The Central Board of Indirect Taxes and Customs has notified the Central Goods and Services Tax (Sixth Amendment) Rules, 2018 which shall come into force on the date of their publication in the Official Gazette.
Goods can’t be Seized for Non-Filling of Part B of E-Way Bill transported within a distance of 50 Kms, rules Allahabad High Court.
RBI has tweaked priority sector eligibility and classification norms following an announcement in the second bi-monthly policy statement on June 6 for Priority Sector Lending guidelines for housing loans with the Affordable Housing Scheme to low-cost housing for the Economically Weaker Sections.
SEBI is set to revamp IPO norms to make them less onerous for legitimate sellers while clamping down on possible misuse. These include recognizing a wider set of institutional investors such as alternative investment funds (AIFs) as counting toward promoters’ contribution in startups, requiring financial disclosures for three years rather than five and reducing disclosure of the price band to two days before the issue opens from five now.
The Employees’ Provident Fund Organisation (EPFO), a $165-billion behemoth that is also India’s biggest bond buyer, could raise borrowing costs for local companies if its participation is limited by restrictive rules on transaction settlement.
.
=============>
.
# *ICAI* announces the Certificate Course on NPO at Noida from 14.07.18.
# *GST*: Inspection and verification of goods - time for recording of the final report in Part B of FORM EWB-03, may be extended for a further period not exceeding three days – N.N.28/2018-CT, dt.19.06.18.
# *GST*: Centralized registration in case of GTA - GST - a transporter who is registered in more than one State or UT having same PAN, may apply for a unique common enrolment number by submitting the details in FORM GST ENR-02 – N.N.28/2018-CT, dt.19.06.18.
# *GST*: Penalty - availing Input tax Credit (ITC) - fake & false invoices - burden of proving is squarely upon the Assessee not on Revenue - Bhavani Enterprises & Ors. Vs. ACCT (2018 (6) TMI 974 - Karnataka HC).
# *RBI* has revised the guidelines prescribing eligibility criteria of housing loans for classification under priority sector, which has come into effect from the date of the Circular i.e 19.06.18.
# *IT*: Validity of assessment u/s 153C - scope of the special audit u/s 142(2A) - non speaking order - Since the extended period was taken under the guise of Special audit, which is held without proper jurisdiction, the time so taken cannot be counted and the period does not get extended - Sunder Mal Sat Pal Vs. DCIT, CC (2018 (6) TMI 963 - ITAT Chandigarh).
.
=============>
.
*👉🏻GST increased illegal activities 4-5 times in terms of Billing*
(GST introduced to track the trail of transaction has in fact increased illegal activities in terms of billing by multiple times)
👇🏻 👇🏻 👇🏻
https://goo.gl/Hvxx5b
*👉🏻MCA invites comments from stakeholders on introductory note and draft on Cross-Border Insolvency*
(Government has taken initiative for Cross-Border Insolvency within the Insolvency & Bankruptcy Code, 2016 to provide a comprehensive legal framework.)
👇🏻 👇🏻 👇🏻
https://goo.gl/hLnvT7
*👉🏻IBC resolution to moderate NPAs; rising referrals slowing process*
(Stressed assets’ resolution under IBC is expected to result in moderation of NPA of banks as they can recover more than 50 % of their dues from the first 12 large cases)
👇🏻 👇🏻 👇🏻
https://goo.gl/HbsD5W
*👉🏻CBDT issues draft notification for amending computation of interest income*
(CBDT has prposed to amend Rule 10CB of IT Rules, 1962 in respect of computation of interest income pursuant to secondary adjustment u/s 92CE of IT Act, 1961)
👇🏻 👇🏻 👇🏻
https://goo.gl/ATFJTg
.
=============>
.
Indian Valuation Standards notified, effective froom 01July 2018
The Institute of Chartered Accountants of India has notified the Indian Valuation Standards (IVS). These Standards are effective for the valuation reports issued on or after 1st July, 2018. This has been necessitated amid increasing need of standardising the practices, principles and procedures followed by valuation professionals supported by Valuation Standards, Guidance Notes, Interpretations and other technical matters. These Valuation Standards will be applicable for all valuations under the Companies Act, 2013 mandatorily. In respect of valuations under any other Act, these Standards are recommendatory.
Following are the Indian Valuation Standards:
1.Indian Valuation Standard 101- Definitions
2.Indian Valuation Standard 102- Valuation Bases
3.Indian Valuation Standard 103- Valuation Approaches and Methods
4.Indian Valuation Standard 201- Scope of Work, Analyses and Evaluation
5.Indian Valuation Standard 202- Valuation Report and Documentation
6.Indian Valuation Standard 301- Business Valuation
7.Indian Valuation Standard 302- Intangible Assets
8.Indian Valuation Standard 303- Financial Instruments
IVS 102- Valuation Bases
IVS 102 prescribes the major valuation bases, fundamental assumptions of valuations and provides the premises of values. There are three valuation bases which can be used by a valuer- fair value, participant specific value and liquidation value. Participant specific value means the estimated value of an asset or liability from the point of view of acquirer considering the advantages and disadvantages that may arises to him.
Premise of value refers to present and future use of an asset. Some common valuation bases are highest and best use, going concern value, as is where is basis, orderly liquidation and forced transaction. A valuer can choose any premise of value depending on the selection of valuation bases.
IVS 103- Valuation Approaches and Methods
This Standard provides guidance on three main approaches of valuation- market approach, income approach and cost approach. There are various valuation methods suitable for each approach. Selection of approach and methods by a valuer are based on valuation bases and premises of value. Some of the valuation methods given in this Standard are discounted cash flow method, market price method, comparable companies multiple method, relief from royalty method, replacement cost method and reproduction cost method, etc.
IVS 201- Scope of Work, Analyses and Evaluation
It provides guidance on how a valuer should determine its scope of work & responsibilities under an engagement of valuation, to what extent a valuer should make analyses and evaluations of facts and what are the responsibilities of the valuer while using work of other experts. According to IVS 201, the terms and conditions of an engagement must be clear to avoid any misunderstanding between a valuer and a client. A valuer should make analyses and evaluations through discussions, surveys, inspections and various calculations, etc. and the extent of such analyses and evaluation depends on the terms and purpose of the engagement.
IVS 202- Valuation Report and Documentation
According to IVS 202, nature of the engagement of valuation purpose decides the form and content of a valuation report. It prescribes significant elements and minimum contents of a valuation report, basis for preparation of a valuation report and provides guidance on sufficient and appropriate documentation of the engagement. A valuer should document the methods & procedures adopted for valuation, relevant evidences obtained, its observations based on those evidences and management representations.
IVS 301- Business Valuation
IVS 301 is applied for valuation of an entire business enterprise or valuation of ownership interests in a business enterprise. In such type of valuations, a valuer should adopt following six steps:
1.Defining the premise of the value in accordance with IVS 102;
2.Analysis of the business to be valued and collection of relevant information in accordance with IVS 201;
3.Identification of the adjustments required to be made, if any, to the information collected in the last step for the valuation;
4.Selection of valuation approach and method in accordance with IVS 103;
5.Calculation of value or range of values as per approach & method selected in the last step; and
6.Identification of subsequent events and their adjustments to the determined value, if any.
IVS 302- Intangible Asset
This standard shall be applied in valuation of an intangible asset including goodwill, which are not covered by any other IVS specifically. A valuer should value an intangible asset at fair value from the perspective of market participants. It prescribes various methods for measuring the fair value which includes relief-from-royalty method, greenfield method, distributor method, reproduction cost method and replacement cost method, etc. The valuation method is based on whether the intangible asset is internally generated or externally acquired.
IVS 303- Financial Instruments
This Standard is applied for the valuation of financial instruments, i.e., financial assets, financial liabilities and equity instruments. It establishes the principles, methodology and other considerations for valuer. A valuer can choose market approach or income approach or cost approach in accordance with IVS 103 and valuation methods accordingly. For the valuation of financial instruments, observable inputs should be used more and should avoid use of unobservable inputs.
.
=============>
.
No GST on Supply of Service/ Materials between Govt Authorities: AAR* [Read Order]
Read more at: http://www.taxscan.in/gst-service-govt-authorities-aar/24844/
.
=============>
.
Interest on Short-term Loan given to Buyers of Material Exempt from GST: AAR [Read Order]
Read more at: http://www.taxscan.in/interest-short-term-loan-buyers-exempt-gst-aar/24849/
.
=============>
.
GST Dept unearths Evasion worth Rs 672.51 crores in Jaipur*
Read more at: http://www.taxscan.in/gst-evasion-672-51-crores-jaipur/24865/
.
=============>
.
SEBI Board Meeting
___________________________
The SEBI Board met in Mumbai and took the following decisions
I. *Review of SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011*
The Board has *approved certain amendments* to SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011. As part of the amendments, it has been decided to *grant additional time for upward revision of open offer price till one working day* before the commencement of the tendering period. SEBI earlier had issued a discussion paper on March 28, 2018 soliciting public comments for reviewing the SEBI Takeover Regulations. The amendments are mainly *aimed at simplifying the language, removing redundant provisions and inconsistencies, updating the references* to the
Companies Act, 2013 / other new SEBI Regulations, and incorporating the relevant circulars, FAQs, informal guidance in the regulations.
II. *Replacing SEBI (Buy-back of Securities) Regulations, 1998 with new SEBI (Buy-back of Securities) Regulations, 2018*
The Board has approved *reframing a new set of SEBI (Buy-back of Securities) Regulations, 2018* (“new Buyback Regulations”) in lieu of the extant Buyback Regulations, 1998. Relevant provisions outlined under *Sections 68 and 70 of the Companies Act, 2013 have been incorporated* in
the new Buyback Regulations to make it self-contained.
Under the new Regulations, the *buy back period has been defined as the period between board of directors resolution/date of declaration of Results* for special resolution authorizing the buyback of shares and the
date on which payment consideration is made to the shareholders. SEBI earlier had issued a discussion paper on March 28, 2018 soliciting public comments for reviewing SEBI (Buy-back of Securities) Regulations, 1998 (“Buyback Regulations 1998). The review was carried out with an
objective to simplify the language, remove redundant provisions and inconsistencies, update the references to the Companies Act, 2013/ other new SEBI Regulations, and incorporate the relevant circulars, FAQs, informal guidance in the regulations.
III. *Review of SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009*
1. The Board *approved the proposed SEBI (Issue of Capital and Disclosure Requirements) Regulations, (“ICDR Regulations”) 2018*
2. The Board, while approving the ICDR Regulations, 2018, considered the *recommendations of the Primary Market Advisory Committee* (PMAC) and the
public comments on the Consultation Paper.
3. Some of the *key proposals Approved* by the Board are as follows:
3.1 The requirement of announcing price band five working days before
opening of the issue would be reduced to two working days before opening of the issue.
3.2 *Financial Disclosures in case of public issues/ rights issues*
a) Financial disclosures to be made for 3 years as against the present duration of 5 years.
b) Restated and audited financial disclosures in the offer document to be made on consolidated basis only. Audited standalone financials of the issuer and material subsidiaries to be disclosed on the website of the
issuer company.
c) Incorporation of the principles governing disclosures of Indian
Accounting Standards (IndAS) on Indian GAAP (IGAAP) Financials.
3.3 *Threshold for submission* of draft letter of offer to SEBI in case of rights issues to be *increased* to Rs. 10 Crores as against the earlier prescribed Rs. 50 Lakhs.
3.4 *Shortfall of up to 10% in minimum promoters’ contribution may be met by institutional investors* such as by foreign venture capital investors, scheduled commercial banks, public financial institutions and insurance companies registered with Insurance Regulatory and Development Authority of India, in addition to Alternative Investment Funds, without being identified as “Promoters”.
3.5 For a company to be *eligible to make a fast track rights issue* it should *not have any audit qualifications or adverse opinion*
3.6 It has been *decided to delete*
a) Chapter on Institutional Placement Programme
b) Provisions pertaining to Safety net and IPO grading
3.7 *SME-IPO*
*Minimum Anchor investor size to be reduced* to Rs. 2 Crore from the existing Rs. 10 Crore.
3.8 *Promoter group*
a) Concept of immediate relative to be retained as against the proposed concept of ‘relative’.
b) The shareholding threshold for identifying promoter group has been revised from 10 percent to 20 percent. Now in case the promoter is a body corporate, any body corporate in which the promoter holds twenty percent or more or which holds twenty percent or more of the promoter would be classified as being part of the same promoter group.
c) Also, in case the promoter is a body corporate, any body corporate in which a group of individuals or companies or combinations thereof, which holds twenty per cent or more of the equity share capital in that
body corporate, also holds 20 percent or more of the issuer, can be classified as promoter group only if they are acting in concert.
3.9 *Disclosures of group companies*
Definition of group companies has been made more specific by clarifying that group company/ies, shall include such companies (other than promoter(s) and subsidiary (ies)) with which there were related party transactions, during the period for which financial information is
disclosed (3 years), as covered under the applicable accounting standards and also other companies as considered material by the board of the issuer.
3.10 *Addition to Anchor Investor Category*
Insurance Companies and Foreign Portfolio Investors except for Category III, promoted by entities related to the lead manager permitted to participate in the Anchor Investor category, in addition to mutual funds
promoted by lead managers.
3.11 *Main Board – IPO* Underwriting provisions to be aligned to requirements of minimum subscription, If 90 per cent of the fresh issue is subscribed in a main board IPO,
underwriting will be restricted to that portion only and accordingly the requirement to underwrite 100% of the issue without regard to the minimum subscription requirements has been deleted.
4. *The contents of the new Regulations have been streamlined* as follows:
a) All the chapters have been categorized on the basis of the type of offering so that all relevant information pertaining to regulations relating to a particular type of offering are available at one place.
b) The procedural requirements have been specified through Schedules to the draft regulations.
c) The provisions have been rearranged based on their
sequence in the public issue process and relevance.
d) The provisions of Companies Act, 1956 (wherever applicable), Companies Act, 2013, SEBI
(Substantial Acquisition of Shares and Takeovers) Regulations, 2011, SEBI (Share Based Employee Benefits) Regulations, 2014 have been suitably incorporated.
e) Various informal guidance / interpretative letters / frequently asked questions / Circulars regarding interpretation of various provisions of the
regulations issued by SEBI from time to time have been suitably
incorporated.
IV. *Decision on review of regulation and relevant circulars pertaining to Stock Exchanges, Clearing Corporations and Depositories* (‘Market
Infrastructure Institutions’)
The Board took note of the recommendations of the Gandhi Committee constituted by SEBI for ‘Review of regulation and relevant circulars pertaining to MIIs’ and the proposals thereon. The Board, after deliberation, *approved the following proposals*
1. In order to bring parity across MIIs, the shareholding limits, which can be held by both eligible domestic and foreign entities in a Market Infrastructure Institution (‘MII’), have been harmonized across MIIs.
- Eligible domestic and foreign entities, may be permitted to hold upto 15% shareholding in case of Depository and Clearing Corporation, as is the case for Stock Exchanges; Additionally, multilateral and bilateral financial institutions, as notified by the Government, have also been
recommended to hold upto 15% in an MII.
- Concept of Sponsor has been removed in case of Depository, with existing sponsor entities being allowed upto 5 years to reduce their respective shareholding. They can hold upto 15%.
2. Given the special role of Public Interest Directors (PIDs) and
Managing Director (MD) in the governance of a MII, norms relating to their tenure and directorships at MIIs have been modified.
- A person may serve as a PID across MIIs, for a maximum of three terms of three years each, or upto seventy five years of age, whichever is earlier, with not more than two terms in one MII.
- The first term in an MII may be extendable by another term, subject to satisfactory performance review.
- A cooling-off period of one year shall be applicable prior to
nomination as PID in another MII.
- A cooling-off period of three years shall be applicable for a PID to become a shareholder director in the same MII or a director in the subsidiary of the said MII.
- A PID shall not act simultaneously as a director on the board of subsidiary of an MII, any other MII or their subsidiary, or relevant / linked participants i.e. Trading Member, Clearing Member, Depository Participant, as applicable.
- A PID on the Board of a Stock Exchange, shall keep the Governing Board of the Stock Exchange apprised of any conflict of interest which may arise as a result of a PID providing services to or being associated
with any company listed on that Stock Exchange.
- A person may serve as Managing Director of a MII, for a for a maximum of two terms of upto 5 years each or upto 65 years of age, whichever is earlier. The said requirement would also be applicable to existing MDs
of MIIs.
- After the first term, the appointment process for MD should be conducted afresh.
3. The composition of the Governing Board and regulatory committees of MIIs has been modified with an aim to balance between the number of PIDs, who serve the interest of public at large and the number of
shareholder directors.
- The number of PIDs, on the Governing Board and the committees of the MIIs, should be at least equal to the number of shareholder directors (including the Managing Director) and in case of an equality of votes,
the Chairperson of the Board/Committee (who is a PID), shall have a second or casting vote.
- The above composition shall also be applicable to the quorum for
voting of the Governing Board and the committees.
4. In order to enhance the *transparency in the utilization of resources*
a MII should disclose the resources committed towards regulatory functions and towards ensuring regulatory compliance, backed by activity based accounting. Also, the charges and fees levied by an MII shall be placed for review before the
Oversight Committee of the MII.
5. To *avoid the requirement of repetitive regulatory approvals* and to provide adequate flexibility to the MIIs in deciding their day to day investments, it has been decided that activities in the nature of treasury investment may be as per the investment policy approved by the
Governing Board of a MII. Any other activity whether involving
deployment of funds or otherwise would need prior permission of the regulator.
6. *Considering the fundamental importance of the role played by Key Management Personnel* (KMP), the definition and norms relating to disclosure of their compensation have been *modified*
- The definition is modified to include, any person who directly reports to CEO or director of the Governing Board of the MII, or any person upto two levels below MD/CEO, or as identified by the Nomination and Remuneration Committee.
- MIIs shall disclose the ratio of compensation paid to them vis-a-vis median of compensation paid to all employees of the MIIs.
7. *Considering that the scope of work of some of the existing committees* of MIIs is inter-related and overlapping, the various committees of MIIs
have been merged / restructured, reducing the number of committee from existing 15 to 7.
- Functional Committees, comprising of three
committees, viz. Member Selection Committee, Investor Grievance Redressal Committee and Nomination and Remuneration Committee; and
- Oversight Committees, comprising of four committees, viz. Standing Committee on Technology, Advisory Committee, Regulatory Oversight
Committee and Risk Management Committee.
8. In order to *adequately capture the risks faced by a Clearing Corporation* it has been decided to *adopt a risk based approach towards computation of Net-worth* of a Clearing Corporation. Instead of a higher
minimum net worth of INR 300 crores, the Clearing Corporations may be required to maintain a net worth at all times of either INR 100 crores or such other amount to cover the various risks (operational, market,
credit, etc.) as notified by SEBI from time to time.
V. *Role of Sub-broker vis-a-vis Authorized Person*
The Board considered and approved the proposal to *discontinue the category of Sub-Brokers as Market Intermediaries* No fresh registration shall be granted as Sub-Brokers. Registered Sub-Brokers shall migrate to Authorised Persons or Trading Members as the case may be and
Sub-Brokers, who do not choose to migrate, shall be deemed to have surrendered their registration as Sub-Broker. Suitable time shall be
permitted to facilitate this transition.
VI. *Consultation Paper for the Amendment of various SEBI Regulations in respect of entities undertaking third party assignment under securities laws*
1. Investor confidence is fundamental to the successful operation of the securities market and it stems largely from credible and reliable reporting of disclosure, financial information, compliance with securities regulations. In this regard, fiduciaries in the securities markets have a very significant role to play. The absence of credible and reliable reporting of such information has the potential to adversely impact confidence in the securities markets and the financial
system.
2. While some fiduciaries such as Merchant Bankers, Credit Rating Agencies, Custodian, Debenture Trustees, Registrar to an Issue, etc. are registered with SEBI under specific Regulations notified for the purpose, certain other fiduciaries such as practicing Chartered
Accountants, practicing Company Secretaries, Cost Accountants, Valuers, Monitoring Agencies, etc. who undertake third party fiduciary duty/assignment/engagement from Issuers or Intermediaries as required under various SEBI Regulations, are not registered with SEBI.
3. The Board approved the *proposal to issue consultation paper to amend various regulations* in respect of entities who undertake third party
Fiduciary duty/assignment/engagement under the securities laws, in respect of any Issuer, Pooled Investment Vehicle, Intermediaries, Market
Infrastructure Entities.
VII. *Establishment of National Centre for Financial Education (NCFE) as Section 8 Company* - subscription to its Share Capital
The Board approved the establishment of National Centre for Financial Education (NCFE) as a Company under Section 8 of the Companies Act, 2013 limited by shares. The Board also approved subscription to 30% of the
paid up capital of the company amounting to Rs.30 crores, by SEBI. NCFE is co-promoted by SEBI, Reserve Bank of India (RBI), Insurance Regulatory and Development Authority of India (IRDAI) and Pension Fund
Regulatory and Development Authority (PFRDA). NCFE is mandated to undertake financial education activities in terms of the National Strategy for Financial Education (NSFE) as approved by the Sub-Committee of Financial Stability and Development Council (FSDC-SC).
VIII. *SEBI Annual Report 2017-18* The Board considered and approved the SEBI Annual Report 2017-18. In compliance with Section 18(2) of SEBI Act, 1992, the Annual Report would be submitted to the Central Government. Mumbai June 21, 2018
Sebi Press Release :
https://www.sebi.gov.in/media/press-releases/jun-2018/sebi-board-meeting_39324.html
.
=============>
.
GST: CBIC modifies Procedure for Interception of Conveyance* [Read Circular]
Read more at: http://www.taxscan.in/gst-cbic-procedure-interception-conveyance/24878/
.
=============>
.
Cash Loan from Wife for purchase of House for the benefit of Family won’t attract Penalty u/s 271D: ITAT* [Read Order]
Read more at: http://www.taxscan.in/cash-loan-wife-penalty-271d-itat/24873/
.
=============>
.
Supplies of service by the employer to the employee :
_Issues: What would be the valuation where the employer recovers Rs 10 towards the supply of canteen service to the employees where the cost incurred by the employer is Rs 100_ ?
🌺Supply of canteen service by the employer to its employees is considered as supply of service and liable to GST.
🌺Employer and employee are related person under GST.
🌺Value of supply would be done based on the CGST Rules, 2017 as the transaction is between the related persons and transaction value cannot be adopted.
🌺Valuation in such case could be at Open market value / value of like kind and quality / 110% of the cost. Where Open market value / value of like kind and quality is not determinable due to the fact that it is practically difficult to arrive at the Open market value / value of like kind and quality on the services provided by the employer to its employees, cost + 10% would be the basis for valuation.
🌺Therefore, in the above example, the value of the supply would be 100 + 10% i.e Rs 110 and GST is payable at the applicable rate though only Rs 10 is recovered by the employees
.
=============>
.
GST Gyan-Transporter registered in multiple states with same PAN may apply for common enrolment no. for eway bill by filing GST ENR-02, using any GSTIN.
