Hi Folks I receive bouquets sometimes for my editorial but I deserve to get brickbats too for delaying the release of LexSpeak. One of the reasons for delay is difficulty in choosing an appropriate topic or concept for editorial which is timely, relevant and interesting. So also the banner picture which has never been repeated so far in the last 8 years ! Aim is to keep it current and in tune with what is happening around us. This time I had planned to debunk the claim of Ministry of Corporate Affairs (MCA) that ‘1 day company incorporation’ is a reality. You can see Modi’s picture on the MCA website with ease of doing business claims. Well, I agree things have changed drastically since the last 1 year, so that entrepreneurs spend less and less time to get legally started and more and more time on actually planning the business. Thanks to centralisation of the company incorporation process, speed is the name of the game. Unfortunately ‘name availability’ is the first casualty. Getting the desired name for your company even after complying with all the guidelines for name application is still uncertain. Applications are rejected on flimsy grounds or technical grounds without proper justification. Calling the call centre doesn’t help since the people manning it are not technically qualified and technical staff reviewing the applications are not accessible. The experience is as frustrating as calling any customer care centre of a large company. Many a times, significance of the names used are not understood partly because of language issues and partly because of the ‘twitter-like-word-limit’ in the e-forms. I am afraid again speed is the name of the game. Ouch, I suspect ‘speed money’ ! Many of us professionals fear that while most part of the incorporation process is smooth, name availability has become the bastion of a few Delhi based professional touts (sorry to use this word). While we have no evidence, some of the names resembling existing company names baffle us. Wish MCA eases this bit and brings in speed and transparency. While I wanted to just highlight the name availability saga, in comes a message from National Productivity Council seeking suggestions to improve the whole incorporation process which is the first brush an entrepreneur has when he wants to start an entity. I was amazed to see the detailed questionnaire asking the user experience at every stage. Here is an opportunity to voice the practical difficulties experienced day in and day out. The way it is designed, I am confident some good changes will follow soon. Gives me hope that the questionnaire is just not another Government feedback form but one designed to usher in real improvement in the Ease of Doing Business. Believe me, this email forced me to change my editorial and find an excuse for the delay in releasing this issue☺ This time, LexSpeak carries news about RERA becoming effective from 1st May, M&A between Indian and foreign entities and the new geo-location requirement of properties at the time of charge creation. You will also find the article on ‘Closure of Defunct Companies’ by K. Vidhya, interesting. Should you wish to refer to any of our older issues of LexSpeak, do visit our Resource Centre at  sharadasc.com. Warm regards Transfer to Investor Education and Protection Fund (IEPF) is allowed by Companies only if Challans were generated on the MCA Portal. Offline generated challans were accepted only upto 15th December, 2016. As companies which had not generated online challans, but had made the transfer to IEPF before 15th December, 2016, were unable to file E-Form IEPF-1; facilitation for filing the same has been provided in a 2-step procedure. With the approval of the Reserve Bank of India (RBI), a Foreign Company can be merged into an Indian Company or vice versa as per Section 234 of the Companies Act, 2013, effective from 13th April, 2017. Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 has been amended to enable Indian Company to merge with a foreign company situated in the jurisdictions as prescribed, by making an application to the NCLT. Valuers should be members of recognised professional body placed within the jurisdiction of the transferee company and such valuation should be as per internationally accepted principles. Integration of details of Aadhar with the MCA portal is being considered. Going forward, MCA services will be available based on Aadhar based authentication only. The following Indian Individual stakeholders i.e. DIN Holders/Directors/Key Managerial Personnel/Professionals of ICSI – ICAI – ICWAI whether in practise or employment, have to obtain Aadhar at the earliest. Aadhar should be in harmony with the PAN.

Companies have to now necessarily disclose and furnish geo-location data of the immovable property i.e. latitude and longitude of such property, on which charge has been created. The intent behind this is to verify the details of properties recorded with the Registrar as Charges for a Company. To this effect, Forms CHG-1 and CHG-9 have been revised.

W.e.f 1st May, 2017, the Real Estate (Regulation and Development) Act, 2016 shall come into force. Real Estate Regulatory Authority will be established for regulating and promoting the real estate sector. Transparency in transactions will be ensured and consumers’ interest will be protected. Speedy Dispute Redressal mechanism will be set up.

The point of taxation of services provided by a foreign shipping line to foreign charterer with respect to goods destined for India has been specified as the date of bill of lading of goods in the vessel at the port of export. This option will be available with effect from 22nd January, 2017. Thus, no service tax is to be levied if the bill of lading is of date prior to 22nd January, 2017.

The definition of input service has been amended to enable the importer to avail Cenvat credit of service tax paid by him in the given circumstances and certain other consequential amendments are also made.

Section 115TD brings into the ambit of Income Tax, the accreted income of a Trust which is no longer eligible for grant of Registration Under Section 12AA due to conversion of the entity into any other form not eligible for such grant or merger with another entity which is not a trust or institution or for not transferring all its assets to another trust with similar objects upon dissolution. The income which is brought to tax is computed as the total value of assets minus the liabilities in accordance with the method of valuation prescribed based on fair value of the assets. The rules for valuation have been prescribed by insertion of Rule 17CB.

The Income Tax Department has been holding that lease rent is to be assessed under “Income from House Property” whereas the Assesses have been holding that such income is to be treated as business income. In view of various cases on the subject, it has been clarified that in the case of an undertaking which develops and operates or maintains and operates an industrial park/SEZ notified in accordance with the scheme framed and notified by the Government, the income from letting out of premises/ developed space along with other facilities in an industrial park/SEZ is to be charged to tax under the head ‘Profits and Gains of Business’.

Vidhya K, CS student gives a quick rundown on the procedure for ‘Closure of Defunct Companies’ under the Companies Act, 2013, highlighting the new requirements.

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.

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