Penalty timing for registration and return defaults: registration penalty from registration due date; return penalty from day after filing deadline.
The statutory penalty for registration default is computed from the date the registration becomes due, while the penalty for return default is computed from the day following the last day prescribed for filing the return.

Personal surety bond format requirement: new notarially attested bonds with two witnesses mandated for VAT registrations.
Fresh VAT registrations must be accompanied by a personal surety bond in the new prescribed format; old-format bonds are incorrect. Personal surety bonds must be witnessed by two persons and attested by a notary whose serial number, place of attestation and official seal are indicated. VATOs/AVATOs at front offices and operations are directed to ensure submission of the new-format, properly notarised bonds to expedite registration processing.

Non-levy of interest on delayed first instalment of advance fringe benefit tax; penalty not leviable, administrative communication issued.
Non-levy of interest is directed for delayed payment of the first instalment of Advance Fringe Benefit Tax if received by 15th August, 2005; the order further clarifies that penalty is not leviable for delayed payment of Advance Fringe Benefit Tax in any case, and instructs communication of this concession to all regional officers.

Line of Credit facility approved for exports, setting eligibility, shipment declaration and limited commission payment conditions.
RBI authorises Exim Bank's Line of Credit to the Philippine export agency for financing capital goods, plant and machinery, consumer durables and other items eligible under India's Foreign Trade Policy; shipments must be declared on GR/SDF Forms. No agency commission is ordinarily payable, though exporters may pay commission from own free foreign exchange; Reserve Bank may permit commission up to 5 per cent for after sales service cases, payable in the Philippines by invoice deduction and reimbursable to the negotiating bank at 90 per cent of the f.o.b./c&f/c.i.f. value minus commission, subject to prior approval. The direction is issued under sections 10(4) and 11(1) of FEMA, 1999.

Return scrutiny procedures require two stage verification and targeted detailed checks where abnormal trends threaten revenue protection.
A procedural framework prescribes a two stage scrutiny of ER 1 and ER 3 returns: a preliminary checklist based verification of completeness, classification, arithmetic accuracy, provisional assessment status, CENVAT reconciliation and payment timeliness, followed by detailed scrutiny for returns with abnormal trends using quantitative parameters in Annexure 2. Both stages should be completed within three months, with deficiencies acted upon by the Range Superintendent, results recorded and signed, and selected cases subject to document requisition, rare assurance visits, periodic divisional oversight and referral to Internal Audit where abnormalities persist.

Minimum value addition for jewellery exports revised, with specified category-based thresholds and carriage heading amended.
The export scheme for jewellery requires value addition to be calculated per paragraph 4A.6 of the Foreign Trade Policy and prescribes minimum average value addition per consignment for specified categories: studded jewellery, plain jewellery (with a rule where stone/studding per-gram value exceeds metal), fully mechanized jewellery, medallions and non-legal-tender coins, and mechanized findings and mountings. The amendments also replace the heading of paragraph 4A.18(a)(ii) with "Personal carriage of gems & jewellery for export promotion tours" and delete the words "or import of plain/studded jewellery" from paragraph 4A.28.

Duty Free Credit Entitlement applications to be processed manually; no e filing concession for related application fees.
The Handbook of Procedures (Vol. I) is amended to exempt Duty Free Credit Entitlement certificates for Status Holders and Target Plus Scheme applications from the general fee note by inserting an exception into the Scale of Application Fees and the fee appendix. These applications will be processed manually with no ECOM access and no fee concession. The Target Plus Scheme applicant requirements in the Aayaat Niryaat Form are revised to require a bank receipt/demand draft evidencing fee payment under the fee appendix and a self certified copy of a valid RCMC.

Export controls on SCOMET items require case-by-case licences with end-use and non-retransfer assurances to prevent diversion.
An Inter-Ministerial Working Group in DGFT will consider licences for export of SCOMET items case-by-case using criteria including end-user credentials, end-use declarations, chain of transmission, risk of diversion to non-state actors, recipient State controls and programmes, end-use assessments, and applicability of bilateral or multilateral agreements. Export licence consideration requires certifications on exclusive declared use, prohibition on modification or re-transfer without Government of India consent, and facilitation of verifications; transfer of "Technology" is treated as export of the item.

Handbook amendment removes balance sheet requirement for Star Export House applications and adds agencies authorised to issue Certificates of Origin.
Amendment deletes the requirement that Star Export House Certification applicants submit a self certified copy of the balance sheet filed with income tax authorities, and adds specified trade associations in Maharashtra and Uttar Pradesh/Uttaranchal to the list of agencies authorised to issue non preferential Certificates of Origin, thereby updating the Handbook of Procedures under the Foreign Trade Policy.

Supplier growth declaration permitted; auditors may rely on supplier statements to certify DFCE eligibility for supplies.
For certification of Sr. No. 11 of the CA certificate under Appendix 17D, CAs/CS/ICWAs may rely on a declaration from the non-status supplier that it has achieved the requisite growth in direct export turnover, enabling supplies by that supplier to a status holder to be treated as eligible for DFCE benefits where the growth test applies.

Import restriction on second hand capital goods: Indian origin second hand items not permitted under the EPCG scheme.
The circular clarifies that although Para 5.1 permits import of second hand capital goods without age restrictions under the EPCG scheme, second hand capital goods of Indian origin are expressly not permitted to be imported under the EPCG scheme.

Securities Transaction Tax and tonnage tax scheme introduced, plus tightened TDS/TCS reporting and expanded taxable receipts.
The Finance (No. 2) Act, 2004 enacts comprehensive direct-tax changes: specifies income tax/TDS/advance tax rates with surcharges and education cess; expands taxable income to include gratuitous receipts above a threshold (with exclusions); implements the New Pension Scheme deduction and treats government matching contributions as salary; tightens TDS/TCS reporting and identification through a common deduction/collection number and dematerialised statement-based credit; introduces Securities Transaction Tax with related capital-gains treatment; and establishes an elective tonnage-tax regime for qualifying shipping companies with detailed computation, compliance, reserve and anti abuse rules.

Export licensing for sandalwood requires DGFT-issued licences, procurement and physical verification documentation, and prescribed export conditions.
A quantity of 1600 MT of specified sandalwood classes is allocated for export within four years and exports are permitted only against an Export Licence issued by the DGFT on the Exim Facilitation Committee's decision, valid for one year without revalidation. Applicants must submit the Aayaat Niryaat form with an export order/irrevocable LC, original Legal Procurement Certificate issued by the Principal Chief Conservator of Forests evidencing purchase at State auctions, and a Certificate of Physical Verification from the DCF/DFO referencing the transit permit and inspection of unexported materials; licences may be subject to quantitative ceilings, minimum export price and size/weight limits.

Input tax credit: contractors may claim credit via subcontractor tax invoices and offset against VAT output liability.
Officers must avoid rejecting registration applications on flimsy grounds and must allow dealers to remedy defects or furnish fresh surety bonds; front office counters must remain open until 4:30 pm, acknowledge filings free of charge, and accept late returns without insisting on penalty. Contractors may claim input tax credit based on tax invoices issued by subcontractors and adjust that credit against output VAT; refund vouchers are preferred to adjustment orders for prior-law refunds; CST amendment applications may be filed on plain paper; dealers informed of their TIN may issue tax invoices from that date; certain CST rate-reduction notifications remain in force.

Addition to appendix of Handbook of Procedures adds inspection agency listing and contact details by DGFT.
The Director General of Foreign Trade, exercising powers under paragraph 2.4 of the Foreign Trade Policy, 2004-09, adds World Wide Inspection Services (Sarl) to Appendix 5 of the Handbook of Procedures, supplying the agency's Dakar address, telephone, fax and email contact information; the addition is published as Public Notice No. 26/2005 and issued in the public interest with an administrative file reference.

Education cess accounting head updated; taxable services must be recorded under the revised head of account.
Correction to accounting head for Education cess on all taxable services: a corrigendum revises the head of account code specified in Note B of the earlier TRU letter and directs principal accounting authorities to record the education cess on taxable services under the revised head for all relevant accounting entries.

EPCG Scheme reforms expand concessional capital goods import and simplify export obligation compliance for agro, SSI, retail and service providers.
Amendments to the Foreign Trade Policy 2004-09 revise incentive schemes: the EPCG Scheme now permits reduced and extended export obligations for agro units, concessional capital goods imports for SSI and retailers with defined conditions, fast track relief for early exporters, and simplified Chartered Engineer certification; EPCG rupee earning facility is extended to minor ports, ICDs and CFSs. Advance Licence changes exempt certain duties for deemed exports, broaden annual licences, allow EO extensions for BIFR/sick units, and relax intra company transfer and job work procedures. DFRC sensitive items are reduced and a 95% re credit on rejected imports is provided.

Evidence of import follow up: banks need not pursue proof for remittances at or below the prescribed threshold when satisfied of genuineness.
AD banks must follow up with importers for submission of evidence of import where remittances exceed the prescribed threshold. For remittances at or below the prescribed threshold, ADs need not pursue evidence provided they are satisfied about the genuineness of the transaction and the bonafides of the remitter; banks should frame Board approved internal policies and guidelines to govern such cases.

Vishesh Krishi Upaj Yojana eligibility clarified by re notification of appendix and removal of 'Others' exclusion, enabling online filings.
Re notification of Appendix 37A amends the Handbook of Procedures to specify items eligible for export benefits under the Vishesh Krishi Upaj Yojana, reissuing a detailed schedule and Minor Forest Produce list, and deletes the note that excluded items described as 'Others' at the eight digit ITC(HS) level; the measure is issued to facilitate online filing of applications for export incentives.

Re-export of defective DFRC imports permitted under conditions; Customs issues certificate for CIF credit and DGFT reissues licence.
Re-export of goods imported under the DFRC scheme found defective or unfit may be permitted by the Commissioner of Customs if re-export occurs from the same port, within six months, the Assistant/Deputy Commissioner is satisfied about the goods' identity, and the goods were not used. On re-export, Customs will issue a Certificate evidencing CIF credit for the value debited against the original DFRC and detailing the original licence and goods; DGFT will issue a fresh DFRC for the credited value with validity equal to the remaining period of the original licence.