Volume #16 | IssueNo. 305/2024 | October 2024
TGM
After an extended Deepavali break, how do you feel ? Are you experiencing the typical MMB (Monday Morning Blues) or looking forward to TGM – Thank God it is Monday? (yeah, yeah I know the original is TGF – Thank God it is Friday😊)
You may wonder why on earth did I coin TGM ? Who on earth says TGM ? Why am I talking positively about returning to work, which is diametrically opposite to my earlier piece titled “The Trapeze”, calling out the lack of work-life-balance ? Because it is true. For some of us work can be therapeutic, enjoyable, rewarding, welcoming, giving us the much-needed break from the weekend chaos.
Decades ago, when I was working with a corporate that saw me leave for work as early as 7am and return 12 hours later, with two small children to be tended to, I dreaded the so-called weekends that were supposed to provide respite from ‘work’. Of course, it was a 100% break from professional work on weekends, since fortunately, I could not carry my desktop back home (no laptops were provided back then!). However, despite a supportive care system that I had created, there was plenty to be accomplished on the domestic front, come Saturday and Sunday – sweeping, mopping, dusting, washing, cleaning toilets, worrying about children’s homeworks, tests, entertaining guests etc. Many a times, I would wait for a relaxed Monday morning when I could read my favourite newspaper, Eco Times and enjoy the FM Radio songs on the long commute to work, chatting up with colleagues. Ah, it was a such refreshing feeling getting back to work, sitting in my cabin !
Radhika was recently recognised as a ‘Star Perfomer’ in an organisation. Usually reticent about her feelings, she opened up to say “Ma’am, thank you so much for the award. It was a very emotional moment for me. Last few years of my life has been a roller coaster on the personal front. But even during the toughest times, those 8-10hrs in office, away from all that and doing what I love, with the most supportive people around was what kept me going. Thank you for always believing in me and pushing me to become a better me. I will really cherish today forever”🥹😁
For Rachit, who is fighting a recurring illness that compels him to take long breaks from work, work breaks his ‘blues’. A little better, he promptly reaches out to the team “Please assign some work to me”. Only those that go through such lows know how healing and assuring work can be.
For some of the young mothers in my team, I believe they look forward to returning from their maternity leaves and getting back to work, albeit in a phased manner. It fills them with a renewed confidence and self-esteem even as they struggle to manage their dual roles – work is welcomed in their 2nd innings !
Well, while for me it was getting away from the weekend, for others work could mean a lot more – curative, transformative, reassuring, meaningful and adding purpose to life. So long as we learn how to respect it, how to manage it, how to benefit from it without becoming a workaholic or enslaved to it, we can stay happy, healthy and empowered !
India’s regulators were super busy during October, going by the number of updates that we have compiled in this 305th issue of Samhita. Be that as it may, it is heartening to see that some of our readers are tracking if we have carried all the relevant news updates released in a month or not. Some of them even call us and share what corrections are required to be made. Thanks to their diligence, our team is kept on its toes as well. We carry IEPF updates of Sep, 2024 along with several released by MCA, RBI, DGFT, GST, IT, SEBI, IBBI during October. RBI’s detailed instructions on Reporting on various matters, appearing on its FIRMS portal is not to be missed even as we await a notification in this regard.
For any previous issues of Samhita and the readers’ feedback, please visit sharadasc.com.
RBI Update
RBI has provided updated reporting guidelines on the RBI FIRMS portal through the User Manual. It provides clarification on various aspects, especially reporting in case of ESOPs exercised by Persons Resident Outside India (PROI). Few of the major clarifications provided in the Manual are as follows:
- Validity of Valuation Report – clears ambiguity regarding the cut off date to be considered for valuation report. It has been clarified that the date for arriving at valuation price and not the date of issue of valuation report shall be considered for computing the validity period of 90 days.
- Reporting for reclassification of FPI as FDI – Where FPI exceeds 10% it shall be deemed to be FDI. In such cases, reporting shall be done for the excess investment as well as original investment. Further, relevant holding statement/ certificate from the concerned depository/ depository participant evidencing the FPI holding shall be submitted.
- Reporting of ESOPs – exercised by PROI through Trust Route and/or Cashless Mechanism. It provides clarity on whether FCGPR/FCTRS has to be filed based on the transaction type.
RBI has also intimated Banks to inform them about names of overseas persons who are exercising ESOPS received by them through the relevant reporting. - Minor changes in few declarations to be provided at the time of reporting
- Reporting of Subscription to MOA: Board resolution/ MOA copy to be attached for FCGPR filing.
- Date of transfer for FCTRS reporting: Date of settlement will be treated as the date of transfer in case of sale/purchase on stock exchanges.
- Reporting of Downstream Investment(DI): In case of transfer of shares of an Indian Company from a PROI to another Indian Company which is FOCC (Foreign owned or controlled companies), reporting in FC-TRS as well as Form DI shall be done.
It may be noted that RBI has not issued any official circular or notification on these aspects as of now. Further there are newspaper reports about bringing issuance of ESOPs under scope of FEMA Press Note 3.
SEBI Updates
On October 3, 2024, SEBI announced an extension of relaxations regarding compliance with specific provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI LODR). Initially established on October 7, 2023, these relaxations dispensed the requirement of sending physical copies of financial statements for General meetings under Regulation 36(1)(b) for Annual General Meeting and under Regulation 44(4) of SEBI LODR till September 30, 2024. Following MCA’s recent General Circular No. 09/2024, which permits holding of AGMs/EGMs in Video Conferencing Mode/Other Audio Visual Means until September 30, 2025, SEBI has decided to align its provisions, thereby extending the aforesaid relaxations until that date.
However, listed entities shall adhere to the compliance conditions specified in the Master Circular dated July 11, 2023, while taking advantage of these relaxations. These conditions include ensuring that the shareholders have access to financial statements and related documents through electronic means.
On October 7, 2024, SEBI announced an extension of the deadlines for disclosures required by Social Enterprises listed on the Social Stock Exchange (SSE) for the fiscal year 2023-24. The new deadline for both annual disclosures and Annual Impact Reports has been extended to January 31, 2025 from initial deadline of October 31, 2024. This extension aims to provide additional time for compliance, allowing Social Enterprises to adequately fulfill their reporting obligations as mandated under the SEBI LODR.
Vide SEBI circular dated October 22, 2024, provisions of (Prohibition of Insider Trading) Regulations, 2015 have been made applicable to Mutual Funds effective November 1, 2024. This move aims to prevent insider trading in mutual fund units, protect investor interests and promote transparency. Pursuant to the same, Asset Management Companies (AMCs) must disclose holdings of Designated Persons, trustees and their relatives quarterly. Transactions exceeding ₹15 lakhs in mutual fund units must be reported within two business days. Specific formats have been prescribed for disclosures and reporting.
The amendments take effect on November 1, 2024, with the first disclosure of holdings as on October 31, 2024, due by November 15, 2024. The circular modifies the Master Circular for Mutual Funds to align with the amended PIT Regulations, ensuring stricter compliance and investor protection.
MCA Updates
MCA vide Notification dated September 09, 2024 amended the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, to streamline the process for transferring securities to legal heirs and protect investor interests.
Key changes include:
- Recognition of Legal Heir Certificates: Legal heir certificates issued by revenue authorities, not below the rank of Tahsildar, are now accepted for transferring securities, along with additional documentation like indemnity bonds and no objection certificates from other legal heirs.
- Claim for Transmission of securities: The threshold limit for documentary requirement for transmission of securities in Demat mode has been increased from Rs. 5,00,000 to .Rs 15,00,000.
- Insurance Coverage: Companies are required to obtain special insurance coverage to mitigate risks associated with the verification of claims.
- Facilitation for NRIs and Foreign Nationals: In case of loss of securities held in physical mode, NRIs and foreign nationals can now submit self-declared, notarized, apostilled, or consularized affidavits in place of legal heir certificates or succession documents, along with copies of their passport and overseas address.
- Publications: Companies are required to publish notifications regarding lost securities in widely circulated newspapers, making the process of addressing misplaced, stolen, or lost securities more transparent.
- Replacement: Substitution of the term “shares” with “securities” in Schedule II (Documents to be submitted to the Authority to register transmission of securities) and Schedule III (Documents to be submitted to the Authority in case of loss of securities held in physical mode) of the rules, thereby broadening the scope to include a wider range of financial instruments.
MCA vide notification dated September 10, 2024, has added ‘National Bank for Financing Infrastructure and Development (NaBFID)’ as a Public Financial Institution (PFI) under Section 2(72) of the Companies Act, 2013.
Established in 2021 through an Act of Parliament, NaBFID addresses long-term infrastructure financing needs in India. This recognition enhances NaBFID’s ability to attract investments, supporting projects in key sectors like transport, energy, water and sanitation. Now as a PFI, NaBFID will play an important role in fostering our country’s economic growth by providing non-recourse finance and technology enabled ecosystem.
Vide notification dated October 09, 2024, MCA has amended the (Adjudication of Penalties) Rules, 2014 to insert proviso under Rule 3A (e-adjudication). The proviso clarifies that proceedings pending before the Adjudicating Officer or Regional Director on the date of commencement of e-adjudication (September 16, 2024) under Rule 3A shall be dealt as per provisions of rules existing prior to such commencement.
MCA vide notification dated October 03, 2024 has amended the annual statement of accounts under the Investor Education and Protection Fund Authority (Form of Annual Statement of Accounts) Rules, 2018. It’s a form for reporting the financial activities of the IEPF Authority during the year. Vide this amendment the responsibility of preparation and submission of this report has been moved from any member of the Authority to its CEO.
(Open MCA notification dated October 03, 2024)
IBBI Update
The IBBI has issued a circular dated October 09, 2024 extending the deadline from September 30, 2024 to November 30, 2024 for filing various forms related to voluntary liquidation processes under the IBC Code, 2016. Initially set by Circular No. IBBI/LIQ/74/2024 on June 28, 2024, it introduced an online platform to submit various forms to IBBI instead of through email communication. These forms pertain to details of Corporate Debtor, Meetings of Contributories, dissolution application etc
DGFT Updates
DGFT has clarified that exporters availing benefits under post-export remission-based schemes, such as Duty Drawback, Rebate of State and Central Taxes and Levies (RoSCTL), and Remission of Duties and Taxes on Export Products (RoDTEP) are not required to obtain a Registration-Cum-Membership Certificate (RCMC). This move aims to simplify the export process and provide relief to exporters.
DGFT has clarified the rules for importing and re-importing “Exhibits and Samples” through Trade Notice, issued on October 7, 2024. This move addresses enquiries from trade and industry sectors regarding import authorization and registration requirements for exhibition goods of Indian origin previously exported for display.
Key Clarifications:
- Exemption from Authorization: Import or re-import of exhibits and samples for demonstrations, displays, exhibitions or participation in fairs, whether in India or abroad, can proceed without authorization.
- Conditions for Exemption: This exemption is subject to conditions, including submitting a bond or security to Customs or using an ATA Carnet.
- No Registration Required: The DGFT confirms that such imports will not require authorization or registration, provided compliance with other conditions in of Handbook of Procedure (HBP) is met.
This clarification simplifies the import process for exhibition goods, eliminating the need for authorization or registration.
Remission of Duties and Taxes on Exported Products (RoDTEP) is a Scheme that provides remission of duties and taxes on exported products to Indian exporters. It provides refund to exporters for taxes, duties and levies incurred during manufacturing and distribution, which aren’t reimbursed by central, state or local governments.
DGFT has issued multiple circulars on the said Scheme, for streamlining the process and providing relief to exporters.
The DGFT through the notification dated 30 September 2024 has extended the benefits of RoDTEP scheme for exports from domestic tariff area (DTA) units by one year, until September 30, 2025. However, for Advance Authorisation holders, Export Oriented Units and Special Economic Zones the extension of scheme is till December 31, 2024.
DGFT has announced significant changes to the RoDTEP Schedule through Notification dated October 28, 2024. These changes aim to align the RoDTEP Schedule with the First Schedule of the Customs Tariff Act, following amendments introduced in the Finance Bill of 2024.
Key Updates:
- New Tariff Lines added: 39 new tariff lines have been incorporated into the RoDTEP Schedule, expanding the scope of eligible export products.
- Tariff Lines deleted: 13 existing tariff lines have been removed, reflecting changes in the Customs Tariff Act.
- Updated descriptions: Descriptions for two existing tariff lines have been revised for clarity and accuracy.
These changes are part of the government’s efforts to streamline export regulations and promote transparency.
DGFT has introduced a significant update to its export policy, mandating the filing of an Annual RoDTEP Return (ARR) for exporters benefiting from the RoDTEP scheme. This move aims to ensure accuracy in duty remission claims and streamline compliance.
Key Requirements:
- Eligibility: Exporters with RoDTEP claims exceeding Rs. 1 crore in a financial year must file their returns.
- Filing Deadline: March 31 of the subsequent financial year (Example: Claims made in FY 2023-24 must be filed by March 31, 2025).
- Consequences of Non-Compliance: Suspension of benefits under the RoDTEP scheme and additional fees for late filing.
- Grace period: Late filing has been allowed until June 30 with a composition fee of Rs. 10,000 (doubling to Rs. 20,000 after June 30).
- Record Maintenance: Exporters must maintain records for five years to support ARR submissions.
Tax Updates
Vide circular dated October 26, 2024 CBDT has extended the due date for filing Income Tax Returns for corporates from October 31, 2024 to November 15, 2024.
Income Tax Department has issued a detailed Circular on October 15, 2024, aimed at clarifying provisions of Vivad se Vishwas scheme. Clarification includes types of appeals covered, which cases are not covered, amount payable for each category, timelines for the scheme and other related clarifications.
Income Tax department vide notification dated October 15, 2024 has amended Form 10A & 10AB (Provisional and Permanent Registration Forms for not for profit institutions). Changes include new declaration confirming accuracy of details provided and additional supporting documentation relating to institutions formation.
Income Tax department vide notification dated October 15, 2024 has amended following rules and forms:
- Rule 26B : Assessee can now submit to current employer details of any income other than salary income received in the same FY, any TDS or TCS under the provisions of Part B or Part BB of Chapter XVII for computing Salary TDS. The above details can be furnished by the employee in Form 12BAA.
- Form 16 and Form 24Q has been amended to accomodate the changes.
Income Tax Department has issued new guidelines for compounding of offences under the Act. These guidelines replace the earlier guidelines issued in 2022. Applications may be filed again if applications under earlier guidelines were rejected only on account of curable defects such as non-payment of outstanding tax, interest, penalty, or any other sum related to the offence, filing of application in incorrect proforma, mention of incorrect assessment year/financial year or section under which offence has been committed, non-payment or short payment of compounding charges, non-submission of undertaking regarding withdrawal of appeals, etc. Credit for the payment already made shall be given against the compounding charges to be paid under these Guidelines.
GST Updates
CBEC has notified the payment deadlines for assesses in relation to notices. Effective November 01, 2024, assesses who receive such communications can make tax payments without incurring interest or penalties until March 31, 2025. For assesses notified under section 74, the payment deadline extends to six months following the issuance of a re-determination order by the appropriate officer.
CBEC has notified that renting any immovable property, other than a residential dwelling, provided by an unregistered person will now attract tax payable by the registered recipient of the service. This amendment will come into effect on October 10, 2024.
(Open Ministry of Finance Notification dated October 08, 2024)
CBEC has amended GST rules. It includes amendments to various rules concerning tax invoices, timelines for issuing invoices, revision of deadlines for submitting GSTR-7 forms, refund claim process and waiver of interest and penalties under specific sections.
GST Portal now provides a pre-filled GSTR-3B form, where the tax liability is auto-populated from the declared supplies in GSTR-1/ GSTR-1A/ IFF by the supplier, while the Input Tax Credit (ITC) is auto-populated from GSTR-2B. Taxpayers also have a facility to amend their incorrectly declared outward supplies in GSTR-1/IFF through GSTR-1A, allowing them an opportunity to correct their liabilities before filing their GSTR-3B.
It may be noted that tentatively from January 2025 tax period, the GST Portal is going to restrict making changes in auto-populated liability in pre-filled GSTR-3B from GSTR-1/1A/IFF to further enhance accuracy in return filing.
November 2024
Quote of the day
"Darkness cannot drive out darkness...only light can do that. Hate cannot drive out hate and only love can do that."
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.