Volume #15 | IssueNo. 289/2023 | June 2023
Let Go
“All the art of living lies in a fine mingling of letting go and holding on.” – Havelock Ellis
This is easier said than done. Life is all about discovering what to let go, how to let go, when to let go and why to let go. As we age, we realise more and more the benefits of letting go rather than holding on. LET GO are two simple words but with profound meaning that shape our lives.
What comes to your mind when you hear the phrase “Let Go” ?
- Is it letting go of emotions, feelings, sentiments, relationships, memories of grief, love, illnesses, anecdotes ?
- Is it letting go of attachment to places you lived in, offices that you worked at, people that you loved or disliked, things that you used and are now redundant ?
- Is it letting go of negative thoughts, excessive thinking, unwanted information ?
- Is it letting go of the six enemies (arishadvarga or shadripu in Sanskrit) of kama (desire), krodha (anger), lobha (greed), mada (sense of I or ego), moha (attachment) and matsarya (bias) ?
You could have more and the list could go on endlessly, depending on your life experiences and your perspectives. While normally we associate ‘letting go’ with emotions, people and living beings, I experienced the ‘holding on’ to inanimate things. As we were moving back to our newly renovated office space, I found it so difficult to give away some furniture, crockery, visiting card albums and even old client files. Why, even to redo the website, I had to tell myself to let go of certain pictures and images that wouldn’t sit well with the new layout. It set me thinking as to why we get so attached to some of these. While repurposing is good, if we do not see any value in some things, we better dispose them off and make way for the new. Giving away, letting go, destroying is essential to receiving, letting in and creation. Unless we clear out the old, how do we clean up the clutter ? how do we make space for the new ? Just think about it. Whether it is technology, information, people, furniture or even positions in an organisation, redundancy must be welcomed. Only then there is room for fresh thoughts, innovation and progress.
I experienced this in yet another part of my life. My speech mentor in my Toastmasters journey would always chip away the unwanted portions and say – let it go. His mantra was – don’t force fit ideas, content, gestures into your speech. Fit in only as much as required, as much as relevant. Make space for pauses, for reflection and audience response. Letting go of superfluous content enhances the speech quality. How true in our lives as well – hoarding of materialistic things, wealth, holding on to toxic relationships, unpleasant memories, redundant data, rivalries – all of these cause stress and anxiety. They need to be purged out from the system. Unboxed from our minds. Periodic cleansing is the key to happiness.
Well, the funda is, the biggest asset one can gain out of Letting Go is happiness, tranquility, peace and health. The key drivers for quality life. Like I said earlier, it is easier said than done. I would like to leave you with a question – What can be done to Let go ?
I have shared a philosophical take on the topic of letting go. Unfortunately I cannot say the same with respect to the failure of the MCA portal that is adversely affecting professional time and money, delaying corporate transactions, impacting the economy and more importantly triggering mental health issues amongst the professionals taking up Company Law assignments. It is 6 months+, yet the technical issues on the portal are as bizarre as before. None of us are in a position to let go and move on because there is no other alternative to get India Inc moving ! This is to express solidarity with thousands of trainees and professionals working on ground zero in extreme conditions of anxiety and frustration.
While at this, let me urge you to scroll down and read up the 289th issue of Samhita which carries two important articles on Digital Lending Guidelines of RBI and the extensive amendments made by SEBI from governance perspective. There are other regulatory updates from IT, GST, RBI, DGFT too. For any previous issues of Samhita and the readers’ feedback, please visit http://www.sharadasc.com/resource-center/.
Here are some pointers to the question of how to let go……take up new hobbies, activities, immerse yourself in work, try music, dance, exercise, sketching, travelling, caring for others, meditating. Let go and Move on!
Happy Reading
S.C. Sharada
DLG - Has RBI felt the Pulse?
The Reserve Bank of India (“RBI”) has recently released the Guidelines on Default Loss Guarantee (“DLG Guidelines”) in digital lending that has left the FinTech space and digital lending market in high spirits.
RBI defines DLG as a contractual arrangement between a regulated entity and an entity meeting specific requirements [Lending Service Providers(“LSPs”)], under which the LSP guarantees to compensate the regulated entity (lender), loss due to default up to a certain percentage of the loan portfolio of the regulated entity, specified upfront. Any other implicit guarantee of similar nature would also be considered as DLG.
The DLG Guidelines require DLGs to be backed by legally enforceable contract between LSPs and lenders, which shall contain among other things – (a) Extent of DLG Cover; (b) Form of DLG cover; (c) timeline for invocation; and(d) disclosure requirements for LSPs.
To know more about DLG, read a brief note by CS Sreenivasan Narasimhan, Senior Associate at our firm.
Article on DLG – Sreenivasan
Open RBI Guidelines dated June 08, 2023
SEBI Updates
In November 2022, SEBI had released a consultation paper on review of disclosures under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. In furtherance to the same, SEBI vide Notification dated June 14, 2023 has notified a series of amendments to the Regulations, most of which shall be effective from 14th July, 2023. These amendments are aimed at strengthening corporate governance in terms of timely disclosures, transparency and accountability of the Board and KMPs.
A brief note covering major amendments under disclosure of material events or information (Regulation 30), composition of Board (Regulation 17), vacancy of KMPs (Regulation 26A), BRSR Reporting (Regulation 34), disclosure under Regulation 46 i.e. website and Regulation 57 relating to payment of dividend, interest or repayment by entities that have listed non-convertible securities is enclosed.
SEBI – LODR – Amendments
Open SEBI Notification dated June 14, 2023
SEBI has been issuing various circulars under the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 (“ICDR”). In order to provide access to such circulars at one place, SEBI has released a Master Circular on June 21, 2023. The Appendix to Master Circular provides a list of circulars that stand rescinded. However, it is also clarified that any prior action done or taken or application made to SEBI based on such rescinded circulars will be deemed to have been made as per this Master Circular.
SEBI (Alternative Investment Funds) Second Amendment Regulations, 2023 have been notified by SEBI vide Notification dated June 15, 2023 which shall come into force with immediate effect. However, amendments in Regulation 23 (Valuation) shall come into force w.e.f November 01, 2023 and amendments in Regulation 4 (Eligibility Criteria) w.e.f such date as SEBI may specify. Highlights of the amendments are as follows:
- Concept of Corporate Debt Market Development Fund (“CDMDF”) as an AIF has been introduced which will be set up by SEBI. CDMDF will act as a Backstop Facility for purchase of investment grade corporate debt securities during times of stress to instil confidence amongst the participants in the Corporate Bond Market and to generally enhance secondary market liquidity. A new chapter III-C has been added in the AIF regulations to provide for registration, investment, governance mechanism etc of CDMDF.
- The requirement for Key Investment team of the Manger of AIF to have at least one Key personnel with 5 years’ experience and professional qualification from recognized university or institution has been substituted. Henceforth such key personnel shall have a relevant certification as may be specified by the SEBI. Further such certificate shall be renewed before expiry of validity to comply with the regulation.
- AIFs permitted to issue units in Dematerialised form subject to conditions as may be specified by SEBI.
- The Manager of AIF shall appoint Compliance Officer for monitoring compliance with the provisions of the Act, rules, regulations, notifications, circulars, guidelines, instructions or any other directives issued by SEBI. Eligibility criteria for such officer will be specified by SEBI.
- Appointment of Independent Valuer for valuation of investments of the scheme of AIF.
- AIFs will be permitted to float a close ended Liquidation Scheme for the purpose of liquidating the unliquidated investments purchased from its scheme, whose tenure has expired. The same is subject to filing of placement memorandum with SEBI.
- Approval of 75% (in value) investors for certain types of purchase and sale of investments by schemes of AIF.
MCA Updates
MCA vide General Circular no. 06/2021 has provided relaxation of additional fee for filing return of deposits in form DPT-3 for the financial year 2023-24 till July 31, 2023.
Companies (Accounts) Second Amendment Rules, 2023 has been notified by the MCA on May 31, 2023 which states that Form CSR-2 for the financial year 2022-23 shall be filed separately on or before March 31, 2024 after filing Form AOC-4 or AOC-4 XBRL or AOC-4 NBFC (Ind AS) as the case may be.
MCA vide notification dated June 02, 2023 has notified the Limited Liability Partnership (Amendment)
Rules, 2023 through which Form 3 has been substituted. Following the release of new Form 3, MCA has also released FAQs for steps to file the form.
Open MCA Notification G.S.R. 411(E) dated June 02, 2023
Open MCA FAQS- LLP Form 3 Filing
The National Financial Reporting Authority (“NFRA”) constituted under Section 132 of the Companies Act, 2023 has observed by that there is a misconception amongst some auditors that resigning from audit engagement will absolve them from their obligation to report fraud. Vide circular dated June 26, 2023 the NFRA has emphasized on auditors’ responsibilities in reporting fraud in relation to a company by highlighting various provisions of the Companies Act, 2013 and Standards on Accounting which cast responsibilities on the Auditors for reporting of fraud.
The NFRA has also referred to recent judgement of the Hon’ble Supreme Court in the matter of Union of India and Another versus Deloitte Haskins and Sells LLP & Anr Criminal Appeal Nos.2305-2307 of 2022 wherein it was held that the provisions of Section 140(5) would be applicable even on auditors who resign from their audit engagement without reporting fraud/suspected fraud.
The circular also states the auditor shall exercise his/her own professional skepticism while evaluating fraud and need not be influenced by legal opinion provided by the Company or its Management
IBBI Updates
MCA vide notification dated June 14, 2023 has notified that the provisions of Section 14(1) of the Insolvency and Bankruptcy Code, 2016 i.e. moratorium shall not apply to the following transactions, arrangements or agreements entered into by the corporate debtor:
- Production Sharing Contracts, Revenue Sharing Contracts, Exploration Licenses and Mining Leases made under the Oilfields (Regulation and Development) Act, 1948 (53 of 1948) and rules made thereunder; and
- any transactions, arrangements or agreements, including Joint Operating Agreement, connected or ancillary to the transactions, arrangements or agreements referred to in above clause.
DGFT Updates
DGFT vide Trade Notice dated May 31, 2023 has introduced online facility for exporters to request appointments for virtual meetings or personal hearings w.e.f June 01, 2023. Exporters can apply for the virtual meeting facility through the DGFT website, and the concerned officers at DGFT Regional Authorities will provide suitable timings as well as the link for virtual hearing links through the online platform. Detailed guidance and manuals have been made available on the DGFT website.
IT Updates
CBDT vide notification dated May 30, 2023 has amended sub rule under rule 11 AA to state that for applications made under clause (iv) of the first proviso to sub-section (5) of section 80G, provisional approval will be effective from the assessment year relevant to the previous year in which the application is made instead of date of the order passed by the Principal Commissioner or Commissioner.
CBDT vide notification dated June 23, 2023 has notified changes to rule 2C, rule 11AA and rule 17A of Income-tax Rules, 1962 under different sections such as section 10, section 12A, section 80G, and more. Notification further amends Form No. 10A, Form No. 10AB, Form No. 10AC, Form No. 10B and Form No. 10BB. Certain new forms have also been notified. Important alterations can be observed in the rules pertaining to registration, approval, and activities of institutions, trusts, and funds.
The aforesaid amendments are effective from October 01, 2023.
CBDT vide notification dated June 12, 2023 has notified amendments in Rule 44E of the Income Tax Rules, 1962 for permitting applicants seeking Advance Ruling to furnish signed or digitally signed applications to the Secretary of Board for Advance Rulings by electronic mail. Earlier, the persons who were required to digitally sign their returns of income were mandatorily required to furnish the application for advance ruling using their digital signature.
CBDT vide notification dated June 21, 2023 has amended Rule 2BB, Rule 3 and Rule 5 under the Income Tax Rules, 1962. A new Form 10IEA has been notified for opting and withdrawing from New Tax regime for Financial Year 2023-24.
CBDT vide circular dated June 28, 2023 has extended the timeline for furnishing TDS/TCS statement for the first quarter of Financial Year 2023-24 from July 31, 2023 to September 30, 2023.
The Ministry of Finance vide press release dated June 28, 2023 has granted more time for implementation of revised TCS rates on payments under LRS and on overseas tour program packages which were to take effect from July 01, 2023. Key decisions informed through the Press Release are as follows:
- Transactions through International Credit Cards while being overseas would not be counted as LRS and hence would not be subject to TCS.
- No TCS on LRS payments up to 7 lakhs per financial year per individual. For payments under LRS beyond 7 lakhs, the TCS shall be as follows:
- 0.5% (if remittance for education is financed by education loan);
- 5% (in case of remittance for education/medical treatment); 20% for others. For sale of overseas tour program package TCS will continue to apply at 5% for amount up to 7 lakhs per individual per annum and the rate of 20% will apply for expenditure above this limit.
- Increased TCS rates to apply from October 01, 2023. Till September 30, 2023 the earlier rates shall apply.
GST Updates
GSTN vide Advisory dated June 16,2023 has reduced the threshold limit for e-Invoicing in case of B2B transactions from 10 crores to 5 crores. The aforesaid change is effective from August 01, 2023. GSTN has enabled all eligible taxpayers with an Aggregate Annual Turnover (AATO) of 5 crores and above as per GSTN records in any preceding financial year for e-Invoicing. Further, such taxpayers are now enabled on all six IRP portals including NIC-IRP for e-Invoice reporting.
The GSTN has introduced E-Invoice Verifier App which offers a convenient solution for verifying e-invoices and other related details. With key features such as QR Code verification, non-login-based operation and a user-friendly interface, this app aims to simplify the process of e-invoice verification. FAQs on the app can be referred for more.
July 2023
Quote of the day
“We must be willing to let go of the life we’ve planned, so as to have the life that is waiting for us.”
- Joseph Campbell
Disclaimer: 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.