This issue of LexSpeak is pretty long with 14 news updates. Therefore, I will keep my thoughts short and focussed. I can’t help but rant about the functioning or non-functioning of the MCA website which is being managed by Infosys, the so-called torch-bearer of Corporate Governance in India. Since the upgradation from 28th March, www.mca.gov.in, the portal that corporate India uses extensively and is a repository of crores of India Inc data has collapsed. E-forms are constantly being revised or replaced because of ‘technical glitches’ or is it tech goof-ups by the service provider ? Company master data
vanishes or is Company master data vanishes or is erroneous. Directors dead and long gone (from the Company I mean) exist on MCA data while those alive and kicking and current have vanished in this revamping process.
Rs. 15 lacs is the shocking number that came up when one of the professionals tried filing a simple DIR3 form that should have attracted Rs. 500 ! Another entrepreneur gave up registering a company when nothing happened even after 20 days of filing – ROC had half-processed the incorporation forms when suddenly from 28th March, in the name of Central registration services, he lost all access and powers to complete it. Thanks to the shaky portal, no forms are being filed and no one from Infosys nor the Ministry seem to care. I understand the birth of the company is stuck between Bangalore and Delhi. Last heard, the frustrated entrepreneur has abandoned his company registration efforts and gone in for a simple partnership !! Mishaps like this abode all over India even as professionals are sweating and fuming in this sweltering, summer heat, over the pathetic condition of the Infosys managed MCA portal. This is a repeat story of the Sep-Dec, 2015 season when new annual filing forms were introduced and an inefficient, unreliable technology (or should I say people managing the technology ??) made life hell for the CSs, CAs and CMAs servicing corporates.
It is unfortunate that even the press (like Economic Times) deems it important to carry a news item decrying the renaming of Gurgaon to Gurugram on its front page while there is not even a line highlighting the kind of bloopers that the MCA portal is throwing at us !!!
MY QUESTION TO INFOSYS AND MCA IS IF NOT NOW, WHEN ??
I take this opportunity to thank fellow professional CA R Krishnamurthy of Planetcfo for sharing the tax related news updates in this issue. He has promised continued support. Read on……..many this time, as you scroll down. Should you wish to refer to any of our older issues of LexSpeak, do visit our Resource Centre at sharadasc.com.
Incorporation of Companies in one day was announced amidst much fanfare by our PM !!!!
Thanks to the collapse of the MCA portal being handled by Infosys, even generating an ordinary DIN number is taking days. After an outcry from the professionals handling Company e-filings, MCA has relaxed the additional fee payable on e-forms which are due for filing by Companies between 25th March, 2016 to 30th April, 2016. Such relaxation shall be allowed upto 10th May, 2016.Who is going to compensate the countless man(wo)hours lost in the e-filing saga?
Where is Infosys which boasts of Corporate Governance? What happens to the SLAs signed with the Ministry?
Banking, insurance, power sector, non-banking financial companies and housing finance companies are not required to file their financials in Extensible Business Reporting Language (XBRL) mode.
New reporting requirements under CARO 2016 with respect to fixed assets, loans and investment, managerial remuneration, related party transactions, preferential allotment/private placement, non-cash transactions have been notified. Modifications have been made in reporting of inventory, granting of loans to certain parties, default in repayment of dues, fraud reporting etc. CARO 2016 shall be applicable on every report made by auditor u/s 143 of Companies Act, 2013 for FY commencing on or after 1st April, 2015.
Exemption available to Insurance, Banking, Section 8 Companies, OPCs, Private Company which is not a subsidiary or holding Company of a public company, having a paid up capital and reserves and surplus not more than Rs. 1 crore as on the balance sheet date and which does not have total borrowings exceeding Rs. 1 crore from any bank or financial institution during FY.
The Ministry has now made it mandatory for Non-Banking Financial Companies (NBFCs) with net worth of Rs.500 crore or more and holding, subsidiary, joint venture or associate companies of such NBFCs to comply with Indian AS for accounting periods beginning on or after 1st April, 2018. The amended Rules also provide the principles to be followed for the purpose of calculation of net profits of NBFCs. Banking Companies and Insurance Companies shall follow the Ind ASs as notified by the RBI and Insurance Regulatory Development Authority (IRDA) respectively.
Accounting Standards have been amended: AS – 2: Valuation of Inventories, AS – 4: Contingencies, AS – 10: Property, Plant and Equipment, AS -13: Investments, AS -14: Amalgamations, AS – 21: Consolidated Financial Statements, AS – 29: Provisions, Contingent Liabilities and Contingent Assets.
MCA has clarified that companies can keep open offer period below 15 days for buyback of shares with the consent of all the members of the company.
To obtain Startup recognition certificate and to avail Startup benefits under the Startup India Action Plan, kindly click on below mentioned links:
Framework of External Commercial Borrowings (ECB) Policy has been revised by Reserve Bank of India (RBI) to permit NBFCs, CICs, Companies in infrastructure sector, Exploration, Mining and Refinery sectors to raise ECB under Track I of the framework with minimum average maturity period of 5 years subject to 100 % hedging.
RBI has issued Regulations relating to deposits between a person resident in India and a person resident outside India. It includes
An authorized dealer in India may accept deposit under Non-Resident (External) Account Scheme (NRE account), Foreign Currency (Non-Resident) Account Banks Scheme, (FCNR (B) account), Non-Resident (Ordinary) Account Scheme, (NRO account) from a Non-Resident Indian (NRI).
A non-resident having a business interest in India may open, hold and maintain with an authorized dealer in India, a Special Non-Resident Rupee Account (SNRR account).
Resident or non-resident acquirers may open, hold and maintain Escrow Account with Authorised Dealers in India subject to the terms and conditions.
A company registered under Companies Act, 2013 or a body corporate created under an Act of Parliament or State Legislature shall not accept deposits on repatriation basis from a non-resident Indian or a person of Indian origin. However it can renew deposits already accepted.
RBI has issued Regulations relating to remittance abroad of assets in India held by a person whether resident in India or outside India. It includes
A NRI or a PIO may remit through an authorised dealer an amount, not exceeding USD 1,000,000 per FY subject to certain terms and conditions.
An entity in India may remit the provident fund/ superannuation/ pension fund amount in respect of its expatriate staff.
Subject to certain documentation, authorized dealer may permit liaison and branch offices of foreign entities to remit assets and winding up proceeds on closure.
Payment of Taxes in India is responsibility of the remitter.
Section 154 of the Income Tax Act provides for Rectification of Mistake Apparent from record. The department has now provided the facility of seeking rectification of an assessment order where the mistake is apparent from record. The facility is available online and can be used where the assesse is not satisfied with the outcome of the processing of his income tax return.
With a view to providing more security for online filing of Returns, tax payers can now opt for logging in using Aadhaar linkage to generate OTP or login through net banking or use of digital signature certificate. Taxpayers can also select how the password can be reset. These new facilities are called ‘E Filing Vault’.
Rule 7 determines the point of taxation in cases where the recipient of services is liable to pay tax. The Rule states that the point of taxation is the date on which payment is made to the provider of service. A new proviso has been added now to state that where there is a change in the liability to the service provider and in case service has been provided and the invoice issued before the date of such change, but payment has not been made to the service provider as on such date, the point of taxation shall be the date of issuance of invoice.
CENVAT credit is not allowed on products or services which are not subject to output tax. In this regard, the producer or service provider may maintain separate books of account to identify inputs of the producer or provider of service not opting to maintain separate books of account and may pay 6% of value of exempted goods or 7% of value of exempted services. A ceiling against the amount of 6% or 7% has been introduced to state that the total amount payable shall not exceed the “sum total of opening balance of the credit of input and input services available at the beginning of the period to which the payment relates and the credit of input and input services taken during that period.” This may provide relief to many assesses dealing in / providing taxable and exempt goods / services.
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. Lex Valorem disclaims all liability on action taken without professional advice.