Hi Folks
  • ❖ Circa – 2018
  • ❖ Month – January
  • ❖ Volume – 10
  • ❖ Issue – 180
  • ❖ New Release –
As we enter the New Year 2018, LexSpeak is rechristened as “Samhita” meaning “Put together, Connected together, Joined” !!
As a team we deliberated a lot, for days, weeks and months on what exactly will represent the intent of this Communique that started 9 years ago. It is beyond legislative changes and regulatory updates. Beyond reminders for tax dates. Beyond legal concepts & definitions. Beyond a thematic banner. Beyond the ubiquitous Thought for the Day. Beyond the light-hearted Funny Quote. Beyond the peek into myriad colours and flavours of life experienced through my editorials. Samhita is a pot pourri of all of these and more “Put together to Connect all of us together” with a simple intent of sharing the good things in life – knowledge and wisdom, that grows by giving ! My team has enjoyed putting together LexSpeak so far. Will continue to enjoy offering Samhita from now on as we hope you will, receiving and reading this fortnightly communiqué.
This issue carries many updates from the IBC world as also GST which are the 2 hot stars currently. Do not forget to read the relief available for defaulting companies under the Condonation of Delay Scheme until 31st March, 2018.
For our earlier issues do visit the Resource Centre at

Happy Reading

MCA Updates
To provide relief to the defaulting companies who have not filed their financial statements or Annual returns for a continuous period of 3 years, the MCA has rolled out the Condonation of Delay Scheme, 2018. Defaulting company here does not include the Companies which have been already stuck off/whose names have been removed from the Register of Companies under section 248(5) of the Act. It is also clarified here that companies which have defaulted in filing for more than 3 years only are allowed to take shelter under this Scheme.
Highlights of the Scheme are as given below:
  • Scheme shall be operational from 1st January, 2018 till 31st March, 2018.
  • In order to allow the filing of the forms, the DIN of the disqualified directors will be activated temporarily till the Scheme is in force.
  • Only the following overdue forms can be filed under the Scheme:
    • Forms 20B/MGT-7,
    • Form 21A/MGT-7,
    • Form 23AC; 23ACA; 23AC XBRL; 23ACA XBRL; AOC-4, AOC-4 CFS, AOC-4 XBRL;
    • Form 66;
    • Form 23B/ADT-1
  • The Company, after filing these overdue documents, shall seek condonation of delay by filing Form e-CODS, along with the prescribed filing fee of Rs. 30,000/-. This form will be available from 20th February, 2018 or on another date as may be notified by the MCA.
  • Pending prosecutions before the Courts for these overdue documents now filed under the Scheme shall be withdrawn by the concerned Registrar.
In the case of Companies:

  • In case of new companies, only Spice forms to be used for applying for DIN. Limited to 3 DINs only.
  • Current Form DIR-3 (DIN Application) to be used only by existing companies at the time of appointment of a Director.
  • Onus to obtain DIN shifted from proposed Director to the Company appointing him.

In the case of Limited Liability Partnerships (LLPs):

Allotment of DINs for Designated Partners/Partners of LLPs temporarily suspended w.e.f 26th January 2018 till 31st March 2018. It is not clear how new LLPs can be formed during this period if the Designated Partners (Promoters) do not have DIN.

MCA says “Stakeholders plan accordingly” – Is this enabling business or unpreparedness of MCA? Who needs planning!!!

IBC Updates

IBBI has specifically stated certain obligations which an Insolvency Professional (IP) i.e. Resolution Professional / Liquidation Professional should ensure at all times which clearly makes him accountable to the various stakeholders under the IBC Code:

– Compliance of applicable laws

Insolvency professionals should exercise reasonable care and diligence and ensure that the corporate person being represented by them should comply with all the applicable laws while undergoing any process under the Code.

If due to non compliance of any law, the corporate person suffers any loss, then such loss will not form part of the resolution process. If such non compliance was due to the conduct of the insolvency professional, then he/she shall be held responsible for such non compliance.

– No outsourcing of responsibilities

Prescribed duties and responsibilities of an Insolvency professional under the Code should not be outsourced by him to any person, including issuance of certificate from another person certifying the eligibility of a resolution applicant.

– Usage of Registered Number and Address in all communications

An Insolvency professional shall in all his communications state his name, address and email ID as registered with IBBI; his Registration No; and his capacity in which he is communicating.

Amendments have been made to the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 and to the IBBI (Fast Track Insolvency Resolution Process for Corporate Persons) Regulations, 2017.
Specific sources of funds are to be identified in the resolution plan which will be used for paying the liquidation value due to dissenting creditors. The amended regulations defines the term dissenting creditors as a financial creditor who has either voted against or abstained from voting for the resolution plan, which has already been approved by the Committee of Creditors.
Now, as per the amended regulations, liquidation value need not be disclosed in the information memorandum. The resolution professional shall provide the value to every member of the committee in electronic form, after obtaining an undertaking that he/she shall maintain confidentiality and shall not take any undue advantage. The professional shall also not disclose the liquidation value to any other person.

The IBC Bill, 2017 has been passed by both the Houses of Parliament, thereby replacing the IBC Ordinance which was passed on 23rd November, 2017. The assent of the President is awaited. There have been some important changes made in the Bill as compared to the Ordinance passed earlier, the highlights of which are as given below:
  • The scope of persons who are ineligible to be resolution applicants have been narrowed down. It no longer includes the promoter and any other person who is in the management or control of such resolution applicant.
  • Scheduled Banks, Asset Reconstruction Companies and Alternate Investment Funds have been excluded from the definition of ‘Connected Persons’.
  • The Ordinance had barred a person as ineligible to file a resolution, if such person has been classified as a Non-performing asset (NPA) and more than a year has passed from such classification. Now, the Bill has clarified that if such person has cleared the overdue amounts with interest, he is eligible to file a resolution application. The ineligibility period has also been extended from 1 year from the date of classification as NPA upto the commencement of the insolvency process of the corporate debtor.
In terms of Companies (Registered Valuers and Valuation) Rules, 2017, the Insolvency and Bankruptcy Board of India (IBBI) has been delegated powers by the Central Government. Accordingly IBBI has recognised the following Registered Valuers Organisations (RVO):
  • The Institution of Estate Managers and Appraisers in the Asset Class of Land and Building, and
  • The IOV Registered Valuers Foundation in the Asset Classes of Land and Building, Plant and Machinery and Securities or Financial Assets
  • GST on College mess fees: Colleges with mess facility for providing food to their students and staff whether supplied by themselves or outsourced to a third person are liable for GST @ 5% without input tax credit.
  • Return filing calendar: The due dates and other details for filing returns including the calendar have been clarified.
  • E-way bill generation rules shall be effective from 1st February, 2018.
  • Manual processing of refunds: Refund claims on account of inverted duty structure, deemed exports and excess balance in electronic cash ledger will be processed manually.
  • Advance Ruling and Appeals: Applications for Advance Ruling and Appeals will be manual. The procedure and forms have been prescribed in the Circular.
  • Amendment to Form Nos. GSTR-1, GST-RFD-01, Statement 1A under Rule 89 (2)(h)/ GST RFD-01A have been made.
  • CGST Rules amended w.e.f 29th December, 2017:

    • Unique ID granted to agency of United Nations: Unique ID Number granted to a specialized agency of United Nations or multilateral financial Institution and Organization under Section 25(9)(a) of the CGST Act is valid for the whole of India. They are to file refund applications in form No. RFD 10 and RFD-11 on quarterly basis.
    • Effective date of Amendment of Name, Address, particulars of Directors etc: Rule 19 provides that form GST REG-14 is to be filed for change of name, address, particulars of Directors etc. A new Rule 19(1A) has been inserted which states that the effective date of amendment filed under GST REG-14 shall be the date of submission of the application on the common portal and not an earlier date except with the order of the Commissioner for reasons to be recorded in writing.
    • Refund computation under Rule 89(4) has been substituted as follows: Refund Amount = (Turnover of zero-rated supply of goods + Turnover of zero-rated supply of services) x Net ITC ÷ Adjusted Total Turnover. For detailed explanation, please refer to Notification.
    • Refund Rule amended to include services: Rule 96 of the CGST Rules originally included only export of goods. The said Rule now includes services also.
    • Forms GST REG 10 / REG 11 /RFD 10 / GST DRC-05 have been amended.
  • Last date for filing of Monthly return in Form GSTR-1 by Registered persons having aggregate turnover of up to 1.5 crore rupees in the preceding financial year or the current financial year has been extended. The revised dates are as follows :

    Sl. No. Period for which GSTR-1 to be filed Extended Due date for Filing
    1 July-November, 2017 10th January, 2018
    2 December, 2017 10th February, 2018
    3 January, 2018 10th March, 2018
    4 February, 2018 10th April, 2018
    5 March, 2018 10th May, 2018
  • The due dates for quarterly return filing have been amended as follows :

    Sl. No. Quarter for which GSTR-1 to be filed Extended Due date for Filing
    1 July – September, 2017 10th January, 2018
    2 October – December, 2017 15th February, 2018
    3 January – March, 2018 30th April, 2018
  • Other Extended Due dates for filing Returns:

    Name of Return Purpose Period Extended Due date for Filing
    GSTR – 5 Non resident Monthly Returns for the Period from July – December, 2017 31st January, 2018
    GSTR – 5A Online Information and database access or retrieval services Monthly Returns for the Period from July – December, 2017 31st January, 2018
    GSTR-ITC-01 Declaration for claim of input tax credit Eligibility during the period July – November, 2017 31st January, 2018
    GST CMP-03 Intimation of stock details for composition levy 31st January, 2018
Other Updates
Listed companies issuing debt securities on private placement basis are required to mandatorily use Electronic Book Provider (EBP) Mechanism, if the issue size (single, shelf, subsequent) is more than Rs. 200 crores. Issuers of Debt Securities, Commercial Paper and Certificate of Deposits may also use this mechanism, irrespective of the issue size.
The private placement process of debt securities through EBP is intended to enhance the transparency resulting in the better discovery of the prices. This shall come into effect from 1st April, 2018.
RBI has released the updated Master Direction on Foreign Investment in India, including the latest Notification on Issue and Transfer of shares to Non residents dtd. 7th November, 2017. For reporting of FDI into LLPs and Companies, Master Direction on Reporting dtd. 1st January, 2016 continues to be valid.

S. C. Sharada & Associates, Company Secretaries. #405, 7th Cross, IV Block, Koramangala, Bangalore – 560 034 Phone : +91 80 25534374 , +91 80 25536618 Email: [email protected]

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