Auction for Sale of Government Stocks

Auction for Sale of Government Stocks 


The Government of India have announced the Sale (re-issue) of 

(i) “7.68 per cent Government Stock 2023” for a notified amount of Rs.2,000 crore (nominal) through price based auction, 
(ii) “7.72 per cent Government Stock 2025” for a notified amount of   Rs.6,000 crore (nominal) through price based auction,  
(iii) “8.24 per cent Government Stock  2033” for a notified amount of Rs.3,000 crore (nominal) through price based auction,  and 
(iv) “8.13 per cent Government Stock 2045” for a notified amount of Rs.3,000 crore (nominal) through price based auction. The auctions will be conducted using multiple price method. The auctions will be conducted by the Reserve Bank of India (RBI), Mumbai Office, Fort, Mumbai on August 14, 2015 (Friday).

 Up to 5% of the notified amount of the sale of the stocks will be allotted to eligible individuals and Institutions as per the Scheme for Non-Competitive Bidding Facility in the Auction of Government Securities.

  Both competitive and non-competitive bids for the auction should be submitted in electronic format on the Reserve Bank of India Core Banking Solution (E-Kuber) system on August 14, 2015. The non-competitive bids should be submitted between 10.30 a.m. and 11.30 a.m. and the competitive bids should be submitted between 10.30 a.m. and 12.00 noon.   

  The result of the auctions will be announced on August 14, 2015 and payment by successful bidders will be August 17, 2015 (Monday).   

    The Stocks will be eligible for “When Issued” trading in accordance with the guidelines on ‘When Issued transactions in Central Government Securities’ issued by the Reserve Bank of India (RBI), vide circular No. RBI/2006-07/178 dated November 16, 2006 as amended from time to time.


Department Of Economic Affairs, Ministry of Finance, Government of India
North Block, New Delhi-110001

**** 

Chennai Zonal Unit of the Directorate General of Central Excise Intelligence Conducts Investigation under Summons Against 16 Insurance Companies Engaged in Providing Motor-Vehicle Insurance Policies, for Wrongly Availing Cenvat Credit to the Tune of Rs. 1200-2500 Crore on the Bogus Invoices of the Car Dealers 

The Chennai Zonal Unit of the Directorate General of Central Excise Intelligence, Ministry of Finance has been conducting investigation under summons against 16 Insurance Companies engaged in providing motor-vehicle insurance policies, for wrongly availing Cenvat Credit on the bogus invoices of the car dealers. 

During the course of investigation, it has been noticed that the car manufacturers enter into agreement with the Insurance Companies for appointing them as Preferred Car Insurance Companies (PICs) and instruct their car dealers to sell their insurance policies to PICs only. Such PICs pay commission on the value of the insurance policies to the car companies (in the range of 2-3%) and the car dealers (in the range of 15-45%).

The IRDA regulations do not allow any person other than insurance agents and insurance brokers approved by IRDA, to sell vehicle insurance policies. Further the maximum brokerage/commission payable for selling insurance policies is also capped at 10% of the premium. To circumvent these regulations, the Insurance Companies ask the car dealers to raise invoices to show that the car dealers have provided the Insurance Companies services such as advertisement, renting of computers/ printers, training, arranging customer awareness program etc. 

As these services were never provided by the car dealers, their invoices are not permissible documents under the CENVAT Credit Rules, 2004 and the Service Tax Rules, 1994 for availing Cenvat credit by the Insurance Companies. These facts have been confirmed by the employees of the Insurance Companies and the car dealers in their voluntary statements. 

The estimated incorrect Cenvat Credit involved in this case is Rs. 1200-2500 crore.