CBEC – GST:

CBEC has issued Clarification regarding applicability of section 16 of the IGST Act, 2017, relating to zero rated supply for the purpose of Compensation Cess on exports. It is hereby clarified that provisions of section 16 of the IGST Act, 2017, relating to zero rated supply will apply mutatis mutandis for the purpose of Compensation Cess ( wherever applicable). Further, Exporter will be eligible for refund of Compensation Cess paid on goods exported by him [on similar lines as refund of IGST under section 16(3) (b) of the IGST, 2017] and No Compensation Cess will be charged on goods exported by an exporter under bond and he will be eligible for refund of input tax credit of Compensation Cess relating to goods exported [on similar lines as refund of input taxes under section 16(3) (a) of the IGST, 2017].

MCA – NCLT:

The NCLT, Mumbai Bench is reconstituted on appointment of Shri Bhaskara Pantula Mohan, Member (Judicial). Mr Mohan has recently joined the NCLT and posted at NCLT Mumbai vide order no.10/36/2016-NCLT dated 31.7.2017. Accordingly, the Benches at NCLT Mumbai are hereby reconstituted as NCLT Division Bench-I {Shri B.S.V. Prakash Kumar, Member (Judicial) & Shri V. Nallasenapathy, Member (Technical)} and NCLT Division Bench-II {Shri M.K. Shrawat, Member (Judicial) & Shri Bhaskara Pantula Mohan Member (Judicial)}. This is in modification of Order of even number dated 05.07.2016. This shall come into force w.e.f. 3.8.2017.

CBEC – Customs

CBEC has clarified the Leviability of Integrated Goods and Services Tax (IGST) on High Sea Sales of imported goods and point of collection. The issue has been examined in the Board. ‘High Sea Sales’ is a common trade practice whereby the original importer sells the goods to a third person before the goods are entered for customs clearance. After the High sea sale of the goods, the Customs declarations i.e. Bill of Entry etc is filed by the person who buys the goods from the original importer during the said sale. In the past, CBEC has issued various instructions regarding high sea sales appropriating the contract price paid by the last high sea sales buyer into the Customs valuation. GST council has deliberated the levy of Integrated Goods and Services Tax on high sea sales in the case of imported goods. The council has decided that IGST on high sea sale (s) transactions of imported goods, whether one or multiple, shall be levied and collected only at the time of importation i.e. when the import declarations are filed before the Customs authorities for the customs clearance purposes for the first time. Further, value addition accruing in each such high sea sale shall form part of the value on which IGST is collected at the time of clearance.

SEBI

With an intent to provide a fair and efficient securities market stands on investor confidence which can be instilled by keeping the market free from manipulative practices. Regulatory intervention in this regard has been made in the areas of market manipulation and insider trading in the form of Regulations such as SEBI( Prohibition of Insider Trading) Regulations, 1992 replaced by SEBI (Prohibition of Insider Trading) Regulations, 2015. Similarly in order to curb the practice of market manipulation, SEBI has framed SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Markets) Regulations, 2003. An efficacious surveillance mechanism is a prerequisite for early detection of market infractions leading to effective and preventative enforcement measures. In this regard, SEBI has setup a “Committee on Fair Market Conduct” having the representatives of law firms, mutual funds, retail brokers, institutional brokers,forensic auditing firms, Foreign Portfolio Investors, stock exchanges, chambers of commerce, data analytics firms and SEBI. Terms of Reference of the committee includes identification of opportunities for improvement in SEBI (Prohibition of Insider Trading) Regulations, 2015 and SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Markets) Regulations, 2003 more particularly with respect to Trading plans, handling of UPSI during Takeovers and align Insider Trading Regulations to Companies Act provisions. The committee is expected to submit the report within a period of four months.

News from NIRC of ICSI

NIRC of ICSI has decided to start fortnightly "PCS HELPLINE" to provide guidance / counseling in respect of problems and difficulties being faced by our members. In this series, NIRC is organizing "PCS HELPLINE ON INCORPORATION OF COMPANIES & LLP” on the 2ND August, 2017, to resolve the queries over telephone regarding Technical / Procedural / Interpretation issues relating to the topic by CS Ravi Sharma, will be available to answer the queries telephonically, on 2ND August, 2017 from 4.00 PM to 5.30 PM at 011-49343001.

SEBI

SEBI is going to initiate Action against Exclusively Listed Companies and its Promoters/ Directors pending Exit Offer to the Shareholders. SEBI vide circular dated October 10, 2016, provided options to the Exclusively Listed Companies (“ELCs”) on Dissemination Board (“DB”) to raise capital for meeting the capital requirement for getting listed on the nationwide stock exchanges or to provide exit to investors. Further, ELCs were required to furnish the plan of action by January 09, 2017 to the Designated Stock Exchanges (DSEs), which was subsequently extended till June 30, 2017. Therefore, Such ELCs and the Depositories shall not effect transfer, by way of sale, pledge, etc., of any of the equity shares and the corporate benefits such as dividend, rights, bonus shares, split, etc. shall be frozen, for all the equity shares, held by the promoters or directors of non-compliant Exclusively Listed Companies. Further, the non compliant Exclusively Listed Companies, its directors, its promoters and the companies which are promoted by any of them shall not be eligible to access the securities market for the purposes of raising capital and the promoters or directors of non-compliant Exclusively Listed Companies shall not be eligible to remain or become director of any listed company till the promoters of such non-compliant Exclusively Listed Companies provide an exit option to the public shareholders in compliance with SEBI circular dated October 10, 2016, as certified by the concerned Designated Stock Exchanges.

CBDT

CBDT, has entered into nine Unilateral Advance Pricing Agreements (UAPAs) with Indian taxpayers in the month of July,2017. Some of the UAPAs signed had rollback provisions also. The nine APAs signed in the month of July, 2017 pertain to diverse sectors of the economy. CBDT has signed its first APA with a taxpayer engaged in supplying rigs used in Oil & Gas exploration. Other than the Oil & Gas Sector, the APAs pertain to Education, Banking, Pharmaceutical, Manufacturing and Information Technology sectors of the economy. The international transactions covered in these nine APAs include provision of software development services, provision of IT enabled services, provision of engineering design services, distribution, contract manufacturing, etc. With this, the total number of APAs signed till date stands at 171 (Unilateral-159 and Bilateral-12).

CBDT:

CBDT, in order to facilitate the e-filing of return, it is also decided to give extension of five days for e-filing of return i.e upto 5th August, 2017. There are some complaints that the taxpayers are not being able to log on to the e-filing website or not being able to link Aadhaar with PAN because of different names reflected in PAN and Aadhaar database. While technical snags have been removed already, the main reason for failure of people to log in is because of last minute rush and panic in which those who have already logged in want to continue for the entire period for fear of losing it. Further, for the purpose of e-filing return, it would be sufficient as of now to quote Aadhaar or acknowledgement No. for having applied for Aadhaar in e-filing website and actual linking of PAN with Aadhaar can be done subsequently, but any time before 31st August, 2017. However, the returns will not be processed until the linkage of Aadhaar with PAN is done.

MCA

MCA has revised the versions of eForm – Form DIR-12 (Particulars of appointment of Directors and the key managerial personnel and the changes among them), Form CRA-4 (Form for filing Cost Audit Report with the Central Government), Form SPICe (New Version – Simplified Proforma for Incorporating Company Electronically (SPICe) – with mandatory PAN & TAN application included.) and Form INC-27 (Conversion of public company into private company or private company into public company) were recently revised on MCA21 Company Forms Download page. Stakeholders are advised to check the latest version before filing.

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.