14th to 28th February, 2019. A singular fortnight. Dastardly & coward attack by terrorists on 40 of our brave-hearts. All of them lose their lives so that we live ours. A measured but swift, targeted retaliation by our armed forces. A strong, confident strike by the Government through brilliant strategic, political, defence and economic actions. Overwhelming international support for this ‘war on terrorism’. Shifting moods of a rising nation. Anger & indignation turning to patriotism and pride. History has been created in this single fortnight even as we mourn the martyrdom of our soldiers and salute their supreme sacrifice.
Someone suggested that this fortnight has so much to speak that I must stay quiet. That I must only salute the brave-hearts and not say a word. I almost did it but couldn’t contain when Gauri Mahadik (who lost her husband Army Major Prasad Mahadik in Dec, 2017 in a fire and is in the news for all the right reasons at the right time) was included in a ‘Company Secretaries only’ whatsapp group. For those who don’t know who Gauri is, just google. She is all over the place. You will find almost all the news channels and social media covering her act of bravery. A Company Secretary & Lawyer by profession, when Gauri lost her hero tragically, instead of blaming her destiny she rewrote it the way she wanted. She is joining the Army shortly (after topping the Selection Exams) as a tribute to her husband. She says she wants to wear his uniform and stars and ‘live him’.
While these are bits of her life available on the media, I decided to call her up as a member of the CS fraternity. Gauri sounded confident, composed and surprisingly very cheerful. I couldn’t believe that a young woman from our profession (which is known for diligence, compliance & caution) has taken a bold, rather off-beat path. Her voice was brimming with energy, enthusiasm & eagerness to begin a new chapter in life. Hailing from a middle-class family in Mumbai, Gauri said she dreamt of joining the Indian Navy when still in her teens but due to financial conditions couldn’t. As fate would have it, she is realising her dream of serving the nation and keeping her love alive by joining the Indian Army. When asked what is the secret of her steely resolve, what is the driving force behind this stunning act of ‘country over self’, she quipped “I always want to stand out in the crowd. Be different. Not follow a beaten path.” I was left speechless. Spell-bound by the genuine, natural response of Gauri, the brave-heart who is all set to ‘stand vigil while we sleep in peace’. Salutations and congratulations to this CS-turned-Lieutenant !! Could we have asked for a better woman role model as Women’s Day is round the corner on 8th March ?
As Gauri is keeping a date with her life’s ambitions, corporate India has many dates to keep over the next few months. The need to file information through different forms for different purposes is never ending…MSME1 (for outstanding dues to micro & small enterprises), DPT3 (for different fund flows into companies), SBO (for identifying the natural person who is the beneficial owner in a company), INC22A (for proving that a company is ACTIVE and not a shell)……may be many more. These summer months are getting hotter and stressful with the squeeze on professionals and corporates as the Government is demanding more and more unconventional data in weird ways. Hopefully all this is in the ‘service of the nation’.
This issue of Samhita brings to you details of the ACTIVE form as also how the Angel Tax for startups is in its new avatar. Saradha Kumar shares more on the ‘Myths of Mediation’. Phew, what a Fortnight That Was !! For any previous issues of Samhita and the readers feedback, please visit https://sharadasc.com/resource-center/
Continuing our series on debunking some of the Myths associated with mediation. We shall debunk some more myths…Read more
MCA updates :
ACTIVE – Company Tagging and Verification
Companies (Incorporation) Amendment Rules, 2019 has been notified by the MCA w.e.f 25.02.2019.
A new rule 25A has been inserted which mandates every company incorporated on or before 31.12.2017 (OPC, Sec.8, Private, Public & Government Companies) to file particulars of the Company and its registered office in e-from ACTIVE (Active Company Tagging Identities and Verification) on or before 25.04.2019.
What needs to be filed ?
Certain details about the Company and Registered Office (RO) along with photos of the external and internal building of the RO with a Director / KMP who is to sign the e-form. For more details kindly refer the attached note.
Who need not file ?
Companies which are struck off / amalgamated / dissolved / under liquidation / strike off process are not required to file this e-form.
Who cannot file ?
Companies which have not filed their financial statements or annual returns unless they are under management dispute and the RoC has recorded the same.
Companies wherein the DIN status of Directors is either “De-activated due to non-filing of DIR-3 KYC” or “Disqualified u/s 164(2)”. DINs of all Directors are required to be in “Approved” status before filing this e-form.
What are the Consequences of non-filing ?
Companies which do not file this e-form shall be marked as “ACTIVE – non-compliant” and shall not be allowed to file the following e-forms with the RoC :
SH-7 (For change in Authorized Capital)
PAS-3 (For change in Paid-up Capital)
DIR-12 (For change in Director except for the purpose of cessation)
INC-22 (For change in Registered Office)
INC-28 (For Amalgamation, De-merger)
What is the filing fee ?
There is no filing fee for e-form ACTIVE. However, companies filing the said e-form on or after 26.04.2019 shall have to pay a hefty fee of INR 10,000. To give effect to the said fee, the MCA has notified the Companies (Registration Office and Rules) Amendment Rules, 2019.
Gear up to show that you are an ACTIVE Company !!
Adjudication of Penalties Rules – Amended
The MCA has notified the Companies (Adjudication of Penalties) Amendment Rules, 2019 on 19.02.2019 and which shall come into effect the date of publication of the notification in the Official Gazette.
The highlights of changes in the said rules are as follows :
Maximum period to show cause has been reduced to 30 days from 45 days previously. Minimum period remains 15 days.
Show cause notice issued by the Adjudicating Officer (AO) should mention the relevant penal provisions and the maximum penalty which can be imposed on the company and each of the OIDs (Officers in Default) or any other person
The Company or the OID or any other person can ask for further time upto 15 days to reply.
The reply to the notice is to be filed in electronic mode only. AO can permit personal hearing and consider the following before deciding the penalty amount :
size of the company
nature of business carried on by the company;
injury to public interest
nature of the default
repetition of the default
the amount of disproportionate gain or unfair advantage, wherever quantifiable, made as a result of the default &
the amount of loss caused to an investor or group of investors or creditors as a result of the default
However, where the provisions of the relevant section of the CA, 2013 impose a minimum / fixed penalty the AO shall have no power to reduce the same. The penalty shall be paid only through the MCA portal.
Extension of due date – MSME I
The due date for filing of initial return in form MSME I has been extended to 30 days from the date of deployment of the form. The previous due date was 20.02.2019. However, the form is yet to be released.
The MCA has notified the Companies (Prospectus and Allotment of Securities) Rules, 2014 w.e.f the date of publication of the notification in the Official Gazette.
In the said rules, in Form PAS-3 (Annexure) the option, “not allotted securities with an application size of less than twenty thousand per person” shall be omitted. This is because the earlier restriction of issue size not being less than Rs. 20,000 has been removed
DPIIT Updates :
Angel Tax exemption – Devil is in the details
In a matter of 10 months the provisions relating to Angel Tax exemptions for recognized Startups has changed atleast 4 times with the latest DPIIT (Department of Promotion of Industry and Internal Trade) notification dated 19.02.2019 superseding all earlier notifications. While the government claims to be working towards ease of doing business, the startup community is crying hoarse that the levels of compliances and taxes and more so lack of clarity, is clamping down innovation and entrepreneurship.
In this context, DPIIT has revamped the existing provisions relating to definition of Startups, recognition process, procedure to claim tax exemption on profits and finally on the controversial Angel Tax provisions. Read a brief analysis since the devil lies in the details.
RBI Updates :
Interest Subvention Scheme for MSMEs
MSMEs with Udyog Aadhaar Number and GSTN are eligible for 2% interest subvention if the borrowing is from RBI registered systemically important Non-banking financial companies.
This scheme is available for incremental / fresh term loans and working capital loans dispersed from 02.11.2018 onwards.
GST Updates :
Inter-State supplies to unregistered persons
It is instructed that the registered persons making inter-State supplies to unregistered persons shall report the details of such supplies along with the place of supply in Table 3.2 of FORM GSTR-3B and Table 7B of FORM GSTR–1 as mandated by the law. Contravention of any of the provisions of the Act or the rules made there under attracts penal action under the provisions of section 125 of the CGST Act.
One-time exception for supply of warehoused goods
Supply of warehoused goods while deposited in custom bonded warehouses had the character of inter-State supply as per the provisions of Integrated Goods and Services tax Act, 2017. But, due to non-availability of the facility on the common portal, suppliers have reported such supplies as intra-State supplies and discharged central tax and state tax on such supplies instead of integrated tax. In view of revenue neutral position of such tax payment and that facility to correctly report the nature of transaction in FORM GSTR-1 furnished on the common portal was not available during the period July, 2017 to March, 2018, it has been decided that, as a one-time exception, suppliers who have paid central tax and state tax on such supplies, during the said period, would be deemed to have complied with the provisions of law as far as payment of tax on such supplies is concerned as long as the amount of tax paid as central tax and state tax is equal to the due amount of integrated tax on such supplies.
Place of Supply for IGST invoices
It is instructed that all registered persons making supply of goods or services or both in the course of inter-State trade or commerce shall specify the place of supply along with the name of the State in the tax invoice. The provisions of sections 10 and 12 of the Integrated Goods and Services Tax Act, 2017 may be referred to in order to determine the place of supply in case of supply of goods and services respectively. Contravention of any of the provisions of the Act or the rules made there under attracts penal action under the provisions of sections 122 or 125 of the CGST Act.
Unregulated Deposit Schemes – Banned
The Banning of Unregulated Deposit Schemes Ordinance, 2019 has been promulgated by the President of India w.e.f 21st February, 2019. The purpose of the Ordinance is to ban unregulated deposit schemes and to protect the interests of depositors. It shall extend to whole of India except for Jammu & Kashmir.
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.