You & Child
| Vol#
14 |
Issue No.
282/2022 |
Month
Nov 2022 |
Quote of the day
“Children are like wet cement, whatever falls on them makes an impression.” – Haim Ginott |
Dear Friends,
‘Samhita’as a living, breathing person who is expressive and evolving. From taking baby steps way back in November, 2009 as Lexspeak, shy and unsure of herself (https://sharadasc.com/newsletter/volume-1-issue-no-12010/) to finding her feet during the tweens to completing 13 years in 2022, she has blossomed into a teenager through the 280+ issues sharing a variety of things – regulatory updates, professional articles, statutory calendar reminders, hand-picked thought for the month, jokes, legal maxims, phrases & definitions, INCOTERMS, insurance terms, tips to improve English, better business communication and of course the much-awaited insightful, Editorials. This year she has turned towards books and is recommending good reads with a short review under the“Books : Best Buddy”column. She has been reinventing to keep herself relevant to a cross section of the readers – legal and accounting professionals, entrepreneurs, teachers, students, management graduates, corporate honchos, home makers, social sector evangelists et al. The Sun continues to shine. The Clouds continue to float. The Seas continue to roar. The Rivers continue to flow. The Mountains continue to stand. The Birds continue to fly. So shall Samhita continue to share for years to come, in pursuit of its inspiration“Tamasoma Jyotirgamaya” (light of knowledge removes the darkness of ignorance) !!
Talking of growing up, I really wish we don’t. We are a child if we still retain the following attributes :
Joy| Fearlessness| Curiosity| Energy| Enthusiasm| Mischief| Adventure| Letting go| Experimenting| Being carefree |
Someone said“We are not our age. We are our energy”. This was in full display during our recent trip to Chiguru Farmshttps://chigurufarm.com/, a 15 acres fully functional organic farm, about 50 kms from Bangalore. Children and adults alike, all of us rediscovered the child in us as we walked around plucking fresh fruits from the 35 varieties – guavas, sapotas, bananas, yellow sapotas, lychees, butter fruits, wild berries, water apples, many more that I don’t remember – biting into them, understanding the varieties of rice and millets grown, admiring the beautiful flowers, tall trees, rows of chemical-free vegetables, throwing stones into the well-preserved lakes, lovingly nurtured ponds over the years and enjoying the simple spectre of ripples in the water. Rani, the sheep gave us company all through the 3 hour walk and was happy being cuddled as she posed for clicks. Other farm animals like cows, calves, sheep, chicks, goats welcomed us affectionately and added to the rural experience.
Raghavendra Bhat, an IT professional-turned-Chiguru Founder took us on a trip explaining everything about the farm, its produce, how chemical-free it is and the whole ecosystem of sustainable living. Food served is prepared from 80% ingredients grown naturally on the farm. His anecdotes from the experiential farm trips shamed us into realising how little we know about what we eat and how it is grown. Looking at a 5 day old calf, I believe, a teacher asked “How much milk does she give ?” Another stunner was from an innocent child who asked “Do you grow the snacks also on the farm?” This huge gap has inspired Bhat into offering curated learning trips to school children, families and communities.
Chiguru Farms
Rani, the sheep
Fearing the notorious Bangalore road traffic, while most of us had announced that we would wind up post a sumptuous home-made lunch, we landed up having evening tea and snacks as we huddled over board games and antyakshari. We played many old outdoor and traditional board games that some of us never knew or had long forgotten since childhood. There was so much strategy, aggression, skill and fun involved – simple yet satisfying. Oh how can I forget to mention the thrill of tree climbing, swinging on the rubber tyre hanging from the branches, enjoying the jhoola with gay abandon, sipping freshly made jaggery-cardomom-lemon drink ! Regained the child in us as we got more energetic through the day. It was a day of bonding. A trip back into childhood. All this was ironically a day before Children’s Day / Week – 14th to 20th November.
As you fast forward to adulthood, in this 283rd issue of Samhita, you can catch Anuj Magazine, Sr Director – Product Marketing, Balbix, a good friend of mine and an amazing Sketchnote Artist (Anuj Magazine on LinkedIn) share a crisp and compelling book review of an autobiography by James Dyson. Balaji shares an insightful short story about why we must continue to do the ‘good work’ even if it is not appreciated. Perhaps this is what has kept us going for the last 13 years as Lexspeak metamorphosised into ‘Samhita’ ! In the regulatory updates section we have carried the announcements by MCA, RBI, SEBI, FCRA, GST & IT made during November, 2022.
For any previous issues of Samhita and the readers feedback, please visit our website.
Happy Reading,
Best Buddy
MCA vide notification dated 21 November 2022 has amended the Companies (Registered Valuers and Valuation) Rules, 2017 (the Rules). Select amendments from the notifications are detailed below:
- Rule 3 – Eligibility for Registered Valuers (RV): clause (f) added in sub-rule 2 stating that no partnership, entity or company shall be eligible to act as a RV unless it is a member of an RV organisation. Also, the proviso states that no RV shall be registered with more than 1 organisation at any given time. Already registered RVs shall have 6 months to comply with the said requirements.
- Rule 7A – Intimation of change in personal details etc: RV is required to intimate any change in personal details, composition of directors or partners, modifications to MoA or partnership agreement. Fee details for the same form part of Annexure V to the Rules.
- Annexure III of the Rules – Explanation inserted– the explanation inserted in Part II under sl.no X clarifies that a person who is a whole-time director in the company registered as RV shall not be considered as taking employment and the membership need not be surrendered. This clarification should have been extended to working partners in a partnership firm/LLP, also.
FCRA Guidelines relating to Foreign Hospitality
Vide Office Memorandum (OM) dated 21 November 2022 revised guidelines have been issued under FCRA relating to foreign hospitality. The relevant sections of FCRA, 2010 and FCRR, 2011 ( including definitions of Foreign Source, Foreign Hospitality, Legislature, person and political party) have been reproduced in the OM following which the procedure and guidelines for filing Form FC-2 have been detailed.
Brief of the relevant provisions and rules:
- Restriction on acceptance of foreign hospitality– members of legislature, office bearer of political party, Judge, public servant, employee of any corporation or any other body owned or controlled by the Government are required to take permission prior to acceptance of any foreign hospitality.
However, prior permission shall not be required in case of emergent medical situations, provided the foreign hospitality so received and details of the same are intimated to the Central Government within 1 month. Such intimation shall not be required if the foreign contribution is upto INR 1 lakh. - Prior permission to be obtained ‘online’– Form FC-2 to be filed online to procure prior permission.
- Permission not required in certain cases: the guidelines contain a list of cases where prior permission in FC-2 is not required, including:
- Where the entire expenditure of the foreign visit is borne by Central/State government or centre/state PSU.
- Where the visit is undertaken purely for personal reasons and entire expense is borne by the said person.
- Where the foreign hospitality is provided by an Indian national living in a foreign country.
- Acceptance of assignment on salary, fee etc.
- Visits for long term / short term training courses approved by the Ministry of Personnel, Training and Public Grievances.
- Visits undertaken by Members of Indian Parliamentary delegation under bilateral exchange.
- Each application should be accompanied with specific recommendations from the concerned Ministry/Department.
- A copy of the offer/invitation containing details of the foreign hospitality being offered should be uploaded along with the application.
- The application for grant of permission to accept foreign hospitality, complete in all respects, should be submitted online 2 weeks before the proposed date of onward journey.
Highlights of the guidelines introduced vide OM dated 21 November 2022:
Please refer the guidelines for complete details.
The SEBI (LODR) (Sixth Amendment) Regulations, 2022 notified on 14 November 2022 has brought about certain amendments to the LODR Regulations, 2015. Highlights of the same are given below:
| Sl. No. | Particulars | Relevant Regulation | Amendment |
|---|---|---|---|
| 1. | Appointment of IDs – Proviso inserted | 25A | Earlier, a special resolution was required to be passed by the shareholders of the listed entity for appointment of an Independent Director (ID). Pursuant to the Amendment even if the special resolution is not passed, if the resolution has been passed with a simple majorityandmajority of the public shareholders have casted their votes in favour of the resolution, the ID shall be deemed to have been appointed. Similar resolution passed by majority of shareholders and public shareholders shall be required to remove the said appointed ID. |
| 2. | Monitoring Agency Report – applicability extended for Preferential issue and QIP | 32 | Earlier only listed entities who have appointed a Monitoring Agency (MA) to monitor utilisation of proceeds of public issue of rights issue were required to submit the comments / report of the MA to Stock Exchange (SE) within 45 days of end of each quarter. This requirement has now been extended to funds raised through preferential issue and Qualified Institutional Placement (QIP). |
| 3. | Financial results | 52 |
|
| 4. | Scheme of arrangement – Regulations inserted | 59A, 61A, 94A | Procedure for submission of draft Scheme of Arrangement or Scheme of Arrangement for listed entities with listed non-convertible debt securities or non-convertible redeemable preference shares has been detailed in Regulations 59A, 61A and 94A. The operational aspects of the same have been detailed inSEBI Circular dated 17 November 2022. |
The above mentioned amendments shall be effective from 14 November 2022.
SEBI has notified the guidelines for AIFs for declaration of first close, calculation of tenure and change of sponsor/manager or change in control of sponsor/manager vide Circular dated 17 November 2022. Highlights of the Circular are as follows:
- Timeline for declaration of First Close of schemes of AIFs:
- First Close should not be later than 12 months from the date of communication from SEBI on taking the Private Placement Memorandum (PPM) on record.
- In case of open-ended schemes of Category III AIFs, the First Close shall refer to the close of their Initial Offer Period.
- Existing schemes of AIFs, who have not declared their First Close, shall declare their First Close not later than 12 months from the date of this circular.
- Calculation of tenure of close-ended schemes of AIFs:
- Tenure to be calculated from the date of declaration of First Close.
- AIF can modify the tenure any time before declaration of First Close.
- Fee for change in control of manager/sponsor or change in manager/sponsor of AIFs
Vide Notification dated 24 November 2022, the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015 (PIT Regulations) have been made applicable to Mutual Funds.
Earlier specific exemption was granted to Mutual Funds, vide the Notification the exemption has been omitted extending the applicability of PIT regulation to Mutual Funds as well.
Chapter IIA containing the restrictions on communication in relation to and trading by insiders in the units of Mutual Funds, has been inserted in the PIT Regulations.
BSE issued FAQs on Social Stock Exchange (SSE) on 23 November 2022. The FAQs covers various aspects including:
- Registration criteria for not-for-profit organisations
- How for-profit social enterprises can raise funds on SSE
- Zero Coupon Zero Principal instruments
- Social Auditor and Social Impact Assessment
Vide Circular dated 23 November 2022, GST Network has been included in the list of Financial Information Providers (FIP) under Account Aggregator Framework (AA).
Financial Institutions which are part of the AA Framework can securely exchange financial information amongst them. GST Network has now been added to this framework. The financial information for this purpose shall mean the details filed in Form GSTR-1 and GSTR-3B. The Revenue Department shall be the regulator for this specific purpose.
CBIC vide Circular dated 10 November 2022 has clarified the following w.r.t. the inverted duty structure:
| Sl. No | Issue | Clarification |
|---|---|---|
| 1. | Whether the formula prescribed under sub-rule (5) of rule 89 of the CGST Rules, 2017 for calculation of refund of unutilised input tax credit on account of inverted duty structure, as amended vide Notification No. 14/2022-Central Tax dated 05.07.2022, will apply only to the refund applications filed on or after 05.07.2022, or whether the same will also apply in respect of the refund applications filed before 05.07.2022 and pending with the proper officer as on 05.07.2022? | Vide Notification No. 14/2022-Central Tax dated 05.07.2022 amendment has been made in sub-rule (5) of rule 89 of CGST Rules, 2017, modifying the formula prescribed therein. The said amendment is not clarificatory in nature and is applicable prospectively with effect from 05.07.2022. Accordingly, it is clarified that the said amended formula under sub-rule (5) of rule 89 of the CGST Rules, 2017 for calculation of refund of input tax credit on account of inverted duty structure would be applicable in respect of refund applications filed on or after 05.07.2022. The refund applications filed before 05.07.2022 will be dealt as per the formula as it existed before the amendment made vide Notification No. 14/2022-Central Tax dated 05.07.2022 |
| 2. | Whether the restriction placed on refund of unutilised input tax credit on account of inverted duty structure in case of certain goods falling under chapter 15 and 27 vide Notification No. 09/2022-Central Tax (Rate) dated 13.07.2022, which has been made effective from 18.07.2022, would apply to the refund applications pending as on 18.07.2022 also or whether the same will apply only to the refund applications filed on or after 18.07.2022 or whether the same will be applicable only to refunds pertaining to prospective tax periods? | Vide Notification No. 09/2022-Central Tax (Rate) dated 13.07.2022, under the powers conferred by clause (ii) of the first proviso to sub-section (3) of section 54 of the CGST Act, 2017, certain goods falling under chapter 15 and 27 have been specified in respect of which no refund of unutilised input tax credit shall be allowed, where the credit has accumulated on account of rate of tax on inputs being higher than the rate of tax on the output supplies of such specified goods (other than nil rated or fully exempt supplies). The said notification has come into force with effect from 18.07.2022. The restriction imposed vide Notification No. 09/2022-Central Tax (Rate) dated 13.07.2022 on refund of unutilised input tax credit on account of inverted duty structure in case of specified goods falling under chapter 15 and 27 would apply prospectively only. Accordingly, it is clarified that the restriction imposed by the said notification would be applicable in respect of all refund applications filed on or after 18.07.2022, and would not apply to the refund applications filed before 18.07.2022. |
CBIC has issued a notification dated 15 November 2022 allowing Input Tax Credit (ITC) claims and amendment of invoices till 30 November 2022. From last week, the GST portal has started allowing the amendment related to FY 2021-22 in October 2022 return period. This in line with the recent amendment in the GST Law wherein amendment can be done up to 30th Nov. of the next FY.
CBDT condones delay in filing Form No.10A for which the extended due date was 31 March 2022.
As per the provisions of the Income-tax Act, 1961, Form 10A was required to be filed electronically by 30 June 2021, which was extended to 31 August 2021 and further extended to 31 March 2022 by Circular No. 16/2021 dated 29 August 2021. In view of the representations received by Central Board of Direct Taxes (CBDT) and with a view to avoid genuine hardship to taxpayers, the CBDT condones the delay in filing of Form 10A up to 25 November 2022 in respect of certain provisions of section 12A / section 10(23C) / section 80G / section 35 of the Income-tax Act, 1961.