Archives for July 2017

MCA:

MCA has notified the Companies (lncorporation) Second Amendment Rules, 2017 which shall come into force on the date of their publication in the official gazette i.e 27/07/2017. The complete process and procedure of Shifting of Registered office from one State to another has been changed. Rule 28, which deal with Shifting of registered office within same state but from one ROC to another, now there is no need to publish advertisement in news paper and to issue individual notices to debenture holders, creditors and depositor. Further, Rule 30 which deal with Shifting of registered office from one state/UT to another has got some welcome changes like No hearing with Regional Director will be held, if no objection is received, Notice to creditors and advertisements in newspaper shall be made not more than 30 days before the date of filing Form INC-23. Earlier, it used to be "not more than 14 days before the date of hearing. Company needs to attach with Form INC-23 a copy of details w.r.t. each of the objection received and responses made by Company. As per amended rule, if no objection is received from any person, the application may be put up for orders without hearing and the order shall be passed within 15 days from the date of application. However, if objection is received, RD shall hold a hearing to get consensus after which, the RD shall pass order within 60 days of filing application.

CBEC – Customs

CBEC has issued Clarification regarding exports under claim for drawback in the GST scenario. As, the higher All Industry Rates (AIRs) under Duty Drawback scheme viz. rates and caps available under columns (4) and (5) of the Schedule of All Industry Rates of Duty Drawback have been continued for a transition period of three months i.e. 1.7.2017 to 30.9.2017. The Government has amended Note and Condition 12A of Notification 131/2016-Cus (N.T.) and dispensed with the requirement of the certificate from GST officer to claim higher rate of drawback. To facilitate exports, the higher rate of drawback can be claimed on the basis of self-declaration to be provided by exporter in terms of revised Note and Condition 12A of aforesaid Notification. Another aspect that may be noted is that there could be cases where export goods had been cleared from factory, warehouse, etc. prior to 1.7.2017 but let export order has not been issued before 1.7.2017. Such goods are not supplies under GST and accordingly, said Note and Condition 12A is not applicable. For such goods, the declaration from exporter or certificate from the then Central Excise officer as applicable in terms of Note and Condition 12 of said Notification No. 131/2016-Customs (NT) shall continue. In order to further facilitate exporters, it may be ensured that all pending drawback claims are disposed of on priority and zero pendency be maintained and Supplementary claims whenever filed should also be processed on priority.

MCA:

The Companies (Amendment) Bill, 2016 has been passed by the Lok Sabha as Companies (Amendment) Bill, 2017 (Copy Attached) & would be referred to Rajya Sabha for consideration and passing. The Bill to further amend the Companies Act, 2013 was introduced in Lok Sabha on 16th March, 2016 whereafter it was referred to the Parliamentary Standing Committee on Finance for examination and report. The Parliamentary Standing Committee on Finance had presented its report on the Companies (Amendment) Bill, 2016 to Lok Sabha and Rajya Sabha on 7th December, 2016. The 43 amendments moved to the Companies (amendment) Bill 2016 on Thursday included one that sought to drop the earlier proposal removing layering restrictions on investment companies. Further, the changes to the Companies Act would go a long way in improving the ease of doing business in India and help the country move higher in the “ease of doing business rankings”.

CBDT

CBDT has provided clarifications on computation of book profit for the purposes of levy of Minimum Alternate Tax (MAT) under section 115JB of the Income-tax Act, 1961 for Indian Accounting Standards (IndAS) compliant companies. The Finance Act, 2017 has amended the provisions of section 115JB of the Income tax Act,1961 so as to provide the framework for computation of book profit for the purposes of levying Minimum Alternate Tax (MAT) in case of Indian Accounting Standards (Ind AS) compliant companies in the year of adoption and thereafter. Further, the MAT-Ind AS Committee has recommended certain amendment to the provisions of section 115JB of the Act with effect from 1st April,2017 (i.e. A.Y.2017-18) which is the date of coming into effect of the amendments made in section 115JB of the Act by the Finance Act, 2017. The recommendations of the Committee regarding issuance of circular in the form of FAQs have been accepted by the Government.

Company_AmendentBill_2016-1.pdf

MCA

The Ministry of Corporate Affairs has notified the new versions of e-Forms. The new version of e-Forms AOC-4 (Form for filing financial statement and other documents with the Registrar), Form CRA-2 (Form of intimation of appointment of cost auditor by the company to Central Government) and Form 21A (Particulars of Annual Return for the Company not having share capital) are available w.e.f. 21st July, 2017. Only new version of e-form will be acceptable and Stakeholders are requested to plan accordingly.

SEBI

SEBI has issued a Circular on Investments by FPIs in Corporate Debt. Earlier, SEBI has redefined the Corporate debt limit of INR 2,44,323 Cr for FPIs as the Combined Corporate Debt Limit (CCDL) for all foreign investments in Rupee denominated bonds issued both onshore and overseas by Indian corporates. The CCDL shall be available on tap for investment by foreign investors till the overall investment reaches 95%, after which, the auction mechanism shall be initiated for allocation of the remaining limits. The Circular also provides for the procedure to be followed in case the overall FPI investment in CCDL exceeds 95%.

CBDT – GST:

The Central Board of Direct Taxes (the Board) had earlier issued Circular No. 1/2014 dated 13.01.2014 clarifying that wherever in terms of the agreement or contract between the payer and the payee, the Service Tax component comprised in the amount payable to a resident is indicated separately, tax shall be deducted at source on the amount paid or payable without including such Service Tax component. In the light of the fact that even under the new GST regime, the rationale of excluding the tax component from the purview of TDS remains valid, the Board hereby clarifies that there is no need to deduct TDS on GST component if shown separately on invoice. Wherever in terms of the agreement or contract between the payer and the payee, the component of ‘GST on services’ comprised in the amount payable to a resident is indicated separately, tax shall be deducted at source, on the amount paid or payable without including such ‘GST on services’ GST for these purposes shall include Integrated Goods and Services Tax, Central Goods and Services Tax, State Goods and Services Tax and Union Territory Goods and Services Tax. Further, for the purposes of this Circular, any reference to ‘service tax ‘ in an existing agreement or contract which was entered prior to 01.07.2017 shall be treated as ‘GST on services’ with respect to the period from 01.07.2017 onward till the expiry of such agreement or contract.

SEBI:

SEBI has issued Circular regarding Disclosure of divergence in the asset classification and provisioning by banks. As per a latest RBI circular, banks are required to disclose cases of divergence in the asset classification and provisioning in a prescribed format. The Notification requires the disclosures to be made in the Notes to Accounts in the ensuing Annual Financial Statements published immediately following communication of such divergence by RBI to the bank. Banks shall disclose, the stock exchanges divergences in the asset classification and provisioning; the additional provisioning requirements assessed by RBI exceed 15 percent of the published net profits after tax and the additional Gross NPAs identified by RBI exceed 15 percent. Further, the disclosures shall be placed as an Annexure to the annual financial results filed with the stock exchanges in accordance with clause (d) of sub-regulation (3) of Regulation 33 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

RBI:

RBI has advised Co-operative Banks the manner of Recording of Details of Transactions in Passbook/Statement of Account. RBI has decided that banks shall at a minimum provide the relevant details in respect of entries in the accounts. RBI has further advised co-operative banks to avoid inscrutable entries in passbooks / statements of account and ensure that brief, intelligible particulars are invariably entered in passbooks / statements of account with a view to avoiding inconvenience to depositors. Further, Co-operative Banks shall also incorporate information about ‘deposit insurance cover’ along with the limit of coverage, subject to change from time to time, upfront in the passbooks. Co-operative Banks shall also incorporate information about ‘deposit insurance cover’ along with the limit of coverage, subject to change from time to time, upfront in the passbooks.

Aadhaar Enrolment

The Unique Identification Authority of India, in exercise of Regulation 12A of the Aadhaar (Enrolment and Update) (Second Amendment)Regulations, 2017 and the Aadhaar (Enrolment and Update) (Third Amendment), hereby directs that every Scheduled Commercial Bank shall provide Aadhaar enrolment and update facilities to its customers. According to Regulation 12A, the Authority may require any Central or State department or agency or any Scheduled Bank or any other entity which requires an individual to undergo authentication or furnish proof of possession of Aadhaar number as a condition for receipt of any subsidy, benefit, service or fulfillment of any obligation pursuant to any Act or Rule or Regulation or order made thereunder, to ensure enrolment of such individual who is yet to be enrolled or update their Aadhaar details, by setting up enrolment centres at their premises. Any non-compliance of these directions shall be dealt under Section 42 of the Aadhaar Act.

SEBI:

SEBI has notified the Securities and Exchange Board of India (Issue and Listing of Debt Securities) (Amendment) Regulations, 2017 which shall be applicable from the date of the notification i.e 13th July, 2017. Amendments are carried out to provide International Securities Identification Number to all companies issuing debt securities. New Regulation 20B has been inserted to deal with International Securities Identification Number and any issuer issuing debt securities on private placement basis, shall comply with the conditions relating to the issue of International Securities Identification Number, as may be specified by the Board from time to time.

CBDT

Income tax department vide press release dated 14th July, 2017 has stated that the IT department has identified 556,000 people for scrutiny over “huge inconsistencies” in the cash deposits made during the demonetization period, also had identified 60,000 people for investigation into claims of excessive cash sales. In the first phase, 17.92 Lakh persons had been identified for e-verification of large cash deposits, of which 9.72 Lakh people had submitted online response. The taxpayer will be able to submit online explanation without any need to visit Income Tax office. All identified persons are being informed through Email and SMS for submitting response online. Further, the Portal of Operation Clean Money (https://www.cleanmoney.gov.in) launched on 16th May 2017 providing comprehensive information and Enabling Transparent Tax Administration.

MCA:

MCA has notified the amended which may be called the Companies (Meetings of Board and its Powers) Second Amendment Rules, 2017 and shall come into force on the date of their publication in the Official Gazette i.e 13-07-2017. Amendments have been carried out to provide more clarity to Rule 3(3)(e), where in any director who intends to participate in the meeting through electronic mode may intimate about such participation at the beginning of the calendar year and such declaration shall be valid for one year. Further, such declaration shall not debar him from participation in the meeting in person in which case he shall intimate the company sufficiently in advance of his intention to participate in person. In Rule 3(11) additional requirement w.r.t draft minutes / proceedings so recorded shall be preserved by the company till the confirmation of the draft minutes are approved by the Board. The Committees of the Board as mentioned in Rule 6 of the said Rules shall now be directly linked with Rule 4 of the Companies (Appointment and Qualification of Directors) Rules, 2014 and companies shall constitute an ‘Audit Committee’ and a ‘Nomination and Remuneration Committee of the Board’ accordingly.

SEBI

SEBI has amended the Guidelines for participation/functioning of Eligible Foreign Investors (EFIs) and Foreign Portfolio Investors (FPIs) in IFSC. It has been decided to replace existing Clause 2 (c) of the circular dated January 04, 2017. Accordingly, in case of participation of an EFI, not registered with SEBI as an FPI, but desirous of operating in IFSC, a trading member of the recognized stock exchange in IFSC may carry out the due diligence on its own or it may rely upon the due diligence carried out by a bank, which is permitted by RBI to operate in IFSC, during the account opening process of an EFI.

News from NIRC of ICSI

NIRC is organising a "Workshop on VOLUNTARY WINDING UP & REVIVAL OF COMPANIES (Restoration of Name), Chief Guest : SHRI RAKESH KUMAR TIWARI, ICLS, Registrar of Companies, Delhi and Haryana on Saturday, the 15th July, 2017 (Registration starts at 9.00 AM) from 10.30 am onwards at Auditorium, ICSI-NIRC Building, 4, Prasad Nagar Institutional Area, New Delhi. Fee : Rs. 400/- upto 14-07-2017 and Rs. 500/- thereafter for all participants including Corporate Members of NIRC; Online Payment / Registration Facility Available; Program Credit Hours: 04.

MCA:

MCA has made Amendment in Schedule IV of the Companies Act, 2013 to provide more clarity to the provisions relating to Independent Directors. Accordingly, Independent Director who has resigned or is removed from the Board of the company shall be replaced by a new independent director within three months (earlier it was 180 days) from the date of such resignation or removal, as the case may be. Further, the independent directors of the company shall hold at least one meeting in a financial year, without the attendance of non-independent directors and members of management. The provisions of sub-paragraph (2) and (7) of paragraph II’ paragraph IV, paragraph V’ clauses (a) and (b) of sub-paragraph (3) of paragraph VII and paragraph VIII shall not apply in the case of a Government company, if the requirements in respect of matters specified in these paragraphs are specified by the concerned Ministries or Departments of the Central Government or as the case may be’ the State Governments and such requirements are complied with by the Government companies.

SEBI

SEBI has issued Securities Contracts (Regulation) (Third Amendment) Rules, 2017, which shall come into force on the date of their publication in the Official Gazette i.e 3rd July, 2017. In the Securities Contracts (Regulation) Rules, 1957, in rule 19A, in sub-rule (1), in the proviso, for the words “three years” the words “four years” shall be substituted. Thereby, any listed company which has public shareholding below twenty five percent, on the commencement of the Securities Contracts (Regulation) (Amendment) Rules, 2014, shall increase its public shareholding to at least twenty five per cent, within a period of four years from the date of such commencement, in the manner specified by the Securities and Exchange Board of India. Earlier, the Companies were required to comply with the same within three years.

News from NIRC of ICSI

NIRC is organising a "Workshop on VOLUNTARY WINDING UP & REVIVAL OF COMPANIES (Restoration of Name), Chief Guest : SHRI RAKESH KUMAR TIWARI, ICLS, Registrar of Companies, Delhi and Haryana on Saturday, the 15th July, 2017 (Registration starts at 9.00 AM) from 10.30 am onwards at Auditorium, ICSI-NIRC Building, 4, Prasad Nagar Institutional Area, New Delhi. Fee : Rs. 400/- upto 14-07-2017 and Rs. 500/- thereafter for all participants including Corporate Members of NIRC; Online Payment / Registration Facility Available; Program Credit Hours: 04.

GST:

An Ordinance to provide for the extension of the Central Goods and Services Tax Act, 2017 and Integrated Goods and Services Tax Act, 2017 to the State of Jammu and Kashmir. The Goods and Services Tax has been introduced in the whole of India except the State of Jammu and Kashmir with effect from the 22nd day of June, 2017 and the Legislative Assembly of the State of Jammu and Kashmir has passed the resolution adopting the provisions of the Constitution (One Hundred and First Amendment) Act, 2016. The Constitution (Application to Jammu and Kashmir) Amendment Order, 2017 has been issued by the President extending the provisions of the Constitution (One Hundred and First Amendment) Act, 2016 to the State of Jammu and Kashmir and the State has proposed to implement the goods and services tax in the said State with effect from the 8th day of July, 2017. The provisions of the Central Goods and Services Tax Act, 2017 and Integrated Goods and Services Tax Act, 2017 are required to be extended to the State of Jammu and Kashmir. As Parliament is not in session and the President is satisfied that circumstances exist which render it necessary for him to take immediate action.

SEBI

SEBI has notified, amendment to Investor Grievance Redressal System and Arbitration Mechanism. In order to further enhance the effectiveness of grievance Redressal mechanism at Market Infrastructure Institutions (MIIs), based on the internal deliberations, discussions and feedback as received from MIIs, it has been decided to add/modify certain provisions in the existing process. In order to enhance transparency and also to provide choice to parties, Exchanges shall disseminate information w.r.t. brief profile, qualification, areas of experience/expertise, number of arbitration matters handled, pre-arbitration experience, etc. of the arbitrators on their website. In order to assist the arbitrators in pronouncing comprehensive and speedy awards, Exchanges shall make necessary arrangements in terms of hardware. There shall be separate panels for arbitration and appellate arbitration. Further, for appellate arbitration, at least one member of the panel shall be a Retired Judge. Exchanges shall obtain prior approval of SEBI before empanelment of arbitrators/appellate arbitrators.

SEBI:

SEBI to initiate action against non-compliant companies which are exclusively listed on Dissemination Board. SEBI has decided to initiate action against the non -compliant “Exclusively Listed Companies (ELCs) on Dissemination Board (DB)", and its directors/promoters. These companies were earlier listed on non-operational/ derecognised stock exchanges and were required to be placed on DB. The ELCs were required to comply with the directions issued by SEBI upto 30-06-2017. Further it was also stipulated that failure to comply with the above would attract actions enumerated as follows. The company, its directors, its promoters and the companies which are promoted by any of them shall not directly or indirectly associate with the securities market or seek listing for any equity shares for a period of ten years from exit from the DB. Freezing of shares of the promoters/directors. List of the directors, promoters etc. of all non-compliant companies as available from the details of the company with nationwide stock exchanges shall be disseminated on SEBI website and shall also be shared with other agencies. Attachment of bank accounts/other assets of promoters/directors of the companies so as to compensate the investors. In line with its circular, SEBI shall now initiate action against the non-compliant companies and its directors/promoters.

CBDT

Ministry of Finance vide its press release has launched Aaykar Setu – Another E-Initiative by CBDT. ‘Aaykar Setu’ is an android based application to directly communicate with the taxpayers, on a range of multiple informative and useful tax services aimed at providing tax information at their fingertips. The tax payers will also be able to receive regular updates regarding important tax dates, forms and notifications on mobile numbers registered with the ITD. All taxpayers who wish to receive such SMS alerts are advised to register their mobile numbers in the Aaykar Setu module.