Tax Updates

Our Associate CA. R Krishnamurthy has compiled all the amendments, extensions of due dates etc under Income Tax and GST laws for the fortnight. The same has been carried as an article with a 5 minutes read time.

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MCA updates

Relaxation of levy of additional fee upto 31.07.2021

MCA has notified vide Circular dated 03.05.2021 that, due to the existing pandemic situation, no additional fee shall be levied upto 31.07.2021 on forms to be filed under Companies Act, 2013 (except for charge related forms) and Limited Liability Partnership Act, 2008 for the forms due for filing between 01.04.2021 and 31.05.2021.

(Open General Circular No. 06/2021 dtd. 03.05.2021

Relaxation of time for filing Charge forms (creation or modification)

Currently companies are required to file forms related to creation or modification of charge within 30 days of creation or modification, post which up to 120 days delay, additional / ad valorem fee shall be applicable. As part of the pandemic related relaxation, a scheme had been introduced to condone the delay in filing forms CHG-1(Creation / modification of charge) and CHG-9 (Creation / modification of charge for debenture) w.e.f. 17.06.2020.

A similar Scheme has been introduced for a brief 2 months period i.e. April & May, 2021, due to the prevailing pandemic situation. Details of the Scheme are as follows:

Applicability Relaxation in time Applicable fees
The date of creation/ modification of charge:

If the date is before 01.04.2021 and the 120 days timeline has not lapsed as on 01.04.2021

The period between 01.04.2021 and 31.05.2021 shall not be included for calculation of 120 days. The period for calculation of additional fee

The period beginning from 01.06.2021 + the period beginning from the date of creation / modification till 31.03.2021

If the date is between 01.04.2021 and 31.05.2021 The period between the creation/modification of charge and 31.05.2021 shall not be included for calculation of 120 days If the form is filed prior to 31.05.2021 normal fee shall be payable. If the form was filed thereafter the number of days for the purpose of calculating additional fee shall be number of days from 01.06.2021 till the date of filing.

The scheme shall not cover filing of Form CHG-4 (Satisfaction of charge).

For a detailed analysis of the Scheme with illustrations please read attached article.

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Open General Circular No. 07/2021 dtd. 03.05.2021

Time gap between 2 Board Meetings – extended by 60 days

Due to the resurgence of the COVID-19 pandemic, maximum gap of 120 days between 2 consecutive board meetings has been extended by 60 days for meetings in the April-June, 2021 and July-September, 2021 quarters. This means that the gap between consecutive Board Meetings can be upto 180 days.

(Open General Circular No. 08/2021 dtd. 03.05.2021

Eligible CSR Activities

Vide Circular No. 10/2021 dtd. 23.03.2020, MCA had clarified that spending CSR funds for COVID-19 is an eligible CSR expenditure. It has now been further clarified that CSR funds spent on creating health infrastructure for COVID care as below:

  • establishment of medical oxygen generation and storage plants,
  • emanufacturing and supply of Oxygen concentrators, ventilators, cylinders and other medical equipment for countering COVID-19 or
  • similar such activities

shall be considered as eligible CSR activities under clauses (i) and (xii) of Schedule VII of Companies Act, 2013 relating to healthcare and disaster management under list of Eligible CSR activities.

Hopefully this will augment the capacity building of medical infrastructure which is so critically required now for battling COVID-19.

Open General Circular No. 09/2021 dtd. 05.05.2021
SEBI Updates

SEBI (LODR) – Amendments

The SEBI (Listing Obligations and Disclosure Requirements) (Second Amendment) Regulations, 2021, was notified by SEBI on 05.05.2021. The Amendment Regulations brought about some major changes. Highlights of the Notification include:

  • Applicability – LODR Regulations that have become applicable to listed entities based on market capitalisation shall continue to apply even if they fall below the threshold subsequently.
  • Applicability of Corporate Governance – Once the provisions of Corporate Governance becomes applicable to a listed entity they will continue to remain applicable till the equity share capital or the net-worth reduces and remains below the threshold for a period of 3 consecutive financial years.
  • Risk Management Committee – The applicability, constitution, quorum for meetings, roles and responsibilities of the committee etc have been detailed in the notification.
  • Quarterly report on Corporate Governance – To be filed within 21 days (instead of 15 days) from the end of each of quarter.
  • Business Responsibility and Sustainability Reporting (BRSR) – Top 1,000 listed entities based on market capitalization are to submit a BRSR describing the initiatives taken by the listed entity from an environmental, social and governance perspective from the FY 2022-23 onwards. The format for the same has been notified vide SEBI Circular dated 10.05.2021.
  • Dividend Distribution Policy – Top 1,000 (500 earlier) listed entities based on market capitalization are required to formulate a Dividend Distribution Policy and referred to in the Board’s Report and uploaded on the website.
  • Submission of Voting Results of the General Meeting – Listed Entities to submit the voting results of the General meetings within 2 working days (instead of 48 hours) from the conclusion of the general meeting. Working days has been defined as “working days of the Exchange where the Securities of the entity are listed”.
  • Audio or video recordings and presentations of post earnings/quarterly calls – The requirement for disclosure of audio/video recordings and transcript has been made voluntary w.e.f. 01.04.2021 and mandatory w.e.f 01.04.2022.
  • Additional disclosures on website of the company – To include the Secretarial Compliance Report, Dividend Distribution Policy, annual return under the Companies Act.
  • ID meetings – To be considered on financial year basis in alignment with Companies Act, 2013.
  • Report on transfer/transmission – PCS certificate that all certificates have been issued w.r.t to share transfers required to be filed within 30 days of close of FY. Earlier it was a bi-annual report.
  • Newspaper notice – The requirement to publish newspaper notice about Board Meeting for considering the audited financial statements is dispensed with.

Please refer the Notification for details.

Open Circular No. SEBI/HO/CFD/CMD-2/P/CIR/2021/562 dtd. 10.05.2021
Open Regulations

Extended due dates under LODR

SEBI vide Circular dated 29.04.2021 has relaxed certain due dates for forms required to be filed under SEBI (Listing Obligations Disclosure Requirements) Regulations, 2015 owing to the difficulties faced due to the COVID-19 pandemic.

The following due dates have been extended upto 30.06.2021:

Particulars Original due date
Annual Secretarial Compliance Report 30.05.2021
Quarterly financial results 15.05.2021
Annual audited financial results 30.05.2021
Statement of deviation or variation in use of funds

1. Quarterly financial results

2. Annual audited financial results 30.05.2021
Open Circular No. SEBI/HO/CFD/CMD1/P/CIR/2021/556 dtd. 29.04.2021
SEBI (Substantial Acquisition of Shares and Takeovers) (Amendment) Regulations, 2021

SEBI has notified the SEBI (Substantial Acquisition of Shares and Takeovers) (Amendment) Regulations, 2021 vide Notification dtd. 05.05.2021. Highlights of the amendments are as follows:

Relevant regulation Amendment
Regulation 1, sub-regulation 3 “Institutional Trading Platform” substituted with “Innovators Growth Platform”
Regulation 3 Incase of listed entities who have listed their specified securities on Innovators Growth Platform the maximum shares and voting rights (VRs) of the acquirer company in the target company is capped at 49% (instead of 25%)
Regulation 6 Voluntary public offer is triggered for listed entities who have listed their specified securities on Innovators Growth Platform only if they are entitled to 49% (instead of 25%) shareholding or VRs in the target company
Open Circular No. SEBI/HO/CFD/DIL2/CIR/P/2021/552 dtd. 22.04.2021

Where the acquirer who acquires shares or VRs in a target company which is listed on Innovators Growth Platform-

  • Aggregates 10% or more of the shares of the target company, the acquirer is required to disclose it’s aggregate shareholding and VRs in the target company,
  • Has 10% or more of the shares or voting rights in a target company, the acquirer shall disclose the number of shares or voting rights held and change in shareholding or VRs, even if such change results in shareholding falling below 10% since the last disclosure made and such change exceeds 5% of the total shareholding or VRs in the target company.
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RBI Updates
Restrictions on Account Operations for Non-compliance – Relaxed

Regulated Entities (REs) are required to carry out periodic updation of KYC of existing customers. Keeping in view the current COVID-19 related restrictions in various parts of the country the customer accounts where periodic updation of KYC is due and pending, no restrictions on operations of such account shall be imposed till 31.12.2021, for this reason alone.

Open Circular No. RBI/2021-22/29 dtd. 05.05.2021
Credit to MSME Entrepreneurs

Scheduled Commercial Banks were allowed to deduct the amount equivalent to credit disbursed to new MSME borrowers from their Net Demand and Time Liabilities (NDTL) for calculation of the Cash Reserve Ratio (CRR). This exemption was available up to Rs. 25 lakh per borrower for the credit disbursed up to 01.10.2021. It has been decided to extend this exemption for credits disbursed up to 31.12.2021

Open Circular No. RBI/2021-22/30 dtd. 05.05.2021
Resolution Framework 2.0 for COVID-19 stress – Individuals and Small Businesses

In order to alleviate the COVID related stress to individual borrowers and small businesses, following set of measures are announced by the RBI vide its circular dtd 06.05.2021:

  • Part A – Resolution of advances to individuals and small businesses
  • Part B – Working capital support for small businesses where resolution plans were implemented previously
  • Part C – Disclosures and Credit Reporting

Eligible borrowers for window of resolution:

  • Individuals who have availed of personal loans except credit facilities provided by the lending institutions to their own personnel / staff
  • Individuals who have availed of loans and advances for business purposes and to whom the lending institutions have aggregate exposure of not more than Rs.25 crore as on 31.03.2021.
  • Small businesses, including those engaged in retail and wholesale trade, other than MSMEs as on 31.03.2021 to whom the lending institutions have aggregate exposure of not more than Rs.25 crore as on 31.03.2021.

Highlights of the RBI Circular are captured in the attached Note.

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Open Circular No. RBI/2021-22/32 dtd. 05.05.2021