Recently I heard a young techie challenge her colleagues – Is your profession a Job, a Career or a Calling ? Job and career need no explanation but what is Calling ? It is something that you pursue with a passion, with a zeal, with your entire being. More often than not, the calling comes from within and when it comes, there is no looking back. No age bar. No barriers of gender, geography, ethnicity or financial resources. This urge to do something, the desire to give back something, the will to pursue something manifests as a limitless energy, propelling you to achieve extraordinary things. The calling comes unannounced. One must be conscious and aware of it. From Swami Vivekananda who strived for Nation Building through the Youth to my Nephew who is making great strides in a top US university in Data Science and AI, despite odds (refer 203rd issue of Samhita for what I wrote back then) to Mrs. Lakshmi Kalyanasundaram, a 91 year young teacher who has been teaching English to spastic children since the age of 67 https://www.bbc.co.uk/programmes/p080b5t4 – for all 3 of them, it is their Calling. Nothing else can explain what they have done or what they are doing. Age, circumstances, finances or the times they were born in, haven’t mattered. Calling is timeless and ageless. As we begin the new decade of 2020, Find your calling, Find life !
Every fortnight, as we start compiling regulatory updates from across legislations and ministries, it appears as if there will be no new updates. It starts with just 1 or 2 but lo, as we proceed into the weeks, the basket is full to offer. Some are genuine changes that reflect progress in the legislative mindset with a positive impact on the economy while many others are corrective actions by way of Rules to rectify clerical / drafting errors. Thanks to the rule-based laws like Companies Act, GST, IBC etc. this is easy and has become the order of the day for the Ministries. So much so that we seem to have lost count of the number of times these laws have been amended. Well, these changes form fodder to Samhita. Wishing that the decade of 2020 ushers in better quality legislations and enforcement in the true spirit of Ease of Doing Business, without just an eye on the World Rankings, a la students aiming for true learning without an eye only on marks. In my opinion this should be the true Calling of all of us – Parents, Children, Teachers, Educational Institutions, Corporates, Society – then and only then the world will be a better place to live in ! As Franklin Roosevelt said, “We cannot always build the future for our youth, but we can build our youth for the future.”
Having said this, catch up with the updates from the stables of CA2013, IBC, GST, IT, RBI etc. along with the interesting article from Mr. Vittal Rao, Labour law Advocate on “Practical Tips for drafting Employment Contracts”, in this 228th issue of Samhita, the first edition of 2020 and the decade !
Wishing all of you a Happy, Healthy & Fulfilling New Year 2020 !!
Companies (Appointment and Remuneration of Managerial Personnel) Amendment Rules, 2020
Threshold limit for appointment of CS increased
The threshold limit for appointment of whole-time Company Secretary in a private limited company has been enhanced from the current Rs.5cr paid-up capital to Rs.10cr, effective from 01.04.2020. This is now at par with the Rs.10cr limit applicable for unlisted public companies which are required to appoint whole-time Key Managerial personnel, which includes a Company Secretary.
Applicability of Secretarial Audit expanded
Currently Secretarial Audit is applicable to all public companies having paid-up capital of Rs.50cr or more OR Turnover of Rs.250cr or more. This is now modified to include all companies, whether private or public, having outstanding borrowings from Banks and Public Financial Institutions amounting to Rs.100cr or more, under the ambit of Secretarial Audit.
It is also clarified that the last date of the latest audited balance sheet shall be the date of reckoning for the above thresholds relating to Secretarial Audit..
Extension of due date- Form BEN-2 and BEN-1
The due date for filing e-Form BEN-2 has been extended up to 31.03.2020 without payment of any additional fee. The earlier due date was 31.12.2019.
Tips for drafting Employment Contracts
In the previous Articles, we had discussed about various clauses in the Employment Contract namely, Non-Compete, Non-disclosure, Confidentiality, Protection of Intellectual Property Rights (IPR), claim on damages – liquidated, un-liquidated, penalty for breach etc. including their conceptual and legal understanding and interpretations and scope of enforceability before the Courts.
Having done so, we need to incorporate the appropriate factors right from step one to the last step of drafting an Employment… Read
Ministry of Labour and Employment
Change in amount of monthly wages for calculation of Compensation
The threshold limits for monthly wages under the Employee Compensation Act for the purpose of calculation of compensation to an employee in case of disablement or death as per the given table in the said Act, stands increased from Rs. 8,000 to Rs. 15,000 w.e.f. 03.01.2020. Rs. 15,000 is the wages for calculation of compensation across the board for all employees, irrespective of their salary drawings. It is pertinent to note that this compensation is only available to employees not covered under the ESI Act.
Ministry of Finance
Indian Stamp (Collection of Stamp-Duty through Stock Exchanges, Clearing Corporations and Depositories) (Amendment) Rules, 2020
Originally the amendments made to the Indian Stamp Act, 1899 vide Finance Act, 2019 were effective from 09.01.2020. However the effective date now stands as 01.04.2020 through the Indian Stamp (Collection of Stamp-Duty through Stock Exchanges, Clearing Corporations and Depositories) (Amendment) Rules, 2020.
Highlights of the amendments to the Indian Stamp Act, 1899 vide Finance Act, 2019 are as follows:
Clause (b) of Section 8A amended – Transfer of securities from a registered owner to a depository (de-materialization) or a depository to a beneficial owner (re-materialisation) shall not be liable to duty.
Clause (c) of Section 8A omitted – Earlier Clause (c) had exempted the transfer of beneficial ownership in securities from duty i.e. transfer of securities dealt in dematerialized form were exempt from payment of stamp duty. Post the above omission; duty may be levied on such transactions.
Section 9A inserted – Stamp duty shall be levied on transaction of securities done on a recognised stock exchange or through off market transfers / over the counter transactions through a depository. Stock exchanges, depositories and such other persons prescribed by the Central Government are authorised to collect duties levied. This is covered under the Indian Stamp Rules, 2020 referred to above.
Section 9B inserted – Duties shall be levied on issue and transfer of securities held in physical form (transactions not on the stock exchange or depositories). In case of issue of securities, stamp duty shall be as per the rate prescribed by the State Govt. where the registered office of the issuer is situated and market value shall be considered for calculating the stamp duty payable. In case of transfer of securities, the seller shall pay the stamp duty calculated on the consideration received against sale or transfer.
SEBI (LODR) (Amendment) Regulations, 2020
Earlier w.e.f. 01.04.2020 top 500 listed entities were required to ensure that the Chairperson of their Board is a non-executive director who is not related to the MD or CEO. However vide SEBI (LODR) (Amendment) Regulations, 2020, the date has been deferred to 01.04.2022, giving them a breather of 2 more years to comply with the “One person, One role” principle.
Video based Customer Identification Process
To enable Regulated Entities (RE) in undertaking Customer Identification Processes (CIPs) and Customer Due Diligences (CDDs) for individuals in a seamless manner, the RBI has prescribed an additional option for REs i.e. a Video based CIP (V–CIP) which shall be Aadhaar based verification. The V–CIP shall be conducted by the RE through a live video based application. The Master Direction on KYC has undergone changes to incorporate this process. It also prescribes the procedure and security measures to be followed by the REs during the use of V–CIP.
Highlights of the IBBI (Liquidation Process) (Amendment) Regulations, 2020 are listed below:
“Corporate Liquidation Account” means the liquidation account maintained by the Board. As notified vide Circular dated 09.01.2020, IBBI has this account with Punjab National Bank which is to be used for deposit of unclaimed dividends and / or undistributed proceeds of liquidation process. Liquidator to deposit unclaimed or undistributed dividend to the ‘Corporate Liquidation account’ before submission of the Final Report. Regulations also contain details about deposit, withdrawal and operation of the Corporate Liquidation Account.
A person who is ineligible under the IBC to submit a resolution plan is prohibited from being a party to any compromise or arrangement during liquidation process.
‘Register of unclaimed dividends and undistributed proceeds’ to be maintained and preserved by the liquidator along with other registers and books required to be maintained.
Secured Creditor who realises his security interest shall:
Pay his share of the insolvency resolution process cost and liquidation cost and workmen’s dues under section 53, as he was expected to pay if he had relinquished the security interest, within 90 days from commencement of liquidation; and
Pay the excess of realised value over the amount of his claim to the liquidator, within 180 days from the date of commencement. If the amount payable is not ascertained within the prescribed time, the liquidator to estimate the amount payable.
Secured creditor not to sell or transfer an asset which is subject to security interest to any person who is not eligible to submit a resolution plan under the insolvency process.
On the heels of prohibiting the promoters and their related parties from submitting a resolution plan during the insolvency resolution process and participating in mergers and arrangements during the liquidation process, now they are also barred from acquiring an asset, which is subject to security interest, from the secured creditor, during liquidation process.
Clarification w.r.t RCM on renting of motor vehicle
A clarificatory amendment has been issued to make it certain that RCM (Reverse Charge Mechanism) on renting of motor vehicle will apply only when the service provider (other than a body corporate), making supply to a body corporate does not issue an invoice charging GST @12% (with ITC) w.e.f. 01.10.2019.
Extension of due dates
CBIC has revised the due dates for filing certain forms as mentioned below:
Earlier due date
Revised due date
Form GST TRAN-1
Form GST TRAN-2
Form GSTR – 1 *
*In order to avail late fee waiver for the period July 2017 to November 2019. The GST council in its 38th meeting had recommended that late fee chargeable on the filing of statements of output supplies in Form GSTR-1, be waived if the same is filed by 10.01.2020.
The government has also released detailed explanation in relation to e-invoicing – Form GST INV-01 vide Notification No. 02/2020 dated 1 January 2020.
Blocking of e-way bill
W.e.f. 11.01.2020 the e-way bill facility will be blocked for taxpayers who have not filed GSTR – 1 for two tax periods. Earlier, this restriction was applicable only for non – filers of GSTR – 3B (Vide Notification No. 75 / 2019 – Central Tax dated 26 December 2019)
Income Tax updates
IT (2nd Amendment) Rules, 2020
Amendments have been made to Rule 10DA and Rule 10DB regarding furnishing of information and maintenance of documents by Constituent Entity of an international group. Please refer to the notification for details.
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,
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