Corporate Updates – 20-07-2017

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.

Corporate Updates – 18-07-2017

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.

Corporate Updates – 17-07-2017

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.

Corporate Updates – 14-07-2017

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.

Corporate Updates – 13-07-2017

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.

Corporate Updates – 12-07-2017

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.

Corporate Updates – 11-07-2017

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.

Corporate Updates – 10-07-2017

MCA:

MCA has issued amendments to National Company Law Tribunal (Amendment) Rules, 2017 to introduce the new Form NCLT – 9 for filing an appeal or application to NCLT for revival or restoration of the name of the company under Section 252(1) or 252(3). In the National Company Law Tribunal Rules, 2016, after Rule 87, Rule 87A shall be inserted which provides for Appeal or application under Section 252(1) and 252(3) before the Tribunal in Form No. NCLT. 9, with such modifications as may be necessary. Such application Shall be served to ROC and person as the tribunal may direct not less 14 days before the date fixed for hearing of the appeal or application. NCLT shall give appropriate orders for restoration of name, cost to be paid and to file all pending returns with ROC as it deems fit.

MCA

MCA has issued Companies (Appointment and Qualification of Directors) Amendment Rules, 2017 which shall come into force from the date of publication in the Official Gazette i.e 5th July, 2017. Through this notification, exemptions have been granted to certain classes of companies from appointment of Independent Director on the Board of the Company. The following classes of unlisted public company shall not be covered under sub-rule (1) are a joint venture, a wholly owned subsidiary and a dormant company as defined under section 455 of the Act. Further, In the principal rules, in the Annexure, for Physical Form DIR-5 (Application for surrender of Director Identification Number) an e-form DIR-5 shall be substituted.

Corporate Updates – 06-07-2017

CBDT:

The CBDT has clarified the applicability of a new section 269ST which has been inserted in the Income-tax Act, 1961 (the Act) vide Finance Act, 2017 on Non Banking Financial Companies (NBFCs) and Housing Finance Companies (HFCs) w.r.t repayment of loan. The said section inter-alia prohibits receipt of an amount of two lakh rupees or more by a person, in the circumstances specified therein, through modes other than by way of an account payee cheque or an account payee bank draft or use of electronic clearing system through a bank account. Penal provisions have also been introduced by way of a new section 271DA, which provides that if a person receives any amount in contravention to the provisions of section 269ST, it shall be liable to pay penalty of a sum equal to the amount of such receipt. It is clarified that in respect of receipt in the nature of repayment of loan by NBFCs or HFCs, the receipt of one installment of loan repayment in respect of a loan shall constitute a ‘single transaction’ as specified in clause (b) of section 269ST of the Act and all the installments paid for a loan shall not be aggregated for the purposes of determining applicability of the provisions section 269ST.

SEBI

SEBI has issued a Circular relating to Investments by FPIs in Government Securities. It has been decided to revise the limit for investment by FPIs in Government Securities, for the July –September 2017 quarter. Limit for FPIs in Central Government securities shall be enhanced to INR 187,700 Cr. Limit for Long Term FPIs (Sovereign Wealth Funds (SWFs), Multilateral Agencies, Endowment Funds, Insurance Funds, Pension Funds and Foreign Central Banks) in Central Government securities shall be revised to INR 54,300 Cr. The debt limit category of State Development Loans (SDL) shall henceforth have two sub-categories, namely, SDL-General and SDL-Long Term. SDL-General shall be available for investment on tap for all categories of FPIs while SDL-Long Term shall be available for investment on tap for only Long Term FPIs. The limit for investment by all FPIs in SDL-General shall be INR 28,500 Cr while that for SDL-Long Term shall be INR 4,600 Cr.

Corporate Updates – 05-07-2017

MCA – IBBI:

The Insolvency and Bankruptcy Board of India invites comments from public on the 9 regulations notified under the Insolvency and Bankruptcy Code, 2016. The IBBI has evolved a transparent and consultative process to make regulations. It has been endeavor of the IBBI to effectively engage stakeholders in the regulation making process. The process generally starts with a working group making draft regulations. The IBBI puts these draft regulations out in public domian seeking comments thereon. It holds a few round tables to discuss draft regulations with the stakeholders. The IBBI invites comments from public, including the stakeholders and the regulated, on the 9 regulations already notified under the Code. The comments received between 4 th July, 2017 and 31st December, 2017 shall be processed together and following the due process, regulations will be modified to the extent considered necessary. It will be the endeavor of the IBBI to notify modified regulations by 31st March, 2018 and bring them into force on 1st April, 2018.

Employees’ State Insurance

The Employees’ State Insurance (“ESI”) Corporation has notified the amended Rules which may be called Employees’ State Insurance (General) Amendment Regulation, 2017. The amendment has been made to Regulation 31 of the Employees’ State Insurance (General) Regulations, 1950, by changing the due date for payment of ESI contribution from 21st of every month to 15th of every month. These Regulations and changes shall come into force with effect from the contribution payable for the month of June, 2017 i.e. by 15th July, 2017.