In January, the Central Government notified the Factoring Regulation Act, 2011 to regulate the factoring business in India. According to this, factoring companies other than banks and Government entities have to register with RBI as a non-banking financial company (NBFC). Now the RBI has introduced a new category — NBFC Factors. Companies that wish to register as an NBFC Factor should have a minimum ‘Net Owned Fund’ of Rs 5 crore, while ensuring that the financial assets in and income derived from the factoring business are not less than 75 per cent of assets and gross income, respectively. Existing NBFCs that fail to meet this income asset pattern shall be given two years to do so, or wind up.
Ruling in 'Azadi Bachao' holds
The Authority for Advance Ruling has relied on the Supreme Court’s decision in the
Service tax revamped
Notifications have been issued operationalising the new charging section and Negative List under service tax from July 1. First, all activities except those excluded under the Negative List or exemption notifications have been made taxable. Second, the Place of Provision of Service Rules have been introduced to achieve a ‘destination-based tax’, which is broadly in line with global VAT principles. These rules provide clarity on the treatment of export and import of services, which have been a bone of contention between authorities and assessees. While clarifications on many aspects are in order, the new law seems to have been simplified and more suited for assimilation into GST.