Archives for 2017

SEBI:

SEBI has prescribed Integrated Reporting by Listed Entities through which it has mandated the requirement of submission of Business Responsibility Report (‘BRR’) for top 500 listed entities under Regulation 34(2)(f) of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 ("SEBI LODR"). Integrated Reporting may be adopted on a voluntary basis from the financial year 2017-18 by top 500 companies which are required to prepare BRR. The information related to Integrated Reporting may be provided in the annual report separately or by incorporating in Management Discussion & Analysis or by preparing a separate report (annual report prepared as per IR framework). As a green initiative, the companies may host the Integrated Report on their website and provide appropriate reference to the same in their Annual Report.

RBI

RBI through its press release stated that RBI will shortly issue 100 denomination banknotes in the Mahatma Gandhi Series-2005, with the inset letter ‘R’ in both the number panels, bearing the signature of Dr. Urjit R. Patel, Governor, Reserve Bank of India, and the year of printing ‘2017’ printed on the reverse of the banknote. All the banknotes in the denomination of 100 issued by the Bank in the past will continue to be legal tender.

SEBI:

SEBI has issued consultation paper for Consolidation and re-issuance of debt securities issued under the SEBI (Issue and Listing of Debt Securities) Regulations, 2008. The Section 121 of the erstwhile Companies Act 1956 had provisions of consolidation and reissuance. However, the recently notified Companies Act 2013 is silent regarding the company’s power to reissue their bonds. In this regard, the Ministry of Corporate Affairs (MCA) has clarified that since Companies Act 2013 is silent on the issue, it may be assumed that such reissuance is possible if there is enabling provision in this behalf in the articles of the company. In view of the clarification provided by MCA, SEBI provided an enabling framework for consolidation and re-issuance. An amendment was made to the SEBI (Issue and Listing of Debt Securities) Regulations, 2008 (ILDS) in the year 2015, wherein regulation 20A was inserted, to provide for consolidation and re-issuance of debt securities. In the light of the above, public comments are invited on the consultation paper latest by February 28, 2017.

CBEC – Service Tax

The Central Government hereby amend the Service Tax Rules, 1994, which may be called as the Service Tax (Second Amendment) Rules, 2017 and shall come into force on the date of publication in the Official Gazzette. In the Service Tax Rules, 1994, in rule 6, in sub-rule (1), after the last proviso, the following proviso shall be inserted, namely,- “Provided also that in case of online information and database access or retrieval services provided or agreed to be provided by any person located in a non-taxable territory and received by non-assesse online recipient, the service tax payable for the month of December, 2016 and January, 2017, shall be paid to the credit of the Central Government by the 6th day of March, 2017.

MCA:

The Ministry of Corporate Affairs has empowered the Regional Director(s) to prepare and maintain/ update the Mediation and Conciliation Panel of eligible experts in pursuance of Rule 3(1) of Section 442 of the Companies Act, 2013 who are willing to be appointed as mediator or conciliator. In this regard, Regional Director, Northern Western Region, Ahmedabad, Gujarat has invited application from eligible person for the panel of experts as Mediators and Conciliators for the year 2017-18. The Professionals willing to be empanelled as Mediators or Conciliators must be in continues practice for at least fifteen years as Chartered Accountant or Cost Accountant or Company Secretary. The application may be forwarded in soft copy and/ or physical/ Hard Copy on the address or at e-mail id of the Regional Director latest by 15th March, 2017.

RBI

RBI has modified Foreign Exchange Management Act, 1999 (FEMA) Foreign Exchange (Compounding Proceedings) Rules, 2000 for Compounding of Contraventions under FEMA, 1999. It has been decided to delegate further powers to Regional Offices in reference to Regulation 9 (2) of Schedule I to FEMA for Delay in filing the Annual Return on Foreign Liabilities and Assets (FLA return), by all Indian companies which have received Foreign Direct Investment in the previous year(s) including the current year. The powers to compound the contraventions of the same have also been delegated to all Regional Offices (except Kochi and Panaji) without any limit on the amount of contravention. Kochi and Panaji Regional offices can compound the above contraventions for amount of contravention below Rupees One hundred lakh (Rs.1,00,00,000/-) only. The contraventions of Rupees One hundred lakh (Rs.1,00,00,000/) or more under the jurisdiction of Kochi and Panaji Regional Offices will continue to be compounded at Central Office as hitherto. These modifications will come into force with immediate effect.

The Hon’ble Finance Minister, Shri. Arun Jaitley presented his fourth Union Budget in the Parliament yesterday.

The budget was broadly focused on 10 themes — the farming sector, the rural population, the youth, the poor and underprivileged health care, infrastructure, the financial sector for stronger institutions, speedy accountability, public services, prudent fiscal management and tax administration for the honest.

Following are the highlights of Budget :

Demonetisation

1. Demonetisation is expected to have a transient impact on the economy.
2. It will have a great impact on the economy and lives of people .
3. Demonetisation is a bold and decisive measure that will lead to higher GDP growth.
4. The effects of demonetisation will not spillover to the next fiscal.

Agriculture Sector

1. Sowing farmers should feel secure against natural calamities.
2. A sum of Rs. 10 lakh crore is allocated as credit to farmers, with 60 days interest waiver.
3. NABARD fund will be increased to Rs. 40,000 crore.
4. Government will set up mini labs in Krishi Vigyan Kendras for soil testing.
5. A dedicated micro irrigation fund will be set up for NABARD with Rs 5,000 crore initial corpus.
6. Irrigation corpus increased from Rs 20,000 crore to Rs 40,000 crore.
7. Dairy processing infrastructure fund wlll be initially created with a corpus of Rs. 2000 crore.
8. Issuance of soil cards has gained momentum.
9. A model law on contract farming will be prepared and shared with the States.

Rural population

1. The government targets to bring 1 crore households out of poverty by 2019.
2. During 2017-18, five lakh farm ponds will be be taken up under the MGNREGA.
3. Over Rs 3 lakh crore will be spent for rural India. MGNREGA to double farmers’ income.
4. Will take steps to ensure participation of women in MGNREGA up to 55%.
5. Space technology will be used in a big way to ensure MGNREGA works.
6. The government proposes to complete 1 crore houses for those without homes.
7. Will allocate Rs. 19,000 crore for Pradhan Mantri Gram Sadak Yojana in 2017-18.
8. The country well on way to achieve 100% rural electrification by March 2018.
9. Swachh Bharat mission has made tremendous progress; sanitation coverage has gone up from 42% in Oct 13 to 60% now.

For youth

1. Will introduce a system of measuring annual learning outcomes and come out with an innovation fund for secondary education.
2. Focus will be on 3,479 educationally-backward blocks.
3. Colleges will be identified based on accreditation.
4. Skill India mission was launched to maximise potential. Will set up 100 India International centres across the country.
5. Courses on foreign languages will be introduced.
6. Will take steps to create 5000 PG seats per annum.

For the poor and under-privilege health care

1. Rs. 500 crore allocated for Mahila Shakthi Kendras.
2. Under a nationwide scheme for pregnant women, Rs. 6000 will be transferred to each person.
3. A sum of Rs. 1,84,632 crore allocated for women and children.
4. Affordable housing will be given infrastructure status.
5. Owing to surplus liquidity, banks have started reducing lending rates for housing.
6. Elimination of tuberculosis by 2025 targeted.
7. Health sub centres, numbering 1.5 lakh, willl be transformed into health wellness centres.
8. Two AIIMS will be set up in Jharkhand and Gujarat.
9. Will undertake structural transformation of the regulator framework for medical education.
10. Allocation for Scheduled Castes is Rs. 52,393 crore
11. Aadhaar-based smartcards will be issued to senior citizens to monitor health.

Infrastructure and Railways

1. A total allocation of Rs. 39,61,354 crore has been made for infrastructure.
2. Total allocation for Railways is Rs. 1,31,000 crore.
3. No service charge on tickets booked through IRCTC.
4. Raksha coach with a corpus of Rs. 1 lakh crore for five years (for passenger safety).
5. Unmanned level crossings will be eliminated by 2020.
6. 3,500 km of railway lines to be commissioned this year up from 2,800 km last year.
7. SMS-based ”clean my coach service” is put in place.
8. Coach mitra facility will be introduced to register all coach related complaints.
9. By 2019 all trains will have bio-toilets.
10. Five-hundred stations will be made differently-abled friendly.
11. Railways to partner with logistics players for front-end and back-end solutions for select commodities.
12. Railways will offer competitive ticket booking facility.
13. Rs. 64,000 crore allocated for highways.
14. High speed Internet to be allocated to 1,50,000 gram panchayats.
15. New Metro rail policy will be announced with new modes of financing.

Energy Sector

1. A strategic policy for crude reserves will be set up.
2. Rs. 1.26,000 crore received as energy production based investments.
3. Trade infra export scheme will be launched 2017-18.

Financial Sector

1. FDI policy reforms – more than 90% of FDI inflows are now automated.
2. Shares of Railway PSE like IRCTC will be listed on stock exchanges.
3. Bill on resolution of financial firms will be introduced in this session of Parliament.
4. Foreign Investment Promotion Board will be abolished.
5. Revised mechanism to ensure time-bound listing of CPSEs.
6. Computer emergency response team for financial sector will be formed.
7. Pradhan Mantri Mudra Yojana lending target fixed at Rs 2.44 lakh crore for 2017-18.
8. Digital India – BHIM app will unleash mobile phone revolution. The government will introduce two schemes to promote BHIM App – referral bonus for the users and cash back for the traders.
9. Negotiable Instruments Act might be amended.
10. DBT to LPG consumers , Chandigarh is kerosene-free, 84 government schemes are on the DBT platform.
11. Head post office as the central office for rendering passport service.
12. Easy online booking system for Army and other defence personnel.
13. For big-time offences – including economic offenders fleeing India, the government will introduce legislative change or introduce law to confiscate the assets of these people within the country.

Fiscal Situation

1. Total expenditure is Rs. 21, 47,000 crore.
2. Plan, non-plan expenditure to be abolished; focus will be on capital expenditure, which will be 25.4 %.
3. Rs. 3,000 crore under the Department of Economic Affairs for implementing the Budget announcements.
4. Expenditure for science and technology is Rs. 37,435 crore.
5. Total resources transferred to States and Union Territories is Rs 4.11 lakh crore.
6. Recommended 3% fiscal deficit for three years with a deviation of 0.5% of the GDP.
7. Revenue deficit is 1.9 %
8. Fiscal deficit of 2017-18 pegged at 3.2% of the GDP. Will remain committed to achieving 3% in the next year.

Funding of Political Parties

1. The maximum amount of cash donation for a political party will be Rs. 2,000 from any one source.
2. Political parties will be entitled to receive donations by cheque or digital mode from donors.
3. An amendment is being proposed to the RBI Act to enable issuance of electoral bonds .A donor can purchase these bonds from banks or post offices through cheque or digital transactions. They can be redeemed only by registered political parties.

Defence Sector

The defence sector gets an allocation of Rs. 2.74,114 crore.

Tax Proposals

1. India’s tax to GDP ratio is not favourable.
2. Out of 13.14 lakh registered companies, only 5.97 lakh firms have filed returns for 2016-17.
3. Proportion of direct tax to indirect tax is not optimal.
4. Individuals numbering 1.95 crore showed an income between Rs. 2.5 lakh to Rs. 5 lakh.
5. Out of 76 lakh individual assessees declaring income more than Rs. 5 lakh, 56 lakh are salaried.
6. Only 1.72 lakh people showed income of more than Rs. 50 lakh a year.
7. Between November 8 to December 30, deposits ranging from Rs. 2 lakh and Rs. 80 lakh were made in 1.09 crore accounts.
8. Net tax revenue of 2013-14 was Rs. 11.38 lakh crore.
9. Out of 76 lakh individual assessees declaring income more than Rs 5 lakh, 56 lakh are salaried.
10. 1.95 crore individuals showed income between Rs. 2.5 lakh to Rs. 5 lakh.
11. Rate of growth of advance tax in Personal I-T is 34.8% in the last three quarters of this financial year.
12. Holding period for long term capital gain lowered to two years
13. Proposal to have a carry-forward of MAT for 15 years.
14. Capital gains tax to be exempted for persons holding land from which land was pooled for creation of the state capital of Andhra Pradesh.
15. Under the corporate tax, in order to make MSME companies more viable, there is a proposal to reduce tax for small companies with a turnover of up to Rs 50 crore to 25%. About 67 lakh companies fall in this category. Ninety-six % of companies to get this benefit.
16. The government proposes to reduce basic customs duty for LNG to 2.5% from 5%.
17. The Income Tax Act to be amended to ensure that no transaction above Rs 3 lakh is permitted in cash.
18. The limit of cash donation by charitable trusts is reduced to Rs 2,000 from Rs 10,000.
19. Net revenue loss in direct tax could be Rs. 20,000 crore.

Personal Income Tax

1. Existing rate of tax for individuals between Rs. 2.5- Rs 5 lakh is reduced to 5% from 10%.
2. All other categories of tax payers in subsequent brackets will get a benefit of Rs 12,500.
3. Simple one page return for people with an annual income of Rs. 5 lakh other than business income.
4. People filing I-T returns for the first time will not come under any government scrutiny.

5. Ten % surcharge on individual income above Rs. 50 lakh and up to Rs 1 crore to make up for Rs 15,000 crore loss due to cut in personal I-T rate. 15 surcharge on individual income above Rs. 1 crore to remain.

News from NIRC of ICSI

NIRC is organising a program on Union Budget -2017 by Dr. Girish Ahuja & CS. Bimal Jain, on Thursday, the 2nd February, 2017 from 5.30 PM onwards at Scope Convention Centre Auditorium, Lodi Road, New Delhi. No Participation Fees; PCH: 2.

CBDT:

Income Tax Department has initiated Operation Clean Money. Initial phase of the operation involves e-verification of large cash deposits made during 9th November to 30th December, 2016. Data analytics has been used for comparing the demonetisation data with information in ITD databases. In the first batch, around 18 lakh persons have been identified in whose case, cash transactions do not appear to be in line with the tax payer’s profile. ITD has enabled online verification of these transactions to reduce compliance cost for the taxpayers while optimising its resources. The information in respect of these cases is being made available in the e-filing window of the PAN holder and the taxpayer will be able to submit online explanation without any need to visit Income Tax office. Email and SMS will also be sent to the taxpayers for submitting online response on the e-filing portal. The response of taxpayer will be assessed against available information. In case explanation of source of cash is found justified, the verification will be closed without any need to visit Income Tax Office. The taxpayers covered in this phase should submit their response on the portal within 10 days in order to avoid any notice from the department and enforcement actions under the Income-tax Act as also other applicable laws.

Department of Trade and Taxes

Department of Trade and Taxes has allowed extension for filing of online return for 3rd Quarter of 2016-17. Thereby, the last date of filing of online/hard copy of third quarter return for the year 2016-17 in form DVAT-16, DVAT-17 and DVAT-48 has been extended to 13/02/2017. However, the tax due shall continue to be paid in the usual manner as per the provisions of Section 3(4) of the Delhi Value Added Tax Act, 2004. The dealers filing the returns through digital signature need not be required to file hard copy of the return/ Form DVAT-56.

SEBI:

SEBI has issued Procedures for Exchange Listing Control Mechanism. Regulation 45 of the SECC Regulations provides for listing of stock exchanges on any recognised stock exchange, other than itself and its associated stock exchange. It has been decided that the Listing Department of the listing stock exchange (i.e. a stock exchange on which the listing is done) shall be responsible for monitoring the compliance of the listed stock exchange (i.e. a stock exchange which is getting listed) as in the case of listed companies. The Independent Oversight Committee of the listing stock exchange shall exercise oversight at the second level to deal with the conflicts, if any. An independent Conflict Resolution Committee (CRC) constituted by SEBI, with an objective for independent oversight and review, shall monitor potential conflicts between listed and listing stock exchange on a regular basis. The listed stock exchange aggrieved by the decision of the Independent Oversight Committee of the listing exchange may appeal to the CRC.

RBI

RBI has decided to partially withdraw the cash withdrawal limits placed on Current Accounts/Cash Accounts/Over draft Accouts with immediate effect. The limits on Savings Bank accounts will continue for the present and are under consideration for withdrawal in the near future. Further, form 1st February, 2017 onwards, cash withdrawal from ATM will have no Limits. Further, banks are urged to encourage their constituents to sustain the movement towards digitization of payments and switching over of payments from cash mode to non-cash mode.

MCA

Ministry of Corporate Affairs has notified amendment to the Companies (Incorporation) Rules, 2014, which may be called the Companies (Incorporation) Amendment Rules, 2017 and shall come into force on the 30th day of January, 2017. The amendments in the principal rules are made to substitute Rule 18 to provide that the Certificate of Incorporation shall be issued by the Registrar in Form No.INC-11 and the Certificate of Incorporation shall mention permanent account number of the company where if it is issued by the Income-tax Department. Further, revised version of Form No. INC-11 and Form No. INC-32 have also been introduced through the said notification.

MCA

As part of the Ministry’s efforts towards promoting greater Ease of Doing Business to stakeholders, new version of Form SPICe (INC-32) with date of effect as 30th January 2017 will be notified soon, so as to include the functionality of applying for Company PAN and first TAN (allotted by Income Tax Deptt) in the SPICe form itself. Applying for PAN / TAN will be compulsory for all fresh incorporation applications filed in the new version of the SPICe form. Stakeholders will be allowed to download new version of SPICe form for all fresh incorporation applications w.e.f 01 Feb 2017. For resubmitting SPICe forms filed before 30th January 2017, stakeholders are required to use older version of the SPICe form for resubmission, if needed. The old version can be used only for resubmissions. Further, Stakeholders may, therefore, kindly note that filing of SPICe forms (including resubmissions) will NOT be permitted temporarily w.e.f Saturday, 28th January until Tuesday 31st January, 2017.

CBDT:

Ministry of Finance (Department of Revenue) has issued Guiding Principles for determination of Place of Effective Management (POEM) of a Company. For the purposes of these guidelines, a company shall be said to be engaged in “active business outside India” if the passive income is not more than 50% of its total income; and (i) less than 50% of its total assets are situated in India; and (ii) less than 50% of total number of employees are situated in India or are resident in India; and (iii) the payroll expenses incurred on such employees is less than 50% of its total payroll expenditure. In cases of companies other than those that are engaged in active business outside India, the determination of POEM would be a two stage process, namely:- (i) First stage would be identification or ascertaining the person or persons who actually make the key management and commercial decision for conduct of the company’s business as a whole. (ii) Second stage would be determination of place where these decisions are in fact being made. The guidelines also provide some of the guiding factors which may be taken into account for determining the POEM.

SEBI

Securities and Exchange Board of India had issued Guidelines for exit of stock exchanges vide Circular dated May 30, 2012 and provided details of the conditions for exit of de-recognised/ non-operational stock exchanges including treatment of assets of de-recognised/ non-operational exchanges and a facility of Dissemination Board for Companies listed exclusively on such exchanges. The Board has passed an Order on January 23, 2017 providing exit to Delhi Stock Exchange Limited ("DSE"). DSE is the eighteenth Stock Exchange to exit under this policy. Further, the Income Tax Authorities, Ministry of Corporate Affairs and the State Government of Delhi are being intimated about the exit of DSE, for appropriate action at their end.

SEBI:

SEBI has reviewed the market data feed mechanism of the stock exchanges in consultation with its Technical Advisory Committee (TAC) and based on the recommendations, it has been decided that stock exchanges shall formulate a comprehensive policy document for providing stock market related data to the market participants in a fair and transparent manner, irrespective of the type of mechanism used by the stock exchanges for broadcasting of data. SEBI has also directed the stock exchanges to synchronize their system clocks with the atomic clock before the start of market.

MOF:

Ministry of Finance (Department of Expenditure) in supersession of earlier notifications, has granted Transport Allowance at double the normal rates to deaf and dumb employees of Central Government. Further, it has been decided that Transport Allowance at double the normal rates is also admissible to Hearing Impaired employees. The admissibility at double rates is subject to the recommendation of ENT, Head of Department of Government Hospital. These orders will be retrospectively effective from 19-02-2014.

MCA:

MCA has deferred the date for roll-out of New version of e-Form SPICe (INC-32) with functionality of applying for Company PAN and TAN is being revised and will be communicated shortly. Stakeholders may therefore continue to file existing version of Form SPICe (INC-32) w.e.f. 21st January 2017. Further, the versions of Form INC-7 (Application for Incorporation of Company (Part I Company and Company with more than Seven Subscribers)), Forms ADJ (Memorandum of Appeal), Form DIR-6 Intimation of change in particulars of Director to be given to the Central Government and Form 23AC (Filing balance sheet and other documents with the Registrar 2.(a)) were recently revised on MCA21 Company Forms Download page. Stakeholders are advised to check the latest version before filing.

CBDT:

Ministry of Finance (Department of Revenue) has issued Clarifications on the Taxation and Investment Regime for Pradhan Mantri Garib Kalyan Yojana, 2016. The Taxation and Investment Regime for Pradhan Mantri Garib Kalyan Yojana, 2016 provides an opportunity to persons having undisclosed income in the form of cash or deposit in an account maintained with a specified entity to declare such income and pay tax, surcharge and penalty totaling in all to 49.9 per cent of such declared income and make a mandatory deposit of not less than 25% of such income in the Pradhan Mantri Garib Kalyan Deposit Scheme, 2016.The Scheme has commenced on 17.12.2016 and shall remain open for declarations/deposit upto 31.03.2017. The Central Government has considered the queries and decided to clarify the same in the form of questions and answers.