Quick Reference to " Few Common & Basic things related to a Company law/Answer to the Common question ( Mixed)"
1. The Company is not a citizen under citizenship act, 1955.
2. The Board resolution is passed by either requisite majority or unanimously ( in some cases).
3. Proxy is not counted in Quorum.
4. The section 8 companies are not allowed to pay dividend.
5. A person holding office as Director in more than 20 companies can still Appointed in the section 8 company.
6. Appointment of Statutory Auditor is mandatory for all Companies.
7. Manager of the Company need not be a Director of the Company.
8. Form MR-1 is not required to file for Appointment of CEO, CS, CFO.
9. An Independent director is not entitled for Stock option.
10. Rotation of Directors is not Applicable to Independent director.
11. A Company shall not issue debentures carrying Voting Rights.
12. Only natural person can become Director of a Company.
13. One Person Company's financial statements shall be signed by only 1 director.
14. The CSR expenditure cannot be claimed for Tax exemption.
15. Form ADT-1 is not required to file in case of Appointment of 1st Auditor.
16. Producer company can issue only equity shares.
17. In case of Ballot method of Voting & Show of hand - 1 shareholder= 1 Vote.
18. In case of Poll method 1 share = 1 Vote.
19. Incorporation through SPICe mode is not Applicable for More than seven subscribers.
20. Nidhi Company can be incorporated through SPICe mode.
21. Death of Additional Director & First Director is not Considered as Casual Vacancy.
22. Final Dividend is recommended by BOD and Declared by Shareholders in the AGM.
23. The Company Did not function is not an excuse for not Convening an AGM.
24. Sweat equity shares can be issued at Discount.
25. Bonus shares shall not be issued in lieu of Dividend.
26. Section 8 Company can have any number of Directors.
27. OPC cannot be converted into a Section 8 company.
28. The Register of Members can be closed for total period of 45 days in a year but not more than 30 days at one time.
29. Right to renounce is available for Right Share but not for Bonus shares.
30. Single entry system of maintenance of books is prohibited.
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No arrests under Sec 66-A for social media posts, rules SC http://www.tribuneindia.com/news/nation/no-arrests-under-sec-66-a-for-social-media-posts-rules-sc/57893.html
The Supreme Court struck down Section 66-A of the Information Technology Act, 2000, on Tuesday.
Pronouncing their verdict on a PIL filed against the section in a packed courtroom, which empowers the police to arrest a person for allegedly posting ‘offensive materials' on social networking sites, a Bench of Justices J Chelameswar and RF Nariman said the section violated the fundamental right to freedom of speech and expression and was therefore was illegal.
Terming liberty of thought and expression as "cardinal", the Bench said: “The public's right to know is directly affected by Section 66-A of the Information Technology Act."
"Section 66-A of the IT Act is struck down in its entirety," said the apex court bench of Justice J. Chelameswar and Justice Rohinton Fali Nariman.
"Our Constitution provides for liberty of thought, expression and belief. In a democracy, these values have to be provided within constitutional scheme," said Justice Nariman, pronouncing the verdict.
"There is no nexus between public order and discussion or causing annoyance by dissemination of information. Curbs under Section 66A of the IT Act infringes on the public right to know."
Calling the written word of the provision, which comprises terms such as ‘"annoying", "inconvenient" and "grossly offensive", vague, the apex court said: “What may be offensive to a person, may not be offensive to others".
The assurance given by one government was not binding on its successor, the Bench said. "Governments come and go but Section 66-A will remain forever," the bench said.
The SC, however, refused to strike down two other provisions of the IT Act that provide blocking of websites.
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Delays in processing tax refunds under the new Goods and Services Tax regime has locked up the funds of exporters, hurting their businesses and affecting their ability to be competitive in international markets.
On September 19, a delegation of exporters met Revenue Secretary Hasmukh Adhia, who is heading a committee set up to look into the GST-related issues that India’s export sector is facing.
During the meeting, the Federation of Indian Export Organisation reportedly said that the government should fast-track the refunds process for exporters or as much as Rs 65,000 crore of their money could get stuck in the July-October period, affecting their ability to do business.
The Goods and Services Tax, which was implemented from July 1, subsumes all the indirect taxes that businesses earlier paid the Centre and states separately, with the aim of creating a common market. It involved a complete overhaul of the tax filing system.
Under this regime, companies are given the opportunity to claim refunds for the taxes they pay while buying inputs for their businesses, such as raw materials. However technical glitches, among other things, have meant that the government has repeatedly pushed back the deadline for filing GST returns, delaying tax refunds too. Exporters claim that they are suffering the most.
Earlier this month, the Union government took note of the complaints of exporters and ordered the Adhia-led committee to be set up. It has been tasked with providing recommendations to fix the problems exporters face. The committee is scheduled to meet next on October 6. However, it remains to be seen if the GST Council, headed by Finance Minister Arun Jaitley, acts on its recommendations.
Blow to exports
Indian exports were not doing particularly well in the pre-GST months of this year in the first place. The rate of export growth in rupee terms slowed during the March-July period before rising again in August. But exporters organisations now fear that this growth could be undone by the negative effects of GST.
In its presentation to the government, the Federation of Indian Export Organisation said that the exports to gross domestic product ratio, an indicator of the relative importance of international trade in a country’s economy, is down to 20% from its 2013 high of 25.43% at a time when Indian exporters are facing tough competition from countries such as China, Bangladesh and Vietnam in international markets. With the chaos following the implementation of GST, it said that it feared that the worst is yet to come.
Working capital blocked
Exporters are required to pay GST upfront for the inputs they buy from their suppliers. They can then claim tax refunds from the government, as exports are tax free.
A spokesperson from the Federation of Indian Export Organisation said that a sharp liquidity crunch has gripped the majority of exporters as their funds, paid as tax, are locked up with the government, with refunds for taxes paid for the July period only expected in December.
The process of claiming refunds is taking much more time than was envisaged because deadlines for the filing of returns are constantly being pushed back. For instance, due to technical snags in the GST portal, the government pushed the final deadline for filing the GSTR 1 return for the month of July to October 10 from the earlier deadline of August 10. GSTR 1 is a detailed compilation of all sales invoices generated by a business in a month.
According to an information booklet prepared by the government on GST for exporters, 90% of the refund amount would be processed within a week of the receipt of the refund application while the rest 10% would be paid within a maximum period of 60 days. The booklet says that “interest @ 6% is payable if full refund is not granted within 60 days”.
However, so far, no one has got refunds yet, said a tax advisor to an industry association, speaking on condition of anonymity. “The returns are not being filed in the right manner as it was anticipated, so nobody in the government is concentrating on providing refunds,” the advisor said.
A spokesperson for the Federation of Indian Export Organisation said that the government should not wait for final filings – when GSTR 1, GSTR 2, and GSTR 3 are all filed, at the end of which the total GST liability/refund is calculated. He said that the government should instead release refunds based on GSTR 3B returns. This is a simplified return that includes only a summary of invoices raised in a month instead of details of each invoice raised.
“Exporters were hoping that refunds for July will come in August but because the return dates are postponed, the refunds will not come before December,” said a spokesperson for the Federation of Indian Export Organisation. “We are saying that refunds should be given based on GSTR 3B.”
This was echoed by Suranjan Gupta, Additional Executive Director of Engineering Exports Promotion Council, a trade body sponsored by the government. Gupta said that the delay between tax filing and the processing of refunds is particularly harmful to small companies as they are forced to take additional loans to fund their day-to-day business activities. He said that these small firms often end up paying higher interest rates too.
“The long gap between payments of tax on inputs and getting refunds will make exports expensive as firms will have to borrow money to pay tax and interest,” he wrote in an emailed response. “The micro and small exporters would be particularly hit as the cost of credit to them is very high.”
Services exporters denied refunds
Software export associations such as Nasscom have their own list of grievances, which have been brought to the notice of the GST Council. Software exports are badly hit as firms that export software services are not eligible for tax refunds on the purchase of capital goods that they use to provide these services, said Bishakha Bhattacharya, Senior Director and Head – Public Policy and Government Affairs at Nasscom.
For software export companies, capital goods could include servers, computers and networking devices, among other things.
“This again seems to be an unfair denial of input tax credit,” Bhattacharya said. “You don’t have duty exemptions, which is available for others. You are also now denied refunds for GST paid on capital goods.”
A software exporter from Pune, who spoke on condition of anonymity, said that his company earlier used to save about Rs 3 crore in exemptions each year under the government’s Software Technology Parks of India scheme, established in 1991 to boost exports. Now, he claimed, his company has already paid Rs 25 lakh in import duties in a month, and is waiting for GST refunds.
In the earlier tax regime, companies part of the Software Technology Parks of India scheme were entitled to claim exemption on taxation on capital goods. This exemption is not available under GST. Thus, software exporting companies are now demanding that the government refund the taxes they paid while acquiring capital goods.
“There were various exemptions that STPI [Software Technology Parks of India] companies used to get….[But these] are now gone,” said Vidyadhar S Purandare, Secretary, Software Export Association of Pune. “They have now asked STPI companies to pay integrated GST and central GST and then claim benefits which is limited to basics customs duty. With this, the cash flow requirement has gone up.”
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Modi's Surgical strike on the Garments Sector.
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The Government of India has today announced the new duty drawback rates to be effective from October 1, 2017 (post-transition period ending September 30, 2017). The new All Industry Rates (AIR) for cotton garments is 2 per cent as compared to the 7.7 per cent drawback available so far. The Apparel Export Promotion Council (AEPC) has expressed disappointment.
The duty draw back rate on garments of blend containing cotton and man-made fibre (MMF) will be 2.50 per cent beginning next month compared to the existing 9.5 per cent. Likewise, the rate on garments made of MMF will also be 2.50 per cent compared to 9.8 per cent at present.
Clothing items (under HS codes 61 and 62) made of silk (other than containing Noil silk) will be subject to a rate of 4.80 per cent as compared to the earlier 7.6 per cent. The duty drawback rate on woollen apparel will also come down from 8.7 per cent to 3.50 per cent.
The duty drawback rate on garment of blend containing wool and MMF will be 3 per cent from October 1, whereas the rate on all other garments will be 2 per cent.
This low rate is unexpected at a time when the industry is facing continuous decline in exports due to global conditions, rupee overvaluation and uncertainties under the GST regime. The duty drawback was one of the key policy support measures towards lifting industry’s cost competitiveness. However, due to the steep drop in the drawback support over 7000 small and medium enterprises in the apparel export sector will be crippled, creating an adverse impact on the employment being provided to over 12 million people by this sector, AEPC said in a press release.
“The apparel industry needs to book orders in advance for the next season. The uncertainty prevailing for the last three months regarding the GST rates on apparel and job work have already cost the industry’s order books. I think the present new rates are unacceptable and the ministry of textiles should immediately consider AEPC’s recommendation for extending the current transition rates till March 31, 2018, to instil confidence in the sector and also ensure a smooth transition into GST and also for sustaining employment in the sector. In the absence of an encouraging drawback rates, the exports will further witness a sharp decline just ahead of the peak festival season when the industry was expecting recovery,” said AEPC chairman Ashok G Rajani.
AEPC has been in constant consultation with the Drawback Committee and various ministries for identification and consideration of several embedded / blocked taxes which are presently not subsumed in GST, not considered in the drawback, and hence a loss to the exporters. The industry was expecting continuation of the present drawback rates till such time as these consultations could be completed and proper measures taken to ensure that exports remain zero rated and no taxes are exported, AEPC said.
Tiruppur Exporters Association (TEA) has also termed the reduction in duty drawback rate as death knell to Tiruppur garment export sector. TEA president Raja M Shanmugham said once buyers go out of the country due to higher price it will be very difficult to bring them back to our country. He apprehended that the latest step might lead to more job losses since 80 per cent of the garment exporting units are in MSME sector.
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IMPORTANT DECISIONS (24.09.2017)
Agreement to sell - Executed on 23rd whereas stamp paper purchased on 27th - Agreement to sell is fabricated. (Hyderabad) 631
Dishonour of cheque - Offence by company - Courts to ensure strict compliance of statutory requirements as well as settled principles of law before making a person vicariously liable. (2017(3) Criminal Court Cases 848 (S.C.)
Execution - Any frivolous objection cannot be decided by way of adopting procedure of framing issues and allowing the parties to lead evidence just to delay execution of decree in question. (2017(3) Civil Court Cases 856 (P&H)
Re-opening of concluded proceedings - Not permissible. (2017(3) Criminal Court Cases 833 (Karnataka)
Transfer of landlord's right in favour of transferee - Attornment by tenant - Not necessary. (2017(3) Apex Court Judgments 061 (S.C.)
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L&T CFO R Shankar Raman: Don’t see private sector coming back for the next couple of years
L&T CFO R Shankar Raman is of the opinion that the govt’s preparedness for GST rollout was nowhere close to what was claimed and this showed in the GDP growth numbers
Mumbai: Almost three months after the implementation of the goods and services tax (GST), R. Shankar Raman, chief financial officer of infrastructure company Larsen and Toubro Ltd (L&T), is of the opinion that the government’s preparedness for rolling out the tax reform was nowhere close to what was claimed and this found reflection in the slipping GDP growth numbers.
In an interview, Raman said one should brace for an across the board spike in working capital requirements of India Inc. in the September quarter and warned that things are unlikely to improve for the rest of the financial year. Edited excerpts:
What impact has the implementation of the goods and services tax (GST) had on L&T’s operations?
We have been working very hard to improve our working capital-to-sales ratio from 26% to 19%. In the June quarter, too, we managed to keep it around 19-20%. But we didn’t factor for GST glitches. I remember the government saying that it was ready but the private sector wasn’t. But today, the government is not ready. The systems are not ready. It is extending the time for filing returns. Things are still being done manually. Today, we are paying GST after computing it ourselves, instead of the government architecture telling us how much to pay based on our purchases and sales.
As and when the system configures this and starts coming out with the figure, god knows how different that would be to the figure we have arrived at. Then there will be a whole host of issues in reconciling the two numbers and the first reaction of the government will be that private sector is cheating.
Given the revenue authorities’ best case assumptions that all of us walking on mother earth don’t want to pay tax, it’s going to be a huge problem to reconcile GST that the industry pays and that the government’s system will throw up. So, according to me, this pain is going to continue for another six to nine months and consequently, working capital is going to get blocked. For instance, even many of our customers in the public sector are, today, not accepting the bills that we raise, including that for GST, without an elaborate check of whether or not all the input taxes that we have paid have got reduced.
Small and medium enterprises (SMEs) too are really struggling under GST. I expect the volume of throughput from SMEs going down and hence I am not surprised with GDP growth slipping.
So, should we expect a shocker in the September quarter?
The growth that the industry might report will reflect the meltdown in GDP growth. How much each one falls is relative to its position and hence is hard to comment on. But working capital will spike up in the system. For L&T, it’s very difficult to predict how much the rise will be because then we are speculating on how many invoices our clients will accept. As we get into the home stretch for the quarter, a lot of our people are sitting with clients, trying to get the bills cleared. How successful they will be, will be known only when we close the quarter. I can, however, say this much for sure that the downtrend in our working capital requirement from 26% to 19% won’t continue in the September quarter.
Generally, however, how’s L&T’s order book shaping up? Are you sticking to your guidance for the full year?
We’ve said our order book will grow by 12-14% and that had already built in a certain element of conservatism. Nothing has dramatically altered on the order inflow front. The environment for ordering continues to be government-dependent and infrastructure-led. The private sector hasn’t come to the party yet. To that extent, I can say the environment hasn’t changed.
The government’s need to fast forward (its projects), however, has got accentuated because I don’t think it likes the position it is in. Slipping GDP growth numbers don’t augur well for it.
At the moment, I don’t have enough data points to change anything. We will validate this when we come out with the September quarter results.
You have been expecting a big rise in government spending in developmental projects ahead of the 2019 elections. Is it happening? Which sectors do you expect this push to come in?
It’s going to be a function of the leader who is pushing it. We find, for example, a lot of energy in the transportation sector. There’s a lot of energy in urban transportation, metros, etc. State governments have a lot of energy in water and power transmission and distribution. I don’t see this across the board, but it’s definitely happening in transportation. It’s happening in freight corridors, smart cities, affordable housing, etc.
Hasn’t there been any revival in private sector investment?
There’s no case for it. Let’s consider L&T to be a proxy for the private sector. Am I taking to the board any major investment plan? The answer is no. All of us are battling capacity underutilization. In fact, I don’t see the private sector coming back for the next couple of years.
Where does L&T stand when it comes to its ambitious dreams in the defence sector?
It’s getting that much closer to fruition. But if the government is going to say that anybody can come into defence, then we will have a rush of people putting their hat in the ring as it is happening now and that’s actually causing confusion and damage. So, the government has to get comfortable with the idea that there will only be a few who are well qualified and equipped. It shouldn’t just go with the L1 (lowest bidder), it should go by benchmarking. It should benchmark with someone who’s delivered defence systems.
So, what we are hoping against hope while waiting is that the government will begin to appreciate that it is comfortable with one or two players in each segment in the defence sector.
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Financial Advisory Services are Classifiable as ‘Banking and other Financial Services’, Not as ‘Management Consultancy Services’: Bombay HC
Read more at: http://www.taxscan.in/financial-advisory-services-classifiable-banking-financial-services-not-management-consultancy-services-bombay-hc/11309/
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*Important Tweets Posted on @askGSTech & @askGST_GOI twitter Handel in past Few Days-(PART-1)*-
1. Taxpayers who have not set off their tax liability for GSTR3B for July 2017 and have only done submit of their GSTR-3B, have now been given option to edit, Submit and file their return. But those who have already offset liability would not be able to edit GSTR-3B
2. If something wrong done in GSTR-3B than Correction can be made in next month's return or during reconciliation between GSTR-1, 2 & 3 with GSTR-3B.
3. GST credit can be availed on spare parts used for vehicles repairs and vehicle is a truck used for moving goods.
4. Under Tran-1 you have to give detail of Revised ST-3 and not the original ST-3.
5. If you have purchased goods from other state , bill date was 31.08.17 & Goods received on 05.09.2017 , then ITC should be claimed in the return for the Month of September 2017
6. A taxpayer submitted his registration Application Within 30 days but got registration in August. Now he had purchased certain goods in Month of July. He can take the credit of those bill in the return of August Month.
7. If you forgot some purchase bill to submit in GSTR-3B of July than you can add them in the Return of August.
8. Composition Dealer can Import Goods on payment of BCD and IGST
9. Service tax paid on advance received and now service is completed and while billing under GST Regime GST is Payble on (Bill Amount - Advance Recd)
10. Input credit of Revise Return filed under VAT laws after 1st july but before filing of TRAN 1 can be claimed only through filling TRAN-1
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