must be endorsed on the Advance Licence. No further extension of the Export Obligation period shall be allowed for such licences, including licences already issued.