Archives for October 2017

DGFT:

The Director General of Foreign Trade has made amendments in Para 5.25 (Re-Export / Repair / Replacement of Capital Goods Imported under EPCG Scheme) of the Handbook of Procedures (HBP) of FTP 2015-20, with immediate effect. As per the amendments, Capital Goods imported under EPCG Scheme, may be re-exported for repairs abroad within three years from the date of clearance by Customs of such goods, with permission of RAl Customs Authority. The duty component on the expenditure incurred on the repairs as well as the insurance and the freight, both ways shall be taken into account for re-fixation of the EO. All other contents of Para 5.25 remain unchanged.

CBEC – GST

Department of Industrial Policy and Promotion has launched a Scheme of budgetary support under Goods and Service Tax Regime to the units located in States of Jammu & Kashmir, Uttarakhand, Himachal Pradesh and North East including Sikkim for a residual period for which each of the units is eligible, a new scheme is being introduced. The new scheme is offered, as a measure of goodwill, only to the units which were eligible for drawing benefits under the earlier excise duty exemption/refund schemes but has otherwise no relation to the erstwhile schemes. The said Scheme shall come into operation w.e.f. 01.07.2017 for an eligible unit and shall remain in operation for residual period. The overall scheme shall be valid upto 30.06.2027. The budgetary support shall be disbursed from budgetary allocation of Department of Industrial Policy & Promotion (DIPP), Ministry of Commerce & Industry.

CBEC:

GST Council has made the recommendations for GST rate structure to reduce the cascading of taxes arising on account of non-inclusion of petrol, diesel, ATF, natural gas and crude oil in GST and to incentivise investments in the E&P (exploration and production) sector and downstream sector. Offshore works contract services and associated services relating to oil and gas exploration and production in the offshore areas beyond 12 nautical miles shall attract GST of 12%. Transportation of natural gas through pipeline will attract GST of 5% without input tax credits (ITC) or 12% with full ITC. Import of rigs and ancillary goods imported under lease will be exempted from IGST, subject to payment of appropriate IGST on the supply/import of such lease service and fulfilment of other specified conditions. Further, GST rate on bunker fuel is being reduced to 5%, both for foreign going vessels and coastal vessels.

IBBI:

IBBI invites public comments on (i) draft Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process for Individuals and Firms) Rules,2017, and (ii) draft Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Individuals and Firms) Regulations, 2017. The Insolvency and Bankruptcy Board of India had constituted a Working Group to recommend the strategy and approach for implementation of the provisions of the Insolvency and Bankruptcy Code, 2016 dealing with insolvency and bankruptcy in respect of (i) Guarantors to corporate debtors, i.e., personal guarantors, and (ii) Individuals having business, and submit a report along with draft Rules and Regulations. IBBI invites public comments on these draft rules and regulations by 31st October 2017.

SEBI:

SEBI issued a circular on non compliance with the Minimum Public Shareholding (MPS) requirements as per Regulation 38 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 which mandates a listed entity to comply with the MPS requirements. In order to maintain consistency and uniformity of approach in the enforcement of MPS norms mandated under regulation 38 of the Listing Regulations, procedure has been prescribed through this circular and shall be followed by the recognised stock exchanges/depositories, as applicable, with respect to non-compliant listed entities, their promoters and directors. The stock exchanges shall issue notices to such entities within 15 days from date of observation of non-compliance, intimating all actions taken / being taken and advise the entities to ensure compliance. The recognized stock exchange shall impose an increased fine of ₹10,000/- per day of non-compliance on the listed entity and such fine shall continue to be imposed till the date of compliance by such listed entity. The recognized stock exchange may also consider compulsory delisting of the non-compliant listed entity in accordance with the applicable provisions.

MCA:

The Ministry of Corporate Affairs has opposed some of the recommendations made by the Securities and Exchange Board of India committee on corporate governance on the grounds that they concern matters already covered by the Companies Act. The committee, which was set up by SEBI to suggest ways in which to enhance corporate governance standards, has called for an increase in the minimum number of directors and the inclusion of at least one independent woman board member — areas under the ambit of the Companies Act and therefore not under the remit of the market regulator. The corporate affairs department also expressed concern that some recommendations seek to extend jurisdiction to unlisted companies, which are regulated by MCA. This relates to the obligations of a listed company’s board with respect to subsidiaries.

GST:

The GST Council, in its 22nd Meeting has recommended various facilitative changes to ease the burden of compliance on small and medium businesses. Some of the welcome changes are Registration and operationalization of TDS/TCS provisions to be postponed till 31st March, 2018; The e-way bill system to be introduced in a staggered manner with effect from 1st January, 2018 and will be rolled out nationwide with effect from 01st April 2018. The last date for filing the return in FORM GSTR-4 by a taxpayer under composition scheme for the quarter July-September, 2017 shall be extended to 15th November 2017. The last date for filing the return in FORM GSTR-6 by an input service distributor for the months of July, August and September, 2017 shall be extended to 15th November 2017. Invoice Rules to be modified to provide relief to certain classes of registered person. Suspension of the reverse charge mechanism u/s 9(4) of the CGST Act, 2017 and u/s 5(4) of the IGST Act, 2017 till 31st March 2018. Changes in Composition Schemes to simplify compliance structures for the tax payers. The taxpayers having annual aggregate turnover up to Rs. 1.5 crores shall not be required to pay GST at the time of receipt of advances on account of supply of goods. The GST on such supplies shall be payable only when the supply of goods is made.

IBBI

IBBI has amended the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons)Regulations, 2016 and Insolvency and Bankruptcy Board of India (Fast Track Insolvency Resolution Process for Corporate Persons) Regulations, 2017. According to the amended regulations, a resolution plan shall include a statement as to how it has dealt with the interests of all stakeholders, including financial creditors and operational creditors, of the corporate debtor.

SEBI:

SEBI has formed a Committee on Corporate Governance in June 2017 under the Chairmanship of Mr. Uday Kotak with a view to enhancing the standards of corporate governance of listed entities in India. The committee consisted of officials from the government, industry, professional bodies, stock exchanges, academicians, lawyers, proxy advisors, etc. The committee has deliberated on various issues including ensuring independence in spirit of Independent Directors and their active participation in functioning of the company, Improving safeguards and disclosures pertaining to Related Party Transactions, Issues in accounting and auditing practices by listed companies, Improving effectiveness of Board Evaluation practices. The committee has recommended various new things for the effective corporate governance including the Secretarial audit may be extended to all material unlisted Indian subsidiaries and in the annual report, a certificate from a company secretary in practice be included providing that none of the directors have been disqualified. Further, the committee has recommended that the term ‘Senior Management’ shall specifically include Company Secretary.

CBEC – Service Tax

CBEC has issued Clarification regarding reflection of transitional credit arising out of payment of Service Tax on RCM basis after 30th June 2017 and by 5th/6th July 2017. It has been clarified that in cases where service was received before 1-7-2017 and payment for the value of the service was also made before 1-7-2017, but the service tax was paid by 5th/ 6th July 2017, details of credit should be indicated in Part I of Form ST-3 by filing a revised return. In order to give compliant assessees who had filed their ST 3 return by the due date or some days later, an immediate and viable window to file revised returns, all ST3 returns for the period 1-4-2017 to 30-6-2017 which have been filed upto and inclusive of the 31st day of August 2017, shall be deemed to have been filed on 31-8-2017. Once details of such credit are reflected in the ST-3, the assessee may proceed to fill in the details in Form GST TRAN-1. Further, in the case of assessees who were not registered under ACES, who want to make payment of service tax on or after 1-7-2017, they may avail of the category of “non assessee registration” in the registration module of ACES.

News from NIRC of ICSI

NIRC of ICSI is organising an One Day Workshop on the topic "Process for Revival of the Companies under Section 252 of the Companies Act,2013 & Remedial measures for disqualification of Directors u/s 164(2) of Companies Act, 2013" on Saturday, the 7th October, 2017 from 10.00 AM onwards at ICSI-NIRC Building Auditorium, 4 Prasad Nagar Institutional Area, New Delhi. Fee: Rs.500/- per delegate (inclusive of GST) (Including Corporate Members of NIRC of ICSI). Registration through PayTM is also available. PCH – 4

CBEC:

The Central Board of Excise and Customs has specifies conditions and safeguards for furnishing a Letter of Undertaking in place of a Bond by a registered person who intends to supply goods or services for export without payment of integrated tax. All registered persons who intend to supply goods or services for export without payment of integrated tax shall be eligible to furnish a Letter of Undertaking in place of a bond except those who have been prosecuted for any offence under the Central Goods and Services Tax Act, 2017 or the Integrated Goods and Services Tax Act, 2017 or any of the existing laws in force in a case where the amount of tax evaded exceeds two hundred and fifty lakh rupees. Further, the Letter of Undertaking shall be furnished on the letter head of the registered person, in duplicate, for a financial year in the annexure to FORM GST RFD – 11 and it shall be executed by the working partner, the Managing Director or the Company Secretary or the proprietor or by a person duly authorised by such working partner or Board of Directors of such company or proprietor. The provisions of this notification shall mutatis mutandis apply in respect of zero-rated supply of goods or services or both made by a registered person (including a Special Economic Zone developer or Special Economic Zone unit) to a Special Economic Zone developer or Special Economic Zone unit without payment of integrated tax.

RBI – NBFC

RBI has issued the Master Directions – Non-Banking Financial Company – Peer to Peer Lending Platform(Reserve Bank) Directions, 2017 which shall come into force with immediate effect. These Directions shall apply to every Non-Banking Financial Company- Peer to Peer Lending Platform (NBFC-P2P) as defined in these Directions. The objective of these Directions is to provide a framework for the registration and operation of NBFC-P2Ps in India. "Peer to Peer Lending Platform” means an intermediary providing the services of loan facilitation via online medium or otherwise, to the participants. No NBFC-P2P shall commence or carry on the business of a Peer to Peer Lending Platform without obtaining a Certificate of Registration (hereinafter referred to as “CoR”) from the Bank. Every company seeking registration with the Bank as an NBFC-P2P shall have a net owned fund of not less than rupees twenty million or such higher amount as the Bank may specify. A detailed procedure for registration by the existing and prospective NBFC-P2P is provided through these directions.

News from NIRC of ICSI

NIRC of ICSI is organising an One Day Workshop on the topic "Process for Revival of the Companies under Section 252 of the Companies Act,2013 & Remedial measures for disqualification of Directors u/s 164(2) of Companies Act, 2013" on Saturday, the 7th October, 2017 from 10.00 AM onwards at ICSI-NIRC Building Auditorium, 4 Prasad Nagar Institutional Area, New Delhi. Fee: Rs.500/- per delegate (inclusive of GST) (Including Corporate Members of NIRC of ICSI). Registration through PayTM is alsoavailable. PCH – 4.

Happy CS Day & Congratulations to proud members of fraternity on Golden Jubilee Celebrations…Hon’ble Prime Minister Shri Narendra Modi Ji will be inaugurating the Golden Jubilee Year Celebrations of The Institute of Company Secretaries of India (ICSI) at Vigyan Bhawan on 4th October, 2017. DD News will cover the event Live. Please watch the program on DD News from 6 pm onwards on 4th October, 2017. You can also tune into the PMO’s YouTube channel, Live webcasting & ICSI Youtube Channel by clicking on any of the links provided herehunder :

https://www.youtube.com/pmoindia

http://liveall10.yolasite.com/mjilii.php

https://youtu.be/qgD8htcTuic

SEBI

RBI in the recent past has decided to exclude foreign investment in Rupee Denominated Bonds (RDB) issued overseas by Indian corporates, from the Combined Corporate Debt Limit (CCDL). Accordingly, in partial modification to applicable SEBI circular dated August 04, 2016, with effect from October 03, 2017, foreign investments in RDB shall no longer be reckoned against the CCDL. Further, the CCDL shall be renamed as the Corporate Debt Investment Limits (CDIL) for FPIs. The upper limit for CDIL shall, henceforth, be stated only in Rupee terms. A sub-limit exclusively for investments by Long Term FPIs (Sovereign Wealth Funds (SWFs), Multilateral Agencies, Endowment Funds, Insurance Funds, Pension Funds and Foreign Central Banks) in the infrastructure sector shall be created within the overall CDIL. The term ‘Infrastructure’ shall be as defined under the Master Direction on External Commercial Borrowings issued by the Reserve Bank of India. However, Long term FPIs will continue to be eligible to invest in sectors other than infrastructure. All other extant conditions with respect to FPI investments in corporate debt securities shall continue to apply.

IBBI

The Insolvency and Bankruptcy Board of India has notified the Insolvency and Bankruptcy Board of India (Information Utilities) (Amendment) Regulations, 2017 which shall come into force on the date of their publication in the Official Gazette. In the Insolvency and Bankruptcy Board of India (Information Utilities) Regulations, 2017, in regulation 3, sub-regulations (e) and (f) shall be omitted which are related to the control of the Information Utility and their voting power more than 49% by the person(s) resident outside India. Further, an Indian Company, Listed on a recognised Stock Exchange in India, or any other Company, where no individual holds more than ten percent of the paid-up equity share capital, may hold up to hundred percent of the paid-up equity share capital or total voting power of an information utility up to three years from the date of its registration. Provided that the information utility is registered before 30th September, 2018. New Clause is also added as Regulation 9 (1A) to define the control of the Management of the Company as more than half of the directors of an information utility shall be Indian nationals and residents in India.

MCA:

MCA has issued clarification regarding the timelines for making applicable / available new Form DPT-3 issued vide the Companies (Acceptance of Deposits) Second Amendment Rules, 2017. The said amendment Rules inter-alia provide for substitution of existing Form DPT-3 with a new Form DPT-3. MCA has clarified that new Form DPT-3 shall be made available for E-filing after the month of November, 2017 and till the time the new eform is made available, the existing e-form can be used.

NCLT

NCLT has issued an Order w.r.t transfer of pending cases pertaining to Oppression and Mis-management filed under the provisions of the Section 397 & 398 of the Companies Act, 1956 and / or Section 241-242 of the Companies Act, 2013. It has been decide by the competent authorities to transfer 72 cases which were filed in previously and still pending in National Company Law Tribunal, Principal Bench, New Delhi to National Company Law Tribunal, Division Bench, New Delhi. The order is effective from 26-09-2017 and revised schedule of hearing in all such matters are also allocated. Stakeholders are advised to check the details and act accordingly.