Volume 10 Issue No. 181/2018

Emailer

Hi Folks

We are living in times of frugality…………….not of money, materialistic comforts, food or ideas (at least most of us if not the whole world). But of time. Time is a premium product. We want as much in as little time. A 10 minute video seems ages. A 7 minute talk seems a sermon. Anything more than 160 words is an essay. Though we spend hours on facebook, instagram and whatsapp we feel vowels and consonants take up too much of our time. We prefer short forms and acronyms…… TGIF (Thank God It is Friday), LOL (Laugh out Loud), ROFL (Roll on the Floor Laughing), OK (Oll Korrect), Eg. (Exempli Gratia), etc. (et cetra i.e. and the rest).
Not to be left behind, the Government is toying with several acronyms…..NITI (National Institution for Transforming India), SBA (Swacch Bharat Abhiyaan), SMILE (Sidbi Make In India For Small Enterprises), CODS (Condonation of Delay Scheme), POEM (Place of Effective Management), SPICE (Simplified Proforma for Incorporating Company Electronically) and the latest RUN (Reserve Unique Name). RUN is meant to be an EODB (Ease of Doing Business) initiative by the MCA for company incorporation. However the initial experience of users is that most names are getting rejected which means Rs. 1000 lost for each application since there is no resubmission option. It appears that there is Zero government fee upto Rs. 10 lacs authorised share capital. This will work well and deliver the intended incentive to entrepreneurs to start up as a company only if RUN works well. Professionals are apprehensive considering the past experience of dealing with the MCA help-desk which does anything but help. *Mere acronyms don’t ease business. Intention coupled with trained personnel who are accountable in a transparent system does. This is the need of the hour !*
With the Union Budget 2018 promising big bang news, our 181st newsletter Samhita has been kept brief – covers changes in MCA, IBC, GST & FDI in the last fortnight of January, 2018. Of course the changes are as impactful as ever and worth reading.
For our earlier issues do visit the Resource Centre at sharadasc.com. Happy Reading

Reserve Unique Name (RUN)

MCA has introduced a new web service called RUN for reserving name of proposed company or to change the name of the existing company in place of Form INC-1 w.e.f. 26th January, 2018. No re-submission of the application is allowed under RUN.

Further, MCA has prescribed revised list of fees w.r.t. registration of new companies, increase of authorized share capital, for filing revised Financial Statement or Board’s Report etc.

Zero incorporation Fee

Zero fee for incorporation of all Companies with authorized share capital upto Rs. 10 lakh.

Incorporation

MCA has mandated only SPICe for incorporation of companies. Earlier Form INC-7 was available. It is not clear what is to be done for incorporation of Producer Companies, since SPICe does not support details for Producer Company.

DIN

Allotment of Director Identification Number (DIN) by allotting it through SPICe Form only at the time of an individual’s appointment as Director.

The government has reviewed the Foreign Direct Investment (FDI) policy in various sectors to bring more activities under automatic route and ease conditionalities for foreign investment.

Highlights:

–Audit firms – In case foreign investor requires a specific International Audit firm to audit the Indian Company in which they have invested, there should be a joint audit where one of the Auditor should not be a member of the International Audit Firm. For e.g. If Big 4 is nominated as a Global audit Firm, then the joint auditor of the Indian company should not belong to the same Audit Firm.

-100% foreign investment is allowed in investing companies registered as NBFCs with RBI under automatic route.

–Core Investment Companies (CICs) investing in the capital of other Indian Companies or LLP shall continue to do so under approval route. Additionally they shall also be subject to RBI Regulatory Framework.

-100% FDI allowed in the Real estate broking service under automatic route, since it does not amount to real estate business.

-Definition of Medical Device amended.

–Issue of Equity Shares against import of capital goods / machinery/ equipment and pre-operative expenses, etc. is now permitted under Government approval route also in addition to sectors under automatic route. Both are subject to compliance with certain conditions and reporting to RBI in form FC-GPR as per procedure prescribed under the FDI policy.

Above changes will take effect once notified under FEMA.

Royalty and License Fee: CBEC has exempted royalty and license fee from Integrated Tax to the extent it is paid on the consideration attributable to royalty and license fee included in transaction value under Rule 10(1)(c) of Customs Valuation (Determination of value of imported Goods) Rules, 2007 on which the appropriate duties of Customs have been paid.

Reverse Charge Mechanism: Services supplied by the Central Government, State Government, Union territory or local authority by way of renting of immovable property to a registered person under CGST Act, 2017 to be taxed under Reverse Charge Mechanism (RCM).

E-waybill GST: www.ewaybillgst.gov.in has been notified as the portal for facilitating registration, payment of tax, furnishing of returns and computation and settlement of Integrated Tax.

Due date for GSTR-6: Form GSTR -6 due date for July 2017 to Feb 2018 has been extended to 31.3.2018.

Goods and Services Tax Council has recommended exemption of certain services under IGST, exemption of certain goods from CGST and also notified IGST rates of various services.

Late fee for filing form GSTR-1, GSTR-5 and GSTR-5A has been reduced to Rs. 25 per day during which the failure continues. However if the IGST payable is NIL then the late fee would be Rs. 10 per day.

Central Goods and Services Tax Rules, 2017 has been extensively amended. Summary is captured in the Note.

In the spirit of good Governance, an Insolvency Professional and other Professionals appointed by him during a resolution process shall disclose the relationship that they have with the various stakeholders of a Company i.e. Corporate Debtor, Financial Creditor, Operational Creditor, IP and other Professionals like CS, CA, Advocates, Registered Valuers etc.

-What is relationship has also been explained.

-5% or more of his / its gross revenue in a year from professional services to the related party.

-IP or the Other Professional, is a Shareholder, Director, Key Managerial Personnel or Partner of the related party.

-Above relationships through a relative of IP or other Professionals.

-IP or other Professionals as partner or Director of LLP or Company.

In the same spirit of transferency, IP’s professional fee shall be included in the Insolvency Resolution Process cost against the bill raised. It cannot be claimed by him in any other person name.

Note: The contents of this Newsletter are only a summary and has not dealt with any issue in detail. Any action taken or proposed to be taken must be in consultation with professionals and not merely based on the articles / news updates. S. C. Sharada & Associates disclaims all liability on action taken without professional advice.

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

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