Hi Folks When I started LexSpeak way back in 2009, the intention was to draw your attention to the regulatory updates and as a preamble to share my thoughts on few other issues as well. However over a period of time, my thoughts and observations seem to have become the focus area. So much so that I know most of you read the editorial without even scrolling down to read the updates. Editorial is a ‘side-kick’ at best. Regulatory changes are the centre-piece or the hero which Lexspeak is supposed to project. For a change, I will allow my thoughts to remain a ‘side-kick’ and request you to give the place of honour to the 14 or 15 updates we are carrying in this 169th edition ☺. I choose to keep it short hence. Should you wish to refer to any of our older issues of LexSpeak, do visit our Resource Centre at  www.lexvalorem.com. Warm regards Notifications have been issued exempting Private Companies, Section 8 Companies and Govt. Companies from certain specified provisions of the Companies Act, 2013. Cash flow statement not required to be prepared by Start-up Private Companies. Annual Return for a Start-up Private Company shall be signed by the Company Secretary, or where there is no Company Secretary, by the Director of the Company. Start-up Private Companies are required to hold only 1 Board meeting in each half of the calendar year and the gap between 2 meetings not to be less than 90 days. Small companies are required to mention the aggregate amount of remuneration drawn by Directors. Disclosure of adequacy of internal financial control in Auditor’s Report exempted for OPC or a small company or which has a turnover less than Rs. 50 crores or having aggregate borrowings less than Rs. 25 crores during the financial year. No limit on maximum number of Directors and passing of special resolution no longer required. Loan can be given by a company in which 26% or more of the paid up share capital is held by the Central Government or one or more State Governments or both, in respect of loans provided by such company for funding industrial R&D projects. AGM shall be held at the Registered Office of the Company or such other place within the city, town or village in which the registered office is situated or such other place as the Central Government may approve in this behalf. Retirement of Directors at AGM and filling up of casual vacancy of retiring Directors shall not apply to a Govt. Company, not being listed, in which not less than 51% of paid up share capital is held by Central Govt, or by any State Govt or by the Central Govt and one or more State Govt; and also to the subsidiary of a Govt company. Power to compromise or make arrangements with Creditors and Members and M&A of Companies has been conferred on Central Government. All the exceptions, modifications and adaptations provided to Private Companies, Section 8 Companies and Government Companies stand automatically withdrawn, if they fail to file their Financial Statements or Annual Return with the Registrar. MCA has clarified that as the transfer of shares to Investor Education and Protection Fund (IEPF) is an act of operation by law, companies should follow the same procedure prescribed for transmission of shares, while transferring shares to the IEPF. Duplicate shares need not be issued in such cases. W.e.f 20th May, 2017, LLP rules have been amended with respect to defunct LLPs. Before filing Form 24 for striking off name of LLP, overdue returns shall be filed in Forms 8 and 11 upto the end of the FY in which the LLP ceased to carry on business or operations. Along with the form to be filed for striking off name, acknowledgement copy of the latest filed Income tax returns under the IT Act, 1961 also to be enclosed. Other necessary documents which needs to be enclosed have also been notified.

Investment in Power Finance Corporation Limited bonds after 15th June 2017 qualifies for exemption under Capital Gains Sec 54EC of the Income Tax Act, 1961. The bond can be redeemed after three years.

Form 26QC has been notified as the Challan cum statement for tax deducted from rent under section 194-IB. The payment must be made within 30 days from the end of the month in which the deduction is made. Further, under the amended rule 31 of the Income Tax Rules, a certificate in form 16C must be issued within 15 days from the due date of furnishing the challan cum statement in Form 26QC.

CBDT has notified the transactions for which the condition of chargeability to STT ( Securities Transaction Tax) shall not apply for claiming exemption under Section 10(38) of the Income Tax Act.

Section 10(38) of the Income Tax Act exempts long term capital gains from October 1, 2004 arising out of sale of equity shares provided STT has been paid on the transaction of sale. In order to curb the practice of declaring unaccounted income as exempt from capital gains tax by entering into sham transactions, Section 10(38) was amended by Finance Act 2017 to state that STT ought to have been paid on the acquisition as well. This resulted in a situation causing hardship in genuine cases where STT could not have been paid owing to the nature of transactions.

CBDT has now notified bona fide off-market transactions which would not be hit by the amendment in the Finance Act, 2017 stated above.

Form 26B which is used for claiming TDS refunds which were hitherto permitted to be signed digitally, now also permits “electronic verification process” alternately. Further, in case of refund application in respect of TDS on immovable property for which return has been filed in Form 26QB, the refund application has to be accompanied by the acknowledgement for having filed form 26QB.

Safe Harbour Rules under Income-tax Act relating to transfer pricing for international transactions have been amended. The “safe harbours” stipulate circumstances in which the Transfer Pricing Officer (TPO) will accept the transfer price declared by the assessee. The A category of international transaction being receipts of “low value-adding intra-group services” has been added. The prevalent safe harbour margins have also been revised. The new Rules will go a long way to avoid disputes between the income-tax department and the assessees.

GST Facilitation Cell are to be established at the Headquarters and all the Regional offices of Directorate General of Foreign Trade (DGFT) to address any issues relating to GST in respect of Foreign Trade Policy. This has been decided in light of implementing the GST in a smooth manner, coming into effect from 1st July, 2017.

Previously IEC no was mandatory to make any kind of import/exports, which had to be correlated with the PAN. Now, with GST being implemented, Importers and exporters would need to declare only GSTIN (Registration no under GST) having prefixed PAN. PAN would be automatically aggregated into the system. This is for the purpose of credit flow of IGST on import of goods and refund/rebate of IGST related to export goods.

In simple terms, for new applications being made to DGFT, applicant’s PAN will be taken as IEC. For existing IEC holders, migration of data to effect the PAN as IEC is under process.

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.

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