Archives for May 2017

MCA – IBBI

The MCA has issued the Order to remove the difficulties and may be called the Insolvency and Bankruptcy Code (Removal of Difficulties) Order, 2017. In the Insolvency and Bankruptcy Code, 2016, in the Eighth Schedule, relating to amendment to the Sick Industrial Companies (Special Provisions) Repeal Act, 2003, in section 4, in clause (b), after the second proviso, the following provisos shall be inserted, namely:— “Provided also that any scheme sanctioned under sub-section (4) or any scheme under implementation under sub-section (12) of section 18 of the Sick Industrial Companies (Special Provisions) Act, 1985 shall be deemed to be an approved resolution plan under sub-section (1) of section 31 of the Insolvency and Bankruptcy Code, 2016 and the same shall be dealt with, in accordance with the provisions of Part II of the said Code: Provided also that in case, the statutory period within which an appeal was allowed under the Sick Industrial Companies (Special Provisions) Act, 1985 against an order of the Board had not expired as on the date of notification of this Act, an appeal against any such deemed approved resolution plan may be preferred by any person before National Company Law Appellate Tribunal within ninety days from the date of publication of this order.”

CBEC

CBEC has issued a Press Release specifying the Tax Incidence on Entertainment Services under GST. Taxes on entertainments and amusements (covered by the erstwhile entry 62 of State List of the Constitution) have been subsumed under GST except to the extent of taxes on entertainments and amusements levied by a Panchayat or a Municipality. The rate of GST approved by GST Council on services by way of admission to entertainment events or cinematography films in cinema theaters is 28%. The rate of GST approved by GST Council on entertainment tax on cable TV and Direct-To-Home (DTH) services is 18%. The rate of GST approved by GST Council on access to circus, theater, Indian classical dance including folk dance and drama is 18% ad-valorem. Further, the GST Council has approved an exemption upto a consideration for admission of Rs 250 per person. Thus, entertainment services shall suffer a lower tax incidence under GST. In addition to the benefit of lower headline rates of GST, the service providers shall be eligible for full input tax credits (ITC) of GST paid in respect of inputs and input services. Presently, such service providers are not eligible to avail of input credits in respect of VAT paid on domestically procured capital goods& inputs or of Special Additional Duty (SAD) paid on imported capital goods and inputs.

Ministry of Finance

The Central Government hereby directs, in super-session of earlier issued notifications, that the Income-tax authorities under section 116 of the Income-tax Act, 1961, having headquarters at the places specified, to exercise the powers and perform the functions of the ‘Authority’ under the Prohibition of Benami Property Transactions Act,1988 in respect of the territorial areas as specified in the notification and having jurisdiction vested in them. Through this notification, Income Tax Commissioners and Income Tax Officers are being appointed as Approving Authority, Initiating Officer and Administrator under the Benami Property Transactions Act, 1988.

FIPB

The Union Cabinet has given its approval to the phasing out of Foreign Investment Promotion Board (FIPB). The proposal entails abolishing the FIPB and allowing administrative Ministries/Departments to process applications for FDI requiring government approval. Henceforth, the work relating to processing of applications for FDI and approval of the Government thereon under the extant FDI Policy and FEMA, shall now be handled by the concerned Ministries/Departments in consultation with the Department of Industrial Policy & Promotion(DIPP), Ministry of Commerce, which will also issue the Standard Operating Procedure (SOP) for processing of applications and decision of the Government under the extant FDI policy. In addition, Foreign Investors will find India more attractive destination and this will result in more inflow of FDI. The move will provide ease of doing business and will help in promoting the principle of Maximum Governance and Minimum Government.

CBDT

The Central Board of Direct Taxes (CBDT) entered into two Unilateral Advance Pricing Agreements (APA) on 4th May, 2017 and 11th May, 2017 respectively, with Indian taxpayers. One of the Agreements also has “Rollback” provision. The APA Scheme endeavours to provide certainty to taxpayers in the domain of transfer pricing by specifying the methods of pricing and determining the arm’s length price of international transactions in advance for the maximum of five future years. Further, the taxpayer has the option to rollback the APA for four preceding years, as a result of which, total nine years of tax certainty is provided. Since its inception, the APA scheme has attracted tremendous interest among Multi National Enterprises (MNEs). The two APAs signed pertain to chip design/development of embedded software and Information technology (software development) sectors of the economy. The number of APAs signed in the current financial year now is four. The CBDT expects more APAs to be signed in the near future.

SEBI

SEBI has issued Securities and Exchange Board of India (International Financial Services Centres) Guidelines, 2015-Permissible investments by Portfolio Managers, AlternateInvestment Funds and Mutual Funds operating in IFSC. Thereby, Clause 9 (4) and Clause 22 (3) of SEBI (IFSC) Guidelines, 2015 are amended. A portfolio manager or any alternative investment fund or mutual fund operating in IFSC shall be permitted to invest in the Securities which are listed in IFSC, Securities issued by companies incorporated in IFSC and Securities issued by companies incorporated in India or companies belonging to foreign jurisdiction subject to such conditions or guidelines that may be stipulated or issued by the Reserve Bank of India and Government of India from time to time. Further, it is clarified that such portfolio manager, alternative investment fund or mutual fund shall invest in India through the foreign portfolio investor route.

MCA – NCLT

In exercise of the powers conferred by Section 419, the President, NCLT hereby re-constitutes the Benches at New Delhi. There will be now 4 Benches at New Delhi comprising of Principal Bench, Division Bench ant two Single Benches. Further, the Single Benches headed by Shri R. Varadharajan, shall attend matters presently pending before it and all the matters related to Amalgamation (section 230-232 of Companies Act, 2013 and section 391-394 of Companies Act, 1956 below 50 Lakh paid up capital. Further, this Bench shall also attend the matters of amalgamation above 50 Lakhs paid up capital whenever assigned by Hon’ble President through Special Order. Thos order shall come into force with effect from 22nd May, 2017.

RBI

Reserve Bank of India has outlined the steps taken and those on the anvil post the promulgation of the Banking Regulation (Amendment) Ordinance, 2017. The amendments to the BR Act 1949, introduced through the Ordinance, and the notification issued thereafter by the Central Government empower RBI to issue directions to any banking company or banking companies to initiate insolvency resolution process in respect of a default, under the provisions of the Insolvency and Bankruptcy Code, 2016 (IBC). It also enables the Reserve Bank to issue directions with respect to stressed assets and specify one or more authorities or committees with such members as the Bank may appoint or approve for appointment to advise banking companies on resolution of stressed assets. Immediately upon the promulgation of the Ordinance, the Reserve Bank issued a directive bringing the changes to the existing regulations on dealing with stressed assets. The Reserve Bank is working on a framework to facilitate an objective and consistent decision making process with regard to cases that may be determined for reference for resolution under the IBC. Reserve Bank has already sought information on the current status of the large stressed assets from the banks. The RBI would also be constituting a Committee comprised majorly of its independent Board Members to advise it in this matter.

MCA – LLP

MCA has notified the much awaited East Exit Scheme for LLP. The Central Government has amended the Rules by notified the Limited Liability Partnership (Amendment) Rules, 2017, which shall come into force with effect from 20th May, 2017. According to the amendment, LLP has to file all overdue returns before filing an application to registrar for striking off its name. LLP has to file overdue returns in Form 8 and Form 11 up to the end of the financial year in which the limited liability partnership ceased to carry on its business or commercial operations before filing Form 24 along with certain documents. Further a a copy of the acknowledgement of the latest Income-tax return filed along with the copy of the initial limited liability partnership agreement, if entered into and not filed, along with changes thereof in cases where the Limited Liability Partnership has not commenced business or commercial operations since its incorporation is also required to be filed.

MCA – NCLT

The Government of India has notified the Companies (Transfer of Proceedings) Rules, 2016. Through these rules all matters relating to winding up and amalgamation has been transferred from High Courts to NCLT. All petitioners were required to submit all information forming part of the records relating to matter filed under Section 433(e) and such documents including details of the proposed Insolvency Professional to the National Company Law Tribunal having jurisdiction over the Company with in 60 days. The time was further extended upto 6 months i.e 14-06-2017 vide notification dated 28-02-2017. All stakeholders are requested to comply with the said notification. Further, the office of NCLT & Registry shall remain open to accept the filing during the vacations i.e month of June, 2017.

News from NIRC of ICSI

Today, the 22nd May, 2017, NIRC is organising a Meeting of Practising Company Secretaries on the topic “Opportunities For Company Secretaries under Labour Laws” at 5:30 PM at NIRC Auditorium, Parsad Nagar, New Delhi – 110005. Fees – NIL; PCH – 2.

MCA

MCA notifies April 1, 2017 as the date on which provisions of clause (a) to (d) of Sec. 2 of the Insolvency and Bankruptcy Code, 2016, relating to voluntary liquidation / bankruptcy shall come into force. Section 2 provides that the Code shall be applicable to (a) any company incorporated under the Companies Act, 2013/ under any previous company law, (b) any other company governed by any special Act, (c) any Limited Liability Partnership (‘LLP’) incorporated under the LLP Act, 2008, (d) such other body incorporated under any law as notified by the Govt., and (e) partnership firms and individuals, in relation to their insolvency, liquidation, voluntary liquidation / bankruptcy. MCA further, clarifies by way of explanatory memorandum that by giving retrospective effect to the notification, “no one is being adversely affected and giving retrospective effect to this notification is purely procedural in nature”.

MCA

The Ministry of Corporate Affairs had issued clarification regarding applicability of Section 16 (1)(a) of the Companies Act, 2013 with reference to cases under corresponding provisions of Companies Act, 1956 and clarified that applications that were rejected by Regional Directors under section 22(1)(ii)(b) of the Companies Act, 1956 on the grounds that such applications were made after the requisite period of twelve months specified therein, cannot apply afresh under Section 16(1)(a) of the Companies Act, 2013, as the extinguished limitation cannot be considered to be received even if no limitation period has been prescribed/ laid down in said section. Section 16 is relating to Rectification of name by the Central Government.

News from NIRC of ICSI

NIRC is organising one day Seminar on "Opportunities & Prospects For Company Secretaries Under IBC" on Saturday, the 20th May, 2017 Registration: 9.00 AM onwards at Hotel Radisson Blu, H – 3, Sector – 14, Kaushambi – 201010 (Near Kaushambi Metro Station); Fee: Rs.1600/- per delegate inclusive of service tax (Rs.1000/- for students); FREE for Corporate Members of NIRC(2017-18); PCH – 4.

MCA:

MCA has issued a Circular, wherein it has withdrawn the previously issued Circular dated April 27, 2017 w.r.t transfer of shares to IEPF Authority. The subject matter of the previous circular is being reviewed by the Ministry and hence the said circular stands withdrawn with immediate effect. Fresh instructions will be issued in due course of time. As per the earlier issued circular, all companies required to transfer shares to IEPF Authority under the applicable Rules shall transfer such shares, whether held in dematerialised form or physical form, to the demat account of IEPF Authority by way of corporate action.

BSE:

The BSE has notified that the System Audit of stock brokers should be conducted annually on Stock Brokers who use Intermediate Messaging Layer (IML)] / Internet Based Trading (IBT)/ Direct Market Access (DMA)/ Securities Trading using Wireless Technology (STWT) / Smart Order Routing (SOR) and have presence in more than 10 locations or number of terminals are more than 50 and Stock Brokers who are depository participants or are involved in offering any other financial services. The stockbrokers were required to submit the System Audit Report for the period ended March 31, 2017 latest by June 30, 2017. Further, in case of non/late submission of System audit report for period ended March 31, 2017 beyond June 30, 2017, disciplinary action/charges will be initiated including Charges of Rs 100/- per day will be levied- for the month of July 2017 and Exchange will withdraw BOLT /BOLTPLUS/ IML facility for non-submission of System audit report w.e.f. 01-08-2017.